Lundin Mining Corporation

Good morning, and welcome to our 2025 second quarter conference call. A press release and presentation summarizing the financial results for the quarter is available on our website, where a replay of this call will be available.

All figures presented today are in U.S. dollars unless otherwise noted.

Before we begin, please note that today's presentation will include forward-looking statements that are subject to various risks and uncertainties. We encourage you to review the cautionary statements on Slide 2 as well as the forward-looking information disclaimer in our MD&A and related filings available on SEDAR.

With me on the call today are 2 members of our senior executive team, our Chief Operating Officer, Juan Andrés Morel; and our Chief Financial Officer, Teitur Poulsen. On June 18, we held our first ever Capital Markets Day, where we outlined our strategic vision and financial outlook to support our growth ambitions.

We have set a target to become a top 10 global copper producer, targeting over 500,000 tons per year of copper as well as over 550,000 ounces of gold. To support our strategic vision, we highlighted multiple near-term growth initiatives at our existing operations in addition to the longer-term opportunity that is presented with the Vicuña project.

The mineral resources contained within this project establishes Vicuña as one of the world's largest copper, gold and silver mineral resources. There is a replay of the CMD available on our website where the audience can go to view to get the full overview as well as highlights from the day.

On April 16, we completed the sale of our 2 European mines to Boliden. This transaction generated cash proceeds of $1.4 billion, and the use of the proceeds went towards fully repaying and canceling the company's Caserones term loan and towards substantially paying down the outstanding balance on our revolving credit facility, bringing our net debt, excluding lease liabilities, down to about $135 million as at the end of Q2.

As a result, our reporting now focuses solely on our 4 continuing operations, which are Candelaria, Caserones, Chapada and Eagle. In May, we announced the initial mineral resource at Filo del Sol, demonstrating one of the world's largest copper, gold and silver resources.

Combined together with the updated mineral resource of Josemaria, the project contains 38 million tons of copper, over 80 million ounces of gold and nearly 1.4 billion ounces of silver, making it a truly unique asset. Also during the quarter, we published our 2024 sustainability report, highlighting the company's environmental, health and safety, governance and social performance.

We are proud to note that in 2024, based on our recalculated 2019 baseline emissions, which now include Caserones, our Scope 1 and Scope 2 emissions targets for 2030 has been achieved. Even without the inclusion of Caserones, our other operations reached 91% of the emissions reduction target.

This was primarily due to Candelaria expanding its contractual agreement to purchase 100% of its electricity from renewable sources with 0 carbon emissions in 2024. Our full sustainability report can be found on our website under the Sustainability page.

Importantly, there were no major injuries in the first half of the year and the Total Recordable Injury Frequency rate, or TRIF, was the lowest in 10 years at 0.33. The team's strong safety performance in the first half of the year reflects our shared commitment to identifying and mitigating critical risks.

Our continued proactive efforts are driving meaningful improvements to the critical controls we are implementing. Now touching on Q2 2025 highlights.

Copper production for the quarter totaled 80,000 tons higher than Q1, primarily driven by a strong performance at Candelaria and Caserones along with improved copper and gold grades at Chapada. In the first half of the year, we produced 157,000 tons of copper, keeping us on track to meet our annual copper production guidance range of 303,000 tons to 330,000 tons.

Gold production also increased significantly quarter-over-quarter from 32,000 ounces to 38,100 ounces this quarter, positioning us well again to achieve the full-year guidance range of 135,000 ounces to 150,000 ounces of gold. This year, we included a consolidated copper cash cost range in our annual guidance.

During the quarter, we produced copper at a consolidated cost of $1.92 a pound, coming in below our revised guidance range of $1.95 a pound to $2.15 a pound, which was supported by strong by-product credits and gold prices. Our operations delivered close to $1 billion in revenue, supported by strong gold and copper prices, $395 million in adjusted EBITDA and $277 million in adjusted operating cash flow.

This quarter, we declared our 36th regular quarterly dividend, which has been adjusted down to just under $0.03 a share per quarter, making room for 4.6 million shares to be repurchased under our NCIB program in Q2. Year-to-date, we have bought back 12.6 million shares, representing approximately $104 million in share repurchases.

Our updated shareholder distribution policy targets approximately $220 million in annual returns, combining an annualized dividend of $0.11 per share with $150 million in share buybacks under our NCIB program. I will now pass the call over to Juan Andrés, our Chief Operating Officer, to talk about our production results in more detail.

Thank you, Jack, and good morning, everyone. The company is tracking to production guidance on a consolidated basis for copper, gold and nickel for 2025.

As mentioned earlier, copper production for the company was 80,000 tons for the quarter and 157,000 tons for the first half of the year. Gold production for the quarter totaled approximately 38,000 ounces and 70,000 ounces for the first half of the year.

At Candelaria, copper production for the quarter totaled 37,000 tons, along with 20,500 ounces of gold. Operationally, Candelaria performed well during the quarter and softer mill feed continued into the first part of Q2.

This drove higher throughput in the mill, which processed 7.8 million tons in the period. In the first half of the year, Candelaria produced 74,000 tons of copper and 41,500 ounces of gold.

We anticipate steady production levels for the second half of the year, which keeps Candelaria firmly on track to meet full-year guidance for copper and gold. At Caserones, copper production reached 29,300 tons in Q2 and 58,000 tons for the first half of the year.

Ore mill was in line with planned production despite unplanned downtime caused by a blockage in the primary crusher. In the second half of the year, it is expected that copper head grades will improve to approximately 0.4%.

Cathode production continued to outperform expectations with 5,800 tons produced in the quarter, driven by increased material placed on the leach pads. In the quarter, Chapada produced 11,300 tons of copper and 17,500 ounces of gold.

Performance improved due to higher grades and better copper recoveries from increased processing of fresh ore and reduced reliance on stockpile material. Production at Chapada is expected to be slightly weighted towards the second half of the year and on a quarterly basis, similar to production levels in Q2.

At Eagle, nickel production was 2,700 tons and copper production was 2,500 tons for the quarter. Equipment availability and power outage during the period limited throughput.

We expect these to improve in the second half of the year. Grades and ore availability are expected to normalize, which will support the annual guidance forecast for the year.

I will now turn the call over to Teitur to provide a summary on our financial results.

Thank you, Andrés, and good morning, everybody. I'm pleased to be able to present yet another solid quarter of financial performance for the company, driven by continued good operational performance, as you just heard from Andrés, coupled with relatively stable LME copper price environment in addition to higher gold prices.

All these factors have allowed the company to post another set of good quarterly results. Before going into the numbers, a reminder that we continue to report the contribution from our European assets as discontinued operations.

As this transaction closed on the 16th of April, our second quarter reporting reflects contribution from these assets for the first 15 days of the quarter. The revenue for the quarter from continuing operations came in at $937 million, with our revenues remaining heavily weighted towards copper, which accounted for 82% of the revenue mix.

Gold and nickel contributed 11% and 3%, respectively. As you can see on this slide, our 2 Chilean mines, Candelaria and Caserones remained the key revenue contributors and represents 77% of the revenue generation in the second quarter.

When including Chapada in Brazil, 94% of our revenues are generated from our South American operations. Now looking at volumes sold and realized pricing.

During the period, we sold 79,000 tons of copper at a realized price of [$4.48] per pound, which is slightly better pricing than the average LME spot price for copper during the period. For the second consecutive quarter, we had sales volumes exceeding the copper production volume at Caserones due to shipping schedules.

We had a negative provisional pricing impact of $6 million in the second quarter and approximately 113,000 tons of copper were provisionally priced at $4.49 per pound at the end of the quarter and remain open for final pricing adjustments. Turning to Slide 14.

Production costs totaled $507 million for the quarter, consistent with the past few quarters. At Candelaria, total costs were higher compared to previous quarter due to higher sales volumes, while C1 costs over the last 2 quarters are somewhat higher compared to the second half of last year as the mining sequence is now back to normalized grades compared to the elevated grades that were mined during the second half of last year.

Caserones costs for the second quarter have normalized compared to first quarter when we had abnormally high sales volume from delayed shipments at the end of last year. Total costs were in line with expectations at $205 million for the quarter, and cash costs are trending in line with recent quarters at $2.45 per pound.

Chapada total costs for the second quarter amounted to $75 million. C1 costs have significantly decreased compared to prior periods, primarily due to higher by-product credits from gold prices and favorable FX rates.

Given the continuing low C1 cost at Chapada, we are reducing the full-year guidance range to $1.10 to $1.30 per pound from the previous guidance of $1.30 to $1.50 per pound. This updated guidance represents a 37% reduction from the midpoint of the original C1 cost guidance as released in the beginning of the year.

On a consolidated basis, our C1 cost for the quarter was $1.92 per pound, slightly below our revised full-year guidance range of $1.95 to $2.15 per pound. Total capital expenditure, including both sustaining and expansionary investments was $150 million for the quarter and $325 million for the first half of the year.

Full-year guidance for total capital expenditure has been revised upward by $60 million to $795 million due to an increase in the Vicuña budget as announced at our Capital Markets Day in June. An increase in capital expenditure at Chapada from additional tailings development and higher capitalized stripping has been offset by lower capital expenditure at Caserones due to certain projects being delayed into 2026.

At Vicuña, the second quarter expenditures were primarily focused on field activities for water program, geotechnical investigations, road maintenance and the procurement of certain long lead equipment. Our key financial metrics for the second quarter are presented on Slide 16.

We generated adjusted EBITDA of $395 million and achieved an adjusted EBITDA margin of 42%. Our adjusted operating cash flow was $277 million and was negatively impacted by cash tax payments at Candelaria of $165 million, of which $92 million related to a payment to fully settle the 2024 taxes due.

Working capital decreased by $37 million, which positively impacted cash flow and was the result of a partial release from the significant working capital build in the first quarter of the year. The company achieved solid free cash flow from operations of $211 million despite a relatively large cash tax payment made during the quarter.

Adjusted earnings amounted to $98 million for the quarter, which translates into an adjusted earnings per share of $0.11. Turning now to Slide 18.

With the closing of the European asset sale in April, there have been a number of cash inflows and outflows impacting our cash flow statement and our net debt positions during the quarter. As you can see on the left of this chart, we entered the quarter with around $1.44 billion in net debt, and we exited the quarter with net debt of only $135 million.

From the sale of the European assets, we received approximately $1.3 billion in net proceeds when allowing for closing adjustments as regulated in the SPA and when netting out the cash sitting in the acquired subsidiaries. Following the closing of the sale, the company paid off $1.15 billion in term loans as well as repaid $170 million of debt drawn on the revolving credit facility.

The adjusted operating cash flow and working capital inflow amounted to $315 million and with total capital investments of $150 million resulted in free cash flow for the quarter of $165 million. We had total shareholder distribution of $108 million during the quarter, of which $72 million related to the payment of the regular dividends declared for the fourth quarter 2024 of CAD 0.09 per share and for the first quarter of 2025 of CAD 0.0275 per share.

Dividends to noncontrolling interest at Candelaria and Caserones during the quarter amounted to $41 million, while other items amounted to a cash outflow of $23 million, leaving the company with a very strong balance sheet with net debt position at the end of the quarter of $135 million. The company continues to hold significant liquidity headroom from its $1.75 billion revolving credit facility with just over $1.5 billion remaining undrawn as of June 30.

That wraps up the summary for the second quarter financial performance, and I'll now turn the call back to Jack.

Thank you, Teitur. I'll take a few moments to talk about our joint venture partnership with BHP, which holds the Vicuña project, a project which combines the Josemaria and Filo del Sol deposits.

Combined together, the Vicuña project ranks in the top 10 mineral resources for copper, gold and for silver when comparing against the world's largest operating mines. In May this year, we released the maiden mineral resource estimate for Filo del Sol and updated the mineral resource estimate at Josemaria.

In addition to the size demonstrated by these deposits is an impressive amount of volume contained within the high-grade core. The Filo de Sol high-grade core contains over 10 million tons of copper and 19 million ounces of gold and over 390 million ounces of silver, while Josemaria has a high-grade core of 1 million tons of copper, 2.4 million ounces of gold and 11 million ounces of silver.

Looking on this slide, the image on the right shows the additional drill holes from Filo del Sol completed after the cutoff of the mineral resource estimate. Over 20 additional holes targeting resource expansion and infill drilling, primarily along the eastern boundary of the deposit, as shown in the figure on the right, are showing good progress and will make its way into an updated mineral resource estimate as part of our integrated technical studies.

A total of 60,000 meters of drilling is budgeted for the calendar year 2025, of which already over 50% has been drilled. In addition to the solid progress made on drilling, an updated EIA for Josemaria was submitted in the second quarter as per the plan.

Ongoing work to support the parallel studies for the multiphase development plan are progressing on schedule. We anticipate the integrated technical report, which will incorporate all phases of the full-scale project to be complete by Q1 in calendar year 2026.

Preparations for the fiscal stability application, otherwise known as RIGI are also progressing in parallel to the ongoing project study work. Overall, the Vicuña project team continues to make solid progress and remains on track with its 2025 work plan.

As presented at the CMD, we have identified several low capital intensity and midterm organic growth opportunities. These are targeting 30,000 tons to 40,000 tons of copper and 60,000 ounces to 70,000 ounces of gold in additional annual production for the company.

At Chapada, the Saúva project presents a near-term opportunity to increase annual production in the range of 15,000 tons to 20,000 tons of copper and 50,000 ounces to 60,000 ounces of gold, representing 50% and 100% growth, respectively. This study includes adding grinding capacity to process higher-grade ore from Saúva through the Chapada mill.

Permitting and technical work are ongoing with a pre-feasibility study targeted for completion by the end of 2025. At Candelaria, we are implementing a 2 step process to ultimately improve performance with the goal of eventually increasing throughput from the underground.

Starting with in-sourcing the underground mining contractor, which is expected to improve both mechanical availability and ultimately development rates in the underground, we will be able to in-source as a first step and the second step will be to lead a campaign to improve mining rates in the range of 50% to 60%, bringing underground throughput capacity from where it is today at around 14,000 tons per day up to about 22,000 tons per day. This could deliver an additional 14,000 tons of copper annually for Candelaria and recruitment, training and licensing for internalization of the crews is already underway.

These brownfield opportunities complement the longer-term vision of developing the Vicuña project. We will continue to provide updates as we continue to advance and derisk these near and longer-term initiatives.

In conclusion, solid operational performance from our high-quality operations and higher commodity prices drove strong financial results for the company in Q2. We remain firmly on track to meet annual guidance on all metals for the year.

We revised cash cost guidance at Chapada, which improved the consolidated cash cost guidance for the company, which is now at $1.95 a pound to $2.15 a pound. Net debt stands at the end of the quarter at $135 million, which was significantly reduced in the quarter using proceeds from the sale of our European assets.

The company is very well positioned for the future. The Vicuña District and near-term growth opportunities at our existing operations provides a clear path to becoming a top 10 copper producer as outlined at our Capital Markets Day in June.

The team remains focused on meeting operational targets, enhancing margins through disciplined cost management while maintaining the highest health and safety standards to protect our workforce. Thank you, and I would now like to open the call for questions.

Juan Andrés, there was some Caserones crusher downtime in the quarter. I'm just wondering, it seems as though this was unanticipated.

Just wondering what the root cause was, how much downtime? Are these issues behind you?

Yes. It was basically some clay-ish material that created a blockage in the primary crusher.

It took us probably around 16 hours to 20 hours to solve the problem, so nothing structural. It was probably some material coming from a faulty area in one of the benches that got clogged in the chamber of the primary crusher.

I see. Juan Andrés, a second follow-up.

You talked about some softer ore mill feed at Candelaria. Is this a function of Phase 11 or Phase 12?

As you also speak about some higher anticipated copper grades coming from Phase 12, is that also anticipated with higher strip ratios? Or are you maintaining that kind of life of mine 2.1 ratio that I see from the technical report?

Yes. That's a good point, Ralph.

It was something temporary, it’s nothing structural in the strip ratio on Phase 12. There were some delays in the ore coming from the underground, so we went a little further on Phase 12 and took some extra tons from the lower benches, but we will get back on track with the spatial compliance by the end of the year.

Regarding the softer ore question, due to these small changes in the short term, we took more ore from the stockpile. We had, let's call it, mid-grade stockpile, not a low-grade stockpile that we use that material to feed the mill, and that material was softer than anticipated.

That is what created these better results in the throughput.

Also a question around Candelaria, pretty strong results in the first half. Your guidance talks about grades being higher, but production being flat versus the first half.

Beyond the softer ore issue, which I guess is now behind you, is there some planned downtime here in the second half? Or is there maybe just some potential upside?

Or are you being conservative with the guidance for the second half?

No, this is a very steady year for Candelaria. We're not second half weighted as last year.

Grades are going to be very stable along the year. We don't anticipate any differences from our performance in the first half of the year.

Maintenance is as planned for the second half and grades will be back on track for the full-year in the second half. Throughput is expected to be in line with our projections, so no big changes in the second half of the year.

Sorry to clarify, are you saying grades at Candelaria are similar to the first half? I thought I heard earlier, they're going to be up.

No. In Candelaria, slightly lower because they were higher in the first half.

A couple of questions. A little follow-up on Candelaria.

I thought I had read that you had some -- throughputs were stronger because you also had some rescheduled maintenance. Can you let us know when that maintenance is now going to be taking place?

It's a normal scheduled shutdown, and sometimes, since we had softer ore, the liners of the mill were at a lower pace. We decided to postpone that shutdown from June to July.

July is over, so how long did that shutdown take?

They're normally 90 hours.

Fairly short. Then secondly, in terms of the CapEx spend this year, could you just give us a little bit of color on the back half of the year for each of the assets?

I think both on sustaining and growth capital, you're a little under the half year run rate. I'm just trying to understand how those pick up over the rest of the year?

Yes, I mean we are a little bit behind on Caserones, in particular, on certain projects, which indeed was also the case last year. The scope of work is running a little bit behind plan.

That's more phasing. It's not really any savings sort of identified at this point.

Therefore, there could be a slight chance that we are slightly underspending on Caserones for the full-year, but we have also taken down guidance on Caserones since -- compared to the original guidance. Then in Chapada, in particular, there was some extra work needed to be done on the tailings dam, which is now more or less behind us.

We have increased guidance on Chapada, and we're also doing more stripping or more fresh ore and less from the stockpile, which also has increased capitalized stripping costs a little bit. Those are the key moving parts, but $795 million is the full-year guidance, including the growth CapEx, and we reaffirm that guidance today.

Just on the Caserones, you said that some of those projects may be pushed into next year. Are you saying that you're going to hit the $795 million for the year?

Or is there a chance that you're going to be underspending this year?

Well, let's see how we do in the second half. I mean we are now assuming that what's planned to be done in the second half will be done, which is why we are reaffirming the guidance, but all I'm saying is that the trend has been that the work has progressed a little slower than planned.

We will have to wait and see.

When you said that you've taken your guidance down, you were referring to the production guidance, right, for Caserones? Or the CapEx guidance?

No. The CapEx.

Then my question is, if it works going a little slower than planned, is there any production impact that we should be expecting?

No, there's not.

Then a final question from me. In terms of the cost guidance, you revised the Chapada cost guidance down, but maintain the overall cost guidance for the consolidated copper cost guidance for the company.

Is that just a function of the relative weighting of Chapada relative to the other assets? Or is there just you're just expecting to be maybe at the lower end of the overall guide?

Or is there something else that I should be thinking about?

Yes. We talked about that.

I mean, obviously, the big reduction in guidance was released at the Capital Markets Day because originally, Chapada was guided at, I think, it was $1.80 to $2 per pound, and we took that down to $1.30 to $1.50. At that point, we did also guide down the consolidated group guidance between $0.10 to $0.15 because of that, but this subsequent reduction in Chapada guidance has such a small impact on the weighted average for the group that we decided to leave it intact.

Mathematically, I think it would represent $0.02 or $0.03 further reduction in the consolidated guidance.

Another one on Candelaria, just the recruiting for in-sourcing the underground mining. How many people do you have to hire?

How would you describe current levels of mining labor availability in Chile?

Matt, Juan Andrés here. The total in-sourcing process, which will take us at least 2 years, is a 4-wave process.

In total, there will be approximately 250 people or positions involved, but since we're in-sourcing, we have already started conversations with the contractor. We will, of course, give priority to the employees that work for the contractor.

We don't see any problems in finding the right skills to complete this in-sourcing process.

Separate question I had on the RIGI deadline. I think there was a San Juan Copper Conference this week and just some headlines about companies raising for the deadline.

Do you have any view on the likelihood that the time line gets extended and when we might hear about that? Would there be any benefit to the Vicuña JV from a slightly looser RIGI deadline time line?

I can take that. Matt, thanks for the question.

We don't have kind of any commentary to provide or any understanding that there's going to be an extended deadline for the RIGI application. Recall that the deadline is July of 2026, and so for Vicuña Corp., we're tracking on to that schedule and I can't speak for any other companies that are looking to apply with the RIGI application, but we are trending on schedule.

Nice quarterly results, and thanks for today’s update. Just in light of the really, really strong gold price, your updated guidance from Chapada reflects that.

As part of the low CapEx expansion at Chapada, is there an opportunity to perhaps focus that asset on increased gold production either through an updated mine plan or perhaps an optimized flow sheet? Part of where I'm coming from is, as you know, when you guys bought this, you bought this from an operator that actually operated that asset as a gold mine.

It's a huge gold endowment.

Lawson, yes, you're absolutely right. We're, of course, looking at opportunities to increase recoveries in both copper and gold, but especially given the current gold prices, there's a greater opportunity to add more value from Chapada if we can achieve higher gold recoveries.

We're looking at a few options that later in the year, we could share with the market.

Interesting. Then I'd ask the same question about Candelaria in light of the same considerations and further with consideration to the fact that the Franco-Nevada stream, the percent that they take should drop off next year.

Yes. In Candelaria, in general, we have a very good performance at the mill.

If you look at our copper recoveries, they are in the order of 92%. Any changes to the flow sheet, we don't see a lot of opportunities there, but of course, we will always be open to any new technology or any marginal improvement to our flow sheet to increase recoveries in all the metals.

I guess just following on from the -- with the gold theme on Saúva. The PFS expected later this year.

Just thinking about the go forward, what are the limitations? Any sort of key technical or regulatory hurdles you have highlighted permitting, but just trying to, I guess, get a sense of how conservative the development time line is for Phase 1?

Is there scope to possibly accelerate that?

The schedule for Phase 1, I think we're very confident that we can achieve that. Of course, we're still looking at the permitting process.

I think we've shared during the Capital Markets Day that we have received the unified license, which will give us some advantages, but we need to confirm that approach. I think in the second half, we will have more clarity together with the completion of the pre- feasibility study.

Maybe just to add to that as well. I mean, we're already looking at collecting baseline data that will support the environmental licensing process.

We're working to get the pathway to permitting as soon as possible. Technical studies are underway.

We'll be looking to follow the quickest pathway possible following this environmental licensing process.

That's great. Just one more for me.

I guess just on the buyback, any specific financial or broader thresholds you would need to see before you would consider expanding the scope of that buyback program from about $150 million a year?

No, I think we simply just remain opportunistic around when we do the buybacks. We've done just over $100 million year-to-date, so 2/3.

The target is $150 million. What we have said is if for whatever reason, we do not reach the $150 million in buybacks, then the -- whatever gap there exists will be paid out as a special dividend in the fourth quarter dividend declaration, so i.e., it's paid out in 2026.

We monitor this, obviously, continuously as to when we think the window of opportunities to buy back.

First, just a small operational question. The cathodes production at Caserones continues to remain sort of around the 6,000 million tons, 6,5000 tons a quarter.

Is that expected to sustain through the remainder of the year? I think your guidance for '26 is 14 to 18, so coming off a bit.

How is that profile in the cathodes at Caserones?

Daniel, yes, during the Capital Markets Day, we outlined some opportunities to increase the utilization of our cathode plant in Caserones, and we have been working on those options. As you said, for this year, we're expecting a little higher production than what we planned initially in the year, and that should also carry over in 2026.

We're looking at improving our irrigation strategy, improving also our -- the way we model the production. We have found more oxide ore in the phase -- in the first benches of the Phase 7, which is the new phase in Caserones.

Then further on, we're looking at bringing potentially some oxides from Angelica and testing some leaching technologies for the future. With all that set of alternatives, we're looking at maximizing the utilization of our SX-EW facility.

If we look at the run rate for this year, if you were to extrapolate that into next, it would be fair to say 5,000 tons to 10,000 tons upside to your guidance you previously gave potential the cathodes?

No, I think what we're doing is maintaining the guidance that we had. I mean the significant increase in cathode production will probably come later once we've actually been able to improve the capacity of the cathode plant.

Then second financial question, 2 parts to it. Your cash tax looks like it's still trending below P&L tax.

Can you give us any guidance on where do you expect cash tax to be for the year? Then secondly, you reversed some of the working capital in the second quarter, how should we be thinking about that in the second half?

Yes. I mean we did actually have quite a high cash tax payment in the quarter because as I said, we were doing a final settlement of the 2024 Candelaria tax due.

That was $92 million. Then as we go through this year now, we are now starting to install cash taxes as per the 2024 tax assessment.

The tax installments for the next 2 quarters are going to be slightly higher than they were in the installment for Q1 this year because the Q1 tax installment this year still reflected the 2023 tax assessment. Essentially, our cash taxes as we tried to outline in our Capital Markets Day, is relatively low compared to the effective tax rate on the P&L because of these tax losses we have at Caserones.

What we have been guiding is sort of between 15% to 20% effective cash tax as a percentage of the EBITDA generation. We should expect that trend to continue for a long time given the significant tax losses we have at Caserones.

15% to 20% cash tax -- I'm sorry, that's an EBIT or EBITDA?

EBITDA.

Then final question. BHP has been in the joint venture for a few months now.

Can you share any kind of changes or what you think sort of the direction of development? What BHP has brought in terms of to the process since the formation of the JV?

Yes, sure. I mean, obviously, BHP brings a lot of bench strength with them and a lot of experience with large-scale projects and operations.

The partnership that we formed transaction closed in January. Really, the biggest thing was bringing together Filo and Josemaria and looking at this as a joint development project and a large-scale phased development project.

The Vicuña Corp. team, the project team is working away on parallel studies.

We've got independent review teams established to look at the packages of work that will be coming out. Together, both BHP and Lundin Mining are providing support as peer reviewers.

I think overall, the partnership is strong, and we're very aligned. I mean this was a culmination of several years of getting aligned before doing the deal.

I think it was really -- things are moving as per plan, and the partnership is very strong today.

Also from my side, well done on the results. Just a couple of questions left from my side.

The first on Chapada, where we saw a very good performance, especially on unit costs, which I would think is a combination of your own initiatives that you launched a few years ago, but clearly also FX and gold tailwinds. As we move forward into the second half and next year, do you see potential for more progress on an underlying basis from self-help?

Or are you largely where you want to be? Here, I'm just looking at the current operations ignoring the [Sol] opportunity.

I'll stop here for the first one.

Yes, definitely, we have had a very good performance in Chapada. As you said, it is the result of a combination of the full potential initiative that we launched in 2023, but also with the help of the increased metal prices.

What we're seeing today is the result of that work, and we expect to continue seeing that level of performance in 2026. Probably the main change would be that we're working on reducing our reliance on the low-grade stockpile.

The effect of that could be a slight increase in the head grade and improvement in the recoveries. We're still working on the next year budget and mine plan, but those are some changes that we could expect going forward.

That's very interesting. Second question, we've seen some of your peers looking to capitalize on the elevated gold prices via streaming contracts and hedges.

Is this something you are considering actively to further bolster your balance sheet ahead of the next CapEx cycle? Within that, as it was mentioned earlier, you've got the Franco-Nevada step down on the current streaming.

Just wondering whether you have the appetite to look at financing right here right now? Or is it something that you will consider once the technical report is out next year and you have more visibility on the capital commitments?

Yes, the Franco stream is obviously there and it was entered into to fund -- to enable the acquisition of Candelaria in the first place. We sort of had to be done at that point in time.

With the elevated gold prices, as you say now, that stream is becoming quite costly, but it is what it is. The 68% stream that Franco gets at the moment is projected to step down to 40%.

At this current production rate, we anticipate that to happen towards the end of next year, end of 2026. From 2027, we should get a higher gold revenue coming from that.

Of course, there are options around how we play that, but at the moment, the contractual relationship is that that will step down to 40% at that point in time. We obviously know with the funding requirements that we have with the Vicuña build that we do need to increase our liquidity lines to fund that.

At the moment, the base case for us is simply to increase our revolving credit facility. We see that as the most cost-efficient way of getting access to a higher funding capacity, but we are not ruling out anything else, but it will surely be done on what we believe is the most cost-efficient way of doing it.

The streaming arrangements we are seeing at the moment that we don't think are cost competitive to RCF. But that's always up for negotiation, and if there's an attractive offer, we will look at it.

We don't rule it out by principle, put it that way.