Capstone Copper Corp.

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" Stifel Nicolaus Canada Inc., Research Division

" Scotiabank Global Banking and Markets, Research Division

" Canaccord Genuity Corp., Research Division

" Jefferies LLC, Research Division

" Barrenjoey Markets Pty Limited, Research Division

" TD Cowen, Research Division

" Macquarie Research

" CIBC Capital Markets, Research Division

" Goldman Sachs Group, Inc., Research Division

Thank you, operator, and thank you, everyone, for joining us today to discuss our third quarter results. Please note that the news release and regulatory filings are available on our website and on SEDAR+.

If you are logged into the webcast, we will advance the slides of today's presentation, which are also available in the Investors section of our website. I am joined today by our President and CEO, Cashel Meagher; our SVP and Chief Operating Officer, Jim Whittaker; and our SVP and Chief Financial Officer, Raman Randhawa.

During the Q&A session at the end of the call, we will also be joined by our SVP, Risk, ESG, and General Counsel, Wendy King; and our Head of Technical Services, Peter Amelunxen, who are available for questions. Please note that comments made today on the call will contain forward-looking information within the meaning of applicable securities laws.

This information, by its nature, is subject to risks and uncertainties, and actual results may differ materially from the views expressed today. For further information, please see Capstone's most recent filings, which are available on our website at www.capstonecopper.com.

And finally, I'll just note that all amounts we will discuss today are in U.S. dollars unless otherwise specified.

It is now my pleasure to turn the call over to our President and CEO, Cashel Meagher.

Thank you, Daniel, and hello to all of you dialing in from the Americas, Europe, Australia, around the globe. Today, we are pleased to present our third quarter 2025 results and achievements.

Q3 was marked by several key catalysts on our path towards transformational growth. This included sanctioning and beginning construction on our Mantoverde optimized project, which will deliver near-term production growth at our flagship asset through a capital-efficient brownfield expansion.

This also included announcing a minority joint venture agreement with Orion Resources Partners at our Santo Domingo project, representing a major milestone towards unlocking the value of the Mantoverde Santo Domingo district. At the same time, we continue to strengthen our pipeline through exploration in support of our commitment to building a world-class long-life copper district in the Atacama.

We achieved encouraging results from Phase 1 of a 2-year drill program at Mantoverde and announced a new exploration program at Santo Domingo and Sierra Norte. While we increased production to meet the growing global demand for copper, we remain committed to doing so responsibly.

Earlier this month, we were pleased to publish our 2024 sustainability report, which demonstrated steady progress on our sustainable development strategy. We also received the Copper Mark award at our Pinto Valley site in recognition of responsible production practices in one of the oldest mining districts in the United States.

As we execute our strategy in a responsible and safe manner, we continue to focus on operational excellence at our existing operations, as highlighted on Slide 5. In Q3, our operations delivered consolidated copper production of 55,300 tonnes at a consolidated C1 cash cost of $2.42 per pound.

This is the third quarter in a row that our team has delivered lower cash costs, especially during times of strong commodity prices. Cost control across the business ensures that margins are protected and incremental value is returned to our shareholders.

Our Mantoverde site experienced higher-than-normal downtime this quarter, primarily due to motor failures in the ball mill, in addition to 5 days of planned maintenance. Our team worked collaboratively with third-party experts to return Mantoverde to full operating rates sooner than initially anticipated and continues to advance a remediation strategy to mitigate the potential for future impacts.

The lower throughput during the quarter was partially offset by record recoveries as we continue to progress towards design levels. We look forward to demonstrating the full potential of Mantoverde over the remainder of '25 and into 2026 as we enhance the consistency of operation, execute on Mantoverde optimize, and progress our exploration strategy.

At Mantos Blancos, we achieved another quarter of strong production and cash costs despite slightly lower throughput due to maintenance completed during the quarter. Arizona continued to experience severe drought conditions in Q3, which resulted in constrained throughput at our Pinto Valley mine.

In the near term, we are focused on the implementation of our asset management framework to achieve stable operations at Pinto Valley. Longer term, we remain committed to unlocking the significant value of Pinto Valley and assets strategically positioned in the United States with over 1 billion tonnes of resources.

At Cozamin, we saw another steady quarter with strong production and low unit costs. Based on our operating performance over the first 3 quarters, we have reiterated our production and cost guidance.

We expect total copper production to finish within the lower half of the range and cash costs to finish within the upper half of the range for 2025. We are positioned well for a strong finish to the year.

Amidst strong commodity markets, we look forward to demonstrating reliable copper production, lower costs, and strong cash flow generation while continuing to advance our production growth opportunities in preparation for a strong 2026. And with that, I'll pass over to Raman for our financial results.

Thank you, Cashel. We are now on Slide 6.

In Q3, strong copper production and commodity prices drove record quarterly revenue of $598.4 million. We note that copper sales were around 2,600 tonnes above payable production levels, primarily due to timing of sales at Mantos Blancos.

LME copper prices averaged $4.44 per pound in the quarter, up 3% compared to $4.32 per pound in Q2, and we realized a slightly higher copper price of $4.49 per pound. LME copper prices are even stronger today at just above $5 per pound.

With over 90% of our revenue derived from copper, we stand to benefit significantly from higher copper prices. C1 cash cost of $2.42 per pound decreased by $0.03 from last quarter and by $0.42 compared to Q3 last year, marking the third quarter in a row our team has achieved lower cash costs.

Solid production and cost control allowed us to realize strong gross margins of $2.07 per pound or 46% in Q3, which represents a 7% increase over Q2. By protecting margins, we can ensure that benefits from strong commodity prices flow through to our bottom line.

Record adjusted EBITDA in Q3 of $249.2 million increased 106% year-over-year, driven by higher copper production, lower cost, and stronger copper prices. This is the fourth quarter in a row we've generated record EBITDA as we continue to realize the benefits of our recently ramped-up mines in Chile.

We also reported strong operating cash flow of $231.2 million before working capital changes. Net operating cash flow of $153.4 million was impacted by adjustments of $77.8 million, largely due to a buildup of accounts receivables at Mantoverde and Mantos Blancos.

We also reported adjusted net income attributable to shareholders of $49.4 million or $0.06 per share in Q3. As you can see from our financial highlights, we achieved record results in a number of areas, representative of a commitment to operational excellence across our organization.

Moving on to Slide 7. On the bottom left-hand side, we summarize our available liquidity, which as at September 30 was greater than $1 billion, including $310 million of cash and short-term investments and $761 million of undrawn amounts on our corporate revolving credit facility.

We finished this quarter with a consolidated net debt of $726 million. In Q3, we continue to see our net leverage decline with our net debt-to-EBITDA ratio of 0.9x at the end of Q3.

This is the seventh quarter in a row we have seen improvements to this metric as we deleverage our balance sheet ahead of Santo Domingo. The chart on the right-hand side of the page illustrates our EBITDA sensitivity of various copper prices based on our 2025 forecast, as well as upside related to MVL and Santo Domingo at run-rate production.

The level of EBITDA generation will enable us to continue to generate cash to delever our balance sheet, further enhancing our financial position. For the balance of the year, a 10% change in copper prices impacts our EBITDA by approximately $50 million.

And at these production levels, a 10% change impacts EBITDA by close to $200 million over a full-year basis. Now I'll hand it over to Jim Whittaker for the operations review.

Thanks, Ryan. We are now on Slide 9, where we will first run through our Mantoverde operation.

Total production yielded 23,769 tonnes of copper at a record low combined C1 cash cost of $2.27 per payable pound. In Q3, plant throughput averaged 27,500 tonnes per day, which, of course, was impacted by the ball mill molded failures we had previously disclosed and 5 days of planned maintenance.

As a result of an investigation with third-party experts and the manufacturer, we now understand that the failures were caused by an issue with a part within the motors called the exciter. We have been focused on repairing the failed motors and remediating the remaining motors while also implementing further protections to avoid potential future failures.

This has resulted in a bit of additional downtime in October. But now as we sit here today, we have completed the required repairs on all 5 motors, including 2 in the ball mill, 2 in the SAG mill, and 1 spare, and with another spare ordered and on the way as additional contingency.

We are eager to get back above design throughput levels consistently, especially now that we are not constrained to 32,000 tonnes per day from a permitting perspective. Copper grades averaged 0.7% in Q3, with the highest grades of 0.81% occurring in September.

Importantly, during Q3, we achieved record recoveries of 85.8%. July had lower recoveries as we finished mining through the transition zone, similar to what we experienced in Q2.

In August and September, recoveries significantly improved as we progressed to predominantly sulfide ore zones. It is also worth noting that recoveries starting from late August were impacted by the processing configuration where we bypassed the ball mill because of the motor failures.

Using only the SAG mill resulted in a coarser grind and overall lower recoveries. So we are quite pleased with the performance on the recoveries this quarter and believe we are well-positioned heading into Q4 and 2026.

Mantoverde is trending towards the lower end of its asset level production guidance range and the upper end of the cost guidance range for 2026. This is primarily due to downtime associated with the motors and impacts from mining through the transition zone earlier this year.

In Q4 specifically, we are expecting throughput just below 30,000 tonnes per day average. Moving now to Slide 10.

We wanted to provide a status update on the Mantoverde optimized project. After receiving the permit approval from the Chilean authorities in July, we announced project sanctioning in August and began construction.

MV Optimize is an extremely attractive project for us, adding 20,000 tonnes per year of copper production at a low capital intensity of around $9,000 per tonne. Our capital cost of $176 million, and our scheduling expectation for the project remains unchanged.

In 2026, we are expecting an additional 10 days of maintenance currently planned for Q3 in order to complete the final tie-in of infrastructure required for MVO. We then plan to ramp up through and during Q4 with a goal to achieve consistent 45,000 tonnes per day throughput rate in early 2027.

We look forward to progressing construction to unlock near-term production growth at our flagship asset. Now moving north to Chile.

Mantos Blancos continued to deliver strong results in Q3, as highlighted now on Slide 11. Total sulfide and cathode production yielded 15,417 tonnes of copper at C1 cash cost of $2.24 per payable pound.

Throughput averaged 18,100 tonnes in Q3, slightly below design levels as a result of maintenance. As we continue to work through our Mantos Blancos Phase 2 study, the team on site was able to continue to push the plant, reaching an individual maximum daily throughput over 28,000 tonnes per day in September.

As a result of strong throughputs and recoveries year-to-date, which we expect to continue through Q4, Mantos Blancos is trending towards the upper end of its production guidance range and the lower end of its cost guidance range for 2025. Turning to Pinto Valley on Slide 12.

We produced 9,949000 tonnes of copper during Q3, lower than we had expected as the severe drought in Central Arizona continued for longer than we had anticipated. The lower production level is based on operating at only 2/3 availability with only 4 of 6 mills online for the majority of the quarter, driven by these water constraints.

The lower throughput was partially offset by stronger grades and recoveries compared to Q1 and Q2. I am very pleased to report that throughout October, water levels were high enough to support a ramp-up to full availability with all 6 mills now operational.

We are committed to mitigating the impacts of drought at Pinto Valley through a number of initiatives that are ongoing. This includes improving on-site water infrastructure, evaluating potential agreements with other closed mines in the area that have impacted water, which could be used in our operations, and also leadership changes to improve the tactical focus.

For Q4, we are expecting throughput to average around 50,000 tonnes per day after accounting for the performance in October. When combined with the performance through the first 3 quarters, Pinto Valley is trending below the lower end of its production guidance range and above the higher end of its cost guidance range.

The focus of the current U.S. administration on growing domestic copper production has provided further endorsement for the strategic value of Pinto Valley.

We remain committed to unlocking the value of the significant resource at Pinto Valley through the evaluation of the upside opportunities on our land package and within our broader district. In the meantime, we will continue to improve the reliability of the plant to drive higher production and lower costs through our asset management framework.

Moving to Slide 13. Building on the success of the first half, Cosmin delivered another quarter of solid results in Q3, producing 6,145 tonnes of copper at C1 cash cost of $1.51 per payable pound.

Cosmin is tracking towards the upper end of its production guidance range and the lower end of its cost guidance range for 2025. We continue to conduct exploration at Cosmin to evaluate the potential for mine life extensions or for potential improvements to the production profile.

And with that, I'd like to pass it back to Cashel.

Thanks, Jim. Turning to Slide 15.

We recently announced a joint venture agreement with Orion Resource Partners at Santo Domingo. This transaction represents the culmination of a competitive process to select the premier partner that will assist Capstone in unlocking the considerable value at Santo Domingo.

Through this next phase of a long-standing partnership with Capstone, Orion will contribute up to $360 million for 25% of the Santo Domingo project. They will also contribute their pro rata share of project CapEx.

Included in the total consideration is a base purchase price of $225 million at FID, a further $75 million 6 months later, and a $60 million in contingent payments based on certain milestones. We believe the established contingent milestone thresholds are very achievable and endorse the value we expect to continue to create by increasing the copper production profile and bringing on byproduct cobalt production.

In our view, an extremely valuable part of this transaction is the buyback option, which allows us to reconsolidate 25% of Santo Domingo for a predetermined price based on a return threshold applied to Orion's contributions. We view this as a call option for Capstone and one that is likely to be accretive for our shareholders, especially in a rising copper price environment.

Orion has also subscribed for $10 million in equity, which will be used to fund new exploration program targeted at the areas eligible for contingent payments. I'm proud of our team for reaching an agreement that realizes significant value and derisks our project funding requirements while also retaining future optionality through a buyback option.

Turning to Slide 16. We have outlined the path towards sanctioning Santo Domingo with the required permits in hand, the feasibility study published last year, and a joint venture agreement reached.

We will continue to progress the remaining work streams in parallel towards a sanctioning decision in the second half of 2026. Next steps include securing project financing, which has already kicked off and is expected to take 12 months.

We also plan to continue to progress detailed engineering, targeting closer to 60% ahead of sanctioning, while also advancing the upside opportunities and potential district optimizations. From a Capstone corporate perspective, we will continue to strengthen our balance sheet through internally generated cash flows and reduce our net debt leverage further prior to a sanctioning decision.

Having recently completed the Mantoverde development project, 35 kilometers away, we are extremely well-positioned to execute on the Santo Domingo project. In pursuit of our vision to build a world-class long-life copper district in Chile's Tier 1 Atacama region, we are unlocking value through the drill bit as shown on Slide 17.

Supported by an expanded budget for 2025 of $40 million, we continue to advance the initial 2-year exploration program at Mantoverde as well as our recently announced program focused on Santo Domingo and Sierra Norte. Related to this, we are pleased to announce we have signed an exploration option agreement with ENAMI for more than 18,000 hectares of concessions surrounding Sierra Norte, further consolidating our position in the region.

We've already received some encouraging results from Phase 1 of the exploration program at Mantoverde, as highlighted on Slide 18. This includes the potential to improve our grade profile in the near to medium term via Brecha Flores sector.

Additionally, the results from step-out drilling at Animas and the Santa Clara Corridor, pictured on the slide, have provided us with increased confidence in our future expansion plans. We look forward to advancing Phase 2 of the exploration program, which is underway.

It follows up on the results from Phase 1, such as at Animas and the Santa Clara Corridor, and will also include targets on the highly prospective northern corridor of our Mantoverde concession identified through an IP survey completed earlier this year. There are 7 drill rigs turning on site at Mantoverde, and this program will continue to inform further opportunities for growth within the district.

Turning to Slide 19. During Q3, we achieved a number of milestones, a testament to the executable nature of our organic growth opportunities.

At Capstone, we are proud to have created a strong pipeline supported by a solid diversified foundation of operating assets. As we enter the final quarter of 2025, we will continue to focus on operational execution, strengthening our balance sheet, and prudently advancing our projects to position us well for 2026.

With sanctioning of Mantoverde Optimize behind us, we are hard at work upgrading the operation to sustain 45,000 tonnes per day, funded by internally generated cash flows. At Santo Domingo, signing of a joint venture agreement, arrangement marked a significant milestone.

We are now working on securing optimal financing for the project while advancing the remaining work streams in parallel towards sanctioning. Beyond MVO and Santo Domingo, we have a strong pipeline of low-risk, high-return projects in top-tier jurisdictions.

This includes an expansion at Mantos Blancos to unlock incremental copper production, optionality to realize synergies in the MVSD district, and the potential development of another major copper district around our Pinto Valley mine in Arizona. A strong copper price environment and growing consensus of increasing future demand supports our growth strategy, reinforcing the importance of remaining agile to execute responsibly.

With that, I'll turn to Slide 20 to conclude today's presentation. In the third quarter, our current operations performed well, allowing us to realize the benefit of strong commodity prices by delivering solid production and improving our cash costs, resulting in record adjusted EBITDA.

We also took tangible steps on our path towards transformative growth. We are well-positioned to become a leading long-life, low-cost copper producer, playing an important role in providing the copper the world needs now and into the future.

And with that, we are ready to take questions.

Cashel, what's the earliest we may start to see some of these Brecha Flores and MVS intercept material into the mine plan? You talked about sort of short-term and medium-term.

I'm just wondering if that means sort of '26 or '27? Or will you wait until a more comprehensive block model is established?

Yes, Ralph, thanks. I think what we've done is with that exploration release is what we've done is we've developed a platform by which we can communicate in the future ongoing exploration results.

It's a rather large program. So for us to be able to incorporate and interpolate the results into a mine plan, we kind of want to have much of the program complete.

So I would suspect that that would be a '27, sometime first half of '27 to be able to really show what effect it has on, number one, Mantoverde Optimize, because some of this drilling will affect the stripping and hopefully, a little bit of the grade a bit. And then the Phase 2 will be an ongoing process because we have ambitions that, that district and that fault will yield higher grades that are more accessible than the immediate pit.

We're just expanding the size of it, such that we can optimize what we call Mantoverde 2 and determine where that center of gravity of future resources to properly locate the expanded and the additional production facility that Mantoverde 2 would provide for.

I wanted a follow-up question on Santo Domingo. And I'm just wondering about the relationship between the $60 million contingent cash consideration that comes upon those 3 milestones and the potential exercise of that buyback right.

And I'm just wondering whether or not some of those conditions would happen before or after or in concert with each other. Some help with that would be appreciated.

Yes. That's a very good question.

The sort of the way we look at it, certainly, the upgrade of the Serra Norte and the oxides. To us, that's something we're getting underway right away.

We suspect that, in the fullness of the development of Santo Domingo that we will be able to realize 2 of the 3 payments during the development process. So we look to enhancing the NAV by that drilling.

And basically, number one, it's to improve the grades beyond year 7 in the current production profile as published in September of 2024 for the grades or for the copper grades and production of copper from years 8 through 15. And so too, to establish an oxide leaching facility at Santo Domingo, whereby we can utilize the capacity available in the SXEW at Mantoverde to complement that copper production.

Probably those, we would meet those thresholds before commercial development or commercial production, I should say. So the threshold for our buyback is post-commercial production.

It will be hit or miss if we're ready with the cobalt, but we might be. It's a cobalt study during that process also, which is the remaining $20 million.

I think what's important about those 3 items is there are enhancers to the NAV of Santo Domingo, which is distinct and different to what the buyback is based on, which is the a multiple to the contributions that Orion makes during the construction and the buy-in to Santo Domingo. So all that NAV created by those $60 million in payment are to our account and hopefully increase the NAV of the asset and therefore, make our buyback of that 25% more attractive and accretive to Capstone.

Clearer now. Congratulations on a well-executed deal with optionality.

Wondering if we can get some more color on the progress at Matoverde sulfides. Specifically, obviously, you had the issues in September, but can you give us a sense of where throughput and recoveries were in October?

And did I hear correctly that you were earlier guided to average throughput for the quarter of, I think, just below 30,000 tonnes a day. Did I hear that right?

Yes. Thanks, Orest.

Yes, you did hear what the throughput ended up being due to the interruptions in production. Fortunately, Jim and his team were able to run the SAG mill independent of the issues we had, such that we could continue producing sort of at a half clip.

So we're able to maintain sort of production. With that being said, there's some detailed questions in there.

I'll hand it over to Jim to answer sort of more fully your question around October and some of the issues around what we experienced in Q3.

Yes, it was a pretty tough quarter in general. And as Cashel said, we managed to get through it kind of limping through because we did have a design option in the MVDP design that allowed us to run the SAG mill direct to flotation.

So although there was a moderate impact on recovery, we were able to partially operate. So all in all, I think we had a pretty good month considering that during the same time, we were basically switching motor for motor and replacing the exciter, which is basically the part that controls the power into the main shell and frame of the motor in each of the 5 units that we have, which was quite complex.

This is all done off-site. There was a lot of logistics involved, a lot of cranes involved, and we were working very closely with our partner, Ingot team to be able to perform all that work, which was quite complicated actually.

So right now, when we're looking at the plant, we've got 4 motors in place operating. We have rebuilt spare that's on the deck.

We do have a crane and everything at site in case we have any further work to do. And we continue to work on the control systems and protections around those motors to make sure we have some consistent operation.

As we mentioned in the text, October is going to be a bit of a difficult month. We haven't closed out finally on the month and the data yet, but we're looking forward to a much stronger end of Q4 and bring up the throughput to be able to push us into the line of our guidance, what we expected from Mantoverde, but we'll just be on the lower edge.

So we have a lot of work left in front of us. With respect to recovery, yes, I can make a couple of comments.

Obviously, with the tonnage changes and the configuration changes, it's been up and down a bit. But during Q3, we did achieve recoveries above 90% during August early in the quarter, which was very good for the group as we managed to get some confidence around running the flotation circuit and those configurations to push that recovery up.

So really, except for Q2, remember, when we discussed, we had a lot of altered material coming in or all of, I guess, you would call it semi-oxidized material coming in. But except for Q2, on a quarterly basis, we really saw the recoveries coming up and increasing.

We were really looking at 82% in the early year. We were roughly 86% in Q3 of this year.

So we're really, really happy with the way that's going. It's running pretty steadily now.

And we're almost at the design recovery levels of, say, 87% and above. We expect to continue to achieve these recoveries in the mid- to upper 80s in Q4 and then consistently look for these design recovery rates in 2026.

So as I said, a difficult quarter, very, very complicated trying to maintain consistent flotation recovery when we're having these plant stoppages because of the motor issues, I think we were able to get ourselves through it. Still some work to do, a lot of people on site, a lot of technical people, and the support from Aussie, Asinko, and FLS and Inga team to help us through this issue.

So yes, I think we're in really good shape to finish off the year and still some work to do.

Just a follow-up. How much time did you guys lose in October with this issue?

I thought this was largely behind you at the end of September.

No, we were still working on to that. I was just going to say a lot of the big impact was through Q3.

But during -- obviously, during this month of October, we were starting off full, but there was still, obviously, within our program maintenance, still continuing to work on the motors. As we disclosed during the Q3, we did have that impact.

And we also took time down for maintenance, which was planned. But we're still -- during the month of October, even though we're looking very, very positive about the quarter, yes, there's still some work to do on that, but we're able to manage that within our normal maintenance downs that we're working through with the motors.

I'd like to swing the conversation back to the Santo Domingo JV. Cashel, can you comment on how you guys made the decision on going with Orion?

Like what sort of criteria? Was it the buyback option?

Was it the fact that they're already a shareholder? Just any thoughts around that?

Yes. All of the above.

Thanks, Dalton. So number one, obviously, we have a very good relationship with Orion.

They were with John McKenzie, our Chairman, founder at Mantos Copper, and founder in the new Capstone Copper. They were obviously 1/3 shareholders at one period of time and have worked with us quite cooperatively through the last number of years.

So obviously, they had insight into our project delivery, our project management, and our operating teams. But that being said, we had classical interest in this process, whereby there were traders, smelters, sovereign wealth funds, and obviously, private equity involved.

And we weighed the various benefits relative to one another. And there's one familiarity, knowing a partner and trusting them.

But one of the things that became very important to us, besides maybe the classically seeking advantageous rates in financing for our ambitions to finance Santo Domingo, was recently, Orion also has announced that they have partnerships with the U.S. government and the United Arab Emirates on various funds and access to funds.

And we feel that they can bring some of that to bear in the financing of Santo Domingo. So that sort of leveled them out with some of the more classical players that would have that type of opportunity available to the funding of Santo Domingo.

And then obviously, the other one is the buyback option. And it sort of came to our attention during this TCRC process that when you have a partner in an asset, the copper you value the most is the copper you produce yourself.

And having a partner, while it's very important to derisk the project, value the project, and finance the project, at some point, you covet the copper you produce that somebody else gets to sell. And that's the original deal.

So we sort of inspected with the various parties that were participating, whether or not there was a possibility to buy back that asset. And lo and behold, that sort of suited the model of a private equity, and certainly with Orion.

And we were able to come to an arrangement that we think is advantageous and is to our call as an option shortly after commercial production when the assets at its most valuable. And so that became very attractive to us.

And really, I think that's what put it over the edge besides the familiarity that we have with Orion as a financing entity.

And that sort of preempted my next question around project financing and the cost. So maybe I'll ask a different one.

Thinking broadly across the Mantoverde, Santo Domingo complex now, you've got 2 different partners at either asset, plus the DL600 at Santo Domingo. How does that play into your thinking around some of these synergies and the net returns to each asset?

I'm just wondering if that opens certain doors and closes others.

I think it keeps all doors open. Like one way or other, like you mentioned the DL 600, which is our tax stability agreement, and that will keep the 2 entities separate irrespective for accounting purposes and tax calculation out of Santo Domingo and Mantoverde, but it doesn't preclude us from establishing transfer pricing for any of the shared infrastructure or materials between the 2 areas.

And so we'll just work through what those are and how they work out. I think what's important is in our process, we did identify some strategic possible partnerships whereby we could optimize the future design by sharing infrastructure within the region.

And to us, that's a very appealing improvement that we can execute on beyond what appeared in the 2024 technical report, and that revolves around pipelines, desalination plants, and principally the port. And so we'll pursue those in parallel with our financing efforts and our detailed engineering over the next year to derisk the project and the project delivery further.

So we still think there's more upside to come out of Santo Domingo by that sort of negotiation. In addition, as I was speaking before, the opportunity to leach material at Santo Domingo and enhance the copper profile beyond year 7 with the oxide and the Sierra Norte sulfides will be enhanced opportunities, just utilizing the SXEW at Mantoverde, of course, will also enhance the NAV at Santo Domingo in the future and so too, reduce the unit costs at Mantoverde.

So it's a very virtuous optimization where both assets benefit. And that's the advantage of operating in a district.

On Slide 11, on Mantos Blancos, what was the unplanned maintenance that happened in the quarter?

Yes, Fahad, thanks. I'll pass that over to Jim to answer.

At Mantos Blancos, we had some issues through the quarter with a final concentrate thickener. As you know, the Mantos Blancos site is very old.

It started in 1957. And when we were doing a routine planned maintenance, we encountered some issues around the base of our Falcon thickener, where basically 100% of the production passes through that thickener.

What we found, we had some, I guess, you would call some weaknesses in the structure below the thickener, and we had to take a look at that, and that included draining the thickener, drilling through the base, investigating, and then refilling those void spaces that we found. There was a lot of very specific work done on that to make sure that it's not going to be an issue in future.

But then again, it may be something that we'll have to revisit in our 5-year planning to see if it looks at -- if we look at any further replacement of that equipment. But it was done very, very efficiently by the team on site.

We had some external specialist contractors helping us with that work, and we were able to bring the thickener back on with actually -- without any harm to anybody working on the job. So there was a lot of movement and -- but a good focus on that.

Mantos Blancos was able to come up back up online and actually now positioning to be at the high end of its guidance for the full year.

Okay. And then maybe just switching gears, a question for Raman.

On the balance sheet targets before sanctioning Santo Domingo, is it fair to say that those have been achieved? Or I'm just trying to square the -- because the net debt-to-EBITDA target has been met, so it's been so is the liquidity target.

But is there further deleveraging that needs to happen? I'm just trying to understand those 2 points.

Yes, it's a good question. So it's a good position to be in.

We have met our targets. Our target was 1x, and we're at 0.9.

We're at 1x last quarter. But that doesn't mean, obviously, this price environment, we're going to continue to delever ahead of Sano Domingo sanctioning.

So we're just putting us in a better position pre-FID. So I'm looking forward to seeing that number go down even further.

And maybe if I can ask a different way, is there another target that you're thinking of post-project financing? In other words, once you have the project financing in place, is there a higher leverage that you kind of wouldn't want to exceed?

Yes. So look, during construction, I think we said we always want to be at least below 2x is kind of when we run our numbers.

So if you look at floor versus cap, I think we were getting below 1 and then no higher than 2x during construction because our EBITDA will be strong when we're constructing Santo Domingo will be north of $1 billion.

Can we just talk a little bit about momentum at Pinto Valley? So it looks like you were mining at reasonable rates.

Obviously, despite the drought, you're mining at a good clip. Does that mean you have the mine in a good place to provide good grades into 2026?

Do you have the water to continue to sustainably run these mills? Or is that still something that you're a little nervous about?

And are there any upgrades that you've done to the mills during this downtime that you could improve operational stability for 2026? So basically, just how is the asset looking?

Yes. Jim, why don't you take that?

Sure, Cashel. Thanks, and great question.

It's good that you're noticing the mining uptick as we are, too. We actually had a really good quarter on the mining side of the business.

We hit a 1-day record of about 190,000 tonnes moved through the last month. So we've been taking a lot of steps to invest correctly at Pinto Valley.

We have some new trucks that are coming online, and we're really starting to see the benefit of that. Between that, the work that we're doing on asset management, the work that we're doing on the operating system, we've seen consistent and steady increases in mining output at Pinto Valley, which is promising and sets us up for the future.

On a grade basis, to tell you the truth, we're right on target where we expected to be through this year. Remember, it is a porphyry deposit.

It's kind of a lot of the same grade. There is small variances, but we're right on our target where we expect to be with that site.

The big thing was really the water through the summer months, these 1 and 100-year droughts seem to be happening more frequently. It was really tough through the summer months, and we obviously had to back off in the milling operation just because we didn't have water in our reservoirs to be able to run it.

There's 3 main sources, I think you could say, of water that feeds into that plant. And we have 3 different groupings of action plans that are focused on those sources.

So one, you just have transport from well fields to the plant. The focus there is making sure that our older pipeline systems are in good condition, and we're investing in them correctly to make sure that that doesn't become an issue for us in the future just from the availability point of view of the equipment.

There's also the evaporation aspect of it, which is about storage facilities and deposit reclaim. The reclaim water that we take back off of the tailings area is very important to us.

But when the water levels are so low, it makes it very, very difficult to receive filtered water. So some of it is about making sure now that we're into the winter months and we're receiving water that we're not losing that water, and we're taking care of those reclaim facilities.

And the other issue is seepage. Our oldest reservoir has some seepage through it, which basically is a loss for us.

We're currently running some projects right now to look how we can mitigate that and minimize that in the future by different methods of kind of covering off, I guess, you could say that reservoir or the areas that we lose water into the base of the reservoir. So a lot of work going on now.

to set up for the next year. We do think the data that we have tells us that next summer is going to be a tough summer, and it's dependent on us right now to be able to store water to be in better shape for the 2026 summer months.

And with regard to just mill availability and stability, any works on that, that -- I mean, that you could improve the reliability of the mill throughput for next year versus what we've experienced in recent--

Yes, absolutely. Our focus is really on asset management and maintenance.

I think the biggest upside that we're going to see at Pinto Valley is being able to run the mine and the plant consistently. And that means that the maintenance side of the business is going to have to give that uptime that we need.

We're looking, obviously, right now into budgeting for the next year. We're looking at our position on the 5-year plan.

We're looking at higher values of that, that obviously will come out with our guidance in the future. But we're a bit bullish on what we think we can do with our maintenance processes and actually bringing stability to that site.

Just one follow-up question, just on Pinto Valley. Can you talk to some of the strategic initiatives you guys are looking at around Pinto Valley with Copper City?

There seems to be obviously a huge focus from the U.S. administration to produce domestic copper, but any updates on that front or timing around future milestones would be appreciated.

Yes. Certainly, Craig, certainly, the focus on -- by the U.S.

administration on copper produced in the U.S. has been timely for us.

We still anticipate the end of this year sort of being in a position whereby we can talk to our neighbors around what is the future and what does -- how is Pinto Valley involved as the only operator within the district. And so we're sort of still on time.

We expect internally to be executing on that option agreement before the end of this year, and then sort of in next year, discussing what is the art of the possible within the area. So simply put, I think the industry understands that quite often cooperation with adjacent sites can produce more value for multiple companies or both companies, and that's what we're focused on.

So we hope in sort of the first or second quarter of next year to have more news on what we can expect out of the future of Pinto Valley.

Just maybe a quick follow-up to that question before. Just wondering if you've had any engagement with BHP, or is that something that you're working through internally with relation to copper cities.

This is just on the back of Mike Henry being in the United States recently, meeting Donald Trump. It appears that BHP is turning a lot more positive on some of the legacy assets in Arizona.

Yes. Adam, thanks.

Certainly, again, there's a lot of focus on U.S. copper.

There's a lot of focus on domestic refinement. There's a lot of focus on the endowment of resources that exists in the American Southwest.

And what I would say is within our district of Globe Miami, we're the principal producer. We're the only ones with a sulfide plant.

We do have a large resource. We have 1 billion tonnes at Pinto Valley.

So we do have right now in our technical report, a mine life out to 2039 or 2038, and we do have opportunity to expand that out beyond 2050. But we're working with our neighbors to understand if there's more value to be had there.

And so what I'll say is a few years ago, we did announce that we went into an option agreement on Copper Cities to be able to evaluate how the 2 assets might work together to create more copper. And that remains sort of on target, and that work remains in progress.

And what I can say is if something materializes from that work, we think we'd be in a position to talk about that maybe in the first half of next year.

And congrats on getting the deal done at Santo Domingo. Just wondering now that you've done the deal, you mentioned the pathway through the project financing route.

Is there any room to bring in a third partner into the JV now that the sell-down has been complete? Just trying to think of this in context of some of the preexisting infrastructure, which is in the region, ports, et cetera.

Yes. I think most avenues are on the table.

Certainly, there is a possibility of that to bring in a third partner to be able to access maybe infrastructure that can enhance the value overall of the project. So we really haven't taken any sort of avenue of engagement off the table.

So just one quick follow-up on Mantoverde. I just wanted to close the loop on the expectations for Q4.

30,000 tonnes of copper -- sorry, 35,000 tonnes of throughput on -- for the quarter. And then in terms of the grade, I think you guys had mentioned 0.81% in October.

Is that kind of the expectation for the remainder of the quarter as well? And then 91% recovery rates.

Is that also the expectation? Or is it somewhat lower than that?

Anita, like Jim sort of was explaining, we're probably in October, what our target was -- originally, our target before these interruptions with the motors was we would push beyond 32,000 tonnes a day because we had the permit to do so. And what we're really hoping for was a good run rate through Q4, such that we could establish a good guidance while we perform the necessary works at Mantoverde Optimize to take us to the end of the year where we would ramp up to 45,000 tonnes a day exiting 2026.

So the way I sort of characterize it is we're somewhere between 3/4 and 2/3 of that 30,000 tonnes a day through October, but with the ambition to be up around 34,000, 35,000 through November and December is the way we look at it. As far as the grade goes, I think we trend -- I think the 0.81 isn't sustainable through the whole area, but high 0.7, low 0.8 is sort of where we'll average out most likely for Q4.

Just a quick follow-up, maybe on Mantoverde's cost expectations into the fourth quarter. I think the guidance is to be on the high end of the cost.

So far this year, I think performance has been better than expected, and maybe mostly on stronger byproducts as well. So just wondering it's -- how should we think about costs going into the fourth quarter?

I know the ramp-up in terms of throughput might not be as strong as otherwise expected because of the month of February. But just it seems like the guidance is conservative at this point.

Just wondering if there's anything else to be considered into fourth quarter.

Marcio, yes, basically, I think the way we look at it, consolidated-wise as a company, we're sort of mid- to high on the cost guidance where we see ourselves by the end of the year. And certainly, Q3, obviously, was a little higher cost, but we expect Q4 to improve on that throughout the balance of Q4.

So as I sort of stated, probably because of the denominator being a little lower in October. But with things trending the right way now for November and December, we can do a little better in Q4 than we did in Q3 with respect to Mantoverde's costs.

And just a quick follow-up on Pinto Valley. Obviously, Mark Scott has been appointed as General Manager recently.

It seems like the water issues are or can be expected to be resolved. Anything else in terms of operational turnaround that can be expected at Pinto Valley to improve the overall cost position there?

What are -- what is Mark's kind of target going forward now?

Yes. I think the way we sort of look at Pinto Valley, it's very much denominator-driven.

Our ambition this year was to run the asset at 52,000 tonnes a day, and we sort of ran into that sort of drought situation. And the way I always look at the asset is the asset on an instantaneous basis, can process ore at 62,000 tonnes a day.

We have 6 mills. And if we're running all 6 mills pull out, that's what it is.

Due to the age of the asset, what would be suggested best-in-class is 90% utilization. So the best that asset can do when operating sustainably is about 56,000 tonnes a day.

So Mark's ambition is over the next year to 1.5 years, move it from what we're currently doing 50,000 tonnes a day to 56,000 tonnes a day. So that's with the asset as it is.

There are other improvement projects and items we're reviewing from our mines technical services group to enhance the opportunity for future production or production increases. But right now, the focus is on, as Jim mentioned, the asset management framework, which will allow the availability of the plant such that the ore can be delivered.

And the other is a management operating system that Mark is bringing to the platform to be able to get more efficient work out of his maintenance group, out of his operating group and therefore, just be more operationally efficient and deliver on that operational excellence such that we can use that capacity that exists between the 50,000, 56,000, and it's not all maintenance. Some of it is the water, as Jim discussed.

And the combination of the 2, we believe, will allow us to deliver the full potential out of Pinto Valley over the balance of the next year or so.

Thank you, operator. We look forward to updating you in February with our Q4 results.

Until then, stay safe and feel free to reach out to Daniel, Michael or Claire, if you have further questions. Thank you for your continued support, and have a great day.