True North Copper Limited (TNC) Earnings Call Transcript & Summary

Good day, everyone, and welcome to our True North Copper webinar today associated with the share placement that we have underway at the moment. Joining me today, we have Paul Frederiks, our CFO; Mark Longbottom, our Head of ESG and Approvals, who will be hosting Q&A at the end and also Jasmine from our comms and IR team. So, as I said, exciting times for True North Copper as we continue to deliver growth across Mt Oxide and develop the Cloncurry Copper Project. And what we'll go through today is just a number of key slides, which just gives an overview of who we are, what is True North Copper, where is the value that we see and that we're working on delivering and also just touch on our key projects. Ultimately, for us, we've got great projects in a great part of Australia, and we know where we're headed. We just have to do the work, do the drilling, do the studies and put it out to the market. Please note the disclaimer page. So, with True North Copper, I appreciate everyone on the call is a shareholder and I appreciate your support. For us, just to reorientate, we do have 2 key projects up in the Mt Isa region being the Cloncurry Copper Project to the East, near Cloncurry and then our flagship Mt Oxide Project up to the north, right next to 29Metals Capricorn Copper. For us, we've got a great team of experience with people who have done this before. So, delivering growth and development across the likes of Adriatic Metals, OZ Minerals and Evolution and [ Laborate ]. So really good quality people who are actually doing great work. And hopefully, people have seen that through our momentum and our activities through the course of the year. Zooming into our projects a little bit more that we touched on. It's a very active area for copper in Australia as people are aware. But for us, we've just really tried to hone in on where are our key projects. One of the things to keep in mind for this region, if you have a look at Capricorn Copper, Mt Isa, the Eva project is being built, the Rocklands plant is looking to restart. Ernest Henry is underutilized. ARC Mines is expanding. There's lots of processing plant capacity in the region. And what we're seeing now with the M&A activity is it's really about ore sources and ore feed to be able to feed into that infrastructure. So that puts True North Copper in a great place, just in terms of our land holdings and our project status around Cloncurry, Flamingo right next to the Eva project and then with Mt Oxide, our flagship up there next to 29Metals. So great projects, great ground and great to see the activity happening in the copper space and the momentum of copper in the market at the moment as well. From those, I guess, context, what we do talk about is our value proposition and where we're at. If we have a look at the likes of the Carnaby deals or the Hammer deals that are progressing at the moment, where we are relative to those projects. That shows us the runway and the opportunity that we have to do. And for us, it's really around doing the drilling, doing the studies and building up that trust and that momentum and the understanding of our story, similar to what Carnaby has done over the last few years. So, for us, we have got similar resources, essentially better exploration projects and discoveries in my opinion, which aren't actually included in this chart at the moment. And for us, it's around continuing to do the work, doing the drilling, systematically growing our resources, building up the credibility and confidence of our portfolio for Cloncurry and making sure we explain and show the value to shareholders and to others in the region as well. So, a great opportunity and a great time for us to actually take the step forward into the end of 2026 and then into 2027. As I touched on as well, we've had 6 to 9 to 12 months now of good, strong, solid delivery. One of the things we like to stay in True North Copper is we want to earn trust through our actions. And for us, the last 3 quarters have really looked to us to build that confidence, credibility and reputation. We've delivered across what we've said at Mt Oxide, and we're continuing to deliver and grow and drill up there. Cloncurry is continuing to progress, building up a strong PFS story towards the end of the year. And the same for our regional portfolio, where we've looked to rationalize and divest and allow us to focus on Cloncurry and the Mt Oxide project as well. So, for us, it's a great opportunity to just keep delivering, keep doing what we say. And then what we see is that people will jump on board the story when they see fit to as well. On that note, I'll hand across to Paul, who will just give us an overview of our corporate summary and also the SPP that's underway at the moment. Over to you, Paul.

Yes. Thank you, Andrew, and good morning, everybody. The slide you're looking at there shows the current shares on issue. So Tranche 1 of our placement has been completed. And so the current issued share capital right now is 188 million shares. If we have a shareholder meeting in October, a date to be determined. And if Tranche 2 is approved by shareholders, that share capital will go up to around 205 million shares. So, the market cap is as of today, $69.7 million. The cash number there is $7.1 million at the end of June. We've obviously consumed a bit of that. And then the money on Tranche 1 that came up is got deposited last Friday is $11.4 million. So we have money in the bank now plus that $11.4 million. You might recall that one of the purposes of the placement was to pay Perilya at 31 December this year, and that's that line noninterest-bearing debt, $7.5 million. So, a component of the proceeds will go to pay that. And then once that's paid, we'll have no bank debt, and we'll have no nonbank debt. The restricted cash at the bottom is bank guarantees for our environmental bonds. So we do earn interest on that money, and we obviously pay a bank guarantee fee on that money. On the right-hand column, you'll see the list of major shareholders. Tembo Capital have participated in the placement, but they participate in Tranche 2. So, their equitable holding will rise to about 21% once shareholders are hopefully approved Tranche 2's placement. Glencore and all the others there will marginally go down when the new share capital on Tranche 2 is issued. I think that's for that slide. This slide is a summary of the key SPP terms. So, we are -- as you should know by now, the offer price is $0.37, the same as what the Tranche 1 and Tranche 2 placements were made at. We are hoping to raise $2 million from the SPP. The Board has the right to scale that back but equally has the right to accept oversubscriptions if there's huge demand. The application prices in the SPP booklet there's a number of banners there ranging from $1,000 to $30,000. And just to highlight there that this is at a discount of 40% to the 5-day VWAP prior to announcement of the offer. And the offer opened 2 days ago, and it closes on the 10th of September. So allotments are now coming in. If you have any concerns about instructions, feel free to reach out to one of us, but payment can be made by BPA or by EFT. And the use of funds is as explained in the announcement we made on the 17th of August, and that's just repeated there. That's it.

Thank you, Paul. I appreciate that overview and summary and also good for us as well in the, I guess, last capital raise in 2025, there was feedback from shareholders that they would have liked an SPP. So, it's good for us now to actually follow through on that request and be offering it now. The other one to call out here is just that Perilya payment is good to see that one being addressed. That has been some feedback we received in the last couple of months is just what's the capital approach to dealing with that overhang. And now that we've actually got that, I guess, resolved, it really allows us to have the runway and the path forward to keep growing and keep delivering across our portfolio and really just focus on the drilling, the exploration and then the project development as well. So thank you, Paul. Going into a little bit more detail. We'll now just go through some of our projects and some of the updates we provided over the last few months, just to give people, I guess, an overview of where we're at, but also where we're heading into the next 12 to 18 months. For us, over the last 6 months, we've really been focused on these 3 strategic platforms. And how we've explained that is that 60% to 70% of our time, money intention has really been into growing Mt Oxide as the, I guess, the biggest blue sky opportunity for resource growth and exploration success in our portfolio. And that's really building on the Vero resource that we have and also the Aquila discovery that we made just over 12 months ago. So it's come a long way in 12 months. Around 30-odd percent of our time, money intention has been around developing the Cloncurry Copper Project. And for us, that's around reflecting and learning from the past and making sure that we have a robust, rightsized and credible PFS project that we can then take through into development options in 2027. So the main one there is to do the work, do the metallurgy, build up confidence in technical success and economic success. And then the remaining 5% or 10% is really on our regional portfolio. We do have ground near Ernest Henry and the like, and you never want to give up the dream of an Ernest Henry. But for us, it's mainly focusing on the biggest value levers for True North Copper being growing Mt Oxides and developing the Cloncurry Copper Project. Looking in at the Mt Oxide project. What we see, what myself, Paul Cronin, Tembo, one of our largest shareholders over many years is that potential in the Mt Oxide project to build a significant sizable and sustainable copper resource and development project. And what we say is that we want to grow Mt Oxide towards the 50 million to 60 million tonne resource, just like Capricorn Copper next door. And as we go through it, you'll see kind of on the same fault zones, the same structures and the same mineralization. And what we're starting to see is that potential is now starting to get delivered. Just to call out in the chat is if people do have any questions, please do use the Q&A tab at the top there, those in, and then we'll be able to get to those towards the end of the presentation. Some questions have been sent through prior. So thank you for that. Any others, please put it there. And I will remind people towards the end of the presentation as well. So touching on Mt Oxide, a great project and great potential. And it's really one that has been sitting there sleeping for 20 or 30 years without much modern exploration and boots on the ground. And effectively, what we've got in that part of the world is it's all hosted by a big fault zone. So it's a big fault. We put geophysics and soil geochemistry over the top of it and wherever there's a hotspot is where we want to drill a hole. And that led to the Perilya discovery last year. So in the first year of actually doing exploration and doing what True North Copper was set up to do, we've been able to have a pretty significant discovery. We believe it was the highest grade best discovery of 2025 for copper in Australia, which is great. And now this year is around extending it, growing our understanding and starting to see where it can go from here. The other one that we'll touch on is that there is that Vero resource, and that was one that was drilled out by Perilya about 2010. So it's got a lot of drilling, a lot of test work, a lot of study work on it and is, I guess, a starter development opportunity as well. So we've got Vero, we're on to Aquila, and we have 4 or 5 other high-priority targets to keep tracking down, keep hunting for more. Looking at Aquila and where we've come from just over 12 months ago from a discovery hole, last year, we were able to drill it to about a kilometer along strike. This year, we've done geophysics to actually extend it further along strike, and now we just have to confirm that with drilling. So that geophysics and drilling is now showing its about 1.8 kilometers along strike with drilling and assays pending. So, they'll be starting to come out in the next couple of weeks, which is great. And we've also seen that, that geophysics and the drilling from last year line up almost one for one. So, it actually helps our confidence in extensions, but also making additional discoveries along strike towards Vero as well. The key for us as well, as we said, is to extend it this year, north and south, but also at depth. And these are the results that were released a couple of weeks ago now, showing that we've gone from about 200 meters depth. Now we're stepping it down to about 300 meters below surface. What we'd be doing later in the year is continue to extend and infill and start to make those systematic step-outs at depth and also along strike as well. The big one for us to also talk about is sometimes people just look for the high-grade pits. But what we're seeing is, in my mind, actually even more important, we're seeing broad mineralized zones, which is important for development thinking because it's got broad mineralization with high-grade shoots within it. So it's really a good combination of what we're finding in terms of exploration success, but where does our development thinking start to go in the future as well. The other bits of the puzzle we're putting together is just how is Aquila and Mt Oxide shaping up. So, as we've got on this screen here, and it's just to put things in comparison, we have the Vero resource, 15 million tonnes, 1.5% copper, 220,000 tonnes of copper in the ground. So, there's a good solid starter resource there already. And as you can see from this screen, it's a couple of hundred meters deep, 150 meters along strike and effectively structure with a high-grade core at the bottom. What we're starting to see at Aquila is the structural information in some of our drilling is showing that it's starting to be potentially 300 meters to 400 meters long true width with multiple high-grade shoots within that broad mineralized zone and then that high-grade core as well. So, I think for us, it's really a geological model at the moment. And for us, it's to put the pieces of the puzzle together to be able to prove that and show that to ourselves and to the market as well. But it just puts the size and scale and the potential of this new Aquila discovery in perspective compared to what we already know at Vero and continue to learn and grow from there. The other one we talked to is Capricorn Copper earlier and that 65-odd million tonne resource that they have there at 1.8% copper. So that's a mine that's mined for 20 or 30 years, around 20,000 to 25,000 tonnes of copper. And I think the other thing to realize here is everything that Capricorn Copper is within a 2-kilometer strike zone. So that 2 kilometers is not too dissimilar from our 1.8 kilometers here at Aquila. So that kind of gives us the analog that we're talking about. And what they have found next door is once you get on to those high-grade structures, they tend to go down the fault zone at depth. I think Capricorn Copper have some of their structures start near surface and then head up to 1 to 1.5 kilometers down plunge as well. So, a great analog for us to look at, but also for us to start to learn from and see where is the potential growing for Aquila in terms of what is Aquila but what else is there along strike here at Mt Oxide as well. So, for us, we really are just starting to test the potential of the Mt Oxide Project from Vero into Aquila and into those extra discovery and exploration targets we've got in front of us as well. So, an exciting time as we come into the end of the year and into 2027. We have touched on Vero briefly, and it probably hasn't had much airplay in the last year or 2. So it's good to just remind ourselves of what that resource is and what our development thinking is. So, as I said, 15 million tonne resource, 1.5% copper, and Perilya did a lot of studies on it back in around 2010. So, it gives us a good starting point for our own development thinking. And what we can see here is that there is that potential for an open pit that transitions into an underground to actually start to think about what development looks like for Mt Oxide as well. So, for us, it's a great position to be in for a company of our size and direction is having something that is there as a development opportunity in a resource plus Aquila plus those extra targets for us to keep testing. So that touching on Mt Oxide. And as I said, that is the flagship and where we are really focused at the moment, and we definitely get a lot of positive feedback around the potential there, and that's why Tembo, Paul and myself really see that upside opportunity for Mt Oxide. Touching now on the Cloncurry Copper Project. That's our near-term development opportunity. The main one we've been doing there is not rushing into production like some have done in the past in that region. Our main one is to do the work, do the drilling, do the metallurgy, do the geotech, build up a robust PFS, make sure it's rightsized the infrastructure in the area and make sure it's economically sound. So the intent there is to release and finish that PFS and potential reserve late 2026, probably November, December. And then from that, late this year, early next year, have the options to evaluate on JVs, divestment consolidation, what's our options to best recognize value from that project. But also, for us is we have more upside, which we're starting to find through this year. So what we've found is we'll deliver the PFS reserve, but we've also got upside at Wallace North, the high-grade hits we've been having there at the Mongoose Taipan acquisition that we've recently done and also now at the Wynberg Gold-Copper Project that we released just recently as well. So touching on Mongoose, as you can see on the screen here, we acquired the Mongoose side of one resource earlier this year. And our work now is just prove that up to actually do 1 integrated resource model instead of 2 to look at the integration opportunities for some extra drilling that has been done that's not yet in the resource and what can we do to increase value at Mongoose Taipan. The same at Wallace North is we had 25 meters at 4% copper equivalent, and that's half gold, half copper. So great to have gold those grades in the portfolio, and there's upside to increase the value and the potential of Wallace North. And then at the Wynberg Gold-Copper Project is seeing that what was previously a gold resource actually has a pathway into the Cloncurry Copper Project due to copper in the resource that was previously not reported. So the main one to close out on Cloncurry is that we do have great ground. And as I say there is we have the 4 to 5 old pits and resources on mining leases. So in our mind, it's one of the nearest-term production opportunities or new production opportunities in the Cloncurry region. And we have great ground holding for short, medium and long-term potential around Cloncurry, which is a great pipeline to have. Closing out on our regional portfolio. As I said, we've got some pretty good ground, but it's not been the main focus. We'll keep ching away at that. Things such as Salebury towards Ernest Henry or some of our Marimo next to Rocklands gives us opportunities near existing infrastructure. And we'll continue to divest projects, which are noncore and let people actually have a crack at discovery and exploration such as Mandara and Prairie Creek, which we've moved on, but also retained exposure to the upside as well. So for us, the main thing with our regional portfolio is for a junior of our size, we do have heats of ground, but how do we focus on Cloncurry and then our flagship Mt Oxide project as well. So touching on the value opportunity and where we're at, but where we're heading is really around doing the work. So for us, we have that runway from where we are to do the drilling, to do the assays, get it out to market for Mt Oxide and show that blue sky growth potential. And then the same for Cloncurry is to continue to develop that robust and rightsized PFS that we can actually look to see the value from Cloncurry into 2027 and beyond. We've also been making great discoveries. So as I said, Aquila in terms of our resources to our market cap, not actually in this chart here that we're showing. So there's actually upside resources and exploration discoveries being made, which further add to our value proposition moving forward. And as I said, the best thing we can do is know where we're headed and then do the work. So we're going to continue to do the drilling, continue to move the assays and put them out to market. We've got more from Mt Oxide coming over the next few weeks, as we said, and then into the end of the year. And then from that is continue to develop the Cloncurry Copper Project as well. So for us, it's really earning trust through our actions, earning market momentum and engagement through our results and continue to just do what we say as well. So on that note, I'll start to close it off and a reminder for people to put any questions into the Q&A. True North Copper, we've got a great team. We've got great backing, and we know where we're headed, grow Mt Oxide, develop Cloncurry and make discoveries in our regional portfolio. So thank you very much for your time. I appreciate your support and potential investment into the SPP. And I will now hand over to Mark Longbottom for any Q&A.

Thanks, Andrew. We've got some questions coming through. I might start with a question from -- that was e-mailed through yesterday. So one of them is, Andrew, I'm sure you had a number of opportunities available before joining True North Copper. What was it about TNC that made you choose to come on board?

No, it's a great point, and I probably should have mentioned my background is mining engineer geo rounded out with an MBA in economics. And I loved what I did over the last 10, 15 years, and mainly that was growing OZ Minerals, size with OZ Minerals from $3 billion to about a $10 billion company and delivered all of their growth projects across Prominent Hill, Carrapateena, Brazil and then also West Musgrave. So I actually like taking challenging projects and resources, how do you rewire them and actually show value that others haven't been able to find or show before. So that's kind of what I enjoyed and did quite well at OZ. That was probably the same for True North Copper. I did have a few other opportunities for or CEO roles. But I probably didn't like the projects, and I didn't like the backing and a couple of my CEO said, "With your first craft CEO role, get good projects that you technically believe in, have good backing and a good register and then see where you can add value." I saw that True North Copper was probably undervalued, probably not properly set up in terms of the strategy and direction, and that's where I can add value. and that's what we've been doing over the last 6 to 9 months since I joined, just refining, cleaning up where we're at and how we focus, but also how we communicate that to the market. And now we're starting to see that, I guess, reputation of True North Copper refresh and reset in the last few months, which is great for where we're heading, but it's taken 6, 9, 12 months of, I guess, work to get there, but we're now set up for the next phase.

Great. Thanks, Andrew. And another question that came through via e-mail, which you did touch on during the presentation, but it would be worth revisiting. So following the $18 million placement and the SPP, what key operational and development milestones does the company expect to reach before needing to raise further significant equity?

A good question, and I appreciate that is one we'll have to keep working through as a junior mining company. The main one is to call out is that $8 million to $7.5 million payment for Mt Oxide. So, for us, that kind of clears the last obligation for Mt Oxide and allows us to have that runway clean slate into 2027. So that does take a fair bit of the money. The next one is really to continue to focus on Mt Oxide. So, the results and what we've been working on the last few months is really around growing and extending Aquila, which has really been quite exciting to see the potential of where it's heading. Later in the year, we'll start to move towards infill at Aquila and testing some, I guess, near resource extensions at Vero as well. So, kind of, I guess, a bit more confidence in the drilling and the infill. And then into next year, we'll be starting to think about resource definition, infill drilling, RC and diamond drilling into early to mid-2027. So, we haven't released when we're doing a resource -- maiden resource for Aquila, but that's when we're starting to think about. Now we're getting the size of the price. The other one for us is later this year, we will be delivering the PFS and reserve for the Cloncurry Copper Project in November, December and then looking at that final investment decision and upside opportunities in the early part of 2027. So that are some of the key milestones is drilling and assays still to come from Aquila we'll be looking to continue drilling and start infill drilling at Aquila later in the year. And then later this year Cloncurry Copper Project PFS and reserves and then upside and optimization into 2027.

Great. Thanks, Andrew. I do have a question there about the resources getting converted into reserves, which I think you've just answered. But a subsequent question there would be for Mt Oxide. With the cobalt grade quoted, do you expect it converted into a revenue stream?

Yes. So I think we have one of the highest-grade cobalt associated with copper resources in Australia, which is exciting, and cobalt is obviously a good critical mineral. We're currently doing some test work on cobalt because at the moment, you don't normally get it out through a flotation plant such as Cap Copper or Mt Isa and the like, and then it's lost to the smelter. So, you don't really get value for it at the moment. So, the test work we're doing now is how can we actually look to leach or extract cobalt as a revenue stream. That might be a bolt-on to a processing plant, but then we can see what a potential value or monetization path is for cobalt, which doesn't really exist in that part of Mt Isa at the moment. But yes, if we had that, it would definitely add a lot more to Mt Oxide in terms of its copper equivalent because it's pretty valuable stuff.

Great. Thanks, Andrew. And I'll combine 2 questions here. How many meters of drilling are planned for the remainder of the year? And how will that drilling be split between Mt Oxide and CCP?

No, that's a great question. We're currently just reviewing and refining our plan, so it probably will change a little bit. We're looking at between 6,000 and 8,000 RC drill meters is our main focus. And it's probably going to be 2/3 to 3/4 at Mt Oxide and then about the remainder to Cloncurry. And really, to me, it's following up on Wallace North, where we see the potential for Wallace North, it was very similar to Jericho next door. So, Jericho, as they got into it, has grown over time, and it's ended up being a bunch of high-grade lenses stacked next to each other. We think there's that same potential there at Mt Oxide from what we've released this year and 25 meters at 4% copper equivalent is pretty exciting anywhere, but particularly around Cloncurry. That's where Wallace North drilling will really focus. And then as I said, for Mt Oxide is our flagship, probably 3/4 of the drilling up there into Aquila and starting to do those infills and follow those high-grade shoots. And then the remainder up there will be a bit of work on Vero and some targets near Vero as well. Sorry, Mark, you're on mute.

Yes, that's all the questions we have, Andrew.

Very good. All right. Well, thank you very much for that. I will just pad out for 1 minute in case there are any other questions. I think someone called Harry has put up his hand, but I'm not sure, Harry, if you're able to type a comment because I'm not sure it's enabled for speaking, but I'll see what we can do.

No, it's not enabled for speaking.

All right. I will allow Mike -- so I'll just allow that for a second and see how it goes.