Capstone Copper Corp.

Good afternoon, ladies and gentlemen, and welcome to the Capstone Copper's 4th Quarter 2024 Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press TAR 0 for the operator. This call is being recorded on Wednesday, February 19, 2025. I would now like to turn the conference over to Daniel Sampieri. Please go ahead.

Thank you, operator. I'd like to welcome everyone to Capstone Copper's Q4 2024 conference call. Please note that the news release and regulatory filings announcing Capstone Copper's 2024 fourth quarter financial and operational results are available on our website and on CDAR+. If you are logged into the webcast, we will advance the slides of today's presentation, which are also available in the investors section of our website. I am joined today by our CEO, John McKenzie. our President and Chief Operating Officer, Kashil Mar, our SVP and Chief Financial Officer, Raman Randhawa, and our SVP Risk, ESG, and General Counsel, Wendy King. Our Head of Chile, Jim Whitaker, and our Head of Technical Services, Peter Emelungsen, are also available at the end of the call for questions. Please note that comments made on the call today will contain forward-looking information within the meaning of applicable securities laws. This information, by its nature, is subject to risks and uncertainties, and actual results may differ materially from the views expressed today. For further information on the risks and uncertainties pertaining to our business, please see Capstone's most recent filings, which are available on our website and on CDAR+. And finally, I'll just note that all amounts we will discuss today are in U.S. dollars, unless otherwise specified. Now, I'll turn the call over to John McKenzie.

Thanks, Daniel. And hello to all of you dialing in from the Americas, Europe, Australia, and all around the globe. We're pleased to present our fourth quarter 2024 results and achievements. 2024 was a big year for us as we commissioned and ramped up Monteverde and achieved design throughput rates at Montes Blancos. This coming year represents an inflection point with our recently released 2025 guidance demonstrating increased cash flow generation, strong copper production growth, and lower costs. We'll be focused on operational execution across our portfolio and further deleveraging of our balance sheet while continuing to advance our pipeline of organic growth opportunities. Starting with slide five. In Q4, our operations delivered record consolidated copper production of 53.9 thousand tons at consolidated C1 cash costs of $2.56 per pound. It was our strongest quarter of the year with respect to production and costs, and that translated into our best quarter of the year from a financial perspective. For the full year 2024, we produced a record 184.5,000 tons of copper at consolidated C1 cash costs of $2.77 per pound, representing a 12% increase in output compared to 2023. Last year was marked by several major achievements at our mines in Chile. After producing first copper concentrates in June at our flagship Montevideo development project, we achieved commercial production levels in September, and the mill ramped up to full rates by year end within the previously announced $870 million capital budget. This is a significant accomplishment, and I would like to thank our team for their commitment and dedication during the past three years in delivering this milestone. To start the year, I'm pleased to announce that in January, we averaged above our nameplate throughput capacity at Monteverde, with a mill throughput of 33,409 tons per day. I know that our team is eager to demonstrate what the new Monteverde sulfide concentrator is capable of. and that the team remains hard at work preparing to execute on our Monteverde-optimized project. Meanwhile, at Montes Blancos, we unlocked the design mill capacity of the operation through a successful de-bottlenecking of the back end of the plant, ending the year above design mill throughput in November and December. This continued in January, with a third consecutive month achieving above targeted mill capacity of 20,000 tons per day. Our finish to the year at Pinto Valley was sub-par, but we're laser focused on progressing our asset integrity program to ensure we consistently achieve the design capacity of the operation. Whilst delivering our near-term growth, we've also advanced our future phases of growth by releasing attractive and executable feasibility studies for the Monteverde Optimized and the neighboring Santo Domingo projects in the second half of 2024. On the corporate side, during 2024, we took steps to improve our balance sheet strength and flexibility, marked by a reduction in our net debt by $185 million compared to 2023. Our balance sheet is in excellent shape, and we're committed to deleveraging further through internally generated cash flows prior to our next major phase of growth. Turning to slide six, as I noted, This year represents an inflection point for Capstone. In 2025, we're targeting 220 to 255,000 tons of copper production at cash costs between $2.20 to $2.50 per pound. As we focus on operational execution across the portfolio, we will advance our pipeline of organic growth opportunities to continue the transformation of our business. And with that, I'll pause over to Robin for our financial results.

Thank you, John. We are now on slide 7. In Q4, we recorded copper production of 53.9 thousand tons, reflecting growth of 14% quarter over quarter driven by the growing production from the ramp-up of MEDP. As a result of seasonal swells at load ports in Chile, copper sales came in below payable production levels by approximately 2,300 tons this quarter. The impact of the delayed sales from Antoverde is approximately $11 million with respect to EBITDA for around $0.01 per share on earnings. We've recorded revenues of $447 million in Q4 driven by realized copper price of $4.04 per pound. That was slightly below the LME copper price average for the quarter. However, on an annual basis, our realized copper price was largely in line with the LME average price, a testament to our QP hedging program. In Q4, we realized strong gross margins of $1.48 per pound for 37%. B1 cash cost of $2.56 per pound decreased by 10%, quarter over quarter. This was driven by the ramp-up of our mantle verde sulfide operation, which contributes our lowest cost production, where cash cost decreased from $2.52 per pound in Q3 to $1.83 per pound in Q4. As well, Manto's flankels operate at nameplate capacity where cash costs decrease from $3.41 per pound to $2.30 per pound in Q4. Manto Verde sulfide cash costs should decline even further in 2025 when operating at full nameplate capacity. Adjusted EBITDA in Q4 of $171.9 million nearly doubled year-over-year, driven by higher realized copper prices and copper production. as a result of sulfide production ramping up in Manta Verde and Mentos Blancos. Moving on to slide eight. On the left-hand side, we summarized our available liquidity, which as at December 31st, 2024, was greater than $500 million, including $132 million cash in short-term investments, $374 million of undrawn amounts under $700 million corporate revolving credit facilities. Our net debt of $742 million is down slightly from prior quarter, with the NVDP capital cost behind us. Over the course of 2024, we have successfully delevered from a consolidated net debt to EBITDA ratio of 3.6x at the beginning of the year to 1.5x at year end. The chart on the right-hand side of the page illustrates your EBITDA sensitivity at various copper prices. The start of 2025 meant a shift from the light gray bar for the 2024 actual EBITDA of $496 million to the turquoise bar, which represents EBITDA in the range of $800 million to $1.3 billion at copper prices between $4 to $5 per pound based on the midpoint of our 2025 guidance. This level of EBITDA generation will enable us to focus on generating cash to de-lever our balance sheet with a pathway to below one times net leverage at spot copper prices. This provides a strong platform from which to advance our growth pipeline in terms of Manitoba to optimize and . Moving on to slide nine. We want to provide a breakdown of our operating cost drivers for 2025 to address the potential impact of tariffs on capstone. Should the threatened tariffs be implemented in the U.S., we estimate that 90% of our 2025 operating costs should not be directly impacted, notably labor, contractors and services, diesel, sulfuric acid, and power. On a consolidated company-wide basis, year to date, we have seen some positive tailwinds through favorable foreign exchange movements and higher byproduct pricing compared to our guidance assumptions, which position us well so far in 2025. Now I'll hand it over to Cashel for the operations review.

Thanks, Robin. We're now on slide 10. Pinto Valley produced 11,626 tonnes of copper at a C1 cash cost of $3.30 per payable pound during Q4. After starting the year strong in the first half, Pinto Valley experienced setbacks in the third and fourth quarters that resulted in the mill operating below where we want it to be. Throughput averaged 45,000 tons per day in Q4 with unplanned downtime due to electrical and mechanical issues that resulted in one of our six ball mills being down. This persisted into the first quarter, but we are recently back up with all mills turning. We've guided for 51 to 58,000 tons of copper production at Pinto Valley in 2025. a C1 cash cost of $2.55 to $2.85 per payable pound. We expect copper production to be weighted towards the second half of the year, driven by grades and throughput, with a lower first quarter as a result of the previously mentioned maintenance. We are committed to the implementation of our asset integrity program, with the goal of improving the reliability of the plant to drive higher productions lower costs. Moving to slide 11. Cozumel Mine delivered another solid quarter, producing 6,724 tonnes of copper at C1 cash costs of $1.55 per payable pound. In Q4, Cozumel cash costs benefited from higher silver byproducts and a weaker Mexican peso, which continued to represent a tailwind for 2025. We have guided for $23,000 to $26,000 tonnies of copper production at Cozumel in 2025 at a C1 cash cost of $1.60 to $1.80 per payable pound. Our Mantos Blankless asset had a very strong finish to 2024, as highlighted on slide 12. Total sulfide and cathode production yielded 13,563 tonnies of copper at C1 cash costs of $2.45 per payable pound. Production and cash costs both improved significantly quarter over quarter, driven by successful ramp-up of the concentrator after the installation of new equipment in July. We are excited to demonstrate the full potential of Mentos Blancos to the market now that we have completed the work required to sustain an average throughput of 20,000 tonnes per day, which has now been achieved for three consecutive months We have guided for 49,000 to 59,000 tonnes of copper production in 2025 for Matos Blancos, slightly weighted to the second half due to planned maintenance. C1 cash costs are guided at 235 to 266 per payable pound. As pictured on slide 13, Average sulfide plant throughput was 19,600 tonnes per day in Q4, achieving nameplate throughput capacity in November and December. We continue to see strong performance into 2025, with average throughput in January reaching 20,600 tonnes per day. Even prior to the shutdown in July, we started to see throughput improve as a result of our asset integrity program. Mantus Blankos' a third the size of Pinto Valley in terms of plant throughput. So we expected this program to bear fruit more quickly here. We are continuing to systematically roll out this program at all of our sites to improve availabilities and achieve more consistent performance. Now on to Mantelverde on slide 14, where it was a transformational quarter and year driven by the continued ramp-up of the Mantelverde development project. Total production yielded 22,029 tonnes of copper at a C1 cash cost of $2.53 per payable pound. Focusing on the new sulphide operation, we posted record quarterly copper production in Q4. Plant throughput averaged almost 25,000 tonnes per day during the quarter. Throughput steadily increased over the quarter to an average throughput of just over 27,000 tonnes per day in December. This improvement has continued into 2025 with the average mill throughput of over 33,000 tonnes per day, exceeding the main plate capacity of 32,000 tonnes per day in January. Meanwhile, grades continue to reconcile well with the mine plan and the block model. We still have a little bit of work left to do on recoveries. We averaged around 85% in December, which took a step back to around 81% in January. Earlier this month, in February, we completed a planned five-day shutdown, which included liner change-outs on our mills. But we also continue to make further minor modifications to the flotation area to get our recoveries to design levels in the upper 80s. We are targeting to achieve those design recoveries within the first quarter. Copper production and cash costs are forecasted to significantly improve in 2025. driven, of course, by the new sulfide concentrator. We have guided for 97 to 112,000 tonnes of copper production at Manto Verde in 2025. At a combined C1 cash cost, $2.10 to $2.36 per pail of pound, Q1 is expected to be the lightest quarter due to that planned maintenance and increasing recoveries. As John mentioned, Our team is also eagerly awaiting the opportunity to execute on our Mantelverde optimized project. We are advancing detailed engineering and preparing to start the project as quickly as possible once we receive a DIA permit amendment, which is expected around the middle of the year. We've been encouraged so far by the individual peak daily throughputs in excess of 38,000 tennies per day, and we look forward to de-bottlenecking the plant to achieve 45,000 tennies per day. Now over to Wendy King for the sustainability review.

Thank you, Cashel. We're now on slide 15 with a review of our sustainability highlights for Q4. Last quarter, we published our 2023 sustainability report, which also included a sustainability performance data book. This includes four years of consolidated capstone data as well as site-level data. In 2023, we started to report both our location-based and market-based GHG emissions, and you can see how we started making progress against our 30% reduction target. We continued this progress in 2024, where we have implemented key initiatives such as the electrifying four generators and three diesel pumps at Pinto Valley, while commissioning the fourth electric rope shuttle and adding two electric buses at Manto Verde. These initiatives are also examples of win-win opportunities where we believe we will reduce our emissions while also generating cost savings. During 2024, we made significant progress towards our Sustainable Development Strategy goal of implementing the global industry standard for tailings management across all RTFs by year end 2028. Our internal benchmarking shows us achieving 48% confirmation at year end 2024, which exceeded our target for the year. I am personally very pleased that we have published our first responsible sourcing policy that defines our commitment to embedding our sustainability expectations and considerations into the selection and management of suppliers and goods and services. We are very much looking forward to working in partnership with our suppliers to align with our goal of contributing positively to the lives of workers and communities both close to our sites and around the world where goods are made. And lastly, subsequent to quarter end in January, we recently signed a 35-year water agreement with the concept to secure long-term water supply by reusing treated wastewater from Anifa-Gasta. This will also reduce marine discharge and increase water recycling at the Mantis Blankos mine. The project involves the construction of a wastewater treatment plant built by a third party and expected to be operational in 2028. And with that, I'd like to pass it back to John.

Thanks, Wendy.

Turning to slide 16, we've outlined our key priorities for 2025. This year, we will focus on operational execution across our portfolio. Over the past two years, We've been in a period of significant change, building and ramping up mines, and now we'll focus on getting the most out of our portfolio. Monteverde Optimized is another key focus for us. Once we receive the permit, we want to execute on it as quickly as possible, as it generates tremendous returns for us. And lastly, we're focused on deleveraging and advancing our pipeline of organic opportunities. Turning to slide 17. We've outlined those sector-leading growth plans and some of the additional upside within our portfolio. 2025 will build on last year's strong foundation of 184,000 tons of copper, and we're on track with the guidance we issued last month. We intend to proceed with Monteverde Optimized following the receipt of a DIA permit amendment. We filed for the DIA permit mid-last year and expect receipts around the middle of this year. We plan to finance this project through internally generated cash flows. MV Optimized has the opportunity to take us up to around 280,000 tons of copper per annum on a run rate basis. At Santo Domingo, we continue to progress with the assessments of the optimal financing structure for the project. We're looking at this in a very similar manner to what we were able to achieve at Monteverde. Included in this we're running a process to bring in a minority partner at the asset level, which is going well. Before a potential sanctioning decision at Santo Domingo, we also want to see all of our assets operating at or near full production levels and our consolidated net debt to EBITDA at below one times. And of course, we'll also be mindful of the overall macroeconomic environment. The way we see it today, That opens up a potential sanctioning window for Santo Domingo starting in 2026. Santo Domingo has the opportunity to take our production up to a level of around 400,000 tons of copper per annum at even lower consolidated costs. Beyond these projects, we are hard at work to unlock further upside across our portfolio with another low-risk brownfield expansion opportunity at Montes Blancos, additional flexibility in the MVSD district to unlock more copper and potentially byproducts cobalt production, and the potential developments of another major copper district around our Pinta Valley mine in Arizona. With that, I'll turn to slide 18 and summarize. In 2024, we realized this first phase of the transformation of capstone copper with tangible delivery on our peer leading growth. We're extremely well positioned to become a leading long life and low cost copper producer, playing an important role in supporting the world's decarbonization and electrification efforts.

And with that, we're now ready to take questions.

Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please make sure to lift your handset before pressing any keys. Your first question comes from the line of Orest Wolkada from Scotiabank. Please go ahead.

Good evening. Nice to see the progress at Manto Verde here in January. I'm curious sort of what your expectation is for achieving sustainable throughput and design recoveries over the next couple months. It sounds like we should expect some maintenance to impact February and Q1 overall, but curious sort of are we targeting kind of exiting Q1 where we should see both kind of near enough steady state nameplate?

Yeah, thanks, Orest. And certainly the way you describe it is the way I see it. But I'm going to ask Kessel just to add a little bit more color to that comment.

I guess I just can't go with ditto. But yes, that's what we're anticipating. Where we are right now with the recoveries, we feel like we're getting stable production. As we said, we had a sort of a planned maintenance process there. for relining the mills. But certainly with the way the progress has gone, excuse me, with recoveries to date, we anticipate by the end of the quarter we'll be up to normal nameplate running.

So, going well.

Well, it's great to see. Maybe shifting gears a bit, with Manto Verde going so well, obviously Santo Domingo will become more into focus. John, I'm just curious if there is any kind of debt reduction targets ahead of a sanctioning decision that you're thinking about, or do you think the balance sheet is in strong enough shape that you can push forward with that even in a kind of uncertain copper environment?

Yeah, it's a good question.

Certainly, I would like to see all of our other assets operating at or very near to full capacity, have confidence in the successful execution of our asset management framework, and also be generating cash, be starting to whittle away at our total debt position. Obviously, I spoke a little bit earlier about a net debt to EBITDA ratio below one that we're targeting. There's obviously two elements to that. One is there's an absolute reduction in our debt. And we've mostly sort of seen that inflection points as we've started moving down. So reducing our debt as of, you know, this past quarter. But obviously we're also significantly increasing EBITDA. So that ratio sort of continues to look more attractive. But I certainly want to be in a position where You know, we're comfortable from a lagging, sort of lagging measure perspective that we are below a one times net debt to EBITDA ratio. And then we'll obviously look at the macro environment. I don't think it's quite as straightforward as just saying, you know, if copper prices are high, that triggers us going forward with the project. You know, we need to look at, you know, what's happening in the general project environment as well. There are some times when it's actually better to launch a project when other people are not doing so in terms of getting favorable contractor rates and better lead times on assets. I think we see ourselves entering a sanctioning window towards probably the beginning of next year, but that really will involve us looking at the macro environment, looking at our sort of internal environments, and just making sure that that is the right timing to take the next step with the project.

Thanks for color. Sure. Your next question comes from the line of Kate McCutcheon from Citi.

Please go ahead.

Hi, good morning, John. Just following on at Santo Domingo, you mentioned the sanctioning window early next year. How are the sell-down state talks progressing there and what is the timing of an update to the market on that?

Yeah, thanks, Kate. It's going well. So, you know, we started a process towards the back end of last year. We had quite a number of parties that came in into the data room. it's always been our intention to sort of get down to a smaller number of parties because ultimately this is not quite as simple as just a, you know, sort of, uh, first or highest across the line. It's, it's, it's, this is, we're talking about a partnership process for sort of the next 30 or 40 years. So, you know, at the end of the day, it's, it's going to involve a negotiation with, um, you know, a very small select group of, um, sort of identified preferred partners. Um, Today, we've whittled that number down to we have six parties that we're in discussions with. And I think we should be in a position around the middle of the year to provide further updates as to where we're at with those conversations. And then in parallel to that, we're also starting to advance other financing discussions in terms of the project financing. but clearly the two are somewhat interlinked. So, you know, to an extent, the nature of the party that would come in would also sort of influence the actual final financing structure for the project. I'd also say, Kate, that sort of at the same time, you know, we've got a number of work streams that are happening in parallel. And, you know, we're looking at a number of opportunities. I think we've spoken about... some revenue-generating synergies. We've got 90 million tons of oxides at Santo Domingo. Those are not currently in the base case plan. That's a big opportunity going forward. We've acquired Sierra Norte late last year. We ultimately intend to incorporate that ore into a Santo Domingo mine plan. And so, you know, there's a number of parallel streams of work. We're also looking at opportunities to, rather than build all of our own standalone infrastructure, seeing whether there are opportunities to share infrastructure. And, you know, those are all, I'd say, parallel streams of work that are busy going on right now. So a lot on the go, but I think we're very encouraged.

Okay, that's helpful. And then just on tariffs in the administration, some of your peers have mentioned some tax benefits possibly, but that's more on the refining side. Are there any tailwinds to call out around capturing perhaps that COMEX premium or any tax tailwinds that have been talked about?

You know, I think obviously we have the Pinto Valley mine in the US and, you know, it might be sort of over the longer term. one could see some sort of potential opportunities arising. But I think in terms of obviously the implications of the tariffs right now, one's seeing sort of a very significant premium between sort of COMEX and the LME. Ultimately for us, I think it's probably a fairly neutral outcome. We're not terribly exposed to sort of tariffs on input costs for us. you know, to the extent that tariffs could impact on global GDP growth, you know, that could be deemed as a small negative. But on the other side, if that triggers additional stimulus in China, that would be a positive. So I think our view at this stage, sort of without further information, is it's really swings and roundabouts at this stage. And we don't see any impact really on the medium or long term growth. sort of very positive fundamentals for copper.

Okay. Thanks, John. Your next question comes from the line of Daniel Morgan from Baron Zoe.

Please go ahead.

Hi. First question is just on the guidance which was issued a few weeks ago, could you just maybe expand on what are the key assumptions that are embedded in that guidance, particularly at Manta Verde? and basically what needs to happen to be at the upper end of the gardens or what might go wrong to be at the lower end. Thank you.

Yeah, thanks for the question, Daniel. And having our prison and chief operating officer, Cashel Moy, here with me, I'm going to pass that one across to him.

Okay, I'll do my best. Mentor Verde, so obviously in the guidance, we've guided the copper tonnage process 68,000 to 80,000 tons in the sulfides, excuse me, in 29 to 32 in the cathodes. Our thinking behind that is, you know, things can go well. There is the opportunity when we reach the mid-year, and if we do get our permit, we just stated that for one month we were at 33,000 tons a day, and We occasionally hit 38,000 tons a day. So there is that opportunity that's not really embedded in that guidance in the back half. That's good because we're a multi-asset portfolio now. And, you know, when one asset's struggling, another asset will pick it up. And that's the real fortune that we have with the onset of Mantis Blancos and Mantiverdea. being ramped up now. We look forward to having four assets that are operating in a reliable fashion. So, mental birdie itself, if you sort of take the midpoint of the guidance, that would suggest through the sulfide plant, probably around 30,000 to 31,000 tons a day. probably at reserve head grade for the year of 0.77 and sort of in the mid-80s for recoveries. So we feel that's achievable. Certainly, we got off to a good start here now. And certainly, our predictive maintenance is working really well. And we had a successful shutdown and reline. So we're really encouraged how 2025 is shaping up.

Thank you, Ed. That answers your question. Yeah, thank you. That does. But just expanding a little bit, on the cost side of your guidance, could you just talk about what's embedded in it regarding the treatment charges? Have you taken what appears to be a very favourable settlement into account or not?

Yeah. Can I ask Raman just to comment on that?

Yeah, I mean, our cash costs are reflecting the current TCRC market in there. So I'd say our budgeted cash cost in there is around $25 a ton to $30 a ton. When you look at our concentrate mix, we're 56% benchmark and 44% spot. So then there is opportunity, obviously, on the spot market, you know, close to zero to negative to beat some of that cash cost. But overall, it's about $25 to $30 a ton.

Thank you. And just last question is the Manta Verde optimized project. What is the latest updated target for NFID? What's the critical path that needs to occur? I think it was mid-year, if I've got that right.

Yeah, that's correct. So we're currently progressing the detailed engineering on that. We expect that to be complete pretty much around the middle of the year. The critical part item is really receipt of the permits amendment, the DIA. It's not a major permit, but it's obviously we need to have that before we can properly progress. We submitted that around the middle of last year. These things typically take around 12 months. We've just completed responding to the second round of questions that the authorities put forward. That normally is a fairly good indicator as to, you know, are there any complicated issues or is it fairly straightforward and I think we were very comfortable with the nature of the questions that were being asked. So I think at this stage we continue to be confident that around the middle of the year we should get that permit. We're not seeing any red flags at this stage in that regard, but that's really the gating item. It might well be that between now and then we choose to start ordering a few long lead time items. Obviously, we just need to look at where the market is at in terms of lead times on certain pieces of equipment.

Thank you so much for your perspectives, John and Cashel. Thank you. Next question is from the line of Adam Baker from Macquarie.

Your line is now open.

Good morning, or good afternoon, John and team. Just following up on that MB optimised, just on the CapEx guidance, noting that there's none of the CapEx coming through in 2025. When you compare that to the feasibility study at the end of last year, did include about $100 million in capex from memory for the MV Optimize project expansion. How should we think about, you know, capex from MV Optimize this year, noting that, you know, all things going well, permitting will come through mid-year. Would you expect to greenlight the project as soon as you get that permit come through? And if so, could capex potentially be re-evaluated? Sorry.

Yeah, so the capital for the project is $146 million for MV Optimized. You know, the return on it is tremendous. So it is the sort of project which, you know, it makes sense to do as soon as we possibly can. And on the basis that we have that permit in the middle of the year and we're able to commence then, I think our current estimate is that we'll probably spend about half

half of that budget this year and half in the first half of next year. But as you say, that's not currently in our CapEx budget.

It's obviously until we've got a project to an approval stage, and that involves having all the permits required. We'll obviously be taking that to our board, getting approval for it, and obviously we'll then be sort of notifying of that change in capex.

Yeah, okay. So the 10 million of expansionary capex that you currently got there, that'd be, you know, a couple of long lead items potentially. And then, you know, if you do get permitting and board approval, that has the possibility to increase all things going well.

Yeah, if we go there, it'd be 62 more. So it'd be 72 for the year.

Got it. All right. Thank you very much. And Monteverde ramp-up, it appears to be going really well. Just noticed that, you know, your throughput at 32,000 or 33,000 tonnes a day, I should say, you know, above nameplate levels, you know, can you push that any further? Do you need to push it any further? And, you know, is it just recoveries that you're now working on and you're very much comfortable from the front end of the plant perspective

Yeah, well, we've got Jim Whittaker here, who's our head of our chili business. So I think he's probably best placed to answer that question.

Yeah. Hi. I think, as Cashel mentioned before, you know, we've seen some days right at the nameplate. Obviously, we're trying to run higher than that to take care of any sort of downtime that we encounter as we continue to ramp up this plant and find out more about this new plant that we have. We have hit days up into 36,000 to 38,000 tons a day, so we're very, very confident on the throughput design of the plant. On the recovery, it's been a bit slower on the uptake. We've been into the high 80s into December, into the mid-80s through January, so we're very confident that we're going in the right direction with that as well. So we don't see any major changes to the gas that we put out with respect to the plant.

Thanks, guys. I'll hand it on. Thanks, Adam. Your next question comes from the line of Paul Hissey from MOLIS.

Please go ahead.

Good day, guys. I was just hoping you might be able to provide a little bit of commentary or an update on any potential discussions or plans you're having with your neighbors around Pinto Valley, please.

Yeah, well, I can give initial comments and I'll ask Castle to sort of add to it.

But, you know, we've got, we obviously sort of signed an agreement with BHP around Copper Cities to do some drilling work a couple of years ago. That drilling work's complete and sort of the resource has been remodeled. It basically validated what was there. And since then, we really just sort of working on a number of option studies that, you know, look at what alternative configurations could be of a district development. And, you know, that's currently work in progress right now. So we don't have any, you know, conclusions from that at this stage. But, Cassius, anything else you'd want to add to that?

No, we continue to work under that option agreement that John mentioned. Sort of in the middle of this year, it's set to expire, but we've extended it once before. Although the way things are progressing, we hope we don't have to. We have a joint committee that is working on what can happen within that region with joining up Copper Cities with Pinto Valley. Obviously, Pinto Valley itself has 1.4 billion tons, and there's a historic resource sort of at Pinto. Copper City is close to that also. So it's a tremendous resource, tremendous opportunity to optimize mine plans there. So we're working with that group. It's very cooperative to be able to see what the best way to get the value out of the two sites are.

And so all I can say is it's progressing really well.

Okay, so hopefully a little bit more color on that potentially mid-year, just taking your comment there about potentially not having to renew the option agreement again. So, yeah, thanks for the response. That's helpful.

Thanks, Paul.

Your next question comes from the line of Dalton Barreto from Canaccord. Please go ahead. Thanks. Good afternoon, John and team.

Most of my questions have been answered, but John, I think you mentioned infrastructure sharing as one of the work streams around Santa Domingo. I'm wondering if you can expand on that a little specifically as it relates to the ongoing JV process, but also as it relates to potential implications on the capital for the project. Thanks.

Yeah. The project has obviously been prepared and you know, submitted on a standalone basis. So, you know, some of that has been influenced by permit considerations as well. You know, we plan to have built another desal plant, a second desal plant, just because, you know, expanding our Monteverde one would require a permit, whereas we already have a fully permitted desal plant through Santo Domingo. It also involves us building our own port. Now, all of these things obviously give us a great deal of strategic flexibility, but one of the issues in Chile that certainly the government has been quite focused on is it would make far more sense for mining companies to be sharing infrastructure, and by doing that, it's obviously a lesser environmental impact in terms of number of sites that are impacted, but it's also beneficial from the point of view of Generally, the cost of these sort of facilities are mostly fixed. And so the higher throughput you get, the lower the unit cost. So I think it's a view that's sort of shared by the industry that there's a lot of benefits in sharing infrastructure. Now, there are a number of ports and a number of diesel plants that already exist along that coast. So one of the work streams is it obviously behooves us to do this before we sort of move ahead and build our own, which that is the base case, to just assess whether or not there's a economically more attractive option to share infrastructure with another party.

Got it. Okay. Thank you.

And then just maybe one more, and this is almost a housekeeping item here. In your CapEx guidance, there's $80 million for sort of ESG-related projects, I think you called them, tailings dam upgrades and stuff like that. I'm just wondering, is that going to be sort of a rolling number on a go-forward basis? Is that a one-time thing?

No, I think we're in the process of moving all of our sites to GISTM compliance, and Some of our sites, Monteverde is at that already because we've just designed it and built it and we did it in line with those. Other of our tailings facilities that obviously predate those standards, we've got plans to do so. Each of them has got different time periods that it takes to get there. I think probably the longest dated of those is probably Pinto Valley, which is going to take probably two or three years to get to that point. I think Montes Blancos is sort of probably two years, something like that. So that's the sort of timeframe over which we would see that capital recurring. And then once we're there, we're back to, you know, it's just the normal maintenance cost of keeping those facilities going.

Yeah, at St. Dalton, it's kind of, reoccur for a few years. It might not be at that same clip, so you may see a bit of a tail off, not 80 downwards, but that'll be some expenditures like John's talking about.

Understood. Thanks very much, guys. Thanks, Dalton.

Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star followed by the number one on your touchtone phone. Should you wish to decline from the polling process, please press star followed by the number two. And if you are using a speakerphone, please make sure to lift the handset before pressing any keys. Your next question comes from the line of Sam Catalino from Wilson's. Your line is now open.

Oh yeah, good morning, good evening all. I just wanted to ask a little bit on Pinto Valley. Obviously, you've provided a great update of the positive performance from the Chilean assets in January, but you also flagged some of the struggles that Pinto had back end of last year. Just wondering how that's going so far this year and whether or not you see any risk to your cost guidance in particular from Pinto.

Thanks, Sam. I'm going to ask Kessel to respond to that.

Yeah, sure. Thanks, Sam. We have a plan. The plan is developing a proactive maintenance process versus having to react to maintenance, unplanned events. Obviously, as that system matures, call it our asset management framework, we become more predictive on especially the older components within a mine. At Pinto Valley itself, obviously, most of the asset itself is pretty aged, having been built in the 70s. We're making really good progress there. We did have some unplanned events, obviously, that you alluded to in your question in Q4, and the remedy for that persisted actually through January, as we sort of said in the script. But we've seen our way through that now in February, and we're back up and running with all six ball mills. So We do have planned maintenance to happen. That is all considered within the guidance. And so we're sort of meeting the cadence that we believe will arrive at that sort of guidance that we've given to Pinto Valley. So we don't anticipate to lie outside of it. And in that guidance, there is some latitude for unplanned events So what we hope is we get ahead of them with this asset management framework and this predictive maintenance model. So we have a lot of people working on this. It is the primary focus of the general management there. And we believe that all these efforts we've been putting in over the last year will yield fruit this year.

Okay, thanks, Gush. Just to sort of push on that a little bit more, I guess the sort of reason for the question is it seems like things are going very well in South America. And if I think about the overall company guidance for volumes 220 to 255 for the year, it seems so far that Chilean assets will deliver into that as expected. Would it be fair to say... that you guys feel Pinto is probably the biggest risk as you look at that guidance figures into the back end of the year?

You know, like, it's all about predicting the unpredictable. You know, so all planned events are put in, whether it's planned maintenance of Mantis Planicosa, Mantoverde, and or Pinto Valley. What I would say is that the guidance reflects the risk inherently built into it. So... If you look at the throughput of Pinto Valley and you look at the performance of last year in the first half of the year, which was 54,000 tons a day without unplanned interruptions, that exceeds what the midpoint of guidance we put out here is, which is at 52. So if you're talking in the context of risk, it's been adjusted in the guidance. If you're talking about it strictly in a comparative basis or relative basis of do we expect or have we accounted for more unplanned breakdowns at Pinto Valley than our brand new plant at Mente Verde, yes, but that is reflected also in guidance. So we've given our best foot forward of what is achievable and what we believe is reliable out of the assets that they sit today with the aim to improve on them year over year.

Thanks, Keshav. That's great, Kela. Much appreciated.

There are no further questions at this time. I would like to turn the call over to John McKenzie for closing remarks. Sir, please go ahead.

Thank you. So we look forward to updating you in early May with our Q1 results. Until then, stay safe and feel free to reach out to Daniel, Michael, or Claire if you have further questions.

Thank you for your continued support and have a good day. This concludes today's conference call. Thank you very much for your participation. You may now disconnect.