Release Date: July 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Metals Acquisition Ltd (MTAL, Financial) reported a record production of 10,864 tons of copper, up 24% quarter-on-quarter.
- The company achieved the highest daily production under its ownership at 265 tonnes of copper.
- Copper grade increased significantly by 20% for the quarter to 4.2% copper.
- Cash and cash equivalents increased by 25% quarter-on-quarter from USD 71 million to more than USD 88 million.
- The company announced a significant increase in the life of mine, extending the reserve life to 11 years.
Negative Points
- Safety performance showed room for improvement, with an increase in TRIFR during Q2.
- The processing plant was down for planned maintenance in April, impacting production.
- Sustaining CapEx remained high at almost USD 13 million for the quarter.
- The company faced challenges with concentrate movement, resulting in a large component of concentrate produced but not sold.
- Net debt, although reduced, still stands at approximately USD 231 million.
Q & A Highlights
Q: What do you expect in terms of tonnes and grades for the balance of the year?
A: We anticipate Q3 to be slightly weaker or on par with Q2, and Q4 to be another strong quarter. The trend should be in the landing areas.
Q: Can you expand on the terms of the presale and whether the copper price is locked in?
A: The presales were done to match cash outflows with inflows. The pricing remains open until the concentrate is loaded onto the ship, after which we get paid within 10 days.
Q: Was there any positive reconciliation against what was expected for the ore grade?
A: There was a slight improvement in dilution and grade, driven by better firing methods in some stopes, which allowed us to pull out ore faster.
Q: Regarding the ventilation project, is it broken up into subprojects, and will there be improvements over time?
A: Yes, partially. Improvements will come from getting development ahead and opening up less vent-constrained areas.
Q: How will the spending for the ventilation project be managed?
A: The AUD42 million project is in growth CapEx. Sustaining CapEx will be slightly down next year, with around AUD20 million allocated to the vent project.
Q: What is the expected grade profile for the balance of the year?
A: We expect an average copper grade of around 3.7% to 3.8% for the year.
Q: Did this quarter give you confidence in the mill's capacity to handle 1.7 million tonnes post-ventilation?
A: Yes, particularly in June, the mill ran very strongly. We are increasingly confident in the operation's ability to handle more than what is currently projected.
Q: When do you expect to start the raise boring for the ventilation project?
A: Likely not within the next nine months. The development needs to get out there first, and we aim to start the raise boring in 2024.
Q: Can you provide more details on the double lift opening strategy?
A: Implemented around May, it has been very successful in reducing dilution and dragging forward metal significantly.
Q: Are there any changes in the relationship with Glencore given the reduction in Board seats?
A: No significant changes. The reduction to one Board seat was appropriate due to their dilution. The relationship remains strong.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
