ACG Metals Limited (ACG) Earnings Call Transcript & Summary

Good afternoon, and welcome to the ACG Metals Limited H1 2026 Operations Results Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. I would now like to hand you over to the management team of ACG Metals Limited. Artem, good afternoon to you.

Thank you very much, and hello, everyone. I appreciate you tuning in to listen to our simple story. So just a reminder to everyone, I'm Artem, I'm Chair and CEO of ACG. And I'm joined here by Patrick, our CFO; and Graeme, our Vice President for Projects. So where we are today is essentially closing on the final days of completing our transition from production of gold into production of copper. The numbers you see in front of you, revenues and adjusted EBITDA for the last year, which was from production of gold and silver doré. And as we move into production of copper concentrate and zinc concentrate, our guidance for the year is 20,000 tonnes to 22,000 tonnes of copper equivalent, and that includes the production of gold and silver from our oxide material, which we'll talk to you in detail. Obviously, as we move through the CapEx, the net debt has increased. But as of now, all the CapEx is spent. And as Graeme will tell you, we are in the final days, now starting commissioning of the project to reach first production by the end of the summer. Why are we doing all of that? Very simple. We remain big believers in the copper upside with demand growing very strongly from new sectors of the economy, global economy, such as AI data centers, robotics, electric vehicles, but also from the old industries such as defense, which is seeing massive new investments as of now. Even if one of those sectors experienced a bust, others are likely to compensate for that demand growth. And given the constraints in supply, the expectations are for the higher copper prices going forward. We are not banking on those. All of the numbers you see in this presentation, as always, are based on consensus price forecasts, which are average of whatever 30-plus investment banking analysts globally. And for this year, this consensus is $12,000 versus $13,500 you see on the Bloomberg screen. And long term, that consensus is $11,000, so massively below current spot. No changes in our team. We have a very strong and capable Board and outstanding management team that have continued to deliver great operating results. Just to remind you of our starter asset, which is a producing mine on the western side of Türkiye, 3 hours drive from Izmir port. It's a very high-grade copper, mainly polymetallic deposit with a copper equivalent grade of 2.3%. And as I mentioned already, we're moving from the production of gold from the oxide deposit into production of copper from the main part of the ore body, which is sulphide. I'm pleased to report on a very strong and improving health and safety culture. And this is an excellent achievement, especially given a number of people concurrently working at the site now from our own team to the EPC contractor to the contractors, to the EPC contractors, many, many people. But as managed by Graeme and our Chief Operating Officer, Peter Carter, there's been a really steady improvement and a very healthy record. You can see on this picture, one of the regular health and safety meetings that is happening on a daily basis. Patrick, over to you.

Yes. Thanks, Artem. Just to give you basically an overview of the ore body that we have in Türkiye. I think there's 3 major areas that we all are working on right now. The oxide is the portion that was exposed to air, which we have been mining in this deposit since 2022. This has come to an end. We basically, in the first half of 2026, mined from the stockpile that we created in 2025. So purely processing that material. Then we're basically now moving into the sulphide, which is why we are building this flotation plant that we raised the funding for and are almost complete building. That will be the future of the mine for the next 10, 20, 30 years. And obviously, we announced in November last year that we identified the enriched ore stockpile which was currently or previously treated as waste as actually a super interesting and very economic project, which Graeme and the team are also working on and actually moving forward. So if we then look at the oxide, the first part of the processing plant, you see the site as it currently stands. We actually see the heap leach there, which we have been processing over the last couple of years. You see the ponds in the backside on the left, which is basically the liquid solution that's very gold and silver rich that flows into the metal recovery plant, the Merrill-Crowe plant, which is then creating the doré bars. And we were very pleased to see that in H1 2026, we basically exceeded already the guidance that we put out on the oxide side for the full year, mainly due to recovery improvements. But most importantly, we also see that there will be further gold and silver produced from that part of the project, which means that we're going to exceed the guidance even further by the end of the year. That is just additional revenue that we didn't account for and is obviously very beneficial in the ramp-up for the sulphide operation. How did we achieve this? I think, obviously, the team has done a great job, a lot of operational efficiencies we could create in the last 1.5 years, actually more than 1.5 years since we actually bought Gediktepe. But most importantly, recovery always takes a bit of time, and we could see the benefits of that improvement in the recoveries really in the last half year, much more than before. That was also due to a technology that we put in place and we announced to the market, technology that basically reduces the consumption of cyanide, which is more environmentally friendly, but also cheaper. And also, it basically is now a patented application that we have in Türkiye, and we are now in the process of actually patenting this in 35 other countries, which will be beneficial for our growth story as well because we see a lot of other opportunities where this technology could be applied. Graeme, maybe over to you on the sulphide and then on the enriched ore project.

Yes. Okay. Thank you very much, Patrick. Good afternoon, everybody. As Patrick and Artem have both said that we are moving very quickly now and heading into our commissioning phase. We have got all of our mills in. We have just finished installing the IsaMills, which were a very large portion of what we've been trying to achieve over the last few months. We have got all the jaw crushers, and we've got all the conveyors in. As of this slide when it was written, we were 87% complete on construction. We're a little bit higher than that now and proceeding at a very rapid pace to achieve our first production. As of this morning, 9:00 this morning, Turkish time, we actually started the commissioning, which is the first phase of our commissioning punch listing, which we're working on the primary crusher building and all the equipment through to the conveyors through to the fine ore bin and then finally through to the SAG mill and the ball mill. On that, the punch listing will take approximately 2 days on that one. Just to explain what punch listing is a little bit. What we do is we go through, we check all the terminations, electrical terminations. We check the safety, handrails, steps, et cetera, right through the whole plant, tightness of bolts, et cetera, just to make sure that everything is ready to go into the second phase, which is our cold commissioning, which is actually running everything, making sure that it's all running in the right direction and running as it should be. As I said, we started commissioning as of 9:00 this morning, punch listing. And we're heading for the end of August for our first production. This, as you can see in the next slide that just came up, we've got a couple of very attractive gentlemen sitting in the middle of the photograph between the flotation cells. You can actually see the 25 cubic meter flotation cells running right down the middle. We have got 3 rows on either side, which is the zinc line and the copper line itself running down. So we've got the 25s. We've got a set of 5 cubic meter flotation cells and then we've got 40 cubic meter flotation cells running down the middle. You can see that the ponds, we have got just on the right-hand side of the screen, we've just got the top end of the contact water pond, which is the water that comes back from the tailings dam. And then we've got the process water pond, which hasn't been lined yet in this photograph. But as of today, we completed lining it. That is the water that we use for process right through the whole plant. The plant is running on a closed-loop system, which means that we do not discharge anything through to the environment. It comes back from the tails dam, goes through a water treatment plant. We clean it up and then water just goes around and around and circles. And we've got to add about 12% water on it every day during the summertime for evaporation. We have also a photograph down on the bottom side. We've got 8 finger bins, which in our product, we have got 8 different ore types. They are that far apart. We cannot put them all together and send them through the plant at any one time. We'll be doing a lot of blending. Now, the 8 fingers are for the each type of ore that we've got. And then we've got 2 blending bins, which as the load is feeding the crushing plant, we'll be blending it as per what the geos and the metallurgists tell us how to blend it down on that. And then on the bottom corner, you have got our main electrical room. Again, that's a lot further advanced than this photograph. This photograph was taken Sunday of 2 weeks ago. As of the 23rd of this month, we will be switching on the mains power. We have been building and construction on generation power. Then we flip to a temporary line from mains power, but on the 23rd, we have got the electrical authority coming in to inspect everything from the main substation right through to our main substation and all of our associated electrical things that we've got. They will be inspecting, if they're happy with it, they will allow us then to turn on the full power from the mains. That happens on the 23rd of this month. Okay. I'll hand it back over to Patrick.

Just on the enriched, Graeme, maybe you can say a few words on the enriched ore project.

Yes, the enriched ore project, we're moving ahead with that. We are 24 hours away from finishing the main earthworks, which was 450,000 cubic meters of earthworks, which we achieved in 3 weeks, which was a major task for us. We have also started geotechnical drilling to make sure that the ground is good enough to set everything on, which it is. And then we can hand all those results over to the designers who are a Turkish company for them to do the designs for the foundations of the jaw crusher, the ball mill and the SAG mill. You can see a few photographs in the background. We have actually purchased all of our major pieces of equipment. This was equipment that had been ordered and deposits paid by another company who went out of business very early on, and we managed to get all this equipment at a very, very reduced price, which really has helped with the financial side of things on our build, which is great, though we've got the SAG mill, that is complete. The SAG mill is in 2 sections only because of transportation. The ball mill that you can see in the top left-hand corner, that's in one piece. That's a lot smaller, and we can send it to the site as it sits now. That was just ready for painting the day I took the photograph. The next day, it was a very nice red color. But unfortunately, I haven't got a photograph of that one done. We've got the jaw crusher. And then we've got all the bearing shells for the SAG mills and the ball mills. We've purchased all of the gearboxes and electric motors. The SAG mill is a 1,500-horsepower electric motor. The ball mill was 800-horsepower electric motor. You can see the girth gear sitting down the bottom. That is the ball mill. The SAG mill girth gear was actually still being fabricated on that. And then we've got the cone crusher and you've got associated bearings, et cetera, on that one. Patrick?