29Metals Limited (29M) Earnings Call Transcript & Summary

Thank you standing by, and welcome to the 29Metals Limited June Quarter 2026 Conference Call. [Operator Instructions]. I would now like to hand the conference over to Mr. James Palmer, CEO. Please go ahead.

Good morning to all. James Palmer here. Thanks for joining this 29Metals update for the June quarter 2026. Today, we'll be speaking to the presentation release this morning alongside our June quarterly report, and joining me here are Ed Cooney, our Chief Operating Officer; Peter Herbert, our Chief Financial Officer; and Kristian Stella, our Group Executive, Corporate Development. So upfront, why invest in 29Metals? Well, globally, copper supply is challenged. New mines are becoming harder to find, lower grade and harder to mine. And on the demand side, as the world electrifies, the world is going to need a lot more copper. As outlined on Slide 3, 29Metals, we're well positioned to capitalize on this favorable copper supply demand dynamic over 2 million tonnes of contained copper mineral resources across 2 Australian-based assets, both with long-life potential and significant geological upside. The 29Metals investment thesis remains strong. As outlined on Slide 4, the company's intrinsic value is underpinned by 2 large copper resources across Golden Grove and Capricorn Copper. At Golden Grove, we're nearing the end of a significant investment phase to enable mining of high-grade ore sources. From 2027, we expect reduction of capital expenditures and progressive ramp-up of mining from high-grade ore sources of Xantho Extended, Oizon and Gossan Valley, which will support metal production growth and improved free cash flow generation. At Capricorn Copper, the team are progressing rapidly towards a restart of production. Water levels have been significantly reduced and are no longer an impediment to a restart. So the focus is firmly on an approval for a new tailing storage facility and study towards a restart of operations. Prior to the production disruptions at Xantho Extended, we were guiding to over 50,000 tonnes of copper equivalent production at Golden Grove. And at Capricorn Copper, we have a low capital intensity pathway to reestablish up to 30,000 tonnes of copper production per annum. So with the recommencement of mining at Xantho Extended in the December quarter and the restart of operations at Capricorn Copper are rapidly progressing, we're advancing this business towards its potential as an 80,000 tonne per annum copper equivalent producer with the size of the resource at each asset, the optionality exists to expand from there. So I'll now talk to Slide 5 to go through the June quarter and how we're progressing both assets towards their full potential. Safety has improved and operations stable. At Golden Grove, 4.8 kilotonnes of copper production and 3.1 kilotonnes of zinc production during the quarter. Existing gold surface stockpiles were blended into the mill feed during the quarter, which also supported strong precious metals production, which Ed will talk to in some more detail. Overall, all metals are tracking well towards our full year guidance ranges, development works to establish the ultimate level access drives at Xantho Extended ore body to further reduce the risk of future production interruptions and the impacts of seismicity were progressed during the quarter with mining at Xantho Extended expected to recommence during the December quarter 2026 as planned. In addition, the team progressed development at the Gossan Valley project and to Oizon, a high-grade copper ore source at Gossan Hill. We remain on track to be mining from all 3 high-grade ore sources of Xantho Extended Gossan Valley and Oizon from the end of the year. The progressive ramp-up of mining from these high-grade ore source is expected to provide mine plan flexibility and support metal production growth at Golden Grove from the end of 2026. At Capricorn Copper with water, no longer an impediment to restart. The focus is now firmly on the approval for a long-term tailing storage facility, which is now the critical path imperative for restart of production. And we're planning for success with the definitive feasibility study in progress to enable the restart of production upon approval of the tailing storage facility. So I'll now pass to Ed to talk through the operations in some additional detail. Ed?

Great. Thanks, James. I'll move straight to Slide 8. So safety first, continues to be a lived value at Golden Grove and indeed across the business with single-digit recordable injury frequency and 0 lost time injury frequency. A result of ongoing focus on putting safety first in everything we do. Development events on a new level access drive to the Xantho Extended ore body were progressed. The first level access drive is now largely complete. The second bypass at circa 60% complete, and the third bypass commencing this week. So good progress, and we remain on track to recommence mining at Xantho Extended during the December quarter as planned. Metal production for the quarter sees us on track for full year guidance ranges. And as James mentioned, precious metal production was also strong for the quarter. Last quarter, I spoke to the focus from the Golden Grove site team on identifying and incorporating additional remnant ore sources into the rest of your plan to replace the tonnes from the later restart of mining and Xantho Extended with the highest value available to push the mill and metal production outcomes harder for the rest of the year. As part of this ongoing focus, 33,000 tonnes of gold ore stockpile was blended into the copper ore feed during the quarter, post a successful trial in the March quarter, contributing to higher quarter-on-quarter gold production of 4,700 ounces versus 1,100 ounces and higher quarter-on-quarter silver production of 195,000 ounces versus 104,000 ounces to prior quarter, certainly welcomed byproducts, particularly given the current precious metal prices. Touching on Gossan Valley. Our activities continue to ramp up with surface infrastructure well progressed, a second jumbo mobilized at quarter's end and recent mobilization of a raise boring for the first bench shaft. We remain on track for first ore by end of 2026. As James mentioned, we remain focused on capital development works in progress across Golden Grove to enhance optionality within the mine plan, and we remain on track to enable the progressive ramp-up of mining from the higher-grade ore sources of Xantho Extended, Oizon, Gossan Valley, to support mining volume and metal production growth and improved free cash flow generation. I'll pass now on to Peter to provide an overview of costs and capital for the quarter.

Thanks, Ed, and good morning, everyone. Slide 9 summarizes costs and capital for the June quarter. We continue to maintain a sharp focus on cost and productivity improvements across the business. At Golden Grove, site costs for the quarter of $96 million were flat despite ongoing inflationary pressures. Elevated unit costs during the quarter were driven by the lower payable copper sold combined with a $30 million stockpile movement charge as ROM and concentrate stockpiles reduced prior to 30 June, partially offset by higher precious metal sales. In addition, all-in sustaining costs were higher due to increased capitalized development expenditure as works to access high-grade ore bodies advanced. We expect downward pressure on unit cost as Golden Grove progressively brings online production from Xantho Extended, Oizon and Hougoumont, as well as Gossan Valley over the remainder of 2026, helping to lift mine production, mill throughput and byproduct revenues. 2026 is an investment year at Golden Grove with significant development and growth capital being deployed to access high-grade ore sources, enhance mine flexibility and support production growth and free cash flow generation. This benefit will be realized progressively over the remainder of 2026 and into 2027. Back to you, James.

Thanks, Peter. Thanks, Ed. So before I move to progress at Capricorn Copper, I want to touch on the impressive ongoing drill results at Golden Grove on Slide 12 with more great results released this quarter. The asset has a decades-long history of mine life extensions and ongoing resource extension drilling continues to provide confidence that Golden Grove will continue to operate for decades to come. Every intercept on this slide was released within the last 12 months, all of them resource extension intercepts. So lots of high-grade copper and zinc, extending existing ore bodies and adding mine life and lots of high-grade gold and silver intercepts is handy byproduct credits. Too many phenomenonal intercepts to go through them all, but a couple to call out. The hits of up a trial up to 20-meter intervals and grades up to 2.8% copper and at Oizon, it's very shallow in the mine, short trucking distances and existing development which will allow for incorporation into near-term mine plans. And drilling continues to grow inventory at Hougoumont Extended and Oizon with intercepts like almost 30 meters at 17% zinc and 15 meters at 2.6% copper. Additionally, resource extensions have shown that Hougoumont Extended and Oizon are converging at depth as one large mineralized system which is expected to enable future mining cost efficiencies via shared infrastructure as mining progresses in this area. So lots of high-grade resource extension results coming from the exploration program, which gives us confidence on ongoing mine life extensions for many years to come. So now to Capricorn copper, where the size of the prize is significant, as outlined on Slide 15. 64 million tonnes in mineral resources, 1.2 million tonnes of contained copper, established surface infrastructure, established underground development directly to the ore body, all within the highly prospective Mt Isa Inlier Province. As a low capital intensity brownfields restart project, Capricorn Copper is expected to double our group copper metal production and contribute significant EBITDA. With site water levels now sufficiently reduced to no longer be an impediment to restart of production, approval for a long-term Tailings Storage Facility is now the critical path imperative for a restart decision. As outlined on Slide 17, we're working towards submitting a response to regulators' request for information during the September quarter, and we're planning for success with good progress on the definitive feasibility study to enable acceleration of a restart of production upon approval of a new tailing storage facility. So as you can see from Slide 18, we see a bright future at Capricorn Copper. Our Tier 1 location, a large copper metal endowment, a low capital intensity pathway to reinstated 30,000 tonnes per annum of copper production and lots of geological upside to enable future potential expansion of resources and production. I'll now hand over to Peter to talk through the balance sheet prior to wrapping up.

Thanks, James. Gross revenue was $164 million for the June quarter. That was in line with our prior quarter results of $165 million with lower revenue from copper offset by higher revenue from precious metal sales. 29Metals finished the quarter with unaudited available liquidity of $202 million consisting of $188 million in cash and available headroom under the group's offtake facility of USD 10 million. Our strong liquidity position afforded us the opportunity to undertake further derisking work with Xantho Extended prior to the recommencement of mining, which will provide higher certainty of production outcomes from the end of 2026 and beyond and allows us to deliver Golden Grove long-term potential. Our liquidity position is sufficient to fund growth capital commitments and risk mitigation works prior to recommencement of mining at Xantho Extended, which is on track for the December quarter. As we look ahead, recommencement of mining at Xantho Extended in parallel with the commencement of mining at Gossan Valley and Oizon will increase mine flexibility and byproduct revenues, supporting lower production costs and improved operating cash flows. Back to you, James.

Thanks, Peter. Thanks, Ed. So 29Metals, we do remain well positioned to capitalize on the favorable copper supply demand dynamic. Over 2 million tonnes contained copper and mineral resources, 2 Australian-based assets, both the long-life potential and significant geological upside. The team remained focused on leveraging this position by delivering safe production and prudently allocating capital to the long-term value to all stakeholders. Prior to the production disruption as Xantho extended, we were guiding Golden Grove to over 50,000 tonnes of copper equivalent production. Capricorn Copper, we have a low capital intensity pathway to reestablish another 30,000 tonnes of copper production per annum. So we are progressing this business towards this potential as an 80,000 tonne per annum copper equivalent producer. And with the size of the resource of each asset, the optionality is to expand from there. So with that, we are happy to take your questions.

[Operator Instructions]. Your first question comes from Daniel Roden with Jefferies.

I just wanted to, firstly, just, I guess, touch on -- you talked about some nondilutive funding options for Capricorn Copper. In a world that changes so quickly these days, are you still seeing strong demand from -- you previously talked about some streaming potential from both assets really on some of the byproduct credits at Golden Grove and Capricorn Copper, are you still seeing strong demand here? Would you consider partial asset sales as well? Like what are the -- I guess, what are the scope and where are you seeing some of those nondilutive financing demand coming from?

Yes. Sorry, Dan, it's Peter here. Thanks for the question. Absolutely, we're seeing strong demand out there in the market and quite encouraged by what we've seen in terms of recent precedent transaction. So no change to that thesis at all. We are taking the project by being agnostic to the bad outcomes. So we're looking at a range of things when we think about nondilutive options and just trying to achieve the lowest cost of capital that allows us to advance Capricorn Copper back as we work in parallel on the study and the permitting for the tailings facility. So we're trying to bring that all together in parallel so we can deliver a great outcome and bring it back online ASAP.

Awesome. And I suppose on the tailings permitting as well. Look, probably just touching on how the regulator and investor conversations are going. The last few times you've tried to push through kind of reopening in tailings permit. You've received a couple of RFIs. What's different about this current process? And what's giving you confidence that there will be a positive outcome this time?

Yes, I can take that one, Ed here. So this is a new facility. I think historically, we were seeking approvals to incremental lifts on old historical facilities. I would say the engagement with the regulator is very strong. We've accommodated them on site for inspections. We've been engaging with technical discussions as we progress through some of the technical work in relation to addressing the Request for Information, and we remain on track to submit it this current quarter. So look, we're doing all the work that's been requested and confident that we'll work with the regulator to get it across the line.

And Daniel, I'll just add Ed's comment. So yes, everything he said and through with the regulator. And then we've got the prescribed projects, the coordinated general process, again, very, very supportive there and actually right through to the highest levels of the Queensland government. People want to see mine start, we've got the regulator doing all the technical work and then we've got all the bits in between. So yes, left-hand certainly talking to right hand, very, very positive progress.