Capstone Copper Corp.

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Good afternoon and welcome to Capstone Copper's Q1 2026 Results Conference Call. At this time, all lines are in a 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 the star zero for the operator. This call is being recorded on Wednesday, April 29, 2026. I would now like to turn the call over to Daniel Sampiri. Please go ahead.

Thank you, Operator, and thank you, everyone, for joining us today to discuss our first quarter results. Please note that the news release and regulatory filings 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 President and CEO, Cashel Maher, our SVP and Chief Operating Officer, Jim Whitaker, and our SVP and Chief Financial Officer, Raman Randhawa. During the Q&A session at the end of the call, we will also be joined by our Head of Technical Services, Peter M. Ellingson, and our SPP Risk ESG and our General Counsel, Wendy King. 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, please see Capstone's most recent filings, which are available on our website at www.capstonecopper.com. And finally, I'll just note that all amounts we will discuss today are in U.S. dollars, unless otherwise specified. It is now my pleasure to turn the call over to our President and CEO, Cashel Mark.

Thank you, Daniel. And hello to all of you dialing in from the Americas, Europe, Australia, and around the globe. Today, we are pleased to present our first quarter, 2026, results and achievements. Over the last three years, we have enhanced our portfolio of assets, delivering a 37% increase in production, and matured our processes and systems to align with the scale of company we are today. 2026 marks a year of operational stability and cash generation. We are well positioned in the current environment of heightened geopolitical volatility. To date, given our scale, operating locations, and robust supply chain, we have not experienced any operational impacts from the conflict in the Middle East. We continue to see strong copper demand in the current market and believe the fundamentals support continued strength over the medium to long term. At the same time, cost pressures principally related to diesel and sulfuric acid, reinforce the importance and continued focus on cost discipline, operational excellence, and maintaining a strong financial position. Through the remainder of 2026, we are looking forward to delivering reliable results from our portfolio of assets while advancing our organic growth opportunities. starting on slide five. In Q1, our operations delivered consolidated copper production of 48,000 tonnies at a consolidated C1 cash cost of $2.66 per pound. Our 2026 guidance is unchanged, including 200 to 230,000 tonnies of copper at cash costs between $2.45 and $2.75 per pound. Solid production combined with exceptionally strong commodity prices drove record EBITDA for the sixth consecutive quarter. Mento Verde quickly returned to design throughput rates following the strike action in January and is again performing reliably and consistently. We were particularly pleased to see the sulfide plant achieve record recoveries in Q1. Reflecting on the strength of our diversified asset base and the improvements we've made across our mine sites, the overall impact of the strike on quarterly performance was approximately 5,000 tonnes of copper, which was incorporated into our annual guidance. The Mento Verde Optimized Project remains on budget and on schedule. Our team is eager to demonstrate the full potential of Mento Verde by delivering meaningful incremental production at a low capital intensity. Mantos Blancos had another strong quarter as we continued to progress the next phase of growth with the Mantos Blancos Phase 2 project. We plan to submit an EIA permit application for the low capital intensity brownfield expansion during Q2, followed by a pre-feasibility study during Q3. At Pinto Valley, we experienced unplanned maintenance during the quarter, which was partially offset by higher grades. As part of our broader asset management framework, we are further refining our maintenance processes, and we are already seeing the benefits from improved tracking of performance metrics. In line with our district growth strategy, we remain focused on unlocking the significant value of Pinto Valley and the surrounding area. Cozumel delivered another quarter of consistently strong performance in Q1, achieving record low cash costs supported by higher byproduct credits. Our exploration team continued to make strong progress on the various programs underway this year, including reaching 94% completion on the original two-year drill campaign at Manto Verde. On the corporate front, we continued to strengthen our financial position by reducing net debt by more than $40 million compared with the year-end 2025. Our balance sheet is in excellent shape, and we will continue to capitalize on strong commodity prices with further deleveraging through internally generated cash flows. This provides a strong platform to navigate any macroeconomic volatility and advance our growth strategy. And with that, I'll pass it to Raman for our financial results.

Thank you, Kashil. We are now on slide six. In Q1, we recorded solid copper production, 48,000 tons, despite the 35-day strike action at Manta Verde. LME copper prices averaged $5.83 per pound in the quarter, up 16% compared to $5.03 per pound in Q4. and we realized a higher copper price of 592 per pound. LME copper prices are currently around the same level. C1 cash cost of 266 per pound increased slightly year over year, driven primarily by the denominator impact of lower production, partly offset by strong byproduct prices. We realized strong gross margins of $3.26 per pound, or 55% in Q1, which is relatively consistent with Q4. Record adjusted EBITDA of 329 million increased 83% year over year. And lastly, we reported another record adjusted net income attributable to shareholders of 95 million or 12 cents per share in Q1. A solid Q1 forms a strong foundation for the rest of 2026 as we continue to deliver results and take advantage of higher commodity prices. Moving on to slide seven. In Q4, 2024, we had just achieved nameplate throughput rates and delivered the first two shipments of copper concentrate following construction completion of the Manto Verde development project. This slide underpins our ability to build new mines. Since then, we've delivered consistent quarter over quarter improvements to both adjusted EBITDA and EBITDA margins. This is now the sixth quarter in a row we've generated record EBITDA as we continue to realize the benefits of our robust foundation of assets amidst a strengthening copper price environment. Next, as highlighted on slide eight, we finished Q1 with a consolidated net debt of $738 million, which represents a reduction of $43 million from the prior quarter. As you can see in the chart on the slide, the decrease was primarily attributable to strong operating cash flows supported by high copper prices or commodity prices. Included in operating cash flows this quarter was a negative impact of a $30 million repayment on the early deposit under our gold stream with Wheaton Precious Metals. This repayment eliminates the associated early deposit delay payments and a liability on our balance sheet of $22 million. Financially, it made more sense to repay the $30 million compared to ongoing more expensive delay payments and spot gold ounces.

Now the full 290 remains available to fund the construction of San Luis Domingo.

Turning to slide nine, the decrease in absolute net debt drove a further reduction in our net leverage for the net debt to EBITDA ratio of 0.7X at the end of Q1. In line with our commitment to strengthening the balance sheet between growth periods, this ratio has come down significantly from a peak of 3.6X at the end of 2023 following the construction of MVDP. And we've always said we want to be below 1X for a Samuel DeVingo FID, and we have achieved this criteria. Our available liquidity as at March 31st, 2026 was greater than a billion, including 394 million of cash and cash equivalents, and 652 million of undrawn amounts on our corporate RCS. Available liquidity has been maintained at over a billion since the beginning of 2025, which ensures we're well positioned to move into the next phase of growth. The chart on the right-hand side of the page illustrates our EBITDA sensitivity at various copper prices based on 2026 expectations, as well as upside related to MVO and San Domingo run rate production. The midpoint of our 2026 guidance represents EBITDA in the range of 1.3 to 1.7, $1.3 to $1.7 billion at copper prices between $5.50 to $6.50 per pound. And as we look into next year, with MVO completed and higher grades at Mantos Blancos, we expect to see a significant increase in EBITDA approaching $1.8 to $2.3 billion, or close to a 40% growth year over year. This level of EBITDA generation will enable us to continue to generate cash during the construction of San Domingo, further enhancing our financial position and providing a strong platform to deliver peer leading growth. Next onto slide 10, we have profiled some of the sensitivities to input cost pressures amidst the ongoing conflict in the Middle East. While the situation continues to evolve to date, our assets continue to operate normally, benefiting from operating locations and robust supply chains. We continue to monitor the pressure from higher diesel and sulfuric acid prices on cost. However, we've seen offsetting benefits from strong copper and byproduct prices. We expect to consume approximately 134 million liters of diesel for the remainder of 2026. Our diesel supply is purchased domestically and in Chile imported primarily from the Gulf Coast. We estimate that each 10% move in diesel prices impacts direct costs by $13 million. from April onwards, comprising of $9 million or $0.02 per pound on consolidated cash costs, or $4 million related to cap stripping. We had used $60 a barrel as our proxy for guidance. We're continuing to evaluate and monitor indirect oil-linked impacts to understand how best to mitigate inflationary pressures, as well as the protections we have within our supply contracts. Sulfuric acid is used to is used for our copper cathode production, which makes up approximately 15% of our total production. We view the cathodes as an incremental business unit, with a majority of our cash flow generated by the sulfides. Our cathode production today continues to generate cash, and we have some fixed price protections. Largely, the acid we consume in Q1 and Q2 was fixed at a price of roughly $185 per ton, or low-consuming Q2. We evaluate the cost on an incremental basis, and if we identify that capital business starts to lose cash, we can either wind down or reduce production levels and continue the sulfides. We expect to consume approximately 590,000 tons of sulfuric acid for the remainder of 2026, of which 55% is fixed at a price of $185 per ton, and the remaining 45% is exposed to spot pricing. with a variable price supply weighted to the second half of 2026. We have estimated that each 10% move in sulfuric acid prices impacts direct costs by approximately 5 million, one cent per pound from April onwards. And we have confidence in the security of supply for the rest of 2026 with approximately 70% currently contracted from Chile, Peru, Asia, excluding China. On a consolidated company-wide basis, year-to-date, we have seen higher byproduct prices compared to our guidance assumptions, which help offset some of the upward cost pressure. A 10% increase in byproduct prices would reduce our C1 by about $14 million, or $0.03 per pound. As we navigate through this period of macroeconomic uncertainty, we are focused on protecting margins to ensure that benefits of stronger commodity prices flow through to the bottom line.

With that, I'll hand it over to Jim for the ops.

Thanks, Raman. We are now on slide 12.

We will start with our amounts of early operation. For Q1, total production yielded 19,018 tons of copper at combined C1 cash costs of $2.59 per payable pound. Plant throughput averaged 27.7 thousand tons per day for the quarter, and above our design capacity in February and March. Copper grades averaged 0.61% in Q1, driven by the processing of lower-grade stockpiles. We were very pleased to see recoveries achieve a record 90.3% during the quarter. Now on slide 13, we are excited to highlight the progress made on Mount Avera the Optimized. In the first quarter, we began taking deliveries of key equipment, in addition to starting construction at the concentrator plant. In Q2, we will receive the remaining equipment, materials and supplies on site, while executing construction at the concentrator plant, the tailing storage facility and the desalinization plant. Our expectations around capital costs and timelines are unchanged, with majority of project tie-in scheduled to be completed during an extended 15-day maintenance period in Q3, followed by a ramp-up period in Q4, 2026. The expanded sulfide throughput capacity of approximately 45,000 ore tons per day is expected to be sustained starting in early 2027. We are eager to imminently deliver production growth at our flagship asset through MVO, which adds 20,000 tons per annum of copper production at a low capital intensity of approximately $9,000 per ton. Turning to slide 14. Mantos Blancos continues to perform well to begin 2026. Total sulfide and cathode production yielded 12,301 tons of copper at C1 cash costs of $3.02 per payable town. Throughput averaged 19.7,000 tons per day in Q1, with the site completing four days of planned maintenance during the period. Sulfide copper grades of 0.73% for Q1 were in line with mine sequence expectations. We continue to expect higher copper grades to return in 2027. As Matzos-Blankos continues to deliver stabilized results, we are preparing for the next phase of growth as we work towards submitting an EIA permit application in Q2 for our Phase 2, followed by the release of a pre-feasibility study expected in Q3. Moving north, we will now discuss Pinto Valley on slide 15. which produced 10,711 tons of copper at C1 cash costs of $3.46 per payable pound during Q1. This is the third quarter in a row of improved cash costs at Pinto Valley. In Q1, we experienced unplanned maintenance at the filter plant and the concentrated storage facilities. we are prioritizing increasing operational capacity through our people strategy and asset management framework. On the human resources front, we made progress this quarter filling a number of key roles at site, including the site maintenance manager, the tailings and water manager, and the health, safety, and environmental manager. During Q1, we also progressed improvements to our operations management systems including better tracking of KPIs around maintenance schedule compliance and operational targets. We are planning for an approximately 10-day maintenance shutdown in Q3 to rebuild the primary customer mainframe and enhance the filter plant and concentrate storage areas. In addition to near-term reliability enhancement initiatives currently underway, this is expected to reduce unplanned mill maintenance issues and support more stable plant operations. It has been a hot start to the year in Arizona, and we continue to monitor our water balance, including performing water simulations that incorporate the past 30 years of precipitation data. At this stage, we do not anticipate production-related impacts from drought conditions like in 2025. COSMIN delivered another quarter of reliable, consistent results in Q1, as shown on slide 16. The operation produced 5,930 tons of copper at record low C1 cash cost of 71 cents per payable pound, benefiting from higher silver byproducts, which continued to represent a tailwind for the rest of 2026. Strong operating margins drove record quarterly EBITDA of $65 million for Q1. Throughout this year, we will continue to conduct exploration to evaluate the potential for mine life extensions or improvements to the production profile.

And with that, I'd like to pass it back to Cashel. Thanks, Jim. Turning now to slide 18.

During Q1, we continued to progress our exploration programs, building on the strong foundation we established in 2025. Our initial two-year exploration program at Manto Verde has reached a completion rate of 94%, with five drill rigs currently operating on site. We plan on sharing more results from this program later this year. At Santa Domingo, four drill rigs are on site with the goal of delineating oxide mineralization, while also testing potential sulfide extensions. We haven't started drilling at Sierra Norte. The team has been busy progressing the re-assay program, geochemical sampling, and geophysical surveying in preparation for the 19,000-meter drill program planned later this year. Overall, in 2026, we are focusing our exploration efforts on advancing upside opportunities for incremental copper production in the Mantuberde-Santo Domingo District, especially those eligible for contingent consideration under our joint venture arrangement. Our team is eager to unlock the significant value of this region through exploration in pursuit of our strategy of building a world-class long-life copper district in Chile. Moving to slide 19, at Santo Domingo, we continue to progress the remaining work streams required before making a sanctioning decision. expected in Q4 of this year. This includes evaluating the optimal financing strategy in collaboration with our joint venture partner. Based on the work performed to date, we feel confident that we will be able to achieve attractive terms in the current environment. We also continue to progress detailed engineering to approximately 60% completion. as well as advancing upside opportunities and potential infrastructure opportunities. We will continue to strengthen our financial position, particularly during this period of strong commodity prices, by deleveraging through internally generated cash flows and reducing our net debt leverage further prior to a sanctioning decision. In addition to advancing Santo Domingo, On slide 20, we have highlighted our priorities for execution during 2026, consistent with what we communicated at the start of the year. Each of these represent an opportunity to deliver value. As Jim discussed, the team at Mental Verde is hard at work upgrading the plant to sustain 45,000 tennies per day, funded through internally generated cash flow. We also made good progress towards submitting the Mantos Blancos Phase 2 EIA permit and releasing the study. The brownfield expansions ongoing in Chile are great examples of the type of growth we'd like to execute as soon as possible. Finally, on slide 21, you can see our clear path to transformational growth, which is well aligned with the copper outlook supported by fundamental demand drivers and emerging trends. This reinforces the importance of continuing to accelerate our growth to deliver value. Beyond our permitted growth of Mento Verde Optimize and Santo Domingo stands a strong pipeline of low-risk, high-return projects. Our organic growth opportunities are unique as they are located in the same top-tier mining jurisdictions as our existing operations, allowing us to leverage real experience to mitigate project execution risk. This includes a brownfields expansion opportunity at Mentos Blancos, which we are working to move into the permitted category, optionality to unlock incremental copper production in the MVSD district, and the potential doubling of throughput at Manto Verde. At Capstone, we are proud to have created a peer-leading pipeline supported by a resilient, diversified foundation of operating bonds. As we progress through 2026, We remain focused on delivering safe and stable results towards our unchanged annual guidance. And we are committed to strengthening our balance sheet and responsibly advancing our organic growth projects. We are well positioned to become a leading long life, low cost copper producer, playing an important role in providing the copper the world needs now and into the future.

And with that, we are now ready to take questions.

Thank you.

And ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press the star followed by the number one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To draw your question, please press the star followed by the number two.

One moment, please, for your first question. Your first question comes from the line of Aris Waukadao with Scotiabank.

Please go ahead.

Hi, good evening. I was hoping to get some more colour about the copper cathodes, just given the sulfur price environment. Given that the cathode operations are already significantly high on the cost curve, do you have full flexibility to pause that, say, if these high acid pricing continues into 27 and 28? And are there any potential impacts to the sulfide mining if you pause on the oxide?

Yeah, thanks, Horace, for the question. It's certainly something that's got a lot of our attention now. Just to clarify, we've been assured by our providers that really the supply of acid isn't an issue. Really what we're exposed to is the cost. And as you sort of pointed out, You know, the cost of acid is pushing up against what one could perceive as a pretty high cost when you take all the phos in. The purposes of the integrated operations, certainly at Mantaverde, the stripping of the oxide material is part of the normal stripping required to expose the sulfide for the sulfide process plant. One way or the other, we're bearing some of that under a fixed cost. So that's part of the consideration we're looking at. This oxide material is a high consumer of acid. With that being said, the first half of this year, more or less, as Raman alluded to in his commentary, is that the first six months were sort of fixed in our acid costs, more or less, and we become more exposed to the spot acid near the end of the year. However, there is buoyancy, and that's in the copper price. And so while the asset price has gone up, we're maintaining some margin of profitability against the copper price. So it's not only the asset price that we're focused on. It's also the realized spot price that we're selling our cathode for and the premium we get for it. I don't know, Raman, did you want to add some more to?

Yeah, some of the COMEX we've sold forward into contracts at a premium. And there was the ARB earlier, which has kind of shrunk away. But also when you're looking at C1 or it's just on the cathode, look higher. But we take kind of a full costing method. So when we're in a mixed pit with sulfide, you work your way through the oxide to the sulfide, we've allocated the mining cost between the two tonnages coming out. When we look at it from a pause or moment, we do an incremental analysis, and then you say, basically, you would incur the mining cost anyways when you bring it up to the top of the pit. What size did we take it to the leach, or should we take it to the waste dump? And if you do that at both sites, it probably knocks off about 60 to 70 cents a pound off the numbers like we have in our MD&A. So that's quite a bit of a difference too when you're looking at the break-even cost of the cathodes.

Okay. And can I assume you're fully exposed to market prices for acid starting in 27? Correct. Okay. And just finally, can you give us a sense of where spot acid pricing is right now in Chile?

Yeah, it's... It was about 400. It's bumped up to about 420, 430 right now, today. As of today.

Okay, so it's continued to rise.

Yeah. Okay. Thank you very much. Thanks.

And the next question comes from the line, Ralph Property with Stifel. Please go ahead.

Thanks, everyone, and thanks for the added color on the cathodes.

Jim and Cashel, Pencil Valley, you said hot start, you know, having to manage the water balance. What's the strategy around securing extra water storage? You know, are you in rationing mode? Is that playing into the strategy? And how much of a buffer is there on the guidance with respect to what we saw in Q1 and the current drought conditions?

Yeah, I'll start, and then Jim could add some detail. The, you know, What I would say is it's requisite on anyone operating in the American Southwest that they ration and they value water, either their sources or their return water. And so we've been on a continuous improvement process of improving our water return from our tailings dam, and then so too on the security of the storage and poundment areas we have. We have a particular advantage this year during the drought season and next year during the drought season, which will give us runway to be able to address some of the infrastructure issues that require some time and remedy, maintenance time, to be able to address some losses of water in those systems. And that's that we're doing a pushback in the open pit at Pinto Valley. That pushback is what we call our northwest wall. It's where we've stopped deepening the mine for the moment, and that will last over the next 18 months or so, where we push back the upper northwest wall and we're getting our ore from it. So that's allowing us to use the pit itself as a storage of water. And compared to normal, we can store almost 50% more water there. When we sort of do the back calculation that was like what Jim had in his narrative during the phone call, that allows us to sort of what I call drought-proof ourselves for a similar situation as last year. The last year we were impacted quite severely by the drought because our storage facilities didn't have the amount of water we're currently storing now. What we would say is the month of March was probably warmer than typical. However, April is actually cooler than normal, we were told today by our GM. And so far the forecast, I'm not sure how accurate the forecasts are, but it's looking like May 2 will be a little cooler on the macro forecast going ahead. So with that, it gives us a lot more confidence. We'll have the amount of water to mitigate the loss of production we experienced last year and therefore have that uptime at our plant and not the downtime due to lack of water. Now, Jim, did you want to add any more to that?

Yeah, Cashel, thanks. Just in addition to that, a couple of comments, as I mentioned in the presentation, a key thing is leadership. We have been going through some changes. We have a specific new manager position in the tailings and water area, which we didn't have before, which is key, and also supported by a new maintenance manager, which will help so much in having the security that the assets are going to work as we need them to, and that operations has the uptime to do what they need to do with them. Cashflow did mention related to the TSF construction, sand production is very important. As we increase sand production, we get better water return from the tailings area. As we mentioned, I think it was in the fourth quarter, we've been making continuous investments in our water wells. We've been looking for more water wells with pilot holes and also we've invested in the connection piping to make sure that we're getting that water to the plant in a related area. Apart from the massive drought situation, which is kind of hard to deal with, I think we've really done a lot of work to be able to withstand the variability of weather. But as I would always mention in Pinto Valley, our real focus is on uptime in the process plant. For those of you who have been following Capstone for a few years, There was a lot of work going on in the milling section for a long time and the milling motors and then we slowly stepped to the extremities. Right now, some of our downtime in Q1 was caused around the primary crusher and it was also caused at the back end of the concentrate management area and the filter area. These are two areas that we have planned for major shutdowns, but in that path to get the parts and get the materials that are required to have a rebuild in those two areas, We may have some downtime. We're not planning for it, but it's really our focus on the maintainability of those circuits to get us to the third quarter and to have a successful year in Pinto Valley.

Great, great. I appreciate that, caller. Thanks. That's all the questions I had.

Thank you. And the next question comes from the line of Daniel Morgan with Byron Joey. Please go ahead. Daniel, you might be on mute.

Sorry, I was on mute. Apologies. Just a quick question on how has April been tracking so far across the various operations? I mean, we're basically done with April.

Yeah. Hi, and certainly thanks, yeah, for the question. It's been going quite well, I would say. You know, Cozumel steady as usual, Mantos Blancos, you know, good throughputs. We did have a scheduled shutdown at Mantoverde during April. And so that was part and parcel of the guidance we put out. However, we've been getting extremely good throughput irrespective of that. You know, while the nameplate capacity and what we budgeted was 32,000 tons a day, They were up closer sort of to like 38,000 times a day as a realization. So that's a real testament to the team there on how they're doing at that metallurgical complex. And I'll sort of just plug them also on, you know, their consistency on achieving recoveries also. You know, due to the strike and some various blending, we had little lower grades at Manto Verde, but they were able to offset and achieve a great recovery during the first quarter and maintain that through April. We're doing a little better at Pinto Valley than what we did in the first quarter. And that's now where we're sort of approaching. We've improved on the first quarter performance and we're edging our way up to where we think we should be. And we're sort of approaching around 44,000 tons a day for April there. So everything is moving and trending in the right direction.

Thank you, Kashil. Just on the diesel and acid, I mean, I know we've talked about the cost stuff, but just more the assurance on getting it. And I guess I'm a little bit more worried about sulfuric acid. Can you touch on how your team is looking through your supply chain, what assurances you have that you can get the acid you need? And then maybe you could also touch on perspectives on the industry and what industry impacts we might see ahead on supply.

Yeah, it's definitely a bifurcated sort of issue. There's obviously, you know, Orr's question focused on the cost issue. You know, here in the Americas, we're just on different supply and logistics routes than what Australia or Asia might be in, or Africa to that measure. Where we source it from are the local smelters in Peru and Chile. We do have some offshore supply. Between traders and suppliers, we probably have a list of eight different ones that supply us acid to our operations. And of all of them, we were only exposed to this year about 10% of our asset requirements coming from China. And we've been told by those suppliers or traders that we're going to maybe source that small amount that they've been successful in sourcing it from elsewhere. So we are exposed to the cost, but we've got very strong confidence in our suppliers and traders that we'll be able to source to our operations through the balance of this year, the assets. So really, I think it's just a different narrative in the Americas than it might be sort of in Africa or Asia or Australasia to that matter. So it's a different sort of paradigm. So again, you know, our risk is more on exposure to cost than supply. as we have these conversations with those suppliers and traders.

Yeah, thank you. Very clear. And just on the question earlier, I think at the top of the call, which was if you do discretionarily decide to reduce production from your cathodes, you do have surplus capacity to in your SXEW circuits to like just hammer the production so could you just stockpile the oxide ore and then you know at a future date when the acid supply comes down could you you know increase production discretionarily yeah there's I mean there are many levers and you know so um there is a certain proportion and we've done it in the past um we've had uh

Since my four years' experience here at Capstone Copper, we've had occasions where some of the long-haul, low-grade oxide or high-acid-consuming oxide, we've decreased in the past some of the delivery to heap or dump, specifically at Manta Verde. So we do have, within the mine plan, opportunistic options in the future to be able to evaluate those, and our teams are evaluating those. We don't see the necessity now. As I sort of mentioned to Oris, there is that ratio of the price of copper and the premium to the price of copper we get relative to the rise. And if we still see a margin, then it's worthwhile because some of those costs would need to be borne irrespective in the stripping profile, as Raman was explaining, to access the sulfide that we require. There's the technological advances that we have. There are several. Part of our MVO is a biox leaching, which will reduce some of the dependency on acid. But even more exciting is, you know, in the next couple of years, I know it's not for this year, but we've spoken in the past about our pyrite agglomeration and the substitution that pyrite has in our active heap leach to offset some of the requirements of acid. And that'll be to the tune of about a third or 30% offset of the sulfuric acid requirements to leach, to provide the same leach kinetics to the oxide mineral. So that's an exciting one. You know, that's, you know, sometimes we talk about it as we are now as a sort of a sulfur abatement program, which could present, you know, in the order of 30% less required acid. But the obvious byproduct credit that we get provided with that also is our cobalt ambitions to be able to produce at Amento Verde some 1,100 tons of cobalt a year, and in the future, close to 4,000 tons of cobalt out of Santa Domingo. So, That's another project that we're quickly looking at trying to bring forward to be able to offset some of these asset prices.

Thank you, Kashil and Tim, for your perspectives. Appreciate it.

And the next question comes from the line of Fahad Tariq with Jefferies. Please go ahead.

Hi, thanks for taking my question. I just want to ask about Cozumel. There was a media article talking about potentially divesting that asset and Cognizant, there's only so much you can share, but just thoughts around the asset and hypothetically, if it were sold, what would be the use of proceeds? Thanks.

Yeah, we've certainly seen those articles, too. Just as a sort of blanket statement, those are speculation by the market and the process itself. we've always sort of stated that, um, you know, um, we're a holder of a portfolio and rationalizing, evaluating our portfolio, whether it's our, you know, as we were talking about just now, what can we do with their oxide operations at Mente Verde, Mentos Blancos, you know, um, there's always speculation that the, uh, Cozumel may or may not be an opportunity for, um, um, sale in the future. I can say what it is is, you know, Cozumel is our steadiest producer. It always creates a margin, and those margins are terrific, especially at these high metal prices. So I'd have to say that, you know, in the past we've had unsolicited bids. You know, we're always evaluating our portfolio. Strategically, we're always considering options. If somebody came forward and knocked our socks off, we'd have to consider it. But right now, we're so happy with the way Cozumel's performing. There are some options for mine expansion and mine life expansion. So it remains a critical piece of our cash flows. If like you said, under the consideration that it was for sale, you know, obviously it would just go to bolstering our balance sheet for the delivery of our growth ambitions in the future. You know, potentially we could raise less debt and deliver some growth ambition like Santa Domingo is probably the best use of that capital in our portfolio if it came available.

Okay, great. And then maybe just switching gears to Santo Domingo, one of the criteria for FID was observing macro trends. Is there anything that's happened so far this year, whether it's the copper price volatility, sulfuric acid, which I guess maybe doesn't apply to Santo Domingo, but anything else you're seeing that maybe changes your views on Santo Domingo going forward or not yet?

Look, We're always sort of watching those macro things. So just to begin with, what I'll say is it doesn't change the actions we need to take place. We sort of said in the narrative here that it's likely a Q4 decision. And that's because we have a number of tasks we need to complete to de-risk the sanctioning and FID of Santa Domingo. One is progress and mature the engineering of the project. Another is to determine what infrastructure is in or out and under what scheme are we building it, whether it's a design-build-operate, a boot contract, or utilizing existing infrastructure that is within the district. All of those are pretty big swings at what the ultimate CapEx requirement for raising to deliver something like Santa Domingo. So... You know, it doesn't change what we're doing to get ready for Q4. I think what you're asking me is if we were in Q4 now or under the current conditions, what would we do? What I would sort of say is when you run the sensitivities and the spider diagrams on a project like Santa Domingo, the steepest curve is the copper price, and the copper price is very strong, and the long term of the copper price is very strong. There is a strong impetus for us to continue with the activities we have such that we're ready by the fourth quarter to bring to our board a financing decision.

Thank you very much.

And the next question comes from the line of Craig Hutchison with TD Cowen. Please go ahead.

Hi, guys. Thanks for taking my question. Just on Pinto Valley, Good. In your remarks, you mentioned throughput's back up to around 44,000 tons a day. Curious, once you get through the maintenance in Q3, what are you trying to exit the year at on throughput? And then just the grades were a bit higher than I expected in Q1. Are those kind of grades around the 0.36 level 80% recoveries, are those sort of sustainable in Q2 here?

Look, you know,

That Northwest wall, we've been experiencing a little higher grade than we thought. So I think it's probably early yet to say that we'll sustain those grades. A lot has to do with, you know, dilution control and management. I think they're a little high, to be honest with you. They're probably going to come down a little, those grades. So, yeah, I think It wasn't opportunistic. It was more, I guess, fortunate that we saw those during this period of time. As per the ambition, look, when I look at the instantaneous capacity of the plant, it's somewhere in the order of 62,000 tons a day. The reality is a plant of that vintage what you can expect is sort of a 90% utilization rate. And that's a factor of a combination of planned and unplanned maintenance. I think with a plant of that vintage, you always have to have that component of unplanned. So at 90% utilization, that would mean, you know, the best you could sustain production over a period of time would be about 56,000 tons a day. I think that's a little ambitious to think we can get there by the end of the year based on the challenges we've had in the past. But I can tell you the team is very focused on that sort of target of around 55,000 tons a day. I think, though, if you handicapped it and made it more reasonable, if we achieve sort of 52,000 to 53,000 tons a day coming out of the last quarter, that would be a strong achievement.

Okay, great. Thank you. And just on Monteverde, good to see the sequential uptick in recovery there. Do you feel like you've really turned a corner there, the 91% you guys reported there in March? Maybe just keep talking, what are those improvements have been? Is it more how you guys have managed to pit, or is it more you've dialed in the reagents and you feel like you've kind of sustained those type of levels in the low 90s? Thanks.

Yeah, Craig, I'll let Jim answer that because his team's pretty close to it.

Yeah, hi, that's a great question. You know, I don't think we're going to be straying too far off where we thought the midpoint of the guidance would be. If you want to think about the ranges of where the birdie should be from a planning perspective, we have been able to, over time, take advantage of more uptime and stability in the plant and it just makes it a little bit easier to be able to tweak and look for recovers that we need to. And also in the mine, we are getting to the point where you've been following us for a while when we were having some difficulties. I think it was the beginning of the 2025, we were running through a mixed ore zone Now we're at the base of the mine, we're in a very good part of the cycle, we have a lot of clean mineralization, that also helps a bit as well. So these things as well, they come in cycles. This is something we really have to get a hold of on our five-year planning to make sure that we're not getting surprised with that altered material or oxidized material as we did at the beginning of 2025. But really, we're in a good spot right now for the recovery, so it's just the focus on the throughput and making sure that we're clearly targeted at our full-year guidance with the ongoing work that we have at the same time in the MBO project.

Great. Thanks, guys.

And the next question comes from the line of Anita Soni with CADC World Markets. Please go ahead.

Hi. I was just wondering if you could provide a little bit more color on the process of getting a partner for the port infrastructure at Santo Domingo.

Yeah, sure. I'd love to.

Yeah, and with that, you know, that's the real swing factor in this project. We published in 2010 the fall of 2024, our technical report that was based on $20, $23. So our base case always assumed a boot contract on the desal plant. So that capital was never part of the original estimate. And that total capital outlined a project about $2.3 billion and self-perform and build a port. So in that particular study, the port was about $300 million. We expect escalation, obviously, since 2023. And one of the big components that we can affect is either use an existing port in the region. And there are existing port owners in the region, but the most proximal one is owned by a Chilean iron ore company. What I can say is... There's dual interest in utilizing port capacity, any of the ports, to increase product through it, to increase the efficiencies of those ports. So we're inspecting that. That's been an opportunity that has been available to us. So what I can say is we're continually negotiating the probable access to those existing ports within the region for the copper concentrate out of Santa Domingo and the iron concentrate out of Santa Domingo. Balanced with that, we need a base case that we can rely on, which is either self-perform on a port or much like what we considered with the desal plant, a boot contract on it, and there are a number of parties that are interested in bidding on the opportunity to either build and own a desal plant on our concession and or a port on our concession with the aim to offer the services and the capacity in those to other future users of the port and or the desal plant. So there are a number of iterations, there are probably four or five different iterations that are advanced negotiating stages. And really, in the next couple months, we hope to be in a position to sort of wrap up what we're going ahead as our preferred negotiated alternative is.

Thanks. My next question was on timeline, but thanks. In the next couple of months, we should expect to hear something.

Yeah, that's right.

Thank you. That's it for my questions.

Thank you. And the next question comes from the line of Emerson Vieira with Goldman Sachs. Please go ahead.

Hello, everyone. Thanks for the opportunity. So just a quick follow-up here on Santo Domingo. As a company advanced in the data engineering program, you guys are now at 60% complete. What are your thoughts on the updated CapEx estimates? What can you share with us in terms of risk or labor, I mean, anything could be helpful here.

Thank you.

Yeah, like, I mean, you know, we're midstream. I've done a number of these major projects and capex estimations. And as you mature the engineering, which the 60% is actually targeted for September of this year, that's when you start driving down the certainty on the scope of elements of the work breakdown structure with respect to the contingency and the quotation. So we receive quotes every day, and we're updating every day what the CAPEX requirement is. What I would say is what we're not surprised by is that Our original estimate of $2.3 billion was in 2023 dollars and there is relative escalation per annum on that in sort of low single digits and compounded that was probably somewhere between 10% and 15% escalation on the design and scope of what that project was, recognizing that the scope of that project was at a feasibility level. And there are certain guidelines around what contingency is considered around a feasibility level. So our best path forward here is to continue with the detailed engineering, get the detailed vendor quotes in such that we narrow down the contingency and add up what the total capex is. And for saying what the total capex would be, as per the last question around the offsite infrastructure, really is the biggest swing around this. If we look at a port that could cost between $300 or $400 million, if we make a deal on a current port, well, then that would reduce the capex by that amount requirement. Obviously, the OPEX comes in to offset a little higher than owning your own port. So I think it's premature right now to be able to say exactly what that CapEx number is, but certainly we see that the very robust returns, irrespective of the strategy, we'll choose with Santa Domingo Copper Project coming online.

All right. Thank you. Very clear.

Thank you. The next question comes from the line of Ben Wood with UBS. Please go ahead.

Good morning, team.

Thanks for the call this morning. I've just got a quick one on MBO, please. So in the release, you've said that most of the MBO tie-ins are expected to be completed in the third quarter during the plan shut. I just wanted a little bit more colour around the risk, whether this presents much risk for the remaining activities in 4Q, and whether sort of global supply chains at the moment are going to perhaps place these deadlines at further risk.

So just wanted to talk about that, if you could, please. Yeah, thanks.

What we're doing in Q1 and Q2 is site prep, pouring cement, placing rebar, e-rooms, pipelines, everything. This augmentation of the capacity of the Monteverde process plant is pretty straightforward. It's about larger diameter pipes, larger pumps, and the required energy to manage those, so transformers and e-rooms to be delivered to be able to distribute that. Yeah, that tie-in is about a 15-day shutdown in late August of this year. Right now, we're on time on schedule. I happened to be at the site last week or two weeks ago, I should say, and much of the material is being delivered and being received. We don't see, again, much like the asset, and even more so with the delivery of the componentry required, we have validation from those suppliers that we're on time with deliveries, we're on time with manufacturing, we're on time with fat testing of e-rooms, etc., So we don't anticipate any delays at this stage. The real activities happen in Q2 and Q3, where we increase the number of workers on site to be able to execute it. But really, it's not a major risk to any of the componentry that would affect what our Q4 ambitions are for mental bird eggs due to delays on goods being received. We just don't see that in the equation as of yet.

Thanks, Kashil. Thanks for the call.

Thank you. And the last question comes from the line of Stefan Miwanyu with ATB Cornmark. Please go ahead.

Yeah, thanks for taking my call. Maybe just following up on MVO. want to put the cart ahead of the horse here given the progress you're making there but just wondering is there any update or or just i guess color as to looking beyond mvo and that potential phase two expansion at manto verde if there's anything specifically going on on that front right now or is it kind of all hands on deck with regards to mbo at the moment yes stephen thanks the um look you know this is why

the four drills that are turning in MDOs, that's what they're focused on is, one, upgrading the billion tons of resource that currently exists there, delineating it such that we can move it either into indicated or measured. And, you know, we've actually been speaking with Peter quite recently about what can we do to either extend the mine life currently of Mentor Verde and provide more tailings room. So we're looking at those opportunities. But really, all this drilling is an aim to prove up the reserves such that we can validate that Mento Verde should merit an expansion. And what we envision is doubling the size of the plant to move it from 45,000 tons a day to 90,000 tons a day. So I think it's later this year or actually it's into next year, I think, is when we'll have those reserves ready. This time next year, I believe it is, where we see the merit of that mine planning and upgrading of that drilling we're currently doing and completing to see what that reserve or, well, I guess it's more or less that... infill drilling to upgrade the inferred resource and then therefore what does the future stripping look like. At the same time, we have a program underway on the remaining 10 kilometers of unexplored strike length where we're testing geochemical and coincident geophysical anomalies such that we can see are there other satellite deposits on our current concessions that we could bring into that mine plan also. I'd say it's a little early yet. We have an aim and an ambition, obviously, with the endowment of a billion tons of inferred resource to upgrade that, that we believe conceptually will be sufficient to merit the construction and doubling the size of the throughput at Manta Verde. But I'd say we have a considerable amount of drilling yet to do that. But like I said, we're looking forward to being able to disclose the drilling we have and show how that has upgraded our current inferred resource maybe to the indicated category in certain areas of the mine.

Time's ahead in terms of even more growth then. Thanks very much.

And we have no further questions at this time. I would like to turn it back to Kash Malar for closing remarks.

Thank you, operator.

We look forward to updating you in July with our Q2 results. Until then, stay safe. Feel free to reach out to Daniel, Michael, or Claire if you have any further questions. Thanks for your continued support, and have a good evening or a great day.

Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.