Record Quarterly Production and Cash Flow Generation1
Metals Acquisition Limited (NYSE: MTAL; ASX:MAC)
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Figure 1 - CSA Copper Mine Recordable
Injuries by Quarter (Graphic: Business Wire)
Metals Acquisition Limited ARBN 671 963 198 (NYSE: MTAL; ASX:
MAC), a private limited company incorporated under the laws of
Jersey, Channel Islands (“MAC” or the “Company”) is
pleased to release its June 2024 quarterly activities report
(“Q2 2024” or “June quarter”).
HIGHLIGHTS
TRIFR of 14.4 an increase quarter on quarter with
remediation strategies implemented, zero recordable injuries in the
month of June.
Record quarterly copper production under MAC
ownership
- Record copper production under MAC of 10,864 tonnes up ~24%
quarter on quarter, with record copper production month in June of
5,378 tonnes
- Record daily production under MAC of 265 tonnes – highest daily
production since 2021
- The record quarter achieved despite a major planned maintenance
shutdown in April, with 1,583 tonnes produced for the month, and a
combined 9,281 tonnes of copper produced over May and June
- Copper grade of 4.2% for the quarter, a ~20% increase from the
prior quarter as the mine plan shifted to higher grade stopes and
dilution control was improved
- C1 of US$1.92/lb2 and Total Cash Costs of US$2.62/lb3 improved
by ~11% and ~17% respectively compared to the March quarter, driven
by improved production resulting from grade, operational
efficiencies and consistency improvements
- Copper production for 2024 tracking to mid-point of guidance
with no change to 2025 and 2026 guidance
Generating material free cash flow
- Operational free cash flow of ~US$21 million4 for the quarter
with an average realised Copper sales price of US$4.41/lb5 (Q2
Copper spot average at US$4.42/lb)
- Cash and cash equivalents increased by ~25% to US$88.6 million
after pre-sales of US$37.4 million, payment of a one-off Stamp Duty
payment of US$23.2 million, repayment of US$7.9 million in senior
debt principal, a ~US$1.8 million investment in Polymetals Limited
(“POL”) and US$2.1 million of exploration expenditure
- MAC also has US$2.8 million of outstanding Quotational Period
receipts and US$20.7 million of unsold concentrate as at 30 June
20246, with the June quarter resulting in a strong build in cash
and available liquidity
- Generated unaudited preliminary revenue of ~US$78 million
(excluding pre-sales of US$37.4 million), an increase of 18%
quarter on quarter
Strategic investment and simplification of capital
structure
- MAC made a strategic investment in POL with an initial A$2.5m
invested for a 4.31% interest in POL, which also provides for
access to water rights and Zinc processing capacity
- Simplification of the capital structure with the completion of
the Private and Public warrant redemption process as announced on
10 June 2024
Production and cost summary
Table 1 – Production and cost summary (unaudited)
Units
Q4 2023
Q1 2024
Q2 2024
QoQ Change (%)
H1 2024
Copper Production
Tonnes
9,832
8,786
10,864
23.7%
19,650
Sustaining capital
US$ million
$10.0
$13.0
$12.8
(0.2%)
$25.8
Cash cost (C1)7
US$/lb
$1.99
$2.15
$1.92
(11%)
$2.02
Total cash cost8
US$/lb
$2.73
$3.17
$2.62
(17%)
$2.86
Group Net Debt9
US$ million
$260
$253
$231
(9%)
$231
Metals Acquisition Limited’s CEO, Mick McMullen,
said:
“Our operations performed to a record level
under MAC’s ownership and in line with our mine plan during the
June quarter, reaching a record level of production of 10,864
tonnes of copper with around 89% of that production being produced
over the last two months of the quarter. This record production was
achieved even with a major planned maintenance shutdown in
April.
The production trend in the quarter was for
sequentially stronger production each month coming out of the
planned mill shutdown in April. Higher grade stopes at the CSA
Copper Mine form a large proportion of our annual production and
played a key role during the quarter, with milled copper grade
improving by around 20% to 4.2% compared to the previous
quarter.
Our CSA Copper Mine operational team
delivered as per the new 2023 mine plan, and as the quarter
progressed went from strength to strength in delivering consistent
production whilst significantly improving safety performance.
Overall, our TRIFR remains above where we would like it but the
site team had zero recordable injuries in the month of June,
coupled with record production and cost performance.
We again ended the quarter with a large
broken ore stockpile of high-grade ore which will underpin
production over the upcoming quarter. Based on the reserve plan, we
expect copper production to now stabilise over the remaining
quarters of the year.
The further benefit of the record production
is the fact that our unaudited preliminary revenue (excluding the
US$37 million of concentrate pre sales) increased by 18% to US$78
million compared to the previous quarter, with the increased
production also contributing to the reduction in our C1 by around
11% to US$1.92 per pound. This also boosted our cash and cash
equivalents by some 25% to US$88.6 million for the quarter after
settling a one-off Stamp Duty payment of around US$23.2 million and
further reducing our interest bearing liabilities by another US$7.9
million.
This is an incredibly strong result when
considered in the context of the bulk of the production and cash
flow coming from the last two months of the quarter alone.
We have already put the additional liquidity
to good use in reducing our overall interest-bearing liabilities by
approximately US$140 million since the start of 2024, which further
support simplifying and building a strong balance sheet.
As part of the ongoing turnaround and
optimisation at the CSA Copper Mine, we announced in Q2 2024 the
new Reserve and Resource Statement, which is a snapshot in time
based on information available back in August 2023. As reported
earlier in the quarter, the new 2023 Reserves and Resources
Statement shows a substantial increase of 64% in contained copper
after replacement of depletion to 0.5Mt in Ore Reserves at an
average grade of 3.3% Cu, and an impressive 42% increase in total
contained Cu after replacement of depletion to 0.7Mt in total
Mineral Resources at an average grade of 4.9% Cu, respectively,
compared to the 2022 Reserve and Resource Statement.
The operational performance and the resource
upgrade support our belief that the CSA Copper Mine is a
high-quality, free cash flow generating, long life copper asset.
The performance of the site team in the June quarter has showcased
just what this mine can do when operations perform the way we know
it can, and the Board and I would like to express our thanks to the
entire team for the strong performance.
Finally, to reconfirm our disciplined M&A
strategy, we will continue to evaluate prospects for growth to
enhance shareholder value.”
ESG
Safety
The TRIFR for the CSA Copper Mine increased from an average of
11.9 in Q1 2024 to 14.4 in Q2 2024. This is below the NSW
underground metalliferous TRIFR average for 2022 of 15.5. Q2 2024
has not been favourable for safety performance with two contractor
LTI’s, three MTI’s and one RWI recorded for the period. June
improved with no recordable injuries, showing a strong improvement
from prior months. Plans are in place to implement strategies to
remediate the increase in TRIFR through increased awareness via
extensive training and coaching, as well as increased safety
presence on site.
Figure 1 - CSA Copper Mine Recordable Injuries by
Quarter
Regulatory
The CSA Mine Rehabilitation Objectives Statement, Final Landform
and Rehabilitation Plan, the Annual Rehabilitation Report and the
CSA Mine Forward Program have all been approved by the NSW
Resources Regulator. Scoping is currently underway for alternate
energy providers for a mix of both wind and solar, to potentially
secure long term energy security, pricing and reductions in
greenhouse gas emissions.
The STSF Stage 9 buttress bulk earthworks are now complete.
Geochemical testing is being completed for Stage 10 material, with
the tendering process under way.
Operations
Table 2 - Quarterly Operational Performance of the CSA Copper
Mine (unaudited)
CSA Copper Mine Metrics (unaudited)
Units
Q4 2023
Q1 2024
Q2 2024
QoQ % variance
H1 2024
U/g development - Capital
Metres
841
466
449
(4%)
915
U/g development - Operating
Metres
448
703
611
(13%)
1,313
Rehab
Metres
153
246
113
(54%)
360
Total development
Metres
1,441
1,415
1,173
(17%)
2,588
Ore Mined
Tonnes
268,685
256,031
271,469
6%
527,500
Tonnes Milled
Tonnes
266,105
260,297
266,936
3%
527,233
Copper grade milled
%
3.8%
3.5%
4.2%
20%
3.8%
Copper Recovery
%
97.6%
97.6%
97.3%
0%
97.4%
Copper Produced
Tonnes
9,832
8,786
10,864
24%
19,650
Silver Produced
Ounces
114,969
102,182
134,701
32%
236,883
Copper Sold
Tonnes
10,812
8,039
8,048
0%
16,087
Achieved Copper price10
US$/lb
3.85
3.87
4.41
14%
4.14
Mining Cost
US$/t Mined
$75.5
$95.7
$91.9
(4%)
$93.7
Processing Cost
US$/t Milled
$25.5
$25.7
$31.9
24%
$28.8
G+A Cost
US$/t Milled
$29.6
$33.1
$25.6
(23%)
$29.3
Total Operating Cost
US$/t
$130.6
$154.6
$149.3
(3%)
$151.9
Development Cost
US$/metre
$9,667
$15,478
$9,330
(40%)
$12,404
Sustaining Capital11
US$ million
$10.0
$13.0
$12.8
(2%)
$25.8
Tonnes Milled per employee
t/employee
189
184
186
1%
185
Mining
US$/lb prod
0.94
1.27
1.04
(18%)
1.14
Processing
US$/lb prod
0.31
0.35
0.36
3%
0.35
General and Admin
US$/lb prod
0.36
0.44
0.28
(36%)
0.36
Treatment and refining
US$/lb prod
0.36
0.17
0.17
0%
0.17
Work in Progress inventory
US$/lb prod
(0.01)
(0.14)
0.03
(121%)
(0.04)
Freight and other costs
US$/lb prod
0.17
0.17
0.14
(18%)
0.15
Silver Credits
US$/lb prod
(0.14)
(0.10)
(0.11)
10%
(0.11)
C1 Cash Cost
US$/lb prod
1.99
2.15
1.92
(11%)
2.02
Leases
US$/lb prod
0.07
0.08
0.07
(13%)
0.07
Inventory WIP
US$/lb prod
0.01
0.14
(0.03)
(121%)
0.04
Royalties
US$/lb prod
0.20
0.13
0.13
0%
0.13
Sustaining capital
US$/lb prod
0.46
0.67
0.53
(21%)
0.59
Total Cash Cost
US$/lb prod
2.73
3.17
2.62
(17%)
2.86
Total Revenue
US$ millions
88.3
66.0
78.0
18%
144.1
Unless stated otherwise all references to dollar or $ are in
USD.
The June quarter was affected by a planned major shut of mill
operations in April 2024, which was offset by a ramp up in
production over May and June resulting in comparable tonnes milled
from Q4 2023 to Q2 2024. Production further benefited from an
increased grade of 4.2%. Mining methods have been refined during
the quarter with blasting techniques reviewed and updated resulting
in lower dilution.
Double lift extraction sequence was completed on two stopes in
Q2 that performed better than expected, resulting in less mining
dilution achieved with stronger grades and less total ore tonnes
for the same metal. This has been critical to the H1 strategy and
will be implemented across future stopes in Q3. Ventilation system
upgrades continued to be scoped in Q3 to access future stopes.
Increased paste was placed in June meaning the mine is well placed
for production into July.
Figure 2 - CSA Copper Mine Quarterly Copper Production
(tonnes)
The average received copper price before hedge settlements was
higher when comparing to the prior period with the June quarter at
US$4.41/lb, up ~14% compared to US$3.87/lb for the March quarter,
with the average spot copper price over the June quarter at
~US$4.42/lb.
In addition, the Australian dollar exchange rate was broadly
flat compared to the prior quarter.
C1 cash costs decreased by ~11% quarter on quarter from
US$2.15/lb in the March quarter to US$1.92/lb for the June quarter.
The higher production tonnes, as detailed above, resulted in an
impact to C1 costs of approximately US$0.40/lb, whilst the overall
cost variance was approximately US$0.16/lb.
This is an incredibly strong result given the low production in
April due to the planned mill shutdown with C1 for May and June
during normal operations at US$1.52/lb.12
Figure 3 - CSA Copper Mine C1 Cash Costs13 - US$/lb
produced
MAC management will continue to implement additional
productivity measures to further reduce C1 costs.
Figure 4 provides an illustration of tonnes milled per employee,
which remains relatively stable quarter on quarter despite the shut
in April 2024.
Figure 4 - CSA Mine Tonnes Milled per Employee
Figure 5 - CSA Mine Mining Unit Rate US$/t
Apart from copper production, the largest driver of C1 costs is
the mining unit rate as mining accounts for approximately 60% of
total site operating costs.
Mining unit rates were broadly in line with the prior quarter
with similar capital development metres achieved. Lower capital
development performance in Q1 and Q2 resulted in a lower portion of
costs able to be capitalised in those quarters, and hence
contributed to the increase in the mining costs when compared to Q3
and Q4 2023.
Figure 6 - CSA Copper Mine Mining Development Costs
Figure 7 - CSA Copper Capital Development metres
Figures 8 and 9 shows the unit rates for processing and site
G&A for the year.
Processing costs per tonne milled increased in the June quarter
given the 10-day full plant shutdown in April. Work was completed
on schedule and budget with no significant incidents recorded.
G&A unit rates decreased during the current quarter after
reallocation of stock consumables to mining and processing
previously allocated to G&A.
Figure 8 - CSA Copper Mine Processing Unit Rate
US$/t
Figure 9 - CSA Copper Mine Site G+A Unit Rate
US$/t
As seen in Figure 10, capital spend (including capitalized
development) decreased slightly over the quarter, largely driven by
work on the TSF embankment, diamond drilling and plant related
works as part of the mill shutdown, with the latter adding an
additional US$1.4 million in costs for the quarter.
Figure 10 - CSA Copper Mine Sustaining Capital
Expenditure
Rail delays due to coal protest action in the NSW Hunter Valley
meant that ~24kt of copper concentrate remained at site and at port
at quarter end, of which ~18kt of concentrate was pre-sold during
the quarter.
Cash position, liquidity and debt facilities
The Company’s unaudited cash holding at the end of Q2 2024 was
~US$88.6 million for an unaudited net debt14 position of ~US$231
million.
The unaudited cash position is after taking into account the
one-off payment of Stamp Duty to the New South Wales government on
the purchase of the CSA Copper Mine amounting to ~US$23.2 million.
A further ~US$7.9 million was also repaid on the Senior Debt
Facility at the end of the quarter.
As of 30 June 2024, the Company had ~US$115 million of liquidity
with access to a US$25 million revolving facility and, as at the
date of this release, has around ~US$2.8 million of outstanding
Quotational Period receipts and around~US$20.7 million of unsold
concentrate as at the 30 June 2024 spot copper price15.
Figure 11 - Q2 2024 Cash flow waterfall (US$M)
Mine Plan, Resource and Reserve
As previously reported, on 23 April 2024 we announced the
release of the new 2023 Reserves and Resources Statement (“R+R”).
The effective date for the R+R was 31 August 2023 and as such, any
new information received after that time has not been incorporated
into the R+R at this stage.
Acquisition of additional 10% of the joint venture interests
in the Shuttleton and Mt Hope Exploration Licence tenements
At the time MAC acquired CMPL from Glencore in 2023, CMPL held
an interest (90%) in two tenements (EL6223 and EL6907) in joint
venture with AuriCula Mines Pty Limited (“AuriCula”), a wholly
owned subsidiary of International Base Metals Limited. The
Shuttleton Joint Venture between CMPL (90%) and AuriCula (10%)
covered EL6223, which is located approximately 75km south of
Cobar.
The Mt Hope Joint Venture CMPL (90%) and AuriCula (10%) covered
EL6907, which is located approximately 130km south of Cobar. On 2
April 2024, CMPL entered into an agreement with AuriCula to acquire
the 10% beneficial interests in this tenure (EL6223 and EL6907)
that it did not already hold.
The agreement provided that, subject to satisfaction of
customary condition precedent, CMPL was to pay A$200,000 to acquire
the 10% joint venture interests that AuriCula holds in the
Shuttleton and Mt Hope Exploration Licence tenements. Completion of
this tenure acquisition occurred on 15 July 2024 (subsequent to the
end of Q2 2024). The Shuttleton Joint Venture agreement and Mt Hope
Joint Venture agreement terminated on transfer of the applicable
tenure to CMPL. Following completion of this arrangement, CMPL now
holds 100% legal and beneficial title to all its mining and
exploration tenure (noting that some tenure remains subject to
pre-existing royalty arrangements).
Exploration
During the quarter, US$2.1 million was invested in
exploration.
During the quarter, MAC continued the resource development and
exploration diamond drilling surrounding the upper Lead-Zinc
(“Pb-Zn”) mineralisation of the Eastern and Western Systems, for a
total of 1,665m. We are awaiting results and anticipate releasing
them shortly but confirmed the presence of in situ, high-grade
Pb-Zn material in the upper portions of the mine, within less than
40m of existing development.
Late in the quarter, extensional and infill diamond drilling
also recommenced at the shallow, high-grade QTSSU-A resource and
ongoing at quarter-end, with results expected to be released when
data is finalised.
Exploratory diamond drilling also continued on CML5 for a total
of 1,779m during the quarter. The initial drilling has intersected
areas of structural complexity and base-metal geochemical anomalism
indicating the potential for buried base-metal mineralisation.
Preliminary interpretation of the 2024 fixed-loop electromagnetic
geophysical survey data shows late-time anomalies, suggestive of
deeply buried conductive material, in proximity to and along trend
of the drilling at the Cherry prospect.
Warrant redemption
On 6 May 2024, MAC announced that it would redeem all public and
private placement warrants that remained outstanding at 5:00 p.m.
New York City time on 5 June 2024 for a redemption price of US$0.10
per Warrant and issue ordinary shares of the Company having par
value of US$0.0001 per share there against.
1,026 Warrants were exercised at an exercise price of $11.50 per
Ordinary Share and 15,344,751 Warrants were exercised on a
“cashless basis,” resulting in the exercise of approximately 99.82%
of the outstanding Warrants (of which approximately 0.01% were
exercised for cash and 99.81% were exercised on a “cashless basis”)
and in the issuance of an aggregate of 4,701,071 Ordinary Shares.
The remaining 27,753 Warrants remained unexercised on the
Redemption Date and were redeemed by the Company for cash.
Accordingly, the Company will have 74,055,263 Ordinary Shares and
no public warrants or private placement warrants outstanding as a
result of the redemption of the Warrants. The Company continues to
have 3,187,500 financing warrants outstanding to purchase Ordinary
Shares, which were issued to Sprott Private Resource Lending II
(Collector-2), LP in connection with a mezzanine loan note facility
entered into on 10 March 2023.
Three Year Production Guidance
The copper production guidance provided to the market covering
2024, 2025 and 2026 remains unchanged:
Table 3 - CSA Copper Mine Production Guidance
Year
2024
2025
2026
Low
High
Low
High
Low
High
Copper Production (t)
38,000
43,000
43,000
48,000
48,000
53,000
This 3-year production guidance is based primarily on Ore
Reserves but also on measured and indicated Mineral Resources (as
at 31 August 2023) and, given that all the deposits are open and a
large drill program is underway, we consider it likely that there
will be changes over the relevant period as the Company’s overall
plan to continue operational and production improvement continues
to develop.
Changes to Board of Directors
Appointment of Ms Leanne Heywood
As announced on the 1 May 2024, Ms Leanne Heywood has been
appointed as a Non-Executive Director of the Company’s Board of
Directors, effective 1 May 2024. Ms Heywood is an experienced
non-executive director with broad general management experience
gained through an international career in the mining sector,
including 10 years with the Rio Tinto Copper Group.
Appointment of Ms Anne Templeman-Jones
As announced on 22 July 2024, Ms Templeman-Jones has been
appointed as a Non-Executive Director of the Company’s Board of
Directors, effective 22 July 2024. Ms Templeman-Jones, is an
accomplished listed company director with substantial financial,
operational risk, regulatory, governance and strategy experience
from a number of industries, including banking and finance,
engineering services in the energy sector, consumer goods and
manufacturing.
In addition to Metals Acquisition Limited, Ms Templeman-Jones
currently serves as a Non-Executive Director, and has been
responsible for a diverse range of committee chairs and memberships
for Commonwealth Bank of Australia (Director since March 2018) and
Trifork Ag (Director since April 2021). From November 2017 until 1
July 2024, Ms Templeman-Jones was a director of Worley Limited.
Change of Glencore Nominee Director
Also announced on 22 July 2024, are changes to the Glencore
Nominee Director where Mr Mohit Rungta will replace Mr Matt
Rowlinson and Mr John Burton as Glencore’s nominee Director to the
Company’s Board of Directors. Glencore is entitled to nominate one
Director for every 10% it holds in the Company. Following
completion of the Company’s ASX listing and recent warrant
redemption Glencore now has a 13.5% interest (entitling it to one
nominee).
Hedging
Revenue significantly leveraged to spot copper prices with over
~70% of forecast remaining copper sales for 2024 unhedged16.
During the quarter, the Company delivered 3,105 tonnes of copper
into the hedge book at an average price of US$3.72/lb. At the end
of June 2024, the remaining copper hedge book consisted of the
following:
Table 4 – Hedge position
Copper
2024
2025
2026
Total
Future Sales (t)
6,210
12,420
5,175
23,805
Future Sales ($/t)
3.72
3.72
3.72
3.72
Conference Call
The Company will host a conference call and webcast to discuss
the Company’s second quarter 2024 results on Monday, July 22, 2024
at 7:00 pm (New York time) / Tuesday, July 23, 2024 at 9:00 am
(Sydney time).
Details for the conference call and webcast are included
below.
Webcast Participants can access the
webcast at the following link
https://event.choruscall.com/mediaframe/webcast.html?webcastid=Odl1UuhQ.
Conference Call Participants can
dial into the live call by dialing one of the numbers below and
request the operator connect to the Metals Acquisition Limited
call.
Toll Free Dial In:
+1-844-763-8274
International Dial In:
+1-647-484-8814
Australia:
+61-3-8592-6289
Replay The conference call will be
available for playback until October 20, 2024, and can be accessed
by dialing:
US Toll Free:
+1-877-344-7529
International Toll Free:
+1-412-317-0088
-ENDS-
This report is authorised for release by the Board of
Directors.
About Metals Acquisition Limited
Metals Acquisition Limited (NYSE: MTAL; ASX: MAC) is a company
focused on operating and acquiring metals and mining businesses in
high quality, stable jurisdictions that are critical in the
electrification and decarbonization of the global economy.
Estimates of Mineral Resources and Ore Reserves and
Production Target
This release contains estimates of Ore Reserves and Mineral
Resources as well as a Production Target. The Ore Reserves, Mineral
Resources and Production Target are reported in MAC’s ASX
Announcement dated 23 April 2024 titled ‘Updated Resource and
Reserve Statement and Production Guidance’ (the R&R
Announcement). The Company is not aware of any new information or
data that materially affects the information included in the
R&R Announcement, and that all material assumptions and
technical parameters underpinning the estimates or Ore Reserves and
Mineral Resources in the R&R Announcement continue to apply and
have not materially changed. The material assumptions underpinning
the Production Target in the R&R Announcement continue to apply
and have not materially changed. It is a requirement of the ASX
Listing Rules that the reporting of ore reserves and mineral
resources in Australia comply with the JORC Code. Investors outside
Australia should note that while exploration results, mineral
resources and ore reserves estimates of MAC in this presentation
comply with the JORC Code, they may not comply with the relevant
guidelines in other countries and, in particular, do not comply
with (i) National Instrument 43-101 (Standards of Disclosure for
Mineral Projects) of the Canadian Securities Administrators; or
(ii) the requirements adopted by the Securities and Exchange
Commission (SEC) in its Subpart 1300 of Regulation S-K. Information
contained in this presentation describing mineral deposits may not
be comparable to similar information made public by companies
subject to the reporting and disclosure requirements of Canadian or
US securities laws.
Forward Looking Statements
This release includes “forward-looking statements.” The
forward-looking information is based on the Company’s expectations,
estimates, projections and opinions of management made in light of
its experience and its perception of trends, current conditions and
expected developments, as well as other factors that management of
the Company believes to be relevant and reasonable in the
circumstances at the date that such statements are made, but which
may prove to be incorrect. Assumptions have been made by the
Company regarding, among other things: the price of copper,
continuing commercial production at the CSA Copper Mine without any
major disruption, the receipt of required governmental approvals,
the accuracy of capital and operating cost estimates, the ability
of the Company to operate in a safe, efficient and effective manner
and the ability of the Company to obtain financing as and when
required and on reasonable terms. Readers are cautioned that the
foregoing list is not exhaustive of all factors and assumptions
which may have been used by the Company. Although management
believes that the assumptions made by the Company and the
expectations represented by such information are reasonable, there
can be no assurance that the forward-looking information will prove
to be accurate.
MAC’s actual results may differ from expectations, estimates,
and projections and, consequently, you should not rely on these
forward-looking statements as predictions of future events. Words
such as “expect,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,”
“believes,” “predicts,” “potential,” “continue,” and similar
expressions (or the negative versions of such words or expressions)
are intended to identify such forward- looking statements. These
forward-looking statements include, without limitation, MAC’s
expectations with respect to future performance of the CSA Copper
Mine. These forward-looking statements involve significant risks
and uncertainties that could cause the actual results to differ
materially from those discussed in the forward-looking statements.
Most of these factors are outside MAC’s control and are difficult
to predict. Factors that may cause such differences include, but
are not limited to: the supply and demand for copper; the future
price of copper; the timing and amount of estimated future
production, costs of production, capital expenditures and
requirements for additional capital; cash flow provided by
operating activities; unanticipated reclamation expenses; claims
and limitations on insurance coverage; the uncertainty in Mineral
Resource estimates; the uncertainty in geological, metallurgical
and geotechnical studies and opinions; infrastructure risks; and
other risks and uncertainties indicated from time to time in MAC’s
other filings with the SEC and the ASX. MAC cautions that the
foregoing list of factors is not exclusive. MAC cautions readers
not to place undue reliance upon any forward-looking statements,
which speak only as of the date made. MAC does not undertake or
accept any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements to reflect
any change in its expectations or any change in events, conditions,
or circumstances on which any such statement is based.
More information on potential factors that could affect MAC’s or
CSA Copper Mine’s financial results is included from time to time
in MAC’s public reports filed with the SEC and the ASX. If any of
these risks materialize or MAC’s assumptions prove incorrect,
actual results could differ materially from the results implied by
these forward-looking statements. There may be additional risks
that MAC does not presently know, or that MAC currently believes
are immaterial, that could also cause actual results to differ from
those contained in the forward-looking statements. In addition,
forward-looking statements reflect MAC’s expectations, plans or
forecasts of future events and views as of the date of this
communication. MAC anticipates that subsequent events and
developments will cause its assessments to change. However, while
MAC may elect to update these forward-looking statements at some
point in the future, MAC specifically disclaims any obligation to
do so, except as required by law. These forward-looking statements
should not be relied upon as representing MAC’s assessment as of
any date subsequent to the date of this communication. Accordingly,
undue reliance should not be placed upon the forward-looking
statements.
Non-IFRS financial information
MAC’s results are reported under International Financial
Reporting Standards (IFRS), noting the results in this report have
not been audited or reviewed. This release may also include certain
non-IFRS measures including C1, Total Cash costs and Free Cash
Flow. These C1, Total Cash cost and Free Cash Flow measures are
used internally by management to assess the performance of our
business, make decisions on the allocation of our resources and
assess operational management. Non-IFRS measures have not been
subject to audit or review and should not be considered as an
indication of or alternative to an IFRS measure of financial
performance.
C1 Cash Cost
C1 costs are defined as the costs incurred to produce copper at
an operational level. This includes costs incurred in mining,
processing and general and administration as well freight and
realisation and selling costs. By-product revenue is credited
against these costs to calculate a dollar per pound metric. This
metric is used as a measure operational efficiency to illustrate
the cost of production per pound of copper produced.
Total Cash Cost
Total cash costs include C1 cash costs plus royalties and
sustaining capital less inventory WIP movements. This metric is
used as a measure operational efficiency to further illustrate the
cost of production per pound of copper produced whilst incurring
government-based royalties and capital to sustain operations.
Free Cash Flow
Free cash flow is defined as net cash provided by operating
activities less additions to property, plant, equipment and mineral
interests. This measure, which is used internally to evaluate our
underlying cash generation performance and the ability to repay
creditors and return cash to shareholders, provides investors with
the ability to evaluate our underlying performance.
_________________________ 1 Record production referencing the
CSA Copper Mine under MAC ownership. 2 See “Non-IFRS financial
information” and refer to table 2 for reconciliation of C1 Cash
Cost. 3 See “Non-IFRS financial information” and refer to table 2
for reconciliation of Total Cash Cost. 4 See “Non-IFRS financial
information.” 5 Realised sales price excluding hedging impact. 6
2,185 dmt at Cu spot price of US$9,476 per tonne of copper as at 30
June 2024. 7 See “Non-IFRS Information” and refer to table 2 for
reconciliation of C1 Cash Cost. 8 Excludes corporate costs from
parent entity. See “Non-IFRS financial information” and refer to
table 2 for reconciliation of Total Cash Cost. 9 Senior Debt +
Mezzanine Facility – Cash and cash equivalents (excluding streams)
10 Realised price is before impact of hedging 11 Sustainable capex
12 See “Non-IFRS Information” and refer to table 2 for
reconciliation of C1 Cash Cost. 13 See “Non-IFRS Information” and
refer to table 2 for reconciliation of C1 Cash Cost. 14 Net debt is
calculated taking senior debt (+) mezzanine debt (-) cash and cash
equivalents excluding streams. 15 Spot Copper price as of 28 June
2024 of US$4.30.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240722961999/en/
Mick McMullen Chief Executive Officer Metals Acquisition Limited
investors@metalsacqcorp.com
Morne Engelbrecht Chief Financial Officer Metals Acquisition
Limited
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