29metals (ASX:29M) Q1 2026 Earnings Call

0:00 Thank you for standing by and welcome to the 29 Medals Limited March 0.25 2026 conference call. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question you'll need to press the star key followed by the number 1 on your telephone keypad.

0:20 I would now like to hand the conference over to Mr James Palmer, CEO. Please go ahead. Thank you and good morning all. James Palmer here and thanks for joining the 29 Medals Update for the March 0.25 2026. Today we'll be speaking to the presentation released this morning alongside our March quarter report and joining me are Ed Cooney, our Chief Operating Officer, Peter Herbert, our Chief Financial Officer, and Christian Seller, our Group Executive Corporate Development. So 0.25 with some strong results and post-quarter end a challenging decision to undertake additional work to further de-risk Zampo Extended, which are now underway. So zooming out first before I talk to the quarterly, The 29 Metals investment thesis remains strong. The company's intrinsic value underpinned by 2 large copper resources across Golden Grove and Capricorn Copper.

1:11 As outlined on slide 4, both assets have long life potential and significant geological upside. At Golden Grove we're nearing the end of a significant investment phase to enable mining of high-grade ore sources, so from the end of 2026 we expect reduction of capital expenditures and progressive ramp-up of mining from the high-grade ore sources of Zamfo Extended, Oizon and Gossan Valley to support metal production growth and 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. Focus is firmly on an approval for a new tarmaling storage facility and the study towards a restart of operations. Prior to the production disruptions, Zanfo extended real guiding to over 50,000 tonnes of copper equivalent production per annum at Golden Grove, so once SAMFO's back, we'll be back at that run rate. At Capricorn Copper, we have a low capital intensity pathway to re-establish up to 30,000 tonnes of copper production per annum.

2:13 So we're progressing this business towards potential as an 80,000 tonne per annum copper equivalent producer and with the size of the resource of each asset, optionality exists to expand from there. So now to slide 6 to talk through the quarter and how we're progressing both assets towards their full potential. While working through the challenges at Zantho Extended and in everything we do, we live by our most important company value of Safety first, which is also reflected in our single digit TRIFF and 0 LTIFF. We completed ground support upgrades at Zantho Extended post the quarter end as planned. This enabled re-entry into the mine post the impacts of seismicity from last year. In parallel with the implementation of the ground support upgrades, further geotechnical review work increased our understanding of the Zantho Extended decline and level axis of areas impacted by seismicity.

3:08 And based on this further assessment, additional work to further reduce the risk of future potential production interruptions are being progressed prior to the recommencement of mining. Upon implementation of the ground squad upgrades we have the option to recommence mining. We chose to undertake the additional work to provide further de-risking of production from the end of 2026 and for the life of the mine. Since the temporary suspension of mining at Downtow extended last year, a dedicated team was established to incorporate remnant and extension ore sources into the 2026 mine plan. So far, this team is hitting the ball out of the park. We produced 6.4 kilotons of copper in the March quarter, a run rate beyond the top end of our 2026 full year copper guidance.

3:53 This work is ongoing to incorporate additional copper and gold ore sources into the rest of the year mine plan to maximise mill throughput and production outcomes and it's expected to partially offset the impact of delayed restart of mining at Xantho Extended. The team delivered this result all while continuing to build a new mine at Gotham Valley which remains on track for 112 million capital expenditures to first ore by the end of 2026. At Capricorn Copper, a successful wet season concluded and water is no longer an impediment to a restart. The team, now having reduced surface water levels by more than 2 gigalitres since the suspension of operations are in a great place. Our focus is now firmly on the approval for a long-term tailings storage facility which is now the critical path imperative for a restart of production. And we're planning for success with the commencement of a definitive feasibility study during the quarter to enable a restart of production upon approval of a new tailing storage facility.

4:53 So we have a lot to deliver for the rest of the year and with Golden Grove generating $10 million of free cash flow for the March quarter and a liquidity position of $238 million, we have the balance sheet to deliver through 2026 with a focus on long-term value creation. I'll now pass to Ed to talk through the operations in some additional detail. Ed. Great, thanks, James. Good morning, everyone. I'll move straight to slide 10 to talk to some additional detail on our plans at Xantho Extended. So as James mentioned, we completed ground support upgrades post 0.25 end as planned. In parallel, the team have continued to progress our geotechnical understanding of the impacts to production we experienced last year. A key learning was that although ground support upgrades alone may be sufficient to mitigate future production interruptions,

5:46 There are specific locations on the existing decline susceptible to higher rock stresses. These locations are situated where the decline crosses over and are coincident with seismically reactive fault structures. To further reduce risk of future production interruptions, we've made the decision to commence new accesses to the footwall drives, which effectively bypass these higher stress zones. This development was kicked off over the last 24 hours with the first 2 cuts on the deck as of this morning. We considered a range of scenarios to complete these works, such as progressing the works in parallel with production. And we do continue to test our thinking on the potential to accelerate recommencement of mining in the upper levels of Zampo Extended whilst development of the new accesses is being completed.

6:38 The current plan is to defer re-commencement of mining until the new accesses are complete, which is expected to be in the December quarter. This approach allows for higher development rates by progressing multiple headings without interruption or interaction from production activities. It gets us to our desired end point faster and provides greater production certainty at ZAMFO Extended from the end of 2026 onwards. And importantly, although this decision does result in deferral of metal from Zampo Extended, no impact to the reserve is currently contemplated. On to slide 11 and the team at Goldengrove are doing a phenomenal job in reworking the mine plans and evaluating alternate ore sources whilst we progress works at Zanfo Extended.

7:31 As shown on slide 11, Zanfo Extended contains high zinc and precious metal grades in addition to copper. However, there are other areas in Gosling Hill and Scuttles that have similar copper grades. Hence, we maintain copper production guidance as we complete the additional access development. Ahead of greater mine plan flexibility from Gosling Valley, Boyson and Zantho extended in 2027, The site team remain laser focused on identifying and incorporating additional remnant and extensional ore sources into the rest of year plan. With a focus on maximising value from the best available ore sources and the key objective of replacing the tonnes from the deferred restart of mining at Danto Extended and finding additional ore sources to push the mill and metal production outcomes harder for the remainder of the year.

8:29 And excellent progress on this front in the March quarter, as James mentioned, with over 6,000 tonnes of copper production. We do still have a lot of 2026 to go, but with the early winds on the board, the team are pushing hard to keep the momentum going. I'll now hand over to Peter to discuss costs and capital. Thank you Ed. On slide 12 we summarise costs and capital for the March quarter. Across the business we continue to maintain a focus on cost and productivity improvements.

9:00 The ongoing containment of site costs is a testament to the excellent work done by the team with $97 million in site costs in the March quarter in line with that achieved 1 year ago. That is despite ongoing inflationary pressures across the industry. Even As we work through the interruption to mining at Soundbrook Standard, we continue to maintain our LZ unit cost margins. AISC unit costs of US $5.10 and C1 unit costs of US $4.30 per pound of copper soil respectively was a strong result. Diesel supply and costs have been a focus in the current quarter. As a high-grade low-tonnage operation on grid power, Golden Grove is relatively insulated from diesel cost increases. We estimate that based on current diesel prices, diesel costs will increase from approximately 2% to 3% of total site costs.

9:53 That said, we are engaging with our fuel suppliers regularly to understand any potential disruptions resulting from global events. Pleasingly, we are not seeing any disruptions currently. On capital, Gosling Valley remains on track for $112 million of capital expenditure to first all by the end of the year. With total capital for the quarter of $28 million versus the prior quarter of $48 million, reflecting the step-down in activity during the quarter upon completion of surface civil works at Gosford Valley and subsequent demobilisation of the civil contractor in January. Additional works at Sanford standard to reduce the risk of further interruptions are estimated to cost between $10 million to $15 million. With reduced need for capital development activity in 2026 from the delayed recommencement of mining, we expect to have managed the cost of these additional works within a pre-existing total capital cost guidance of $160 to $185 million.

10:52 Work to identify opportunities to reduce and defer non-critical capital expenditures to better align with the resumption of mining at Danfoor Extended remain ongoing. Back to you James. Great, thanks Peter and thanks Ed. So before I move onto progress at Capricorn Copper I want to touch on the Golden Grove drill results released from the 2025 drill program during the quarter and post 0.25 end. Slide 15 shows some of the highlights from the 25 program. Every hole bar 1 is a resource extension hole, so wide high-grade intercepts outside pre-existing mineral resource estimates.

11:29 Overall, the 25 drill program added mine life and provided mine plant flexibility which then flows into the important work talked about earlier, incorporating and accelerating additional remnant and extensional ore sources into the 26 mine plan and beyond. As this work bears fruit over 2026, the additional works at Xantho Extended are completed and Gotham Valley is brought online, you can see how the pieces of the puzzle for Golden Grove come together in 2027 and beyond. We're really excited to bring that to fruition and while the decision to undertake the additional works at Zampo Extended have come at a cost to production in 2026, they're essential to delivering this potential. Now on to Capricorn Copper on slide 20. A huge milestone achieved during the quarter. Site water levels now sufficiently reduced to no longer be an impediment to a restart of production.

12:21 The team have had an extremely successful wet season, with significant water level reductions that now see the total water inventory significantly below the maximum operating level and surface water levels comparable to the levels prior to the extreme weather event in March 2023. And this was achieved through a very heavy wet season. It was a 95th percentile wet season, so only 5% of wet seasons have had more rainfall, 1 in 20 year event. The outcomes achieved during this wet season demonstrate that a sustainable water balance footing is possible at Capricorn Copper with the right focus and the appropriate water treatment infrastructure. A great job by the team. Approval for a long-term Tarling Storage Facility is now the critical path for restarted production and we're working towards a response to the Regulator's request for information in the September quarter. And we're planning for success with the commencement of a Dependency Feasibility Study during the quarter to enable a restarted production upon approval of a tarling storage facility.

13:18 I'll now hand back to Peter to talk through the balance sheet prior to wrapping up. Thanks, James. Gross revenue for the March quarter was $165 million. That was $28 million higher relative to the prior quarter result. That result was driven by higher payable copper and zinc metal sales. 29 metals finished the quarter with unaudited available liquidity of $238 million, consisting of $223 million of cash and undrawn liquidity under the Group's off-take facility of US $10 million.

13:49 Golden Grove generated $10 million of free cash flow after all capital expenditures for the quarter, inclusive of its Gosselin Valley investments. The decision to undertake further de-risking works at Danfoor Extended prior to the recommencement of mining provides us with greater certainty of the production outcomes from the end of 2026 and beyond, and allows us to deliver on the long-term potential of the assets. If the decision follows consideration of a March quarter performance, available liquidity, the macro environment, options to manage group operating capital expenditures and the ongoing efforts to identify additional oil sources in the rest of the year mine plan. Back to you James. Thanks Peter. So wrapping up here we've seen globally mines are becoming harder to find, lower grade and harder to mine. On the demand side, as the world electrifies the world, it is going to need a lot more copper.

14:40 29 Metals remains well positioned to capitalise on this favourable copper supply-demand dynamic with over 2 million tonnes contained copper in our mineral resources across 2 Australian-based assets both with long-life potential and significant geological upside. The team remain focused on leveraging this position by delivering safe production and prudently allocating capital to deliver long-term value to all stakeholders. Prior to the production disruptions as Antho extended, Golden Grove, 50,000 tonnes of copper equivalent and we'll be back at that run rate. Capricorn Copper, a low intensity pathway to re-establish another 30,000 tonnes of copper. So we are progressing this business towards its potential as an 80,000 tonne per annum copper equivalent producer. And with the size of the resources at each asset, the optionality exists to expand from there. So with that, I'm happy to take your questions. Thank

15:33 you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Once again, that is star 1 on your telephone if you wish to ask a question. We'll now pause a moment to allow for any questions to register. Your first question comes from Daniel Roden with Jefferies. Please go ahead. Hello guys. Thanks for taking my question. I just wanted to, I guess, understand, I guess, the example extended, I guess, the indicated mining rates there when we do get back in to the production kind of year end.

16:30 Probably a couple of questions in here actually, but I guess what's the decision and guiding process for bringing that forward? I guess you're still seeing it against seismicity and safety in the area, but what do you need to see to be able to accelerate mining in that area? And then I guess to follow on, like any of the work that you've done at the moment, has that indicated that we need to be reviewing I guess the mining intensity and mining rates longer term from that area, just given to manage that seismicity impact and make sure that you're not causing any safety implications for your workforce down there.

17:08 Yeah, great. Thanks, Daniel. Thanks for the question. I mean, the first thing, safety, yeah, as I said and I'll certainly reiterate it, That's been the primary focus and the ground support works that we've done, they've certainly allowed that. So we've had re-entry into the mine, so yeah, safety first always. Then the decision for the additional works is all around minimising the production potential interruptions going forward. So that first work focus on safety and then of course making sure that we can safely and without interruption progress the performance of Xantho Extended. Then within that while we're doing those works That's where we are considering the upsides to accelerate both outside Xantho Extended as well as Xantho Extended itself. I'll just hand it away to Dickie for a little bit more detail on some of those.

17:56 Yeah, thanks James. To inform a decision on any earlier commencement of mining, i.e. In parallel with development, we do want to undertake some more technical work and principally that will be some numerical modeling.

18:12 In terms of your other question about run rate, In January we did revise the production rate, the maximum production rate from Xantho Extended to about 600,000 tonnes per annum. That absolutely remains the goal and objective and nothing that we've seen from the technical work done to date would suggest that that target is not achievable once we restart production. So that's certainly the objective. Once we complete the bypass development then we can get back into production. Yeah, thanks. And I suppose part of the question is just looking at, I guess Golden Grove is able to give a $10 million net mine cash flow in the quarter. I think it just goes to show that the NSR profile of the production zones isn't just Santa expended. You do have some other obviously areas with high MSR,

19:09 tons that are coming out. So maybe is there any, I guess, additional colour on what that might look like in terms of the year until you get into Sanfo Extended?

19:18 Are you looking at similar MSR profiles to what you've delivered in the March quarter or would you expect that to change modestly and you've targeted some higher areas first to improve the operations now?

19:36 Daniel, I can grab the start of it and then Ed can add some more detail. So yeah, we've certainly had, since the first seismic event, we've had a team really working on that. So everything, the rest of the mine, so Xantho Extended as you've seen from some of the work, is obviously the bottom, the new development area of the mine. We've still got the rest of the mine where the team are always looking at that and exactly as you said, the NSR scripts are always targeting high value, but through the work they're doing we're seeing more of that coming through. The other thing I'd add to is the exploration work and things like Oizon, Hugamon,

20:10 we're seeing those coming together, so lots of potential upside, and then things like Trial right up in the top area of the mine. So yeah, value always and lots of that value drives you towards particularly copper, gold, which we've seen some of and certainly looking to fill the mill with that through the rest of 2026.

20:38 Yeah, I mean the only thing I'd add to that, so some of the specific and recent extensional results that we've had have introduced additional inventory at trial which is quite reasonable copper grades, 2.5% copper grades, very shallow so from an NSR perspective that is attractive. That will come into the plan sort of the back end of the year. Always on as well which will be a new ore body. That will kick off in the latter part of the year into 2027. And ultimately

21:08 it's a bit hard to pin down exact range of NSR material because there is still some work ongoing and ultimately they're trade-offs. We are also looking at gold specific sulphide material that we could either blend in with copper or treat in isolation. So there's a few variables to work through as we continue on this work.

21:32 Thanks, I appreciate that. I might ask a quick one and pass over. I guess the CAP copper, the wet weather programs over the, I guess, cyclone in wet weather period in March seems to have been quite good. It was definitely better than my expectations given the level of rainfall that you had. It must be pretty encouraging for the regulator to see that the progress they are making, they're able to de-stock some of the water inventory.

22:02 How are those conversations going? You mentioned that in September you're going to get a bit of a basic view on what the TASF decision is going to be. I guess what's the timing expectation on the DFS that you're doing at the moment and what should we expect to see from that?

22:21 Great, thanks Daniel. Yes, certainly very pleased with the way the scene has handled all of the work. You can see that's been a downward trend, over 2 gigalitres of water now reduced over the last 2 years. So happy with the long-term trend but then as you pointed to, really happy with the short-term trend given how wet it was up and around northwest Queensland and you've seen some of our neighbours certainly have a lot of water as well. So yes, the resilience of the site to be able to reduce water levels, not just when it's easy but also when it's hard, very, very pleased with that. And then you're

22:53 right, that does mean the regulator, they can see the work, they can see the risk has reduced, so very positive conversations in general with the regulator. And then specifically, so yeah, DETC themselves, we've got the OCG overlay, so again, all very positive, where the tailings permit is now the critical path. So by removing water from the critical path, Tarlings becomes the critical path. So yeah, we'll be responding to that request for information from the regulator. We've had technical meetings. So yeah, all of that is going well. Then you mentioned the DFS. So yeah, obviously the team have been ramping that up during this quarter and therefore we expect by the end of the year that we'll have a lot of detail. We've got some detail on some of the big packages but we'll have a lot of that detail towards the end of the year.

23:45 Awesome. Thanks James. Thanks Dave. I appreciate your answers and your time. Cheers. Bye. Thanks, Ben. Thank you. Once again, if you wish to ask a question, please press star 1. The next question comes from Richard Brown, private investor. Please go ahead.

24:03 Mine was just on the same lines for Capricorn. Is there any, you know, on a positive or pessimistic view as to when that might be open or how long away for that mine to restart if everything went well? Yeah great, thanks Richard. Yeah we certainly do look at the glass half full side internally. I think what I'll do is I'll go back to, yeah, having water not being the critical path, I think that obviously gives a lot of cause for optimism and therefore the tailings permit is the critical path. With that being ultimately in the hands of government that's what makes it hard to really predict or forecast when we would have that permit in hand. But that's why we're not waiting, we're doing the work on the DFS. So we'll be in a position to be able to make a final investment decision once we know the outcomes of the study and then the outcomes of the tarlings permit. So they're the 2 big things that we're focused on.

25:08 One of them certainly firmly in our hands with the DFS, the work with the regulator, progressing really well and very positively, but yet very hard to predict or forecast when the regulators are going to give us that approval. Thanks, Richie. Thank you. There are no further questions at this time. I'll now hand back to Mr Palmer for closing remarks. Okay great. Well thanks for the time. Today I think as you've seen certainly we're focused on returning Zanto Extended to production while We're developing always on Gotham Valley through 26 and we have the balance sheet to do this. We're also pursuing the DFS on Capricorn proper and then strategic options to deliver the potential of this business offer.

25:58 Thank you and have a safe and productive day.