Ivanhoe Mines Ltd.

Good morning, ladies and gentlemen. Welcome to the Ivanhoe Mines Ltd. second quarter earnings call. At this time, you are in a listen-only mode. Following the presentation, we will conduct a question and answer period. This call is being recorded on Thursday, July 30th, 2026. I would now like to turn the call over to Tommy Horton, Vice President, Investor Relations and Corporate Development. Please go ahead.

Thank you, operator. Hello, everyone. As introduced, my name is Tommy Horton, and I am Vice President of Investor Relations and Corporate Development for Ivanhoe Mines. That is my pleasure to welcome you to our second quarter, 2026, from the school. This call will be recorded on today, Thursday, July 30th, 2026. On the line today from Ivanhoe Mines, we have Ivanhoe Mines founder and co-chairman, Robert Friedland. and Chief Executive Officer Marla Cloeter, Chief Operating Officer Tom van den Berg, Executive Vice President of Technical Services Simon Bottoms and Executive Vice President of Projects Steve Amos. We've finished today's event with a question and answer session. You can submit questions using the Q&A box on our webcast page as well as through the conference operator via the phone line. Given our time constraints, we will be unlikely to finish every question, but we will endeavour to follow up after the calls via our investor relations team. Before we begin, I'd like to remind everyone that today's event will contain forward-looking statements that will involve risks and uncertainties that could differ from actual results materially. Details for our forward-looking statements are contained on our news release on July 29th, as well as on CEDAR+, as well as on our website, www.ivanhomemines.com. It's now my pleasure to hand over to Ivan Home Mines founder and co-chairman, Robert Friedland, for his opening remarks. Robert, please go ahead.

Thank you to all of our shareholders and stakeholders. I'm speaking to you from a cloudy and relatively cool day in New York City. And I'd like to draw your attention to the slide on page three, as you see our phase one solar power plant generating 60 megawatts of power when it's fully running at the end of this quarter in a few weeks. Thank you for joining us. This is 60 megawatts, 24 hours a day. And in time, it will be twice as big as this vast field of solar arrays. And then it will be triple this size. So this is a very good paradigm for our sort of vision for Ivano Mines for the future. A company at the bottom of the world cost curve. and many more. and I rarely give investment advice. I've seen shares overvalued and undervalued. But if you pay close attention to this conference call, you'll see why it's obvious that it's intelligent to approach our shares from the long side. They're now oversold. There's nothing but upside going forward. There's an incredible series of opportunities as we develop the largest precious metals mine in the world, the richest zinc mine in the world, and yes, and the near future about the Western Forelands. So with that, I'm going to turn this over to a woman I love a lot. She's our Chief Executive Officer. She just celebrated her 20th anniversary with Ivano Mines. I've watched her grow enormously. As a manager, as a human being, as a visionary, as a politician, she's great. And if you want blunt advice about what to do with your wallet, I'm happy to talk about it later at the end of this call. But now over to Marna, our president and CEO. Marna?

Thank you, Robert, and thank you for the kind words. And just because he loves you doesn't mean he goes easy on you. But it's been a great 20 years working for you and learning from you. The picture in the background on this slide is quite close to my heart. Our mining crews at Kamoa actually constructed this box cut themselves. So we didn't get in a construction company to do this box cut development. We did it ourselves and they did it under budget and ahead of schedule. So definitely well performed and well executed box cut. I also would just like to introduce David van Heerden who's also on the call with us today. Tommy accidentally omitted him. I was a bit nervous because I thought maybe I was going to have to take you through our financials, but David is also with us on the call today and I'll introduce him shortly. We can go into the highlights, Tommy. In the second quarter, Kamau produced in excess of 64,000 tons of copper and our C1 cash cost in the first half of 2026 averaged $2.70 per pound. That was towards the lower end of guidance. Our margins were significantly supported by a 42 cent per pound smelter benefit. Kamaaka Kuila sold 120,000 tons of sulfuric acid at an average price of $465 per ton. And in July, our contracts up to $840 per ton were concluded. So if you look at the sulfuric acid prices, it more than doubled from the beginning of the year to the contracts we are now concluding in July. The production rates at Kamauka Kula are set to progressively increase towards the second half of the year. So we're really looking at an outstanding back half of the year after we've started implementing the turnaround strategy at Kamauka Kula. We have also tightened our guidance for 2026 to between 290,000 and 310,000 tons of copper produced. and during the quarter, the first tower of our 60 megawatt solar facility with battery backup, as Robert alluded to, was delivered and currently the ramp up is underway. The Pushy, the star of the show nowadays, had another great quarter, producing in excess of 70,000 tons at a cash cost of 90 cents per pound. And at Western Forelands, where the Makoko discovery continues to grow, we plan to announce an upgraded mineral resource towards September of this year. Our adjusted EBITDA for Ivano Mines amounted to 179 million for the quarter. We can move to the next slide. It is with great sadness that I have to report the loss of life of Mr. Mohamed Mbaye on the 6th of July at the Kakula underground mine. Mr. Mbaye was conducting scaling activities when a fall of ground occurred. The root cause of the incident has been identified and a large-scale training program for scaling operation and hazard identification has been implemented for all our operators and supervisors. Our operating procedures have been updated based on learnings from this incident. Our thoughts are with his family in this terribly tragic times as well as with his colleagues. In the second quarter, a large part of our sustainability initiatives focused on training and in particular also on underground safety. On the next slide, it would be amiss of me not to focus on, and I quote a wise voice from earlier in this call, the richest copper mining district in the world. It would be amiss for us not to highlight some of the significant achievements of the DRC over the past couple of years. The DRC is now the second largest global copper exporter. 40% of the DRC's GDP is directly derived from mining. Copper production in the DRC has increased by more than 300% in the past 10 years, and that cemented its position as the second largest copper producer. There's been a 7% year-on-year increase in copper production to 3.2 million tons in 2025, producing 14% of the world's copper. And then the DOC also made history by issuing its first inaugural sovereign euro bond in April of this year to the tune of 1.25 billion dollars. and then Ivano has been a long-standing citizen in the DRC and we've cemented very successful strategic partnerships with the DRC government as well as with GECAMINS and we continue to foster those relationships and expand these projects that we are delivering in the DRC. With that as an introduction, I would now like to hand over to David van Heerden, our CFO, to take you through our quarterly financial results. Over to you, David.

Thanks very much Mada. We can move to the next slide. So Kamau Kakula sold just over 61,000 tons of payable copper in the form of anodes and blister in the second quarter. The copper and concentrate produced through the mills was pretty close to the tons sold, leading to copper and inventory on hand remaining flat at around 40,000 tons. Although there was no destocking in the second quarter, we do expect that payable copper inventory to reduce significantly Thank you very much. and relating to the sale of sulfuric acid and a $33 million positive impact from mark to market of provisioning price sales. With higher production on its way and the current copper price environment, we definitely expect to exceed the $1 billion of a revenue mark on a quarterly basis pretty soon. Moving to the next slide. Cash cost for the second quarter of 2026 was $2.84 per pound of payable copper in saleable product produced. The copper grade of ore processed was fairly similar to the previous two quarters. So the quarter on quarter decrease was primarily higher costs, most notably the direct impact of higher diesel prices, which was responsible for 18 cents or 70% and many more. and C1 Cash Cost and the jump from Q4 last year was due to the smell to power usage and as well as the impact of higher fuel prices. The cash cost for the year to date of $2.70 is still at the lower end of our guidance range which we maintain despite the higher pricing environment. Kamal Kukula's EBITDA for Q2 was $385 million and only 3% lower than Q1, notwithstanding the lower tons sold and the higher cost environment. Higher copper prices, of course, played a role and we continue to realize the significant smelter benefits. Just looking at those smelter benefits again, a little bit close on the next slide. Here we again show a waterfall to better illustrate the movement in our cash cost and highlights the benefits we get from our smelter. On the left-hand side, we start with the average C1 cash cost of the second half of last year, and then we set out our movements to end on our cash cost for the first six months of 2026 of $2.70 per pound. The smelter operating cost of 33 cents is easily offset by the reduction in logistics costs, the sulfuric asset credit, and then the savings on treatment charges. In total, the smelter caused a roughly 50 cent saving on a per pound basis if the saving of road and export taxes are included, and But that would be even more on a normalised diesel environment. Then mining and processing, more to the right hand side, is a little higher in the last six months due to the slightly higher power cost, the lower absorption of fixed costs due to the relatively lower production this year, and then of course the higher diesel price since the closure of the Strait of Hormuz. And that's exactly where I will focus on the next slide. Here we look at the C1 cash cost for Q1 and Q2 with the direct diesel cost shown separately. So at the bottom left of the screen, you can see that Kamau Kukula spent 34 cents per pound of payable copper in final product, Thank you very much. and it's noteworthy that the current diesel price is a little bit higher than the average diesel price and we achieved in the second quarter but also that once the 60 megawatt of solar is operational later this quarter our diesel consumption would go down with 25 to 30 percent and an even bigger mover in Q3 Thank you very much. So if the current price holds for the remainder of the quarter, then the sulfuric byproduct credit will be close to 60 cents per pound of payable copper produced in the third quarter. And that's much higher than the already nice credit of 38 cents recognized in Q2. Then on the right hand side of the screen is just a reminder of where we forecast our C1 cash cost to be in the future as development rates and stoping tons and grades improve. On the next slide, Here we show the quarter-and-quarter EBITDA waterfall for Kamaukukula. Here you can see that $76 million of the quarter-and-quarter EBITDA increase was due to higher copper price for the second quarter when compared to Q1. 43 million dollars of and that 76 million was the impact of the re-measurement of contract receivables which represents the mark to market of provisionally priced sales at the higher price in the second quarter. Revenue from asset sales was $7 million higher in Q2 than it was in Q1 and is expected to increase further, of course, as I mentioned on the previous slide. Logistics and treatment charges did not move much, but this was also because we are now transporting significantly lower volumes due to the smelter and cost was up quarter on quarter, mainly due to the higher diesel prices, as I've already explained. Lastly, you can see the impact of selling 5,000 tons less of payable copper tons in the second quarter compared to Q1 and we definitely expect that block to be green and sizable in the coming quarters as we increase production and as we destock the current stock on hand. and then you end up with the quarterly EBITDA for Kamau Kukula, which is very close to what it was in the previous quarter. Moving to Kupushi on the next slide. It was another great quarter for Cappucci with another record of tons produced. The realized zinc price was also higher at $1.58 per pound of payable zinc and Cappucci did however not sell all the zinc produced with roughly 14,000 tons increase in finished goods due to the inability to secure sufficient trucks to transport the concentrate to port. The closure of the Strait of Hormuz significantly decreased the number of trucks entering into the DRC with sulphur from Dar es Salaam and with less trucks entering the DRC, less was available for backhaul with capuchin concentrate. To add to that, the quotas assigned to the DRC Cobalt producers also impacted negatively on truck availability. But the team has since been able to make very good progress in securing the required volume of trucks and inventory on site has halved since the end of June, even with production running extremely well. So we will take advantage of these great currency prices. Still, Capucci recognized revenue of $148 million in the second quarter and an EBITDA of $51 million at a margin of 35%. Cash cost was well controlled at 90 cents per pound of payable zinc, even with the inflationary pressures, and was 88 cents for the year to date, still below the midpoint of our 2026 guidance, which we maintain. Also noteworthy is that Kapushi generated cash from operations of $94 million in the first half of this year, even with the buildup of inventory. So moving to Ivan & Mines' consolidated results on the next slide. So Abeno Mines recorded a profit of $46 million in Q2 and an adjusted EBITDA of $179 million. Both our EBITDA and our profit is expected to continue to grow with the increase of expected production at Kamaukukula and Kapushi and with Blackreef's contribution coming very soon. and something that I would just like to point out is that people often forget that our profit and EBITDA is reduced by our continued investment in exploration, particularly on the Western Forelands. Expensing exploration expenditure is an accounting policy decision, so it's not necessarily treated the same way by our peers, but important to take into account when looking at our results. It might not be reflected in our profit or our EBITDA, but we do continue to see great results on exploration and Simon will touch on that and the latest news a little bit later on in the presentation. We continue to maintain strong liquidity levels and that can be seen on the next slide. So, Ivano had $635 million of cash and cash equivalents on hand at the end of June. Still a very strong liquidity position. Our pro rata net debt increased slightly, but more due to the reduction in cash over the quarter as opposed to an increase in debt. The pro rata and net debt ratio for the trailing 12 months remained stable, but still includes the impact of the lower EBITDA in Q3 last year. and it is back to below two if you recalculate it using an annualized EBITDA for the last six months, as an example. S&P downgraded Ivanhoe's corporate rating to be minus during the quarter. Our view is, of course, that it is not a fair reflection of the credit, even though S&P notes in their report that there is no material liquidity risk. and that our credit metrics look very positive in 2028. Their metrics unfortunately focuses on just 2026 and 2027 and ignore the very good 2028. But having said that, we were very encouraged with how our bond continued to trade even after the event. and so if we turn to the next slide just to show where we are planning to spend our cash that we've got on hand. The capital expenditure on each of our projects remain in line with expectation and the guidance for each of them are reconfirmed. During the quarter, Ivana Mines contributed $76 million to Kamau Kokula for its ongoing capital and operational requirements. With production and sales set to increase over the next few quarters, it is expected that no further contributions will be required and that Kamau Kokula will generate sufficient cash from operations and joint venture level facilities to support its own operational and capital cash requirements. At Platte Reef, the Japanese consortium contributed $65 million towards Phase II development expenditure during the quarter, highlighting its ongoing confidence in the project's long-term potential and our team's execution capabilities. The Platrief project's phase two finance was also closed during the quarter and $87 million was drawn and received by Platrief in July. So our cash balance at the moment is actually higher than it was at the end of the quarter. and that financing is structured such that two-thirds of the remaining Phase 2 capital expenditure will be funded by this facility and we will do quarterly drawdowns going forward. And with that, I will hand over to Tom van den Berg, our Chief Operating Officer, to start the operations and project update portion of today's presentation.

Thank you, David, and thank you for the introduction. Project 95, as you can see in the slide in front of you, just go back there, you can see those are the thickeners and the high grind, the regrinds back in the background there. So that was commissioned in June 2026. So that's up and running at this stage at phase one and phase two. Thanks. Let's go to the next slide. If you look at the numbers here, you can obviously see the combined copper ore grade processed as being climbing from quarter, the last quarter, to this current quarter as we access higher grade in the areas of Kukula. Kamoa is also producing good grade at the moment. And the Tans Mild is also Thank you very much. The phase 3 concentrator continued to mill at around about greater than 25% above its design capacity, really doing well and achieving what we expected to achieve and overachieving at this stage. So equivalent to milling a rate of 6.3 megatons per annum. Phase 1 and 2, as I said, they were doing batching in the last portion. So they're running at about 60% of the capacity at 10.5 megatons per annum. Due to the ongoing turnaround at Kulub Mine, we expect that to increase and we are moving tons at this stage across from Kansaukal Mine to the Phase 1 and Phase 2. As the Kamoa Mine builds up and fills the Phase 3, we are able to move tonnage across to Phase 1 and Phase 2 from Kansaukal Mine. Project 95 is boosting recoveries as you can see and that is up and running and has been commissioned at this stage. Phase 1 and Phase 2 concentrators, the feed grade and the recoveries improved in Quarter 2 and that was following the depletion of the surface stockpiles because obviously as we got to the bottom of the stockpiles We had reduced grade, but that was then picked up by fresh ore from underground. And that is what you see with the change in the grade. So the mining rates are set to improve further in the second half of 2026. And we are seeing that through a combination of productivity initiatives, opening up more ends and getting into more areas on Kukula currently. You can go to the next slide. Thank you. So the 500,000 tonne per annum smelter is running at about a 60% capacity. We started it up at the end of 2025. It's really been doing well. It's been performing very well at 60% of its capacity and it is stable and we haven't had any issues with respect to the smelter and no major concerns. So as you can see, lots of copper anodes that have been generated in the picture. It generated 64,000 tonnes of anodes, blister and anodes in quarter two, 2026. There's a further ramp-up of the smelting in line with Kamoaka Kula, mining rates increasing, and we will do that as we go ahead. 10,000 tonnes of unsold copper is to be destocked, as David spoke about, in H2, 2026, and then targeting the year-end inventory to go to be 25,000 to 30,000 tonnes of copper. Thank you. If you look at the ramp up for the copper production to the 500,000, so what you're seeing there is quarter one to quarter two is that the nine was effectively the destocking that you're expecting to do. The two pink bars on quarter three and quarter four are the Thank you for joining us today. and the increases are basically the new Kerala box cut. The picture that you see behind this picture is the Kansoko Sutwan. Thank you very much. What we are doing at Kamoa and Kansoco at this stage is we're up and running with the stoping. So we're getting our stoping back to what it should be and we have effectively got the mines established to the new layouts and they are performing well. So it's Kukula at this stage. We've just got to get the development, which we've done well. on the front of the north east and the south east and then it will be around the front of the mine on the eastern side in 2027. Thanks, we can go to the next slide. The sulphuric acid, David's spoken to most of it already, so I'm just going to highlight a few issues there. The sulphuric acid realized price was $465 per tonne. We did very well in terms of our sales and our cash costs in terms of the guidance from the The sulfuric acid in the market remains tight in the DRC, and this is due to the reduced supply of sulfur passing through the Straits of Hormuz, coupled with import constraints inside and through the DRC. So quarter three, the 2026 contracts priced at 80% higher than quarter two at approximately $840 per tonne. So a really good story. The ore body is generating good acid from the smelter and we are able to sell it into the market and make money from it. Thank you. Next slide. Over to you, Simon. Sorry.

Our feasibility study updates are well underway. We're currently finalising updated mineral resource models with drill data from the last three years across all deposits in the Kamoa-Kakula complex. Alongside, we're also updating newly calibrated geohydrological models, particularly focused on Kakula. These models will provide us with the foundation for the commencement of multiple mine design trade-offs and then further optimisation throughout this quarter. Alongside these studies, we've commenced a detailed feasibility 250km drill programme, focused on 2027-2031 mining areas, with the first drill hole at Kukula pictured in the background of this slide. This detailed drill program will be further complemented with high-definition active seismic surveys, which together will provide the high-resolution geological and geotechnical models, updating our structural models to both optimize our geotechnical and hydrological dewatering designs across the complex. We anticipate that this drill campaign will extend into 2027 and we will utilise the initial results of this high-resolution dataset to inform our trade-off decisions and subsequent life and mine plan optimisation that we are commencing this quarter. So with that, I'll hand back to Tom to continue through the operations.

Yeah, thanks. Thanks, Tom. I'll give an update on the solar project. So we've spoken about this nice picture there. You can see the batteries in the foreground and the panels in the background. So just to remind everyone, this is baseload power, 95% availability, more reliable than grid power, and it certainly reduces our diesel consumption quite significantly. So the way we're running phase one, there's two IPPs, independent power producers, each producing 30 megawatts. The first one has completed construction. We're receiving 15 of the 30. The second 15 is under commissioning, and we expect that, I would say, in about two weeks' time. And then the final 30 megawatts from the second IPP by the end of September of this year, so by the end of Q3. We've also initiated phase two of this project, which is basically a copy-paste, so another two IPPs, each producing 30 megawatts. We've signed the first power purchase agreement, PPA, with the first independent power producer, and the second signing of the contract is imminent. I'm expecting that in a couple of weeks' time. and then there'll be a phase three. There's no question that this is a good initiative and we're looking at self builds for phase three. I think we've got enough experience now from this work to take this on ourselves. Next slide, please, Tommy. Thanks Steve.

Yeah, much appreciated. So yeah, well done team Kapushi. They really did a great job and they continue to overperform. So thanks to Kapushi for the record 70,000 tons of zinc in quarter two to 26. Kapushi milled a record of 200,000 tons of ore quarter two, an average grade of 38.7%. That's a notable higher grade amount of zinc. Multiple concentrator records were achieved in quarter 2-26, including recoveries averaging nearly 92%, and then 25,634 tonnes of ZIG produced in May. So as you can see, the graphs on the right-hand side, they talk to what I'm talking to on the left here. Production guidance and change at 2.40. Setha will be the world's third largest zinc mine in 2026. And then we're also doing the same thing as what Steve is saying. The DLC has got a very high sunbelt. We've got 12 hours of sunlight a day, more sunlight in winter than we have in summer. And with that, we're going to dial in 10 megawatts of constant power at Kapushi. And that will also assist them in managing their constant power supply and making sure that they can Mine and Produce with those megawatts. Thanks. Next slide.

Okay, I'll take over, talk about Plat Reef. So this is the focus for the project team at the moment, Plat Reef Phase 2. And this is the next big thing for Ivanhoe. What you can see there is Shaft 3. It's a rock-hoisting shaft. We hoisted our first rock from that shaft at the end of March. and then we've spent this quarter constructing the underground ore moving facilities which consists of a crusher, two belts feeding the shaft and two truck tips. It's a thousand meter deep shaft. It's a rock hoisting shaft only. We'll use shaft one for manor material. This shaft initially will feed the Phase 1 plant. As the mining ramps up underground, we'll start building the stockpile for the Phase 2 plant. And when the Phase 2 plant comes online towards the end of next year, the shaft will feed off to the Phase 2 plant. Next one, please, Tommy. We're just talking about Platte Reef and in particular Phase 2. So we're developing the project in three phases. Phase 1 complete. Phase 2 will be complete by the end of next year. And that's about 450 to 500,000 ounces of 3PGE plus gold. So decent size, 10,000 tons of nickel. And then Phase 3 will be a doubling of that. We're currently busy with the plant construction, earthworks well advanced, civil work started. We've in fact bought the mill base, which is on the critical path. We've awarded all the mechanical contracts, SMPP, structural mechanical piping and plate work. ordered all the long lead items and the bulk of the equipment. So going very well on the plant construction, definitely on target for the end of next year to start milling ore. 3.3 million tons per annum is the milling rate of the phase two plant. Another big bit of work that we're doing is Shaft 2. So Shaft 2 is the future of Platte Reef. It's a rock and man material shaft, 8 million tons per annum, so a big shaft. We're busy with what we call sloping and lining, which is basically the widening of the shaft from 3.5 meters diameter to 10 meters diameter. We will be ready to hoist man and material late in 2028 and then rock about six months later. So as I said, eight million tons per annum, huge shaft and de-risks phase two and gets us ready for phase three. Thanks, that's all Tommy.

So looking now to the exciting Western Forelands project, we're currently updating our mineral resource models with the data that we've gathered up until the end of the first quarter this year. And with this, we are anticipating to grow our total mineral resources by more than 30%, as well as increasing the overall grade in our updated mineral resource statement, which we will publish in September this year. In parallel, we're ramping up the drilling on site to undertake the largest drill program that has ever been undertaken on the project so far. This drilling is testing the continuity of mineralization between Makoko West and Central, as well as stepping out to test both the shallow eastern extensions of Makoko Central and the southern extensions around the high-grade Kotoko target. We will of course be updating you in the upcoming months with both the updated mineral resource and with the results of ongoing step-out drilling, which we believe will further grow shallow copper resources. Alongside the exploration works, we've commenced early project establishment and operational camp construction. will be aiming to commence a series of technical studies later in the year in which we anticipate will include multiple shallow open pits that will enable a lower capital, fast execution construction to the project. So next slide, please. So now looking across our exploration portfolio, and firstly, the Moxico Province in Angola, this is a frontier greenfields exploration program where we're testing our interpretation that the Katangan Basin sediments extend into Angola below cover, potentially targeting Western Fallen Star mineralization. We've completed a range of airborne geophysics and soil geochemistry over the prospective areas. And from the results of this, we've targeted stratigraphic drilling to test these interpretations. The preliminary results of the first few holes through this year have been very encouraging and have been confirming our regional interpretation. Whilst it is early days in this exploration program, we plan to continue drilling into 2027 as we vector in on potential mineral system targets. So then turning to the substantial exploration package in the northwest province of Zambia. This is situated adjacent to the Angolan border with similar stratigraphy to well-known neighboring mines. Here, our drilling is targeting both covered Katangan stratigraphy and younger IOCG-style mineralization targets, which were identified as part of an airborne geophysical survey. Our drilling commenced in mid-June on a number of the IOCG targets, the results of which so far have identified prospective alteration and sulphide veining. In parallel to this, we're running a regional soil geochemistry and ground geophysics program on the southern licenses within the package throughout the second half of this year. The next phase of drilling in early 2027 will be planned to test the sedimentary hosted copper targets in the northern and western permits of the province. So then turning to our strategic exploration joint venture in Kazakhstan, where we are funding a further $20 million of investment to expand the drill program targeting sedimentary-hosted copper targets in a large sedimentary basin, which hosts giant Soviet-era discoveries, analogous to that of the Kuprashefa Basin in northern Europe. In 2025, we completed a program of field mapping, soil geochemistry, and geophysics, which defined the key basin architecture, and we've been subsequently drill testing. Throughout this year, we're planning to drill approximately 35,000 meters on a number of conceptual targets. We anticipate that the results of this program will refine our basin interpretation and enable us to progressively vector in on potential mineral systems within the permits.

Thank you, Simon. So we'll now start the question and answer session. Covering analysts, you may submit your questions to the operator via the phone line. Questions can also be submitted through the webcast. Any questions submitted via the webcast that we are unable to address during the Q&A session, our investor relations team will endeavor to follow up with you. So, operator, let's start by clearing the phone lines. I see there's four in the queue. Over to you.

Thank you. Ladies and gentlemen, for any questions on the phone lines, please press star one. You will hear a prompt that your hand has been raised. And if you wish to decline from the polling process, please press star two. First question on the phone, Daniel Major with UBS. Please go ahead.

Hi, thanks for the questions. First question, just around the production versus sales outlook into the second half of the year. You noted in your material, Comerica Cooley, you expect to destock 10,000 tons of copper inventory. Is that all the destocking of will concentrate and will flow through as production of blister anode, or will that also be partially an unwind of sales of copper versus production of copper through the balance of the year? Because year-to-date, sales has lagged production, so just where that $10,000 is going to sit.

Yeah, thanks. Happy to take that, Daniel. So, yeah, currently we've got roughly 40,000 tons of copper in inventory, and that is a combination of copper in finished goods, copper in concentrate waiting to be snelt, and then copper in the snelting circuit. I mean, we've said previously that we expect a and many more. 10,000 more either turn concentrate into finished goods and sell it or finished goods but we don't have quite have 10,000 tons of finished goods in stock at the moment and so it will be some of it will be a conversion of concentrate into finished goods and then sell but of that 40,000 you'll see that reduced to at least 30,000 by the end of the year meaning that whatever finished product we produce by the end of the year or over the next two quarters we will see an additional 10 being sold as well.

Okay so it's a total of 10 split between finished goods and Concentrate, Destocking. Is that right?

Yeah, that's correct.

Okay. And then just a second part of that. Would you expect that to reduce working capital in the second half of the year at the Comer, Cucula, JV level? Or is there any offsets?

Yes. Now, we would expect that to reduce working capital and turn that into cash. Okay, thank you.

And then the second question, I believe there's a deadline around increasing local ownership in DRC operations at the end of July. Can you just give us an update on where you stand with respect to any such local participation thresholds and whether there's any potential changes in ownership, any of the DRC assets?

So I'm happy to take that one. So maybe just for a little bit of background for everybody. There's been communication received from the Minister of Mines asking mining companies to confirm local participation in its shareholding. That is based on the 2018 Mining Code, which requires companies who convert an exploration permit to a mining permit. to give 10% free carry non-dilutable state participation to the state and then also to give a 10% state but that's not on a free carried basis and also not non-dilutable to Congolese nationals. Originally, the legislation envisioned that it was accompanied by regulations that stated that as an example, the 10% to Congolese nationals could be 5% to employees. So that was the foundation of the communication by the Minister of Mines. Subsequently, there's been a number of engagement with the Minister of Mines as well as with the Prime Minister. The Minister of Mines went as far as drafting a decree trying to implement this change retroactively. This decree cannot amend legislation as it will need to be adopted by Parliament. As much as this deadline is looming, we've had numerous engagements and we were hopeful to have further engagement today. So it's really happening real time, but I don't think it will necessarily conclude before the end of this month, but the industry is positive that we should be able to find common ground and try and argue that this should only apply to conversions post-2018 and not to pre-2018 conversions, as is the case with Kamal Gugula as well as with Kapushi and our partnership with Jekamins. Okay, thanks.

Would Western Forelands fall under that? So I would assume you would have to dilute that one.

Western Forelands would have, as soon as you convert your exploration license to a mining license, you would in any event have to do the 10% to the DRC government and 10% to... Congolese Nationals. So in Western Forelands, guys, and Western Forelands is made up of numerous permits. We have been applying that principle at Western Forelands. So at Western Forelands, it's not controversial at all because most of those conversions are post-2018.

Okay, great. Thanks. I'll go back to Nikki.

Thank you.

Thank you. Next question on the line, Lawson Winder of Bank of America. Please go ahead.

Thank you very much, operator. And thank you, Robert, Marta and team for the presentations today. And also Marta, congratulations on your significant 20 year anniversary. That is quite an accomplishment.

Thank you so much.

Yeah, it's remarkable. 2027 production. So you've expressed some confidence in the 2026 Copper Production Outlook from Kamala Kukula. That's very helpful to hear and comes through very clearly. But when looking at 2027, what are you now seeing as the key gating items that will ensure production hits that 380,000 to 420,000 ton guidance? And then How do the lower target underground development rates that you've cited in the release factor in here? Thanks.

I'm happy to talk about that. I mean, the key for 2027 is

Thank you very much.

A big upgrade of a lot of our horizontal pumping capacity in Kukula Underground. We actually have more vertical pumping capacity in excess of 8,500 litres a second, but we're only able to utilise about 5,500 litres a second of that and many more. We're installing additional horizontal pump stations. Those horizontal pump stations will enable us to make substantive progress, particularly in the east. As we progress that dewatering, that will allow us to speed up some of those development rates and also increase production, particularly in the northwestern corner, which is supporting the production through the first three quarters of 2027.

Okay, Simon, thank you very much for that. That's helpful, Collar. On the cost pressures, the language around that risk seems to have been slightly toned down in Q126. Of course, correct me if I'm misreading that. But to what extent is that because of cost pressure having moderated in severity versus the benefit from the sulfuric acid sales and, of course, a quickly rising pricing for sulfuric acid?

I think it has been moderated a little bit just because we're now more aware of what we're dealing with. I mean, the current cash cost included, as I mentioned on the one slide, 52 cents of cost related to diesel. At the height of pricing in... In this quarter, that would have been close to 70 cents. So, around about an additional 18 cent increase at the height of that pricing level. So, yes, that is substantial and will have an impact. But then, as I've also mentioned, we will reduce our diesel requirement by 25 to 30 percent, which is... Thank you very much. and many more. The current credit, so more than offsets the increase in the diesel directly, whether you take the solar into account or not. So that's why we're a little bit more comfortable around the current pricing environment. And yes, the sulfuric acid and the current price for that plays a significant role.

Okay, fantastic. Thank you all very much.

Dalton Barreto with Canaccord. Please go ahead.

Thanks for taking my question, guys. My first question is also around the development rates at Kukula there, and I appreciate all the color that was provided. Just a very simple question.

Sorry, Dalton, I'm just going to interrupt. It's Tommy. We're just struggling to hear you. If you could maybe readjust.

Oh, my apologies. Is this better? Yeah, my apologies. So I just want to follow up on the line of questioning around the development rates there. So my first question is that bump in production that you alluded to in Q4 of next year, presumably that's related to stoping in high-grade ore. Does that timeline assume an improvement in the rates that you're seeing now? And then I guess part two of that is if you don't Start Stopian or buy Q4 of next year. What does 2027 look like? Thanks.

Yeah, so yes, that does assume a continued step up from where we are at the moment in development rates. But I mean, it only assumes another, I think, step up by about 12%. And that step up is only actually planned from Thank you very much. It's about another, that portion of the mine is due to bring about 40,000 tons of copper to the plant. So without that, if you back calculate that into our guidance, that would be the impact if we were to not get that.

Thanks, that's helpful. And then just switching gears to the drill program that's on right now, the Intel drill program. If it is successful, what do you think you can take that 60% extraction rate up to in the new mine plant?

It'll be varied across different areas within the mine. No question in Kamoa, we're currently very actively late last night having discussions on changing those extraction ratios where we're able to take it to. We don't have a definitive number yet, but that breccia doesn't exist. There's a good chance we will be able to increase them Not necessarily as high as they were before, but we will certainly be able to close at least half of the gap of where they were before. But those changes in extraction ratios are going to come in incrementally. They're going to come in by domain and by portions of the mine. So it won't just be one large, big change. It will be as we demonstrate the stability and particularly as we demonstrate the The change in hydrological conditions as well as geotechnical conditions, because the two are quite intrinsically linked, then we will be incrementally bringing more and more, I suppose, back into the reserve statement. There will be a number of other changes which I anticipate will come through in the mine design trade-offs that I think will have quite significant positive impacts on our year-end reserve statement where we're looking at potential shallow Shallow Resources and what the best mining method is to be able to extract those.

Thanks, guys. That's all for me.

Operator, we've got three or four minutes for one last question. I see there's Craig on the line. With respect to other messages that have come through, I believe most of these have been answered by the analysts so far. So we'll finish up with this last question and wrap up. Thank you.

Thank you. Craig Hutchison at TD Cowan, please go ahead.

Good morning, guys. I just wanted to ask about the grades in the second half of this year. If I look at the April release, you guys were, I think, targeting 500,000 tons from Kukula at about a 3.5% grade, and now the guidance is for 400,000 tons a month, 2.7% grade. Can you just talk to the reduction in the grade, and is that a potential risk as we go into kind of early 2027? And I'm just wondering if it has something to do with the dewatering rates. Thanks.

I'm happy to say that no, I mean, it's actually it is linked to the dewatering rates and it is intrinsically linked to that. But it's actually should be considered as an opportunity because that the primary mining front in that we're that we're mining from at the moment in Kukula is actually in the northwest. That eastern development that we're talking around developing around the barrier pillar is developing in very, very low grade copper. That's bringing in like 1 to 1.5% copper. It's not a substantial contributor to production. And that northwestern corner where we have had higher hydrological inflows than we'd initially modeled, and we haven't been able to utilize all of our vertical pumping capacity without these horizontal pump stations. and so on.

Just one quick one again. Just at Western Forelands, I think you mentioned there's technical studies underway and look at some high-grade open pit opportunities. When can we expect kind of an update, maybe a scoping study or a PA-level update on Western Forelands? Thanks.

So we're updating the mineral resource currently. The results of that mineral resource, as Manu mentioned earlier, will be released in September. From that release, we'll then be putting out some concepts in terms of where we're going with the scoping study and where we expect to go. But the key thing really initially has been, well, how big... and what is the extent of some of this higher grade shallow mineralization? And so far the drilling just keeps extending it. So it's quite a nice problem to have, but it's difficult to wrap a full study around it whilst we're still growing the resource at quite such a rate. Thank you.

Thank you. We have no other questions.

Thank you operator and that concludes Ireland Home Mines second quarter 2026 financial results call. Thank you all for attending today and thank you to our senior management including David, sorry for forgetting you earlier and we look forward to speaking to you all soon about the many exciting milestones we have ahead. Have a good summer. Thank you.

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