Halo Minerals (LSE:HALO) — Investor Presentation

0:01 Good afternoon, and welcome to the HALO MINERALS PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Andy Denon. Good afternoon to you.

0:26 Good afternoon, and thank you very kindly for hosting us today, and thank you for those of you that have tuned in to hear the latest updates from us HALO MINERALS. We'll run through the recent presentation which the company uploaded to its website and give you an update on all activity that's been going on since IPO and where we're positioned moving forward. Before we move on to the first slide, let me just start by introducing HALO. We're a company which offer investors exposure to an advanced copper and gold development project in Chile, which has defined job compliant ore reserves and resources, a BFS level processing concept, an approved EIA and recently an updated CPR economical study.

1:12 Playa Verde is really differentiated by its surface deposited feedstock, the absence of conventional mining and alignment between metal recovery and management of a historic environmental legacy. So our focus has now shifted from technical validation to optimization work streams, commercial contracting, financing, and ultimately taking FID so we can advance to production. Next slide. Oh, yes. I'm here today with Frank, our CFO, which you... You've seen before. And I don't think anyone's had the opportunity to meet Eric, our COO, who joins us from Lima, Peru today. So we'll obviously have interactions with the gents as we make progress. We've got the disclaimer up on the screen now. I'm not gonna read through that, but please do take your time to study and familiarize yourselves with the risks and the disclaimers that are included on that slide.

2:14 So I think this slide really captures the proposition in one page. We've got 33,940,000 tons of JORC compliant ore reserves and that's defined by a dual processing route and a strong study based economics of $195,900,000 MPVA after tax and a 46 IRR. And from our perspective, really underpins the economic case of the oil reserves. In addition to those oil reserves, we do have a number of organic growth drivers which we'll come on to as we progress through the presentation. But importantly, the asset is already at an advanced stage. The EIA is approved. The class three engineering study and the updated CPR are complete.

3:01 And as I mentioned, our attention is now really focused on optimization, commercial agreements, and the financing work stream. So the... That base case really underpins the economic study... Sorry, the economic case for the investments in Playa Verde. Obviously, it's got robust NPV numbers and IRRs and a healthy annual free cash flow profile. And the processing route that we'll be using to retreat these tails will combine both acid leaching and SXEW as well as flotation to ultimately produce both copper cathodes and a copper gold concentrates. And the tailings that we have here have been deposited on a beach which you can see in that small picture in the bottom right of the screen.

3:48 This is orders of magnitude five to 5.5 kilometers and approximately one to average volumetric depth of about 9.5 meters. So it's within that red area there that we have that 50, actually 54,000,000 ton jaw compliant resource base, which does include the 32,000,000 tons of reserves. But as you can see, we also have licenses and covered in the blue area, which extend out into the Bay Area there. And that's a big organic growth story for us where potentially significant minerals lie at the bottom of the seabed within that existing footprint, and they'd be hugely synergistic and valuable minerals for us to get after and process.

4:34 Next slide please, Nick.

4:36 In terms of Playa Verde, the project really benefits from characteristics which are quite unusual in copper developments. The material that we have has already been mined, crushed and has now been deposited at surface on the beach as we've just spoken about where it's subsequently been extensively drilled and tested. This allows a dredging based extraction method and a comparatively capital efficient development concept while the reprocessing and managed reconstitution of the beach with the clean tailings will address an existing environmental legacy. So known feedstock, no conventional mining, capital efficient scale, and environmental purpose all combined here to give us that sort of four pillared

5:24 foundations. Eric, is there anything maybe you just add on why Playa Verde is different? Yeah. So first of all, good morning or good afternoon to everyone. This project avoids the stripping, the blasting, and the underground development associated with any conventional risk... Conventional mine. So the electric dredging, it's a plus. And also after doing our engineering studies, we've seen that from previous years, we are going to be able to maybe save some money in the CapEx because we've identified some efficiencies in the flow sheet, the... And the machinery and equipment used in the in the plant.

6:15 Yeah. Perfect. So I think just in terms of that recent class three study, we've got an estimated $92,800,000 of of total CapEx. I think as you were just mentioning there, Eric, there's been some observations where there's some optimizations to be incorporated into the final flow sheet through our value engineering program, which is ongoing, as well as some other potential cost savings on the actual ultimate equipment through a competitive procurement tender strategy. And I think the low end of the estimates on capital savings are sort of circa 6,000,000, maybe up to $10,000,000 savings. So sort of ultimately, we're expecting to land with a CapEx need in that sort of mid to potentially low 80s. So very affordable in the context of a typical copper development story. Next slide. Thanks Nick.

7:08 Recently, the company also announced an updated competent persons report. This is obviously a key work stream for us on that pathway towards FID, really reframing the ore reserves in the context of that updated class three engineering study, which brings the definitive feasibility up to a bankable feasibility study level. I think what's important as a distinction is between what supports the current investment case and what represents upsides. So the 33,940,000 ton oil reserve is really the foundation for that independent base case. The wider onshore mineral resource is expected to extend the processing run of mine life from seven to eleven years. We've got a lot of high confidence in that.

7:55 But that is an upside case based on the majority of this information and the sort of technical studies that we're going to be talking to you about today. And then

8:05 we've got low hanging fruit to convert potentially another 25% to 30% of our existing resource into the reserves category. This is something that we may turn our attention to in due course, but if it's not a prerequisite for us to be taking FID, we'd rather be getting on with putting the capital stack together and beginning the construction phase of the project with a key view of getting into production as soon as possible really being key and focal to what we're doing here. But obviously, all of these things are sort of working in parallel with one another. And then we also have the surf and the bay areas, and they step probably a little bit further out on the development horizon.

8:51 They obviously represent the minerals contained in that blue area of the licensing that we saw on one of the earlier slides. They're hugely synergistic or highly valuable minerals for us to get access rights and develop... Or modify the development plan to include those.

9:06 But obviously, that's contingent on the maritime concession, which is an ongoing work stream that we're pursuing at the moment. In terms of the updated ore reserves and the mineral resource, Eric, is there maybe anything that you'd just add on that? Yeah. So on September, we updated our CPR, and we recategorized our ore reserves. We increased them by 1,740,000 tons or a 5.4% increase, and we got up to 33,940,000 tons of 0.25 copper in the... In our reserves. The total mineral resource of our allowed area of exploitation right now includes 53,440,000 tons of resource at 0.24 of copper.

9:58 And, also, our competent person, Emmy, has identified preliminary potential for a further increase of up to 25 to 30% of these reserves. This, however, is subject to drilling, modeling, recategorization, and confirmation of modifying factors. So we should do this after FID. And, also, at at the long term, we have identified and we know that in the marine surf and and bay zones, There's a lot of resource potential based on historic non York information. But in order to explore and to prove further resources and reserves, we would need to to have the permits and the rights to do so. So we will do that in parallel as we continue to move forward on the project.

11:00 Yeah. And I think it's probably just an important point to flag that there really is a significant depth of a... Of technical database that support these studies. There's been more than 300 drill holes over 2,600 samples taken. And, obviously, that encyclopedia of project knowledge and depth is what's gone into producing some of these numbers here. So, you know, it's really built on job compliance sound sort of technical studies and obviously has been looked at by a number of different people throughout the project's life. So it's good to see that there's continuity on the consensus from those independent parties as well. Next slide, please, Nick.

11:42 So in terms of how we convert these minerals on the beach into processed metals for commercial sale, I think the flow sheet really is designed around the mixed oxide and sulfide characterization of the tailings. Soluble copper is recovered through the agitated leaching in the SX EW while the sulfide component will be treated through flotation to produce that copper and gold concentrate. The concentrate will be 20% copper with between five to six grams per ton gold included in this as well.

12:17 And then these reprocessed tailings are then placed into a managed sequence behind the advancing dredging operation. So we effectively reconstitute the beals... Sorry, the beach with the clean tailings. And that's obviously key to efficiency and key to some of the obligations that we've taken on in terms of reprocessing the material and also reducing the heavy metals and specifically the bioaccessible arsenic in the return sands such that on completion of the reprocessing operations, we expect to return the beach back to the municipality in a state suitable for recreational use once again. So that's the concept. It's been very well defined. It's the same concept that's moved from the preliminary definitive and most recently bankable feasibility studies that we've done.

13:06 And other than some optimizations and perhaps introduction of vertical filters over horizontal filters, the core thesis of how we're gonna be executing that processing remains the same. One thing I would just add is that the tailings deposited on this beach is a result of the Porto Elios and El Salvador mines depositing some 250,000,000 tons plus of tailings in a dry riverbed from the nineteen thirties to nineteen fifteen sixties. Those tails are then washed a 120 kilometers downstream to be deposited where we have them in location today. And for want of a better phrase, perhaps maybe one of the benefits of that 120 kilometer journey is that we've got a a very homogeneous ore body.

13:52 So that journey has really blended up the tails, and that's resulted in a very consistent ore body now deposited on the beach, which does lend itself very well to the passive excavation method of using the dredge and also the processing operations that we'll be setting up as well. So unlike maybe some other tailing deposits where you can have them in a... On a on a pad and processing has changed over the years and the ore body has changed over the years and you've got sweet spots and low spots. This isn't the case with what we've got in Channorau. We've got a very consistent, very uniform, very homogeneous ore body and that does actually lend itself very well to the method that we'll be using. Eric, in the seats of COO, just on sort of pro... Defined processing concept, is there anything you'd just add as to what I've said there?

14:42 Yeah. So it's... As as you mentioned, it's a really simple

14:46 procedure. The sands are really homogeneous. It's easy to to to dredge. As mentioned before, we have no blasting, blasting, no stripping, no no mining. So it's just a dredge that pumps up the sands... The wet sands into the plant, which is going to be 200 meters away from from from from the operation. It's a really straightforward plant. It... You pump the sands. You classify the sands. What goes into the to the feet

15:26 agglomerates, then we leach it, then we do some electro weaning. We clean the the process. We float it those additional sands to extra clean the the sands, and then we get two products. By leaching and and having this electrowinning process, we're gonna get some copper cathodes. Approximately, 8,640 tons per year of of of copper is gonna be recovered through the process. And then we we get copper concentrates. These copper concentrates, they're copper and gold. So at the end of the process, at the end of the... Of of the year, we're gonna have 8,600 tons of of copper and also 1,400 ounces of gold.

16:25 That gives us an approximately 72% rate of recovery. The plant is designed to process 5,000,000 tons of of sands through the year. And instead of having a tailings pond where you throw away all all your your tails, what we are... What we do or we're gonna do is those clean sands after this electro weaning and flotation process are gonna be resanded or resent to the beach to give back to a community of a a beach that they could use. Right now, it's unusable. So

17:05 it's a really nice process, a really simple and nice process. You you you clean out the sands while recovering all the the minerals and then re sanding the beach with clean sands. Perfect. Thank you. And, Nick, can you next slide? So in terms of economics, this is obviously just helping people understand what we have here on the beach and what it could be worth. There are a number of different scenarios here. And I think we deliberately lead with the reserves case because it's the appropriate foundation for the sort of investment proposition.

17:44 On that basis, the latest CPR, which we announced some of the highlights from earlier this month, indicates an after tax NPV 10 of $174,300,000 and an IRR of approximately 46%. On an NPV eight number, that's closer to $196,000,000 value just in the ore reserves alone. And a number of our peers, more probably over in Canada use, for example, NPV five or six numbers, which will obviously be much healthier than what we're showing to you here today. But I think what we're ultimately conveying here is we've got a very economic project. There are a number of other scenarios that we've also been able to show you how they impact the value of what we've got on the beach there. We have the optimized ore reserve case, which moves then from NPV 10 of 174 to 190, and NPV eight goes from 196 to $212,000,000 And that's ultimately incorporating 6,000,000 of CapEx savings, so not the full 10 that's been potentially identified, $6 of it, which I think we're very confident ultimately realizing.

18:54 And also a reduction in the sulfuric acid price from the model $200 per ton in the base case to a $150 per ton, which BIOSME, the guys who did that class three engineering study based in Santiago, are confident is attainable on a long term supply contract. Obviously, sulfuric acid's in a bit of a pressure point at the moment with the situation in The Middle East, but we don't need that asset until Q3, Q4 twenty twenty, twenty twenty eight. So we're not paying the spot prices that people are having their handheld to the FIRO at the moment. But in addition to the ore reserve case, as we spoke of, we've got a very homogeneous ore body here. We've got a lot of confidence in the additional metals contained in the resource above and beyond just the reserve case.

19:44 So we have a management case, which is to retreat the full full job compliant resource that we have onshore on the bay there. And if we use the original base case assumptions, that's about a $3.00 $7,000,000 NPV eight, an IRR of about 48%. But then if we include some of those optimizations, which again are the $6,000,000 CapEx saving and a reduction in the asset prices, then we're in the sort of $337,000,000 $338,000,000 NPV eight range and a 54% IRR. So a very robust project with a lot of leverage towards copper price. All of these economics are computed on a 6.20 per pound copper price and $3,700 an ounce gold price, which are below where the spot prices are on those today. And, obviously, our anchor around that $92,800,000 CapEx number save us about $6,000,000 CapEx saving in the optimized scenarios.

20:41 It's a very defensive numbers for us to compute or the the q p for the CPR to to compute this economic analysis.

20:53 So in terms of the reserve base case production, cash flow and sensitivity table here, I think what we want to convey is that the reserve case produces a simple initial profile. It's got an approximately seven year run of mine life to exhaust the reserves, which will be increased by a further four years to incorporate the other 20 odd million tons of JORC compliant resource, which we have on the beach as well. It's an average copper output of around 8,600 tons per year in payable copper, and that's approximately 7,080 tons of copper cathode. And then the balance is obviously the the the copper produced in the concentrate, which by volume is about 8,000 tons of concentrate, but 20% copper with an average 5.5 gram per ton gold credit included as well.

21:43 So it's a pretty simple project. It's a highly cash generative project. And I think from a management team's perspective on putting the funding stack together towards taking an FID, a lot of our focus is really on leveraging that project definition and the high cash flow generative profile that the CPO study projects the company to generate to be able to leverage debt products suitable for that future cash generation profile. Eric, anything you'd just add there or Frank, maybe anything you'd add there just in terms of the ore reserve base case, maybe on the OpEx?

22:24 I think from my side, we'll be talking later on about the financing packages that we're looking to put together. But this is at the foundation of it all and has been very well received so far. Eric Eric, anything you add before we move on to the next stage?

22:44 Yeah. Just to add, the the potential of the of the project is amazing. The the beach... The on beach reserve supports a life of mine of seven years, but should we process all the resource, we're gonna have an extra four year life of mine so it it would come up to eleven years without including the long term upside case of the surf zone and the and the and the base zone area. The operating cash cost is estimated at 2.2 pounds of copper... Of byproduct trade. So so we have the copper prices with us. It's it's going to be a really profitable project, and and and hence, that... That's why we're gonna be generating $56,000,000 of operating cash flow per year.

23:46 Yep. Next next slide then, please. So this is capital and operating cost framework. I think the message here is that the capital requirement is modest relative to the scale of the modeled project value. So, like, a 92,800,000 CapEx before cost savings are realized is based on that class three engineering study, and it includes contingency, and it's a very fully costed number. So I think that's a very strong defensible number for us to be seeking funding for. The current optimization program is really focused on executable savings both through design, procurement and commercial contracting. Obviously, supply contracts are important and are an important operating cost lever for us to continue to pursue.

24:36 And obviously, achieving those expected cost savings is pretty vital for us as well. I think the only other thing that I'd just add here is that there... I don't think we've spoken about it in this presentation so far is that there is also an optimization to be had, which will increase the NPV of the project by 4 to $5,000,000 by just changing the dredging sequence. So that's something that, you know, we can incorporate into the final plan. And, obviously, these are all sort of upsides here. So I think the downside is is pretty well covered in terms of understanding what the sort of right hand of the brackets would look like and cost. Next slide, Nick. So now, obviously, we're at the exciting stage of sort of advancing from engineering validation towards taking an FID.

25:25 Project's really now moving from these technical concepts to preparing for execution. Our current work streams are really centered on these value engineering programs, the procurement, the permitting, and the key commercial inputs such as power, acid, and offtake. So all of those are live work streams. We're also advancing the financing package that we're hoping to put together in order to support taking FID. And, obviously, as we spoke about, we're seeking to highly leverage the cash generative profile of the project in order to support debt products for that development stage. Now one of the interesting things about our project is it's actually more infrastructure led than mining risk per se because the materials there at surface, it's not like we're opening up a pit or underground mining and there's a big ramp up over a period of time. The material's there. Once the dredge is on-site, we'll be able to move effectively, you know, full production plateau amounts of material from the first day in theory.

26:26 So it does ramp up to full production pretty quickly. I think the recent studies really highlight that first production could be expected in October 2028, which in the context of copper developments is really just around the corner now. Just in terms of these gate items here, I think since this presentation was published, we've also received the mining permit, which we announced last week, and that's a key permit that will enable us to operate the dredge on the beach to pick up the tails to feed the the processing plant and, as equally importantly, redeposit the clean material back onto the beach as well. So that's an important milestone for us to have achieved as we make progress through these gates as well. Eric, anything you would just add just in terms of what I've said there?

27:15 Yeah. So I would mention that since we received we received the environmental approval, We started working really fast and really, really thorough. We've updated our costs with BIOSME. We updated our CPR and our reserve statement. We've been moving really fast with the permits in Chile. As you mentioned, we've received last week our mining use of beach permit, which is a really important and... A really important permit for for our operation. We expect to receive our mining easement really soon, but I think we're gonna talk about it afterward. And we are really focused right now on on assembling the finance... The financial package and and taking FID. I think that's that's our biggest step right now.

28:12 And once we do that and we have the funds to to build the plant and start operating, The planning assumes an eighteen month implementation period and a potential start up in October 2028. That's that's our plan.

28:33 Yeah. I think we can go to next slide now. So in terms of how we're going to take FID, we've got quite a number of levers and potential sources of capital available to fund a project of this nature. So I think it's safe to say we're not pursuing a single source sort of financing strategy. From our perspective, the technical definition and those modeled cash generation profiles really do allow us to evaluate a blend of different types of instruments. And I think they're mostly centered around senior debt, off take and prepayment linked financing opportunities, equipment financing from some of the OEMs and the vendors that we'll be dealing with, strategic capital potentially is of interest given that we're reproducing effectively sustainable copper.

29:28 And I think where economically appropriate, looking at royalties or stream financing structures is also on the table for us. We have the benefit of having none of those instruments in place at the moment. So we've really got the full menu of different tools available to us given that all the development and sort of exploration and technical work has been funding an equity. The project remains unburdened by other types of instruments that other developers may already have sort of gone to the well to draw capital. So the objective for us is to really fund construction on terms that preserve value and maintain appropriate or adequate levels of flexibility through the buildup and ramp up stage of project development and really to align the repayment of capital with as we've spoken around that highly cash generative profile of the asset as mold in that recent updated CPR study.

30:23 So that's what we're principally focused on. You know, the senior structured debt, private credit style lenders, family office style lenders seem to be resonating with the story that we're able to tell. The offtake link prepayment, I think the industry has got more competitive in terms of getting access to offtake and traders understand that there needs to be a little bit of capital on the table to secure allocations for the future. That's definitely an area. Royalty and streaming, as I said, we think that's available to us. It's probably a slightly higher cost of overall capital. So it's probably not the immediate focus of where our attention is on. And I think that immediate focus was really on the senior structured sort of backbone debt.

31:09 And then these other instruments will sort of slot in around that. But I think for us, main objective is to take FID as soon as possible and to get into production as soon as possible. So really focused on people with speed and efficiency and existing knowledge of some of the things that we're doing here are quite vital in us being able to to take that. Frank, Eric, is there anything you guys would just add in terms of the diversified project finding strategy? Think it's worth saying that we're looking to do... To make major progress towards the FID by Christmas with the final sign off when we draw down, which will be in quarter one twenty eight. Yeah. And that keeps us on track for October 2028 model sort of first production profile. So And quarter one twenty eight. I would add that every time we discuss about how we're gonna fund the project, our main vision and our main focus is to generate value for our shell... Shareholders.

32:15 And the aim here is to be flexible

32:21 trying to to raise these funds. So we are in the position of having a really balanced funding package aligned with generating value for our shareholders with a cash generate... Generating project. So as you mentioned, Andy, we are looking more into senior and structured debt, offtakes, royalties. And I think that the reserve base case CapEx is approximately 53% of NPV 10, so that supports engagement across multiple funding channels. Yeah. I think that's kind of the important message here is that, you know, 92 ish million dollars of CapEx prior to the realization of already identified cost saving initiatives versus a 195 ish million dollar NPV just on the reserves base case alone really becomes quite manageable.

33:22 I mean, typically, debt is in the 60 to 70% loan to value ratio or total funding requirements less than 60% on a loan to value relationship. So that's why we have confidence and high focus on landing those types of products because we've got the sort of project economic backdrop that can support them. So... And obviously service it through that high cash generative profile once it's actually into production. We we do find when we go into the market that we... We're pushing out an open door. There is a a great willingness to talk to us and talk about structures and and finance packages, which is, in my experience, quite unusual for a project at this stage. Yeah. And, obviously, timing's everything in that regard. And, you know, having a project that's got over $10,000,000 of sunk costs in technical definition has got a reserve base, has modeled that on a processing concept that's very well defined, completed the BFS level CapEx and OpEx numbers and having the permits in hand are quite unique attributes that not a lot of people are in a privileged position to be in.

34:37 And obviously with the commodity price of copper being where it is and the world demand drivers for copper only really being added to. You know, it's it's almost a perfect storm for projects like this to to be able to succeed. So it's down to us as a management team to take advantage of that environment and convert that or convert our project to those realities. So that's what we're working on.

35:03 So we spoke earlier about multiple layers of project upside. This is an important part to our story because we are more than just that base case reserve case project. We're anchored on that and that's a very pessimistic place to be because there is these number of growth drivers that we also have the advantage of. And this is really a staged value framework rather than a single blue sky claim. So that reserve base case stands on its own and really is the foundation. Optimization is obviously the nearest and most controllable upsides that we can add into that process in the coming weeks and months. We've got further reserve conversion and the full resource processing that then sit behind that as well. And obviously, that's all contained within our existing license area.

35:48 And then we've also got the surf and bay zones, which really do represent longer optionality and material tonnage to go through that processing plant as well. So there's a multilayered approach here to how we're sitting on organic upside. Our sequencing is really to finance and execute the foundational asset before relying more heavily on these additional layers. But they also do form an equally important part of our organic growth story given that they are highly synergistic and very valuable minerals for us to process. And as I say, this is all within the existing license area. In addition to that, there is the opportunity for inorganic growth and there's a number of avenues that we're pursuing there. And there are hopefully initiatives that we can see convert into resource inventory growth in due course.

36:38 But as I say, for us, it's really important that we stay focused on getting our foundational asset financed and into production as soon as possible because then all of these upsides become a lot more meaningful and also more affordable given that all of this can be funded out of future production revenues as well. So, yeah, I think we're more than just the reserves base case is the key message that I wanna get across there. And, you know, the opportunity and the timing is is now for us. So it's it's really exciting time in our journey. Eric, anything you would just add on that? Yeah. So as you mentioned, I think our immediate upside has been the increase in our ore reserve through our CPR.

37:30 They increased to 33,940,000 tons. I think the next one and the and the logical one is to identify and and reduce these efficiencies in in CapEx, which would also give us a potential upside. And then once we have FIB, we need to work on increasing these reserves of our 33,000,000 tons of resource in in the onshore, but also explore the possibility to to drill, explore, and and get the rights and approvals from the Chilean government to process the ore that's been deposited in the surf and the bay zones area. So so we extend the the life of mine and, of course, increase the NPV and the and the cash flow.

38:30 Yep. Next slide. So resource recovery and environmental and community purpose. And this is a key theme for us as a business, obviously, being focused on tailings. So environmental purpose is really embedded in our operating concept. So the project is, as we've discussed, designed to recover copper and gold from historic tailings whilst also managing the process material through controlled redeposition onto the beach to reconstitute the beach in a way that we expect is going to be suitable for recreational use once again. Alongside the engineering work that we spoke quite heavily about, HALO is also taking very seriously its health and stakeholder commitment programs and they've been going on in the background. I think we announced the initiation of those in April, shortly after the completion of the IPO and we're going to continue to treat environmental compliance and community engagement as core delivery work streams for us. It's all very well getting the authority to operate, but you need to maintain your social license to make sure you're able to continue to operate throughout the full project life cycle. So that's a key focus to us. Those community stakeholder programs have been ongoing recently. In fact, I think on Friday, Eric, we had the last one

39:46 for that most recent program. And obviously, the experienced specialist teams that we have working on the human health studies. This is us going above and beyond to continue to comply with the obligations of our RCA are continuing as well.

40:04 This is very important because the people of Chernobyl have had this pollution effectively deposited in their front garden or front beach. And this is, you know, a toxic site. So UNESCO visited it back in the eighties and said it was one of The Pacific's largest industrial pollutions. And I think Eric, correct me if I'm wrong, but one of the former presidents went for a swim in the bay in the early two thousands and had a skim rash as a result of that. So, you know, a lot of what we're doing here is, yes, producing the key... The the the the metals the for commercial sale, but also reducing the heavy metals and specifically a bioaccessible arsenic in the return sands. So very much improving the the livelihoods of the people that that have this beach on their front doorstep there. Anything you would add on that, Eric? Because I think I've covered it.

40:55 Yeah. Just to mention that Playa Verde is a really unique project, not just in the in the tailings and and the geology of it. It's really unique in in its environmental and community aspect. It's not a tailings pond that it's deposited in some site of a mining site next to a plant and a mine. This is from the art of the people of Chanaral. So one key component of the project is the

41:26 involvement of the people and the and the community of Chanaral, and we've we've known that from from the start. So in parallel of getting the permits and and and doing everything we need to do to to fast forward the project, we've been really involved in developing this social strategy and community engagement with. And that's why we've hired our technicians and our and our specialists to assay and measure the sands pre, during, and post process and to really focus on processing the tailings and getting the copper and gold out of it, but focusing a lot in re sanding the beach with cleaner sands that don't create human health risk.

42:23 This is probably one of the most important things we we we talk about in in in our meeting. So I think we've we've really... We've redone some work here, and we will continue to do it. Yeah.

42:46 Okay. So the investment case. So just bringing all those slides together just as a quick recap of of where we're up to, what we're what we're offering, I guess, exposure to ultimately. So we've got a very advanced asset. We've recently published the results of an updated competent persons report. We've got draw compliant all reserves and resources, and we've recently updated our definitive feasibility study to bankable feasibility study level, CapEx and OpEx numbers with that class three engineering announcement that we put out earlier this month as well. So we've got a very current technical and economic foundation, which is relevant obviously for the work streams towards FID. We've got very compelling reserve economics. So an after tax NPV 10, which is very prudent way of viewing it of nearly $175,000,000 and an IRR of approximately 46% is also a foundation that we can build hope and expectation on converting into delivery in the near term.

43:49 We've got a very capital efficient concept as well. So CapEx of 92,800,000 before cost savings as we've spoken about. It's order of magnitude 54% loan to value on the reserve case. Base case is manageable financing commitment for a project of this nature. We've got a defined production concept, so we'll produce about 8,640 tons of payable copper per year and about 1,400 ounces of gold by processing approximately 5,000,000 tons of material a year. And just in terms of orders of magnitude, that's approximately a square kilometer of the beach. So just in terms of that dredging operation, it's going to move around the beach most likely in a clockwise motion, dredging that sort of square kilometer pond every year to sweep through and retreat ultimately the full 53,000,000 ton resource.

44:43 We also have visible catalysts. So we've obviously got the optimization work streams. We've got the potential future reserve conversion opportunity as well. We've obviously got financing FID and those longer term bay and serve zone opportunities as well. So a number of bites of the cherry in terms of future material catalysts. We also have a differentiated purpose. Metal recovery from legacy waste really aligns production of these key strategic metals with environmental purpose and that really is quite important in today's modern society. So I think in summary, HALO really offers an advanced Chilean copper development proposition, multiple visible catalysts in the near term with multiple financing pathways ahead of us as well.

45:32 Investment case really founded on those existing reserves, which are very technically well defined. So no exposure to exploration success, but we do have material upside through the drill bit and certainly in regards to the SURF and Bay Zones that we'll address in the future. Immediate valuation creation program is really centered on completing optimization and commercial work streams, ultimately securing an appropriate financing package, which we're working on actively at the moment and ultimately progressing towards FID, which we hope we're able to remain on track for later this year. There were some contributing factors which make that slightly outside of our ultimate control. But I think the key message from us is that getting that funding package right and taking FID with confidence is our ultimate focus.

46:23 If, you know, ultimately, FID slips by a couple of weeks for a project that's gonna be processing material for eleven years in the management case, a couple of weeks slippage really in the grand scheme of things doesn't materially move the needle. And I think even as... And accommodated in our our recent class three engineering studies so that we're still on track for production sort of second half of twenty twenty eight, which as we spoke about, really is around the corner in the terms of copper developments. So I think that's most of the main material slides. I don't think we need to go through the board and appendix slides. We've covered those previously in a prior presentation. So I'll invite you to go back and have a look at that if you wanna go through those. That's great. If I may just jump back in there and thank you guys for your presentation.

47:12 Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that recording of this presentation, along with a copy of the slides and the published Q and A can be accessed via our investor dashboard. Nick, at this point, if I may hand over to you to chair the Q and A, read out the questions where appropriate, and I'll pick up at the end. Thank you.

47:38 Brilliant. Thank you very much. Hi there, guys. I think First of we're relying on third parties. Some of that relates to permitting. Some of that relates to closing timetables. But I think what we are confident on is moving towards at least definite... I think, you know, putting together the financing package so that we can confirm to the market the ultimate capital stack that we're gonna be drawing down on. And I think we reasonably expect that we'll be drawing down on that at some stage in q one. And then obviously on track for that first production second half q four of twenty twenty eight. So that's still the intention. I think core focus for us is to get into production as soon as possible.

48:35 Obviously, as a small company, we don't want to encourage any delays in that process.

48:41 But like I say, we're not fully in control of it ourselves, but we're doing everything we can to to achieve that as soon as possible. Thank you. Next question. Is it safe to say that equity as a financing component has been removed from the project financing options? I think for us at this stage until we've taken FID, everything is on the table because succeeding and making sure that the project gets to that first production is clearly mission sort of focal point. I think what is safe to say is that equity is really right at the back end of that capital stack. I think as we've spoken about in the presentation, the focus on leveraging the cash generative profile of the asset is a core focus of what we're really looking to lean into and secure as much debt funding or prepayment funding and vendor financing funding as possible.

49:34 If there is an equity component, as I say, comes right at the back end of that and it would be a bookmark at the end of it. We're not certainly expecting the equity markets to lead on the financing for the project development stage of execution. But I think it would be remiss of us to take anything off the table at this point in time as we finalize what that funding stack looks like. But hopefully we can show to the market in due course later this year what that funding stack is ultimately gonna be composed of, and then we'll be able to perhaps say at that stage that equity is is off the table if if that's the the final reality or or what a small equity component if it's required would be... Is expected to be. But it... It's definitely the back end of our focus at the moment, and it really would be just a bookend, little bit of contingency if it was required at all.

50:29 Next one. Are there any financing offers that are at a term sheet stage yet? If so, how many? Okay. Good question. It's getting into the commercially sensitive side of things here. I think what we can say is that there are a number of financing that are at the term state... Sorry, term sheet stage yet. Sorry. Term sheet stage now. No. Yeah. A number is is is what I would say, so more than one. Obviously, we had LME week here in London last week, so it was a very busy week for us. A lot of those conversations were about further term sheets and putting concepts and discussions that we've got in the funnel to come out at the other end in a sort of structured process so we can compare apples with apples at this stage and whittle it down to a list of preferred providers of choice. So yes, number of term sheets are in process at the moment. They're being actively negotiated, so it'd be remiss of us to go any further because it's commercially sensitive, but we're at the exciting end of the stick.

51:33 Next one. You described a layered funding approach ahead of equity, prepay, offtake, vendor finance, royalty and streaming, and project debt. Which of these are actually under negotiation now? What proportion of the US dollars 92,800,000 build could each cover and what would force an equity raise? Yes, I think we've probably spoken about the answer to this question as we maybe progress through the presentation just to keep a short sound bite so we answer it. Obviously, as we spoke of, focus on leveraging the high cash generative profile of the asset. Senior debt is the current focal point because that's the backbone of the funding stack that we're hoping to put together, supplemented there by sort of vendor finance as well as financing initiatives attached to the offtake rights. So whether that's a prepay, whether it's a working capital facility, there are a number of different tools in that box that we could ultimately bring out, but depends on the order of magnitude of that senior debt piece which we're looking at.

52:40 Some of the things that we're looking at are already potentially in the realms of potentially 100% financing through those types of sources. So, obviously, we've to get through credit committees. We've got to go through all of these other gates to to convert those expectations into reality, and that's what we're working on at the moment. But a material amount of our financing needs appears at this stage to be available to be financed through these non dilutive debt style instruments or credit style instruments linked to the project cash flows. So that's what we're focused on. What would force an equity raise? Well, we're well funded as a result of the IPO raise that we did in March when we listed. I think that sees us sort of funded on a G and A working capital basis through to the second half of next year.

53:30 So there's no pressure points on us to have it come to the equity markets. In the meantime, what would force us to do an equity raise? I guess what would force us to do an equity raise? Nothing is forcing us to do an equity raise ultimately. We've got time on our side. We've got ongoing conversations progressing in the right direction. And we'd be hopeful that we could put some color on what the terms and conditions of those... Of the ultimate FID funding stack are before then we even have to revisit an equity conversation. So we need to obviously continue to be successful in the work streams that we're pursuing, but we've got confidence in that. So I don't think anything's forcing us to do in equity raise. Frank, do you feel forced? No. No. Not at all. Good.

54:17 Next one. Following this year's US Chile critical minerals cooperation, has HALO engaged with the US EXIM, DFC, or any other official sector lender, and would such financing be available to a copper cathode producer of this size?

54:35 So, yes. Have we engaged with these types of lenders? Yes. I think the truth is that they're slower beasts and more bureaucratic beasts to move than the pace that we would like to move at. I think those sort of private credit, family office style, institutional investor style investors have realized they're underweight copper. The ESG story resonates with them. They get exposure to copper through a project like ours without having to take mining risk on, which is usually the main complication for them in getting their exposure to projects of this type of nature. And they will move at a much faster pace than a much more competitive pace. Maybe they cost a couple of 100 basis points, one or 2% more than securing capital through these types of lenders.

55:25 But I think as we've previously discussed, our focus is on getting to production as soon as possible. So going with lenders or

55:33 credit investors that are engaged that don't have the bureaucratic processes of maybe some of these other institutions at governmental level has more strategic value to us than the cost of saving 1% to 1.5 in your overall cost of capital. So, yeah, there are conversations there. I think what could be quite interesting for us is sort of conversations with strategic OEMs where, again, there's a big push for ESG compliance. Copper can be a big part of industrials now moving forward, certainly the data center guys and the battery EV guys and things of that nature. So they seem to be showing a little bit more entrepreneurial flare currently than maybe historically you would have thought from them. So that's another interesting pool of capital that we probably haven't spoken about, but is there as part of our our screening or engagement activities at the moment as well. And next one. What is the current expected timeline for the mining easement and the maritime concession?

56:34 And what specific capital savings sit behind the upside case in the latest presentation? Maybe, Eric, that's one you wanna take? Yeah. Okay. So there are several permits we need to obtain in in in the project. Last week, we've obtained a massive one, a really important one, which is the mining use of the beach. With that, we are allowed now to obtain the mining easement. So we expect to get the mining easement in a few weeks, maybe next week or in or in two weeks. Then the maritime concession,

57:11 it's a more lengthy process. It's a it's a it's a different animal. We have had that process identified since the beginning, but it's a it's a more elaborated procedure to obtain that permit. So right now, we've done all the stages we needed to do. We we measured first the the beach line with the beach line. We

57:37 got the certificates required for the file, but we're missing one. Once we receive that pending certificate, we will submit the maritime concession application, and that takes between one to two years approximately, which which goes parallel with the with the of the the other permits. But, also, since we have the other use... The the mining use of beach and the easement, we have no issues there. So I would say mining use of beach is already granted. Mining easement would be coming in the following weeks, and then the maritime concession would be a lengthy procedure that's going to be parallel to all of our workings, and it's going to be ready once we start operations in 2028.

58:33 And and just to mention the capital savings be be... From the new upside case, I would say, as we mentioned before, it's the it's the optimization in the filters, the optimization in the in the direction we would dredge the beach, and also the immediate optimization of the research done by our CPR. Thanks, Eric. Just moving on to the ones that have been submitted live, and we think you've dealt with this from what we're doing. Are you at a point yet where you're receiving or have received final heads of terms for for funding deals? Yes. So, obviously, this is ongoing live and commercially sensitive, but certainly heads of terms are being negotiated.

59:26 They're not final until we're in a position to sign them. And, obviously, there's more than potentially one counterparty that's currently been engaged with. So that's a work... Live work stream. So, yes, we are in the heads of term stage for ultimate FID funding stack. Next one, post LME metals week, has anything changed? Did you miss everyone you expected to? When do you expect asking for final bids from interested parties? Yeah. So it was very well timed LME week for us given the work streams that we've completed on the lead up to it. So obviously, the class three engineering study, which BFS level CapEx and OpEx numbers, updated CPR, so reframing the economic analysis of the project cash flows for that audience to to be able to look at as well.

1:00:16 And then, obviously, on Friday, the end of the week, to get the mining permit through as well. So I think it's a very productive week for us. Yes. We met everyone that we've expected to. A number of these parties have organically approached us on the back of the EIA being approved last year. We've been speaking with them for some time now. I think a lot of the concepts that are being discussed have needed the CapEx... BFS level CapEx and OpEx numbers and have needed the the updated CPR to now be finalized. So a lot of those

1:00:47 conversations really were about you now have everything that you need to make a decision. We are moving at pace and term sheets are being received. There is a use it or lose it scenario now ultimately in front of you. We would like to continue to collaborate with you, but that really now needs to convert into what your commercial substance and proposal is so we can make that decision and and whittle it down to sort of providers of choice. So, yeah, it's a really productive week for us. I think we met everyone we needed to meet, and, you know, we're... We've put those relationships on a course trajectory towards sort of final terms so that we can make that comparative view and finalize that... Finalize the necessary.

1:01:33 Next question has about four pass throughs. I'll do one at a time. And considering how advanced this project compared to exploration projects, what do you think is making the investors' drug market slow to embrace this as an opportunity? Yeah, good question. I mean, it is a very well advanced project. It's probably quite different to what AIM investors are typically used to where they're spinning the drill bit to see what they might have. We've, in some regards, already arrived. We've got a very well defined project with significant upside drivers attached to it as we've discussed. Perhaps maybe what makes this slow for investors to embrace is the sort of obstacle in their mind of how you finance the $92,000,000 CapEx with a market cap of 10 to £11,000,000 on any given day currently at the moment.

1:02:22 So I think as we derisk that, hopefully the equity markets will show us the reward that we hope is available to us and our shareholders. Perhaps maybe just the advanced stage of the asset and it's not subsurface risk that we're looking at here, it's execution risk. It's probably slightly different risk to what the average AIM investor is used to putting their money into. But perhaps maybe as we derisk that, we hope to see that re couple. I think it's important to point out Equity Developments did an updated research note. Was it last week?

1:02:58 And I think they're confirming we have a fair value of 47p per day... Sorry, 47p per share as of today, you know, as as we are in the world today. So a significant discount to that. So those people that are coming into the story at this level, hopefully, are well positioned to realize meaningful upside. Next part, I think you've dealt with what percentage ratio of equity fundraise loans, bonds, debts is the company considering to raise the CapEx money as needed? Well, potentially, a 100% debt funding is kind of what we're focused on at the moment.

1:03:35 So as much of that as possible. Yeah. I think we've we've spoken pretty well to that. Yeah. Our next bet, is the timeline to production still feasible, or is there a possible delay? Yeah. I think the timeline to production production is still feasible. That stems out of the BIOSME updated class three engineering study, which is pretty contemporary. I think we announced that was it last month. We've got the mining permit sooner than we were expecting, so that's a very strong positive for us. Obviously, we're expecting the mining easement. We're engaging with all the other odds and sods that need to complete in order to get there on time, but we've got no fundamental floor issues or no meaningful issues that have crystallized. I think really it's still down to putting the FID funding stack together, drawing down on that capital.

1:04:25 And if we can draw down and access the capital by the end of Q1, we're still on track for that sort of October 2028 first production. I think we're all on track for The last bit of this question was when is the projected point of inflection for the company?

1:04:41 Well, as we spoke about, we've got multiple growth catalysts. I think near term CapEx savings, near term FID funding stack and putting the color on how that CapEx will be financed is probably a pretty material inflection point. We got maritime concession approval, which unpacks the journey offshore. At some point in time, we might do the resource to reserve recategorization for the onshore. And then, obviously, subject to the maritime concession and spinning the drill bit offshore, you've got work and you've that potential opportunity as well. So I think we've got a number of potential inflection points ahead. The next one, I think we've largely covered. Can you please clarify the FID timeline?

1:05:27 I think there might have been some small variation in language in this presentation. Is it still on track for before Christmas this year? I think the target is Christmas this year. It'd be a nice stocking filler for everyone if we can achieve that. I think in terms of FID, maybe the change or the variation here is in the language. So FID would be the final investment decision drawing down on the capital and, you know, executing it and beginning that. I think that's probably realistically q one when you actually draw down on the money. But I think ahead of Christmas, what we can do is put together the sort of funding stack to give, or, you know, the the the outline of what that funding stack looks like with credible counterparties that we've got high confidence in the cost of capital that we'll be taking on.

1:06:15 And then, obviously, there's some legal work streams that we need to complete, but I think we're on track there. We expect to access the government we need by the end of March, which then keeps us on track for sort of October 2028 production. So, yeah, I think from our perspective, we're doing everything we can to achieve this as soon as possible. And as we spoke about, some of it's slightly outside of our control, so we become a slight passenger in some of the processes, but we're we're making sure that we're sort of in front of people as actively as possible and that they understand and think the government understand that this is, you know, an important asset to to see developed. So we're focused on that. Next one. Is this the first such project of this sort, or have there been other successful examples of revisiting waterborne copper tailings?

1:07:05 Yes. Everywhere in the world. Yeah. I I Let let me talk about it. Yeah. I've I've been involved in reprocessing mine waste tailings, both copper, gold, and nickel and coal in Africa, Europe, and

1:07:27 America, South America. So this is not a this is not a reinvention of the wheel. This has been done many times before, and it is very common standard technology. Yeah. I think that's one of the key points about what we're doing here. We're not reinventing the wheel in any way in any way, shape, or regard. We're not taking any entrepreneurial or technical execution risk.

1:07:59 We're using a dredge. I think it's very well established in in the luvial systems or or... In fact, Eric, we've looked at some Chilean tailing dumps where they're using dredges to manage their tailings as well. So dredging for moving tails is certainly not a new concept. And then the processing facilities is tried and tested technology. Yes, we're using the latest, greatest and best in class to increase the efficiencies, but we're not taking any sort of execution risk on trying to develop or be ingenuitive with technological processes. I think that's really a key point of being beach located. You don't want to actually take those risks when you're situated on coastal line.

1:08:45 The path of least resistance is to use tried and tested technology, and that's what we're focused on. That's all the questions are submitted. Andy, back to you for some closing remarks. Well, thank you everyone for joining today's meeting. Thank you for submitting your questions. Obviously, if there are any follow ups, you can reach out to us through the contact form on the website or at the bottom of our announcements. We're very focused on achieving what we set out to achieve, and we look forward to updating investors as that journey continues and successes delivered and updating you as as as we make progress along that way as well. But thank you very much for your time. Fantastic. Andy, Frank, Eric, thank you very much indeed for updating investors today. Could I please ask investors not to close the session? As you know, we'll automatically redirected to provide you feedback, which will help the company better understand your views and expectations.

1:09:37 On behalf of the management team, we would like to thank you for attending today's presentation, and good afternoon to you all.