Operator: Good afternoon, and welcome to Capstone Copper's Second Quarter 26 Results Conference Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call, you require immediate assistance, please press 0 for the operator. This call is being recorded on Thursday, July 30, 2026. I would now like to turn the call over to Daniel Sampieri, Please go ahead.
Daniel Sampieri: Thank you, operator, and thank you, everyone, for joining us today to discuss our second 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 for today's presentation, which are also available in the Investors section of our website. I am joined today by our President and CEO, Cashel Aran Meagher. Our SVP and Chief Operating Officer James Whittaker, our SVP and chief financial officer, Ramanpreet S. Randhawa, and our SVP, risk ESG, and our general counsel, Wendy A. King. During the Q&A session at the end of the call, we will also be joined by our Head of Technical Services, Peter Amelunxen. Is available for questions. Please note that comments made on the call today 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 will just note that all amounts we will discuss today are in US U.S. dollars unless otherwise specified. It is now my pleasure to turn the call over to our president, and CEO, Cashel Aran Meagher.
Cashel Aran Meagher: Thank you, Daniel. And hello to all of you dialing in from Americas, The Americas, Europe, Australia, and around the globe. Today, we are pleased to present our second quarter 26 results and achievements. At the beginning of this year, I spoke about 2026 being a year of operational stability and cash generation, between periods of transformational growth. Q2 2026 delivered exactly that. As highlighted, on slide 5. Our operations delivered consolidated copper production of 51.8 thousand tonnes at consolidated C1 cash costs of $2.82 per pound in Q2 2026. Improved production combined with exceptionally strong commodity prices drove record EBITDA for the seventh consecutive quarter. This performance was underpinned by record throughput and record low cash costs at Mantoverde. Strong throughput at Mantos Blancos and consistently solid execution at Cozamin. With reliability initiatives underway, at Pinto Valley. We have reaffirmed our 2026 guidance As we execute on our operational targets, we remain focused on advancing our growth pipeline to increase production and lower our costs. Near term growth is driven by our MDO project. Which remains on schedule and on budget. Longer term, we recently submitted an EIA permit application at Mantos Blancos and progressed Santo Domingo towards a sanctioning decision which continues to be expected. In Q4. We are also prioritizing absolute cost reduction projects. Like the Mantoverde pyrite augmentation project, designed to reduce sulfuric acid requirements while increasing copper. Production. We continued to strengthen our financial position in Q2, and intend to deleverage further. Through internally generated cash flows. Over the course of this year. Ensuring we are well positioned to invest in accretive growth opportunities. As we increase production to meet growing demand for copper, we remain committed to doing so responsibly, as highlighted in our recently published 2025 sustainability report. Our people remain at the core of everything we do. Enabling Capstone to safely deliver results. At Mantoverde and Mantos Blancos, we have recently negotiated new 3-year collective bargaining agreements with all unions. Providing important stability as we continue to operate in advanced growth in Chile. Since the 2022 merger, our company has matured and we have delivered improved output from a diversified base of 4 operations in top tier mining jurisdictions. As we look towards the future, our near term growth pipeline enables Capstone to deliver the copper the world needs. And, with that, I will pass over to Ramanpreet S. Randhawa. For our financial results.
Ramanpreet S. Randhawa: Thank you, Cashel. We are now on Slide 6. In Q2, we recorded copper production of 51.1 thousand tonnes marking improved output over the previous quarter. LME copper prices averaged $6.50 per pound in the quarter, up 4.0% compared to $5.83 per pound in Q1 2026 and we realized a higher copper price of $6.22 per pound in Q2 2026. After subtracting C1 cash costs of $2.82 per pound, we deliver strong gross margins of $3.40 per pound or 55.0% in Q2. Despite global inflationary pressures. Record adjusted EBITDA of $354 million, up 8.0% quarter-over-quarter and 64.0% year-over-year, This marks our seventh consecutive quarter of record EBITDA driven by solid operations and strong copper prices. Lastly, we reported record adjusted net income attributable to shareholders of $97.6 million or $0.13 per share in Q2 2026. Another quarter of record financial results builds on the success of Q1 and forms a strong foundation for H2 2026. Next, as highlighted on slide 7, we finish Q2 2026 with a consolidated net debt of $675 million which represents a reduction of $63 million from the prior quarter and over $100 million year to date. The decrease was primarily attributable to strong operating cash flows supported by higher realized copper prices. Turning to Slide 8. Our available liquidity at quarter end was greater than $1 billion including $367 million of cash and cash equivalents and 715 million of undrawn amounts on our corporate RCF. The decrease in our absolute net debt combined with a record EBITDA drove a further reduction in our net leverage with a net debt-to-EBITDA ratio of 0.5x at the end of Q2 2026. This is down significantly from the peak during construction of Mantoverde development project. The improvements made to our net debt, leverage, and liquidity since completing MBDP is aligned with our commitment to strengthening the balance sheet between periods of growth. The chart on the right hand side of the page highlights our trailing 12-month EBITDA growth since 2023. At these copper prices, we expect EBITDA to continue to increase with Mantoverde Optimize coming online. On the far right, we have profiled our future growth with expected EBITDA close to $3 billion with both MDO and Santo Domingo run rate production. We have a strong platform to deliver peer leading growth of approximately 70.0% compared to our 2025 production levels. Once both projects reach full rates. On to Slide 9. We present a snapshot of the year so far as well as our expectations for the second half. Our consolidated operations delivered solid results in H1, enabling us to reaffirm our consolidated 2026 production cost and CapEx guidance. We are particularly pleased to see Mantoverde and Mantos Blancos performing well following project ramp ups but both on track towards full year guidance. These 2 assets combined have generated approximately 70.0% of consolidated EBITDA year to date. As a testament to the benefits of a diversified portfolio of assets, Cozamin is tracking towards the upper end of its site level production guidance range partially balancing Pinto Valley, which is tracking towards the lower end. In the second half, we are expecting even stronger production primarily driven by higher sulfide grades and throughput at Mantoverde. Stability in our operations allowed us to progress and execute a number of key catalysts during H1. Throughout the remainder of the year, we look forward to delivering reliable copper production and strong cash flow generation while continuing to advance our growth opportunities. On to Slide 10. We highlight some of the proactive steps we have taken to protect margins and max cash flow amidst the current inflationary environment. More importantly, copper markets have remained strong. Our operating locations are robust supply chains have ensured continued supply security. So to mitigate diesel volatility in the second half, we took advantage of temporarily lower price to hedge 40% of the Chilean exposure at 82¢ per liter versus current spot of approximately 93¢ per liter and 50% of our Pinto Valley diesel exposure at $0.93 per liter versus current spot of approximately $1.28 per liter. With these protections in place, our exposure to diesel price volatility through the second half of 2026 has been significantly reduced as shown on sensitivities on the slide. We view our capital of business as incremental but most of our cash flow generated by the sulfides This gives us valuable flexibility in how we respond to input cost pressures. Given the current elevated sulfuric acid prices, we leverage mine plan flexibility to temporarily reduce higher calcium carbonate ore feed to the Mantoverde heap leach which will lower our cathode production by approximately 5 thousand tons and eliminate the requirement to purchase approximately 200 thousand tons of sulfuric acid at spot in H2. We then reallocated the resource to lower cost sulfide business which will contribute to additional sulfide production of approximately 5 thousand tonnes. And is thus net neutral to consolidated copper production and a plus to optimize cash flow. Rest of the cathode business, including the dump leaches, is unchanged and continues to generate cash. For the remainder of the year, approximately 80.0% of our asset consumption is fixed at a price of approximately $190 per tonne. Compared to spot prices around $450 to $470 per tonne. The pyrite project will improve economics of our oxide business going forward. To reduce the asset requirements and provide incremental copper production. Given First half cost performance and our expectations for higher proportion of lower cost sulfide production in the second half, we are reaffirming our 2026 cost guidance And with that, I will hand it over to Jim for the operations.
James Whittaker: Thanks, Raman. We are now on Slide 12. We will start with our Mantoverde operation on Slide 12. For Q2 2026, total production yielded 22.5 thousand tons of copper at a record low combined C1 cash cost of $1.97 per payable pound. Plant throughput averaged a record 36.3 thousand tons per day for the quarter 13% above our design capacity despite completing 5 days of planned maintenance during April. We are also pleased to see strong recoveries maintained at an average of 90.2% for the quarter. Copper grades averaged 0.61% in Q2 2026, which is slightly below our expectations for the year. At the bottom of the Mantoverde pit, we experienced more water than predicted this quarter. Requiring some material from the lower benches to be placed on the stockpiles to dry which resulted in some lower grade stockpile material being utilized. The team responded quickly to add wells and pumps which increased the extraction rate. With that infrastructure in place, we expect grades to improve at Mantoverde in the second half. As Raman noted, we responded to elevated sulfuric acid prices by temporarily pausing heat leach production at Mount Verde. The oxide ore we were mining over the last few months had higher calcium carbonate content, which requires more acid to process. So we stockpiled it with the option to leach it at a later date once acid prices normalize. Starting in August, we are into oxide ore with lower calcium carbonate grades requiring significantly less acid. We expect to resume heat leaching at that point. Albeit at lower levels than previous expected. With little ramp up time required. Taken together, record throughput, strong recoveries, and flexibility in our mine planning enabled Mantoverde to deliver a 24% improvement in unit cost in addition to improved production compared to last quarter. Moving to Slide 13. This quarter, we made good progress on the Mantoverde optimized project. During our 5-day planned maintenance down in April, we were also able to unlock higher throughputs by eliminating certain bottlenecks. This included improving the capacity of the rougher concentrate and reguaring tanks, as well as a complete replacement of key pumps and water systems. The remaining project tie ins will be completed during the extended 15-day maintenance period in September. Followed by a ramp up period in Q4. Our expectations around capital costs and time lines are unchanged with increased sulfide throughput capacity of approximately 45 thousand tonnes per day expected to be sustained starting in early 27. Next on slide 14, we are excited to highlight the Mantoverde's pyrate augmentation project. Which will incorporate a new pyrite recovery circuit into the existing concentrator plant. This project is designed to reduce Mantoverde's sulfuric acid requirement by a material 20.0%. While increasing heap leach copper production by approximately 3.5 thousand tons per year. And an assumed sulfuric acid price of $200 to $450 per ton, This results in cost savings of approximately $18 million to $40 million per year. We expect this project to be completed in early 2028 for an estimated CapEx of $45 million which will be incurred next year. The net present value of this project is around $200 million assuming copper prices of $5 per pound and sulfuric acid prices of $200 per ton. However, this increases significantly to approximately $350 million at spot prices. The project boasts very high NPV, to CapEx ratio of approximately 4.0x at longer term prices and 7.0x at spot. Building the pyrite plant also enables the opportunity to produce cobalt at Mantoverde in the future. The cobalt project is currently in the feasibility stage. Especially within the context of current inflationary environment we will continue to prioritize projects like this that not only improve unit cost by proxy of increased production, but also reduce absolute costs. Turning to slide 15. Mantos Blancos continued to deliver on plan in Q2 2026. Total sulfide and cathode production yielded 12.5 thousand tons of copper at a C1 cash cost of $3.93 per payable pound. Throughput averaged above design rates at 20.9 thousand tons per day in Q2 2026. Sulfide copper grades of 0.66% were in line with mine sequencing with the lowest grades of the year expected in Q2 and Q3 2026. We continue to expect higher copper grades to return in 2027. Unit costs at Mantos Blancos were impacted by higher diesel and sulfuric acid prices, in addition to higher maintenance spend to improve availabilities. Consistent operating performance at Mantos Blancos enabled the delivery of key growth catalysts this quarter. Including submitting an EIA permit application for the next phase of Mantos Blancos. We expect to release a prefeasibility study by the end of the year including details of the increased throughput from the concentrator plant and increasing cathode production via historical tailings re leaching. Moving to Pinto Valley on slide 16. Which produced 10 thousand tonnes of copper at C1 cash cost of $4.17 per payable pound during Q2 2026. Pinto Valley delivered incremental throughput improvements over Q1 2026 and we see a clear path to future gains. The planned 10-day shutdown in Q3 2026 directly targets the main areas that have constrained plant performance this year. The filter plant and the primary crusher. Which we expect to position Pinto Valley for more stable operations. This investment in reliability is supported by a broader people strategy, and asset management framework designed to deliver sustained improvements in mill availability. On the people side, this includes reducing turnover and strengthening training while on the asset side, this includes improving maintenance practices. Once again, Cozamin delivered another quarter of strong, consistent results in Q2 2026, as shown on Slide 17. The operation produced 5.75 thousand tons of copper at a C1 cash cost of $1.52 per payable pound. Cash costs in Q2 2026 came in towards the low end of the guidance range, driven by higher solar byproducts. And with that, I would like to pass it to Wendy.
Wendy A. King: Thank you, Jim. In Q2 2026, we released our 2025 Sustainability Report detailing the meaningful progress we made on our sustainable development as highlighted on slide 18. We were particularly proud of the improvements to safety driven by the implementation of a new HSC roadmap including a 22.0% reduction in recordable injuries year-over-year. We are also tracking well towards our GISTM implementation across all tailings storage facilities by 2028. Achieving 80.0% conformance in 2025 compared to 48.0% in 2024. In 2025, we strengthened our climate governance and risk assessment by expanding Scope 3 data collection towards our goal of disclosing scope 3 emissions for all sites by the end of this year Our workforce grew to over 8 thousand employees in 2025. With increased representation of women, and reduced turnover. Reflecting our ongoing commitment to an inclusive stable and engaged workplace. As Cashel mentioned, that stability was reinforced this quarter with new 3-year collective bargaining agreements reached with both unions at Mantos Blancos Following the Mantoverde agreement earlier this year, all of our Chilean operations now have labor stability for the next 3 years. Going forward, the Mantoverde pyrite augmentation project that Jim discussed also delivers meaningful sustainability benefits. Less pyrite sent to our tailings facility more copper from the heap leach, and fewer trucks on the road delivering sulfuric acid to site. At Capstone, we recognize that mining is a long term business We are committed to responsibly delivering copper production growth by continuing to embed sustainability throughout our organization. I will pass it back to Cashel.
Cashel Aran Meagher: Thanks, Wendy. Moving to slide 20. This quarter, we continued to make steady progress towards a sanctioning decision at Santo Domingo. Expected in Q4 this year. In terms of the remaining work streams, prior to FID, we are progressing 60% detailed engineering completion. We are evaluating the optimal financing strategy for the project. And we are advancing potential infrastructure opportunities. Our balance sheet is already enriched. But we will continue deleveraging through internally generated cash flows prior to a sanctioning decision. Santo Domingo is a transformational growth project that will deliver material improvements to our consolidated production and cost profile. With that said, Capstone's growth story is not dependent on a single project. Our growth pipeline includes brownfield, and greenfield projects built around assets we know well. Jurisdictions where we have deep operating experience, establish infrastructure, and strong community relationships. We are committed to demonstrating an executable path to meaningful production growth. While prioritizing disciplined capital allocation. And sustainable free cash flow. On slide 21, we highlight some of the key catalysts we look forward to delivering in pursuit of this goal. Throughout the second half. Mantoverde optimizes our nearest term to deliver value by upgrading the plants to sustain sulfide throughput of 45 thousand tonnes per day at a low capital intensity. As MDO moves closer to completion, we have initiated our next brownfield expansion by submitting an EIA permit for Mantos Blancos in Q2. We look forward to further defining this opportunity with the release of the study by the end of the year. Slide 22 reinforces our multilayered growth trajectory. Driven by organic brownfield expansion. The Santo Domingo project district scale opportunities in Chile and Arizona and exploration upside across the portfolio. This is not growth for the sake of being bigger. These are low risk, accretive opportunities to deliver value in the same top tier mining jurisdictions as in existing operations. Importantly, our growth pipeline is well aligned with the copper outlook. Reinforcing the importance of continuing to accelerate growth to deliver value. Our capital allocation priorities remain sustain and continue to optimize our existing operations, invest in high return growth projects, and maintain a strong balance sheet. Capstone is well positioned as we enter a period where execution can directly translate into value. We have near term operational momentum. A permitted growth pipeline, and district scale optionality which provides a strong foundation for Capstone to provide the copper the world needs now and into the future. And with that, we are ready to take some questions.
Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press *1 on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press #. If you are using a speakerphone, please lift the handset before pressing any keys. 1 moment, please, for your first question. Your first question comes from Orest Wowkodaw. Of Scotiabank. Your line is already open.
Orest Wowkodaw: Orest. Thanks very much, and congrats on the improved operating performance it is great to see. The question around this Pyrite project at Mantoverde, I mean, looking at the economics here, it seems like it is a no brainer. I am just curious on what the plan is for 2027. Given that this project will not be on line until early 28. Like, is the would you think about curtailing if acid pricing stays elevated, should we expect you to curtail cathode at least the heat leaching through 2027 until this is ready, or how are you thinking about that transition period?
Cashel Aran Meagher: Orest, I can probably take that 1 on. I mean, when we look at our cathode production, there is a certain amount of oxides. When you think about it that are in kind of like the mixed pits, so you are mining through them to get to the sulfide. So that is kind of, like, incremental oxide feed, and then basically, what we will be running the cathode business when you look into 2027 because that is a kind of cutoff grade question that you triangulate with a calcium carbonate. So a lot of our material is actually low calcium carbonate. If you are mining to it anyways, once we know the price of acid and certain looking at that later in the year and the copper price, we can do a balancing act to make sure that is profitable. But then what this has kind of proven is we have that flexibility. If we were in a oxide only pit and it had a higher calcium carbonate, you know, there is no point of sending the trucks and shovels there. You might as well divert them to the sulfides, which gives us more flexibility And our mill, as you noted when you started, is running very well. So we can run higher than kind of nameplate a little bit and push more on the sulfide, which is way more cash flow positive than, you know, into an oxide only cut. Okay. Is there any opportunities to reduce acid consumption at Mantos Blancos?
James Whittaker: I will give that to you, here. Yeah. We are we are evaluating it right now, Orest. The Mantos Blancos does not have a heap leach. it is a-- it is a run-of-mine leach that generally consumes less acid anyway. But we are in the process of optimizing that as well. And another thing that is currently-- we are workshopping is, a you know, acid swaps, for example. Some assets been prepurchased, so we are looking at-- we are looking at different opportunities.
Cashel Aran Meagher: Yeah. And just to add to that, Orest, you know, there is that future opportunity of leaching and Mantos Blancos of the coarse tails in the rip years. And, you know, in that process, we will evaluate any of these initiatives we have. But keep in mind, that is likely a chloride leach. So requires some testing to see if there is some compatibility or Fair enough.
Orest Wowkodaw: Just finally, if I can, what kind of timing do you think we can expect for an exploration update at Mantoverde?
Cashel Aran Meagher: Yeah. I think what it is we have-- we have done a lot of the drilling to date. I guess, on the near-pit inwards. So I think we have sort of said, like, the middle of next year is when we consolidate those mine plans. There will probably be some conversion of Inferred to Indicated, and therefore, we will evaluate its inclusion in the life of mine process. So outside of that, we got few drills running up to the north. And when we sort of consolidate a bunch of results, we will put it out. We will put those out. So maybe not the next quarter, but the quarter after that, we will probably have enough meat on the bone to be able to sort of guide what our exploration plan for the region are and what the results are to date. Okay. Orest. Thanks very much.
Operator: Your next question comes from Fahad Tariq of Jefferies. Your line is already open.
Fahad Tariq: Hi. Thanks for taking my question. At Mantoverde, is there an opportunity to displace more than 5 thousand tons from the oxides to the sulfides? Or is it constrained by the 15 day tie in and the third quarter?
Cashel Aran Meagher: No. Not really. I mean, the-- that sort of movement is sort of built in with the mine, and we are being somewhat what I would call conservative on what the throughput capabilities are I mean, we have now disclosed what the production rates were obviously in June, and, you know, we are similarly seeing similar performance through July. So we are optimistic that perhaps the ramp up will go faster than what we built into our guidance, number 1. And, therefore, it is really up to the cadence of the mill to be able to accept more tonnage. Than necessarily the 45 thousand tons a day and in a faster ramp up. Obviously, internally, we are very optimistic that is indeed possible. And that is where we would see an uptick beyond that 5 thousand replacement of sulfide over cathode. And the opportunity therein we have always sort of kept that in our back pocket as a contingency in our guidance or, in this case, as we remain within guidance opportunity against guidance.
Fahad Tariq: Got it. Okay. And then maybe just switching to Santo Domingo. Any update that you can provide on any potential discussions on a tolling agreement with companies that own the port and how we should be thinking about the CapEx I would imagine the CapEx estimate is going to come, I think, in the third quarter before sanctioning in the fourth quarter. But please let me know if the if the time line is different.
Cashel Aran Meagher: Yeah. Well, we have a dual process. We continue negotiating with port holders within the region to be able to optimize the project makeup So that continues what I would characterize as very well. And then with respect to the CapEx, you know, I think what we would see is the CapEx update would come in the fourth quarter in parallel and with sort of that FID announcement. We are sort of working towards what we call 60% detailed engineering, and it is sort of at that time we can provide that certainty of CapEx for the project going ahead. Orest. that is it for me. Thank you.
Operator: Your next question comes from George, an analyst from UBS Financial. Your line is already open.
George Agia: Yeah. Hi, team. Nice update here. Can I ask again on the 200 thousand tonne reduction in asset at Manto Verde? What are the trade offs there operationally to reduce this, I guess? And does it have any impact specifically on recovery too?
Cashel Aran Meagher: No. It does not. it is simply it is just a cost per pound calculation. The way it works is some of the material that has the higher carbonate consumes more acid. And therefore, that cost to produce a pound exceeds the value of selling a pound. And really, that is how simple it is. So what it means is some of those trucks that would have been moving that material to sustain production at the heap leach, which is simply assigned to the capacity that we know exists within the sulfide plant. And, therefore, we are just pulling those tons from there. The benefit, of course, in the short term is those tons have higher margin and therefore lower the cost overall. But in the long term, we still remain, you know, encouraged by our optionality with the oxide production and cathode production, and especially now with the addition of this pyrite augmentation, which will reduce the overall cost structure therein. And then I will add the other the other there will be another step change in the future. We mentioned it in the phone call where we are working on the feasibility study to add another byproduct credit to further enhance the economics of the oxide material to produce cathode, which is to produce a saleable form of cobalt. And so we are excited about that. And so next year, that will be another increment of cost reduction in our c 1 to produce the copper.
George Agia: Okay. No. that is good. Thanks. And then just back to Mantoverde optimize again, like, just the comments early 27 and the sort of commentary before. Could you could we realistically say that 40 5 thousand tonne per day rate average in 1 quarter next year? Is that reasonable? And I guess, with the tie in, will you get more color or, I guess, conviction in how that ramp up will go once you have done the tie in as well this quarter?
Cashel Aran Meagher: Yeah. Look, we are on time. The project's working as designed. So, again, when we stated our guidance the start of the year, we were always a little conservative in the ramp up rate. If I am to take the current performance of the plant, as to what we experienced in June, and seems to be what we experienced in July. I would be now more positive that we will be able to ramp it up before the end of the year to 45 thousand tons a day. But we are not gonna restate our guidance or that sort of contingency. That sort of you know, where we are sort of sitting. And what we put built into that guidance is the midpoint for Mentor itself was a throughput rate of 36 thousand tons a day. And in June, as we disclosed, we were at 40 tons a day. So we are very close to the nameplate already. Which gives us encouragement that there might be possibility in the future to exceed what we have designed it for, the 45 thousand a day. But, you know, the proof is in the pudding. We have gotta run it through to see what it will do. No. that is clear. Good stuff. Thanks.
Operator: Your next question comes from Marshall Farid of Goldman Sachs. Your line is already open.
Marcio Farid Filho: Thank you, operator. Good evening, everyone. Thanks for the time. And congrats on the quarter. that is me. Good operational setup there. I wanna spend some time on the month of Wendy. Clearly, you know, running above nameplate capacity for the full quarter, And we connected trade, I think, in June at about 40 thousand tons per day. it is quite remarkable. Just trying to understand if you, you know, what sort of level, of throughput you think you can maintain going into, the second half of the year? If you look at guidance for the year in terms of grades at just above 0.7%, Obviously, that implies some step up from the first half, and, you kind of-- sort of maintain the expectation for grade for the year as well. Just wondering if there is a scenario where we see you know, stronger throughput combined with stronger grades into the second half of the year, which could fall very well for, for overall, output as well. Thank you.
James Whittaker: Hi, Marcio. How are you doing? Good question. Hi, Jim here. Yeah. You are exactly right, actually, on what you explained. The project is going really, really well. We budgeted, a 176 million with about a 102 million committed. So the project burn rate's going very well. We are on track. We have the shutdown planned for September. And, that should put us in a strong position to be able to ramp up the plan very quickly. As Cashel mentioned, we have all the indications that we will be able to push that as much as possible. I think in our estimations, we are pointing around 41 thousand average for the, for the first quarter, but we are gonna be trying to hit that as soon as possible. We are planning an increase in grade in the fourth quarter. We will be going from 0.7% in Q3 up to 0.79% in Q4. Our current plan. And, recovery should basically be in line with plan. So, yeah, you are right. And, yes, we are very optimistic about Q4 this year.
Marcio Farid Filho: Orest. Thank you. And just 1 on Santo Domingo. How should we think about potential hedging before Quebec is committed? Is there any plan to do some sort of hedging, both on, you know, either by products or on the cost side or on copper, let's say, to reduce risks going into the CapEx plan? Thank you.
Ramanpreet S. Randhawa: Yeah. Good question. So, I mean, as we get closer to FID, we can look at hedging. But when you look at our balance sheet, we are running multiple different scenarios, but at lower copper price environment, it still shows our balance sheets in strong spot. And as you can tell, we are delevering. Our target was 1.0x and we are at 0.5x and we got another few quarters here to go underneath our belt. So we will be in a very strong spot. So I think it gives us the ability to make that decision if we like, but know, where copper is trading right now, we are very comfortable with the balance sheet, and then we will, you know, we will consider at that time if we wanna layer in some protection. Sounds good. Would cause any or it is cause any part of that kind of portfolio or balance sheet protection as well? Look. that is kind of trading, like, you know, if you look at it, that is just kind of reduces your equity intake. So it is not a requirement for funding Santo Domingo. Okay.
Marcio Farid Filho: that is great. Thank you.
Operator: Your next question comes from Rafael Barcelos of Bradesco BBI Company. Your line is already open.
Rafael Barcelos: Hello, and thanks for taking my question. I have just 1 question. So Pinto Valley is an operation that has proven to be more challenging than initially thought. Right? So I just wanted to get your thoughts on when we should see the asset delivering a more normalized run rate and even what would be your thoughts for operational performance for 2027? And on top of that, if there is any sort of strategic optionalities in both Pinto Valley and Cozamin? Thank you.
Cashel Aran Meagher: Yeah. Hi. Look. You know, we have been working on the asset integrity and plant availability and utilization at Pinto Valley for some time now. We had identified last year critical elements that required upgrading and replacement, specifically revolving around the copper filtration system and the primary crusher. Our ambition was to address those in May, but there were some manufacturing delays in the filtration components. And we only wanted to take the plant down once. So we deferred it to September. And, unfortunately, there was some production interruptions unplanned. But what I would say is we have done a tremendous amount of work on inspection and evaluation of the integrity of the asset. We are gonna address a lot of the deficiencies in this shutdown in September. It also gives us a tremendous opportunity to inspect validate our assumptions and lay out a plan for Pinto Valley after that. But our expectation is we will be up and we will be closer to 50 thousand tons a day beyond that correction or that shutdown. And that is sort of where we are going to take off from. And then we believe, you know, over the next year, we will be able to get it up to its nameplate. And, you know, its nameplate is probably in the mid fifties, And so that is our goal then. So we are very encouraged. it is sort of there is light at the end of the tunnel. We really wish we had been able to address these issues in May. But we are gonna address them in September, and we are looking forward to continuing with it. What I will say about, you know, the strategic process on Cozamin versus Pinto Valley. Pinto Valley is a billion ton deposit. At over 0.3% copper. It actually comes with in its life of mine over the next 5 to 6 years, incrementally higher grade year over year. So we look forward to getting the asset to its full capability and increasing production from that asset total tons of copper year over year. And driving down the unit costs with it. So we think it is still very core. To Capstone. Perfect. Thank you.
Operator: Your next question comes from Daniel Morgan of Barron Joey. Your line is already open.
Daniel Morgan: Cashel and Tim. Just on Mantoverde, I mean, it is pleasing to see that is running well. The sulfide portion. If you can run above nameplate, if that is possible once Mantoverde optimizes on, Is there flex in the rest of the operation to actually handle that, like, you know, the mining rates or any other constraints that might come to mind? Thank you.
Cashel Aran Meagher: I suppose it depends how high it goes. But we feel the so on average, I believe our allowance is up to 55 thousand tons a day under the permit. Now So that would be an ultimate constraint. The other constraints are simply, you know, mine planning, and how much material movement there is. We believe that there is opportunity to exceed the 45 thousand tons a day with the current assets we utilize, the current mine fleet to keep up with it. And certainly, there is capacity in our tailings management system We also have a number of stockpiles of low grade with which we have optimized grade in the past and going forward more in the future. And then we could decide incrementally to present those in if we needed to reduce truck and shovel count. But sort of as you point out, Daniel, that would be a terrific problem to work on. So we look forward to it. Yeah.
Daniel Morgan: Thank you. And maybe just obviously ask about it. I mean, the question, I guess, twofold just about the market itself and then what you are doing about it. So what is happening to the acid market in Chile right now is obviously, Middle Eastern events have impacted global supply. But is there also a feeling that other miners are taking actions like you to reduce use and maybe we are seeing some impact on production in the industry? And then part 2, how do you think about asset purchases for 2027? Thanks.
Ramanpreet S. Randhawa: Yeah. Good question. I mean yeah. So Chile is subject to global pricing, as you know, so it kind of quoted you a spot price, like, $450 to $470 a ton, and to be honest, not a lot of people are buying at those prices just like us. We reduced 200 thousand tons of exposure. So you are seeing some of those actions taken which are reducing some of that cathode production that would have been purchasing and you know, the flip side of that is that is a bonus to copper price. Right? So it is-- it is, you know, lower cathode or lower asset purchases means holding copper prices stronger and supports it. 2027, you know, let's I think there is a, hopefully, a pathway here to resolution towards the end of the year, and, really, acid prices do not really get set in this market till later in the year, really November, December and you do not even have to fix it, then you can kind of, you know, keep negotiating into the new year. So I think it will be a moving target. I am hoping for you know, a lot of that forecast are calling for the prices to ease. As we see some resolution here.
Daniel Morgan: Okay. Thank you so much for your perspectives, Cashel and Tim.
Operator: Your next question comes from Anita Soni of CIBC. Your line is already open.
Anita Soni: Hi. Good evening. Thanks for taking my question. I was just trying to figure out, I am really just trying to know exactly what is happening with the, cathodes at Mantoverde. So if I can get a little bit more color. Is the idea that you are gonna you are going to stop producing cathodes at this point or just you know, play it by ear? I think Chris was asking a little bit about this. Like, what does 2027 look like in terms of your cathode output? And then you know, how exactly is this going to reduce the sulfuric acid that you are producing your own and then will not need to buy out in the market, or you are reducing just in terms of the kind of ore you are processing? Thanks.
Ramanpreet S. Randhawa: Yeah. it is a good question. I mean, some simple terms, the cathode now that we have the sulfide as a incremental business unit. So we have that flexibility to figure out what throughput we wanna send to the heaps. We have some dump bleach, which is always gonna make money, and then we have the heap leach. With the heap leach, you get a grade, a copper grade,, but you also get a calcium carbonate grade. So we play with a cutoff of what we need to what we want to place there. To make sure it is economic and generates cash. And some of the pits that they are only you know, oxide only and high calcium carbonate, we have diverted those trucks onto the sulfide and the mill is running well. So the offset is we are getting higher sulfide production and cut back on our cathode and reduced our exposure to acid. The pyrite that you speak about will generate you know, a pyrite that would be put into the heap leach at the agglomerator, and that will reduce our acid required on the heat bleach by at least 20%. So, you know, if we used to consume 400 thousand tons of acid a year is roughly a number for the heap. It will be 80% of that number. Or the other way to see it is we are acid proofing ourselves. When you look at the sticker price of acid in the market, take 80% of that because we are gonna have a 20% reduction on what we need. Okay.
Anita Soni: I am sorry. Can you just reiterate how much acid you are consuming maybe in dollar amounts just so at spot prices or even in the tons be great.
Ramanpreet S. Randhawa: At Mantoverde, typically, we consume about 600 thousand tons a year. With our forecast, we have reduced that to 400 thousand tons. And our price is about a $190 a ton. Is what we fixed and the market price is around 450.
Anita Soni: Say that again. $190 and $450.
Ramanpreet S. Randhawa: Right?
Anita Soni: Okay. Okay. Yep. So you assumed it was the budget was $190, and currently, it is spot at-- it is $450.
Ramanpreet S. Randhawa: Yeah. But we have also fixed that $1.90, so we are not buying anything at $4.50.
Anita Soni: Okay. And how long does that fixed rate last?
Ramanpreet S. Randhawa: For all of this year.
Anita Soni: Okay. And then next year, you are exposed to spot?
Ramanpreet S. Randhawa: Yeah. Next year, we will go through the same kind of, like, you know, by then, like I was mentioned on the last question, know, the forecasts out show the forecast, it should not normalize. So assuming some resolution in the Strait of Hormuz.
Anita Soni: Thank you. Thanks. that is different. Oh, actually, you know what? I have another question. On m and a, I just wanted to get an idea of what your current thinking you know, is about divestitures. I mean, I know that there is been some chatter about Cozamin, And given its, obviously, its consistency, I just want to understand why you are thinking about divesting that asset. And then wondering if you are looking at other assets in nearby jurisdictions? Yeah.
Cashel Aran Meagher: You know, you always sort of you function or you operate a business as a portfolio. You are always evaluating the components of the portfolio. Of when it is optimum to either move off them or invest in them. You know, the growth profiles that we have around brownfields and greenfield opportunities around Pinto Valley and also around Mentos Blancos and Mantoberde. And, obviously, the big addition which we intend on allocating capital to Santo Domingo at the end of this year, sort of have us looking at the rationalization of sustaining a business of between 15 thousand tonnes of copper per year in Mexico at an isolated mine. The mine has been absolutely tremendous. Over the last 10 years. it is been a very consistent producer. Much of their residual resource lies also in zinc, and it is a slightly different combination for a copper equivalent going forward outside of the 4 or 5 years. And so to us, it is sort of maybe our portfolio is outgrowing the size of what Cozamin is. Now with that being said, we would not obviously divest it if we felt that the value in seeing it through to its end of mine life we can assure ourselves now of those cash flows and why would we sell it if that is the case. So we have a you know, we have that sort of strategic consideration where we are evaluating the possibility if someone was to buy it, then maybe we would sell. So it is sort of like a portfolio rationalization And 1 of the things, you know, you keep in mind is what is the present market and what is the present value of a copper pound. And obviously, you know, if you were sitting here this time last year, you know, the copper price was lower, but it is been sustained over $6 for some time now, and that operation will cash flow really well this year. So it is sort of a ongoing continuous discussion that we have at our executive level of what we do with all our assets and where we allocate our capital. So I guess it is just a it is a wait and see story.
Ramanpreet S. Randhawa: And, Anita, just on the absolute numbers on the ACID just for reference, if we had bought 600 thousand at budget was a 190, that would be $114 million of assets spent in Mantoverde. We are currently gonna spend 400 at $1.90, so that is 76 million. But if we had continued with plan, you know, a, that additional cathode, we would have had, you know, the same tonnage and acid at a blended price and we would have $160 million because we would have bought 200 thousand extra tons at spot prices. So, really, it is a saving of $90 million in absolute dollars. Okay.
Anita Soni: Thank you. And 1 final follow-up on that. What kind of recovery rates is that run of mind getting within the mill? I was trying to model that.
Ramanpreet S. Randhawa: The dump recovery, I think it is 40.0% to 45.0%. Is it alright?
James Whittaker: Yeah. Low forties.
Anita Soni: Okay. Okay. Thank you.
Operator: Ladies and gentlemen, as a reminder, if you have a question. There are no further questions at this time. I would hand over the call to Cashel Aran Meagher for closing comments. Please go ahead.
Cashel Aran Meagher: Thank you, operator. With Mantoverde optimized tie ins ahead and a sanctioning decision on Santo Domingo expected in Q4, Second half is set to be an exciting 1 for Capstone. We look forward to updating you in October with our Q3 2026 results. Till then, be safe and feel free to reach out to Daniel, Michael or Claire if you have any further questions. Thank you for your continued support, and have a good day or a good evening.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.