Metals Acquisition Corp Price & Performance (MTAL)

Thank you, and thank you everyone for joining us. This is our full year results, which Morne, our CFO, will present here shortly and the resource and reserve update, which I'll present.

This presentation was released on both ASX and NYSE, and you can read all the disclosures at your leisure. So Matt had a pretty good year last year. Enterprise value [indiscernible] just over $1,000,000,000 As we pre announced, we produced just over 41,000 tonne of copper at a grade of 3.9% copper.

Significant operational cash flows of about US117 million dollars dollars Lots of liquidity available at the end of the year, US213 million the vast majority of which was cash at bank. And a strong margin. So we have just under a 50% EBITDA margin and we convert a lot of that margin to to free cash flow. And as we as previously said in our guidance, we have a pathway to being plus 50,000 tonnes of copper. And perhaps as you see some of the stuff we're rolling out today, you might get a feeling that we can do a little better than Our goals for last year were to operate the mine safely and I'm glad to say that our safety at Trifer actually improved significantly in Q4. We wanted to continue to deliver a a longer reserve life. So we now have reserves that will underpin a twelve year mine life. We had record copper production just over midpoint of guidance. We delevered the balance sheet significantly and simplified it and our net gearing at the December sat at about 15%. We are pushing on to that 50,000 tonnes of copper. We raised 475,000,000 in equity in two ways on the ASX.

And we've got our management team and board built out and in place So it was a very busy year for us on reflection. But it's really set us up for a strong 25 and onwards. So in terms of the detail of the numbers, obviously, obviously, overall, we had a C1 of about $1.92 a pound for the year. But Q4, we ended at $166 so trajectory was was very good. Again, a lot of liquidity and a lot of cash. And our projects were advanced, our ventilation project, which is really critical for unlocking the bottom of the mine is on track for Q3 of twenty twenty six. And our Cutia South Apo, which forms part of the new Merriman Mine, which all about the year. Was commenced and on track for sort of first MAC out of that by Q4 of Dixi.

And as shareholders want to do, they want to know what's in the future. So this is all backward [indiscernible] So we've got a couple of quite good tailwinds. Obviously, the Australian dollar has continued to trend down against the U. S. Dollar. Broadly about 80% of our costs are in Australian dollars. And as our offtake terms are on annual benchmark terms, the TCRC reset in early January which will reduce our C1 by around about US0.16 dollars a pound. So a couple of pretty good tailwinds there on the cost side. Now we come to the Merritt mine. We have been mining here about twenty months now. The vast majority of our mining happens towards the bottom of the mine You can see on Slide seven there, between two ore bodies, Cutias North, which is the large one on the right side and QTS Central, which is the sort of smaller one about two thirds of the way down the page. And these are great ore bodies, particularly Cutious North. It's got some very high grade zones in it. And is accessed through two haulage shafts down about half a through the mine and then trucking. However, our current production is limited out of that by ventilation.

I touched on this ventilation project we're doing, which should be done by Q3 of next year. That's really critical for opening up the mine. The ore body can produce a fair bit more ore than we're currently mining. But we need more ventilation to be able to put more fleet in there. When we bought the mine, we knew we had significant mineralization in the top 900 meters of the deposits. They were not in a digital format, all that data, they were not in [indiscernible] And so the team have spent about eighteen months digitizing old data, scanning records, doing some twin drilling. Some confirmation work, and that has now allowed us to estimate for the first time some resources in that area up there. We have some internal resources that are not suitable for release just yet, but sufficient for us to start actually mine planning. And as we spoke to investors over the last month or so, it became apparent that it was all a bit complex to have different mines, deposits, lenses at the top, So we've elected to call everything from surface down to about 900 meters below surface. One name, one new mine.

It is a new mine. We're calling that the Merrin Mine in honor of our Chair, Patrice Merrin. And that will allow us to distinguish for the marketplace the fact that we have one mine at the bottom of the mine, what we're existing mining and actually one new mine that's about 1.6 kilometers away from that mine, it just happens to be 1.6 kilometers vertical, not horizontally. The mineralization in this area is for the most part within 100 meters of existing [indiscernible] It will be accessed separately. So again, the current mine we bring the ore out and waste out through the twin shafts. The Merame Mine will access through the existing decline. We've already started development across to the that small ore body over the left there, which is cut to your South upper. We should have production out of that in Q4. But we now have been able to quote an inferred resource zinc mineralization up here. Which is on one of the following slides. We have substantial copper mineralization in this area. Which we have not quoted a public resource for yet. But we have sufficient information to begin mine planning. So we're quite excited about this.

This can add reasonable incremental production. It will materially derisk the operation by having separate ventilation and haulage systems to the rest of the mine. And I think our team have done a good job to pull the resource and mine plans together for this. There is significant mineralization up there and it's all shallow within starting within 200 meters of surface. We like the idea of this as just additional incremental production for start we've got a large fixed cost base. More money But more importantly and equally as importantly, I guess is that as we've spoken to before, we have a small number of very high grades stopes at the bottom of the mine that have an outsized impact on production. So it does lead to some [indiscernible] volatility quarter on quarter. Having some ore that we can pull from up near the top of the mine relatively quickly separate to the bottom of the mine allows us to smooth out that sort of quarter quarter volatility. We look at our annual production and we go overall on annual, we always come out where we say we'll be. But quarter to quarter we do get some volatility driven by those small number of high grade stopes This will allow us to offset that and I guess smooth out some of that sort of single mine risk that people have sort of spoken about the existing decline and more than likely eventually a new decline out to the side.

But this is right near infrastructure. We can monitor pretty quickly. You can see in the two different colors there, the zinc the zinc loads and the copper loads. Again, we've quoted a zinc resource We have not quoted a copper resource up there, but clearly we have a block model for it. So coming on to the broader resource and reserves. Last year, we had a massive increase And so I'm not sure we're going to sort of double mine life every year. You can see there that our resources have gone up a little bit. We have increased the reserve life by one year, so we replaced everything we mined over the first eighteen months and we've added another year to reserve life, so we now have a twelve year mine life on reserves. You'll also note, we put it in the detail of the press release we put out grade has gone up slightly in the resource through additional drilling, and Grind has gone up slightly more in the reserves as a combination of that in situ grade increase, but also dilution control and changing the modifying factors. We We did our first new reserve last year for a very long time at the mine.

We probably went a little bit heavy on the dilution that was included in the modifying factors. We've honed in on sort of what do we actually get in the last year. So our grade, our reserve grade actually is about 3.44 now. Which compared to I think 3.23 last year. So overall, I think a pretty good result. All the ore bodies are open, mostly up and down. We have lots of mineralization in the measured indicated category, not in the reserves yet. Over 200,000 tonnes of contained copper to 5%, 5.5% copper. So there's a fair bit of work going on right now to see what we've got to do to get that material into a reserve. And so our focus has been for the last year really sort of upgrading the quality of the resource upgrading the M and I, increasing the reserve, and now focusing on this sort of mirror in mind of the top of the operation, which gives us some opportunity to pull some metal out in a relatively short space of time. So again, if you take midpoint of guidance for twenty twenty twenty six, it's about 50,000 tons a year. We've clearly said in the press release we put out under the the SK 1,300 rules in The U. S, we are not allowed to put non reserve material into our guidance.

Clearly that material at the top of the mine and the Merrimine is is not in reserve yet, but we feel very comfortable about going and mining that stuff. So I would think that you can sort of see we expect to produce a bit more than 50,000 tons of copper and we have not put the zinc on there that we intend to be mining and trucking up the road to the 40 kilometers to the north of us. We have signed a zinc tolling agreement [indiscernible] And so I think based on their public disclosure, around the middle of the year, they should be up and running there and we think towards the end of the year, we'll be in a position to send them some zinc ore up the road. So guidance, as I said, we haven't changed our official guidance here for this year. The range was relatively wide. So top end of the range is 48,000 tonnes of copper. Again, the zinc is in inferred, is not in reserve. So I can't stick the zinc in there. But We are going to be mining some zinc. And grade has increased for the range for this year is about 3.8% to 4%.

If you went back to last year's technical ore, the grade was 3.5, 3.6, I think from memory. And that's a combination of again better dilution control, better grade in the resource as we've drilled it out. And better sequencing of stopes and then going into 2026, again, we see the grade again elevated to where it was last year in the plan, but sort of dropping down a little bit. And the top end of the range there is sort of 53,000 tonnes of of copper, but no zinc and no production at all from the Merrimon actually. So look, I think we can show some pretty good organic growth here. We can across the bottom of the mine when the ventilation project is in place across the Merrin mine, I think we can basically fill the processing plant give or take. And so the best IRR we can find right now for our shareholders from a debt [indiscernible] But Monae will talk about the best IRR for us is to develop what we already own We think we can get a pretty good return for shareholders with very nominal CapEx All this stuff's more or less within 100 meters of development.

And it's sort of known, it's been processed before at the mine, metallurgy risk is low. And that's by far and away the best return we can get for shareholders. So that's really going to be the focus for us in 2025. So we're quite excited about this. I'm very pleased sort of name it after Patrice. And I think that this this again, I come back to the point about the quarter on quarter variance. Depending on whether in these big high grade stopes or not in them.

We do want the ability to smooth that out a little bit. Again, the March quarter, again, if you refer to the press release, historically, the March quarter is a typically softer quarter in the year. We saw that pattern last year. We're going to see that quarter that pattern again this year. So sequentially, March quarter will be a bit weaker the December quarter. And it will be the softest quarter we have during the course of the year. And as that Merriman stuff starts coming on in Q4, we expect to see a reasonable tick up in production as get towards the end of the year.

So again, we're pretty happy about this. CapEx. We've given guidance here. So last year, we spent give or take, US50 million dollars of sustaining CapEx this year will be between US40 million dollars and US50 million dollars dollars and in addition of between $20,000,000 and $25,000,000 of growth capital, which is really the Vent project and [indiscernible] So moving on to the next slide, I'm going to hand over to Mona Engelbrecht CFO, and he can talk to you about the financial metrics.

Thanks, Mick. Good evening, morning everyone. I'll be taking you through the following full slide covering the 2024 financial results, which was released today in the form of the appendix 4E and the annual financial statements. I'll first start by recapping Our balance sheet position and cash flow waterfall for the year. So on Slide 11, The balance sheet is excellent shape and we are looking to further simplify it with the repayment of the MES facility as soon as the refinancing process is complete. Overall, as noted previously, we have significantly delevered MAX balance sheet by reducing our net gearing by over 60% to a a company record low of 15% net gearing of 15% as at thirty one December. Which is only sort of 0.8x underlying EBITDA for 2024. So very comfortable position at the moment. We also have a very healthy US177 million dollars in cash and cash equivalents or around US276 million dollars which is up over 400% since the end of twenty twenty three. And this is further supported by an unborrowed revolving facility of 25,000,000 Outstanding QP receipts were 6.5 unsold concentrate amounting to about $5,500,000 and the investment in polymetals which has done really well of managing to about AUD6.5 million thirty one December this brings our total available liquidity at the December to two thirteen million dollars or AUD340 million?

As I said at the December. You know, the balance sheet was further boosted by the completion of the [indiscernible] during the fourth quarter of around 150,000,000 Australian ore $103,000,000 the forecast As announced in December as well, we did reach an agreement with First Rock to repel the mezzanine facility. At MAC discretion from the 01/01/2025 And to this end, we are in the process of completing our refinancing process, which will not only see us further simplify and strengthen our balance sheet, through the retirement of this debt facility, but also provide us with much lower debt cost, ongoing debt cost going forward. So with the new facility, we're hoping to save around $14,000,000 of interest per annum. The aim of the refinancing will also be to extend the senior debt facility provided deferred repayment schedule and more flexibility with increased with the increase of our revolving facility as well. So as soon as we concluded this process, we will definitely make a further announcement to the market So in summary, Mac's got a excellent balance sheets, very strong, very commanding position. The best position since the acquisition of the mine. And that obviously gives us great flexibility to drive our organic growth agenda as Mick MAC outlined.

In terms of the Merrimon funding the Merrimon as well. Moving to Slide 12. Moving on to the all important cash flow waterfall. So there's a few key drivers to keep in mind that impacted cash for 2024. Firstly, we again have a healthy free cash flow from operations after sustaining CapEx of around $121,000,000 U. S. For 2024, which not only form the basis for deleveraging, but also will form the backbone of our funding going forward. It should be noted that due to the light shipment at the December, we made a sale of concentrate at Port were recognized in cash, but not able to be recognized in the free cash flow for operations nor revenue. Until that shipment went in January. Secondly, we repaid about US57 million dollars of our senior debt in 2024. With that senior facility now sitting at around US158 million dollars And as I said, net gearing at 15%. The third point wanted to make on the slide here is that we paid interest of around $38,000,000 for 2024. In cash. With the refinancing that we're looking to complete in the not too distant future now. That will reduce by that $14,000,000 plan.

And as I said before, The other key element in the cash flow notice that around $120,000,000 of cash outflow for 2024 was related to once off sort of cash payments, so that related to the settlement of that deferred consideration to Glencore. And then also the stand duty So again, overall, in a very healthy balance sheet position and we will further strengthen that with the repayment of the mezzanine debt facility, which will drive significant cash interest savings and further simplify our balance sheet and Going to Slide 13, looking quickly at the financial results now. Look, it's not really helpful to compare to 2023. Results in 2024 because obviously 2023 sort of covers six point five months of the year. But overall everything has moved in the right direction. Most importantly, our underlying EBITDA margin increased significantly to almost 50% driven by increased production and obviously that level of C1 and total cash cost that we've reported as well. So Overall, our statutory net loss after taxes is $70,000,000 which has obviously been very heavily impacted by non cash movements in fair value for the financial instruments of about US81 million dollars which is mainly driven by the increase on the copper price over the year and then also the extension of the mine life compared to 2023.

It should be noted that some of the volatility will drop out because we redeemed those private and public warrants during the year as well. So that will reduce that volatility in that fair value adjustment going forward. So overall, record revenue and underlying EBITDA of $568,000,000 and MAC ownership with a very healthy underlying EBITDA margin of almost 50% and converting about 72% of that to cash flows from operations. And moving to Slide 14, we provide a breakdown there of just our statutory net loss and the reconciliation there. You will note the impact of the non cash elements there on the earnings. Impacted by there's about $75,000,000 of interest expense there, dollars 38,000,000 after $75,000,000 of interest of finance cost, there's 38,000,000 of interest cost. And then we've got realized hedging losses of $12,000,000 as well that's recorded in there. With the remainder made up of the streams and nonrecurring non recurring interest cost on the Glencore deferred settlement as well. And with that, I'll hand back to Mike.

Thanks, Morne. So I think the company at the end of 'twenty four was in a vastly different position to the company mid-twenty three when we bought the mine. I think we feel pretty good about the way the business is running. You can see here our production trend. We feel very comfortable given where we ended up in Q4. In terms of getting to our midpoint of guidance. And again, without the Meramein, which clearly is not going to be negative production. Cash costs, again, we had a strong cash cost result. We've always sort of talked about having a target of around US1.50 dollars a pound C1, I feel quite confident of getting there. It'd be lovely to have some byproduct credits from some zinc to drive that down a bit further like a few of our peers do. And net gearing, we ended the year at about We've got a gearing range there of sort of zero to 20%, I like no gearing. But the facilities that Mornay has been working on to put in place will incorporate a fairly sizable revolver that we can use as we need It will also give us there'll be some flexibility for additional mine growth internal funding if and when needed.

Or to eventually start looking at things like sort of shareholder returns and the like. So yes, I think the business is looking pretty good compared to where it certainly was. Our goals for this year is again consistent safe and low cost production We want to deliver our organic growth projects and open up new Merritt mine again that will really that will give us a better IRR than anything else we can do. Obviously, Obviously, taking out the higher cost debt within the MAC is a guaranteed return. And so that's sort of happening fairly soon. And maintain balance sheet flexibility to support our growth. But again, I think for this year, we're very focused on delivering our organic growth projects. We see an ability we have a large process and plant with a lot of excess capacity We do now actually now that we have some resources for that stuff in the Merit mine, We actually have a pathway to be able to open that open that stuff up and to sort of get going towards filling that mill finally. Again, we do see a fair bit of volatility quarter on quarter between [indiscernible] It's lovely to have 8% stopes.

You know, They're great days when you're in them, but you don't have them every single day of the quarter. And so having some additional sources of production allow us to smooth that out a little bit We feel very comfortable with our annual guidance, but obviously month to month, we do see a fair bit of volatility in the in that copper production, right? So again, the Merriman absolute production growth, more cash flow, but I think equally as importantly is the ability to smooth those quarters out. And with that, I think we've sort of gotten through the bulk of the information. Happy to turn it over to any questions from anyone. And we'll open the floor up to questions.

Your first question comes from Daniel Morgan from Berenjoey. Please go ahead.

Hi, Mick and Mona. First question is referring to Meron. Is there any copper resources from Meron which sit within the total resource. I think previously you've had QTS South Upper Resources. But I guess I'm referring mainly to the bit that is not QTS Beth upper, if that makes sense?

Yes. The answer is no. There's a very small indicated resource up at the Kudu South Upper. The significantly larger portion over sort of 500 meters vertical We have an internal resource The data, the assay data is relatively old and so the reason we can't quote it as a resource is we don't have the the assay QAQC certificates predominantly. So the answer is no. We have a resource. We have sufficient information for us to start mine planning. The capital hurdle on mining that is very small. And so we are confident enough to go and start mining that. But that is why it's not sitting in reserve and that is why it's not sitting in in the guidance.

Okay. Thank you. And I guess related to that, on Slide 10, you intimate that the growth CapEx numbers you've given the market includes CapEx for Marron is Is the Mariner CapEx, is that significant? And it looks like we've got the capital cost to get Marin online, but obviously you haven't given us the benefits of that yet. Which I presume will come at a later point.

That's Yes, that's correct. So we're just working through some plans. So there's a couple of options. One is could go and mine some stopes quite quickly for me more or less just near existing development and you're talking of a few $2,000,000 $3,000,000 to get into it sort of thing. We could go the other way where we sort of elect to go to ramp up faster, but that's likely to be sort of few couple of tens of millions of Aussie dollar top sort of thing, which would be decline off the side of the two level new vent rise, which would allow us to ramp up much faster. But it's, I don't know, in that $20,000,000 $30,000,000 Aussie mark sort of thing. So The reality MAC be somewhere in the middle, something, I don't know.

It's in that sort of order, right? Like it's not large amounts of capital.

Yes. And so I mean referring to Slide eight, and that diagram you've provided, You've got a new decline in there in the red on the right, Is the reason for the location of that decline is the the resource opportunity I. E. The zinc and the copper stopes you've outlined there would they impair the old decline? What's behind the new decline decision?

Well, I haven't made the decision yet, but I'm just showing you a couple of end endpoints of the spectrum of what we could do. I don't know whether you've driven down there, but we've got a narrow point in the existing decline I don't know, 300, 400 meters down the hole, that you need to bypass. If you're going to haul ore up there. So we have some stoping areas that are well above that that we can get started on. But if we're going to develop it as a full mine, you will need to bypass that, right? So the question is how much of a bypass do you bother putting in? How much of extra vent do you want to get down that decline? In order to ramp up production faster? So we're sort of it's a bit of a work in progress. We've got two endpoints. Guess that's the other reason I'm not giving you guidance apart from it's not in reserve. But yes, there you'd need And just the last question on Slide eight, I know it goes down [indiscernible] 600 meters below surface I think Marron is defined as down to 900 Is there conceptual opportunities both in that last 300 meters as well?

Yes, we haven't done the resources for that lastly. Awesome. Thank you for your perspective, Simeon.

Thanks.

Sorry, I would say the zinc resource that we quoted isn't all of the zinc mineralization up [indiscernible] But we have enough to sort of make a mine plan and get started. Thank you. Your next question comes from David Radcliffe from GMR. Hi. Good morning, Mikhail and Warren.

So a couple of more questions on that theme with me. So TEC and Glencore have recently published some pretty positive charts on the zinc market. So you can definitely see the optionality there. But in in terms of the value per tonne of copper ore versus zinc ore, the zinc ore's hauling cost and then the spare capacity in your own plant, are there higher grade zinc stopes that can compete with maybe putting through some additional tons of even lower grade copper ore at Marron. So how do you think about that in the planning?

Well, I'd like to take it all is a short answer. The zinc grades are quite high. So we're looking at sort of 9%, 10% zinc, couple of percent lead. And because that's not going to go through our plan, we they ripped out the zinc circuit I don't know, in the 1980s. So that zinc ore will get mine and get trucked up to Endeavour, the polymetals zones. And so copper, we think about margin as opposed to grade. So 2.5%, 3% copper dirt, up near surface that's a pretty short haul and easy mine. Is we've got spare capacity in the plant, we should be putting that through as much as we can, I must MAC been I haven't actually done a comparison of the two because we've sort of looked at it at mining both the zinc and the copper? I guess at some point if we get to a point where having to pick one of the two, pick whichever one's got the best margin for us.

Sure.

Okay. And then just on picking up on something you said there. I mean historically, the system has had quite a lot of lead in it. So but no lead grade was is that from just lack of essays or it's not there? How should we think about that?

In the zinc load, it's in the press release somewhere the press release there, but it's about one, I want to say off the top of my head, 1.6% led, I think from memory was the number. It's relatively it's much more rich in zinc than lead.

But there'll be some the tolling agreement we have with Endeavor is [indiscernible] [indiscernible] Okay. And sorry, lastly then, just to kind of Dan's question. Trying to sort of quantify how much of this current inferred resource for zinc is representative of, I guess, what you see as the the potential because I guess we can't see from the diagram how much is sort of encapsulated within that? And maybe when you might think about Is there a timeline for actually putting out some zinc reserves?

Well, we'd like to try and it during the course of this year because we're going to mine it Yes, I think we'll give you some info. But like think we should be able to mine 150,000, maybe 200,000 ton of material a year at 10% zinc top sort of stuff, couple of percent lead. That's what we're There's obviously much more tonnage than that, but we'll try and restrict it to a higher grade core, I think. Cut off grades are fairly low than that, but we might as well try and mine the better stuff first. I think Right. Thanks. That's really helpful. I'll pass it on.

Thank you. Your next question comes from Sam Catalano from Wilson's Advisory. Please go ahead. [indiscernible] Mick MAC good morning. Fergot, just explore a little bit your guidance. So you've been very clear on the upside potential at Merren to current guidance figures. But just on the guidance that you do have, So You've You mentioned in your comments that the grade for this year's guidance that corresponds to this year's guidance has gone up to 3.8% to 4% from somewhere around 3.5%. So let's call that a 10% increase roughly in grade. [indiscernible] overall production guidance flat, so is that you being conservative or have you sort of reassessed throughput figures as well?

Probably like what we're actually seeing in the mine is we're mining less tons, higher grade for the same metal. Or a little bit more metal. [indiscernible] ore tonnes maybe a bit less, but it's the same metal, right? Like it's ore tons a bit less, grade is a bit higher.

Sure. So unit cost should be a bit lower all things being equal?

Yeah. Yeah. That's right. Yeah. I said that's right. And look, it's a range, it's a pretty wide range. So maybe this time last year, we were sort of giving you a range and maybe we're coming in towards the bottom of the range and maybe we're not coming in towards the bottom of the range now.

Sure. Okay. That's great. And just to clarify, I think in your answer to Dave's question, just before were you suggesting potentially rough order of magnitude, 150,000 to 200,000 tons of zinc bearing ore is what you're thinking in terms of order of magnitude [indiscernible] Planning engineers will tell you you can do more, but I think that's a reasonable sort of reasonable range. The Endeavor mill has got plenty of capacity for that. If you look at his public disclosure, I think he should have it up and running mid year. Maybe a little earlier. You'll have a bit of time to sort of troubleshoot I think that's fair. So really we're hoping to get some of that out by Q4 of this year. And then really get going into it next year, right? So again, it's I think it's a useful byproduct credit for us, some decent cash flow And if we ever get to the point where having to pick or choose copper or zinc ore, I I guess we'll just take the stuff that gives you the best margin.

And mining cost per tonne up there, wildly different lower down in CSA?

It will be cheaper because it's so much quicker to get to it and not a lot nowhere near as much ground support and not as much double handling. It's probably slower. We're going to have to be like we're going to be probe drilling up and around that area as well. So that'll be a negative. I would imagine it would be somewhat cheaper than what we're currently mining. I think think we're US75 dollars a tonne in Q4 for the overall mining cost. I would have to I'm not going to give you the exact number, but if I net everything out, it's definitely got to be cheaper than that. Okay. That's great. Thanks, Mick MAC. Thank you. Your next question comes from Ben Lyons from Jarden Securities.

Good morning, everyone. Just like to get a feel for the capital pipeline as we look into calendar 'twenty six please, Mick. Obviously, you've got the ongoing bend projects which will carry through into next year. Just whether there's any other major projects to bear in mind as we sort of cast our mind forward? Thank you.

Well, we haven't given guidance, but the short answer is we sort of dropped stuff off So in this year $25,000,000 we're executing the Stage 10 tailings lift. That's about US12 million in total. I don't know, I think we spent US2 million dollars or US3 million dollars last year on Once that's completed by end of Q3, early Q4, So I don't know what we're spending this year, maybe Nine U. S. On that this year give or take. That's sort of the end of that We then have tailings capacity till 02/1930. So that will drop away Obviously, if we start producing I can't produce a lot more copper and zinc with no extra capital. There'll be a little bit of marginal sustaining capital up in the top of the mine and the Meron mine, but won't be that much, it won't be $9,000,000 in U. S. And then the growth capital I would think that will sort of gradually tickle down There's a fair bit of spend this year on that vent project as well in there. [indiscernible] sort of expect to see sustaining capital trending down next year maybe by 5,000,000 and Grove Capital flat to down a little bit, I would think.

Great. That's very helpful. Thank you. I'll pass it on. [indiscernible] Your next question comes from Eric Windmill from Scotiabank.

Great. Hi, Nick and team.

For taking my question. Just looking at some of the year over year cost comparisons, I see like energy cost is up quite a bit. Also contractors up a little bit. How do you see those two line items shipping out into the year ahead?

That might be a question for Morneau. Do we have that I'm not sure we have that in the detail here, but I'll let Monet handle that one.

Yes. No, look, it's from a in terms of the cost you sort of mentioned there, Eric, the power cost, the power cost has been very variable. So that contract we sort of inherited from Glen Cove when we bought the mine. And that's a spot contract on buying tailwind market. So in the East Coast Of Australia, it's pretty volatile market. So what we've been doing is sort of looking to hedge that. So we've hedged a fair amount of that coming out to the contract end, which ends sort of June of next year, which we will then sort of renegotiate that and try and enter into a fixed price contract. But there has been some sort of volatility during the year, especially in that sort of [indiscernible] Where that's contributed to a bit of an increase in cost for 2024. But for 2025, like I said, we've hedged out 80% of that volume for the year. Or most of it already. So that should actually come down for 2025 from that perspective. And then contractors, MAC the contractor side, we have been going through a bit of a process And I think Mick has spoken to this before.

Initially, when we bought the mine We reduced the numbers from about 700 to 500.

Employees. And then that sort of reduced to about $450,000,000 $460,000,000 which is probably a bit low to where we want to see numbers. So 500 is probably that sort of running rate. So during the year, some of those positions were sort of filled by contract as well. We then get more permanent employees to fill those roles at [indiscernible] of a lower cost as well. So again, for 2025, that should come down and going forward, that should more stabilize more so. Okay, great. That's very helpful. Yes, I appreciate it, Morne.

I think that's about it for me. I think most of the questions are answered. So yes, I'll hop back in the queue. Cheers.

Yes. I think on cost control, again, C1 has come down to $1.66 a pound in Q4. We've I think we've had a pretty good effort given the backdrop of cost escalation in the Australian mining industry, particularly West Australian mining industry, We locked in a four year wage deal in November at 3.25% per annum. For the bulk of the employees. So that's sort of locked down our biggest cost.

Our second biggest cost is power. And as Morneau said, we're hedging that now. So again, not trying to get the lowest, lowest possible payout price, but we're trying to hedge out the extreme spikes. There's probably a bit more room to go on Ab [indiscernible] the biggest bang for our buck is going to be about growing the production line. And so that's what we're doing and growing it through cheap add on type sort of in the mine type expansions. That will give us the best bang for our buck. We've got so much of our costs are fixed. That actually will give us a fairly substantial cost benefit. On a unit basis.

Thank you. Your next question comes from Paul Hissey from Wallace Australia? Thanks, moderator. Maybe just a question for Morneau first.

A little bit specific around freight or trans in the terms of notionally interchangeable. But just am I right in thinking that there's a a freight charge or a freight credit you give up to your off taker and that's what we see recognized [indiscernible] an expense at the revenue line and then there's additional transport costs Is that transport of the con from the site to the port? Monet, are you just able to give us a bit more granularity on the distinction between those two things, please? [indiscernible] our site to the Niqar support, I mean that's the cost per tonne that we move from the concentrate from site to the port and then from obviously in terms of going on a ship to the delivery of to a market that's obviously another cost to us. And then there's the normal TCRCs that's offset against the revenue. That's Mick has referred to previously that's reduced by 70%. So you get a combination of those costs that's reflected either as a net revenue or as a separate cost as the freight cost.

Yes. And just to be clear though, the freight the shipping costs is netted off against the revenue and the rail cost is taken as a cost, as a traditional expense, yes? As a separate cost.

Yes, okay. No worries. And just I guess perhaps a bit more of a high level question for you, Mick, just around, I mean, clearly, it's frustrating that you can't incorporate your additional copper tons from the high levels of the mines because you don't have a reserve yet. I guess I just want to ask you, I know that Mac has been born out of the spec listing in The U. S. But do you think that listing still fulfills its purpose? Or is it more of a pain than you get benefit from it? And what might that mean for the future of your sort of dual listed structure?

Yes, look, good question.

The reality is that 70% of our liquidity is all on the New York line.

I'm pretty sure the New York line sets the price. And again, we're in a few few indexes over in The U. S. That have bought substantial amounts of stock, right? So The wisdom when we did the ISX listing was that all of the stock would move to Australia, all the liquidity would be on Australia. And that U. S. Listing would become irrelevant. Well, the reality is actually, yes, we've listed on the ASX, we've raised a bunch of money, 70% of our liquidity is in The U. S. Still.

And so what we found is some of our some some shareholders want to hold the stock where there's the most liquidity. Maybe that's their rules or that's what they just like to do. So actually, we've seen some stock move back to The U. S. Line.

Fully fungible. So yes, if it hadn't worked out the way that everyone sort of indicated it would or not, actually I thought it would. Then yes, that U. S. Listing would be probably not very relevant. But that's not actually the case. So for now, we're dual listed. And unless something changes, I think that's likely to be the the case.

Great. I appreciate that commentary.

Thank you. Your next question comes from Daniel Morgan from Barringelli. Please go ahead.

Hi, Mike. I thought I'd come around background. Just probably following up from that point, I understand you've got QAQC issues on resource and reserve from from very high up in the mine in the Merriman piece. But you also are Very confident enough to look to mine it. It appears you're a bit hamstrung by SEC guidance rules when it comes to guiding on this. Just wondering how will this evolve in news flow I. E. Will you be doing more work on drilling and assays to get into a position in the upper portions of the mine in Maran and then that would logically give you a potential upgrade if appropriate later this year. Or will, Maron be a mining area where it will be hard to perpetually give guidance under SEC guidelines.

No, I think we'll our goal will be to sort of switch some of our drilling. Well, in fact, we have switched our drilling to be drilling stuff up new surface. So of our exploration spend I'm just going back to see if I can find so on this slide that I've showed If we haven't started, it will be starting in this week. There's a small deposit called Pink Panther, which is right up at the very top there just off to the left of what is cut yourself up and that little blob there we're drilling out from service because the The plan is to push the decline on from there and go and mine that thing as well. We'll then come back and actually probably from underground, I suspect drill out some of the zinc and copper stoping areas in the Merriman. And once we get a sufficient number of sort of new drill holes with new QAQC on them, to allow us to sort of then upgrade the classifications. It's really about classification. It's not about we're confident of space and raid and volume, it's just classification, right? Then yes, we'd clearly, because obviously, I'd rather not have to MAC MAC dance around what we think we're going to mine up there.

Rather be able to just come out and tell you what it is, but I can't. So, yes, we literally got these resources the week before Christmas. And so we have moved pretty quickly to run through our optimizations see what's economic up there and now we're looking at designs. That's why I say there's sort of two endpoints on the design of what we can do. But I figured I might as well tell you what I know right now And what I know right now is the capital hurdle is very low. So we are going to mine some of this stuff. By the end of this year, And yes, I'd like to get a rig in there and I'd like drilling it and then I'd like to be able to quoting it into a indicated or better resource and then sticking it into our guidance. Absolutely.

And then just to be clear, you talk about mining at this year, are you saying you expect to to get a stope out of upper, I'm referring just to the Merrin piece that's not QTS South. Will you have a copper stope out of that as you're I'd like to, probably a zinc start first, I reckon.

Okay. Thank you very much. Thank you. Your next question comes from Hayden Bairstow from Argonaut.

Good morning, Mick, MAC morning. Just a couple of things. Your comments around just the first quarter being softer. Obviously, we look at this year or last year and the year before, was like 20% of production or something last year. Is it are you talking about that sort of metric or more sort of it's a bit softer, but not quite as dramatic as it was last year?

Well, we haven't finished the quarter yet. But I think under 10,000 tons of copper For sure. All I can just tell you is that it will be weaker. We're very comfortable annual guidance. I'm letting people know that the first quarter will be softer. So when we put it out, I'm telling you ahead of time.

Very comfortable for our annual production. Normally, we don't normally guide by quarter by quarter, but I'm just telling you so that it doesn't come as a surprise, but we feel very comfortable with our annual guidance shot.

And is that something that's just going to be ongoing every now and then you've just have a softer quarter and then you'll be plus 4% for the rest of it and hence the pathway to mid-50s is still quite relaxed in terms of how you get there?

Yes. Yes. Look, again, I've talked about the fact that we have a small number of very high grade somewhat sizable stopes that drive a lot of our production, right? I thought it used to be something like the top six stopes were more than a third of our production. And so just depending on where you are in the sequencing, that has a big impact on your quarterly production. Right? And so as I've said, bear in mind, yes, I want more production out but I also want the ability to smooth that out a bit, right, so that shareholders can go, okay, we can sit here and see it. We can see the month by month schedule going out. We see what the stope profile looks like, We're comfortable with our annual guidance.

But shareholders like to see consistent same number every quarter, right? And shareholders like to see 50% increasing every quarter, but that's not going to happen. So yes, it'll be under 10,000 tonnes of copper.

Yes, I guess we're starting a lot.

Just as always, no surprises, all good. And then just on the Merit stuff, I mean, given as much as you can, I guess, but How do we split the volume here? Is it sort of visually it looks pretty similar between copper and zinc? Is that rather is it more zinc in [indiscernible] there's about double the amount of copper tons is resource tons as there is zinc tons. But the grade in the zinc is pretty high, right? [indiscernible] And still open, we haven't done all the way down, there's still another zinc lens to go. But we have what we have and this is the time when we're talking about R and R I can We can tell you what we know about it. We know there's enough to go. We're going to go mine this stuff.

There are no further questions at this time. I'll now hand back to Ms. McMullen for closing remarks.

Well, look, thanks everyone. I've We're pretty excited about all the developments here. The team at Syth have done a really good job last year and I think they can continue to execute pretty well through this year. And we're pretty happy where our investment in polymetals has done very well. Think he's doing a good job there getting this thing going. Up the road gives us a great outlet for our zinc. And we look forward to continue to engaging with people and we'd like to take people through the mine. It's a bit of we like to showcase it. It's a fantastic operation.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect. [indiscernible] [indiscernible] [indiscernible] [indiscernible]