Capstone Copper Stock

Good afternoon, and welcome to Capstone Copper's Q3 2026 Results Conference Call.

[Operator Instructions]

This call is being recorded on Thursday, October 29, 2026. I would now like to turn the call over to Daniel Sampieri. Please go ahead.

Thank you, operator, and thank you, everyone, for joining us today to discuss Capstone Copper's third quarter results.

Please note that the news release and regulatory filings are available on our website and on SEDAR. If you are logging in to 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, Ramanpreet Randhawa.

During the Q&A session at the end of the call, we will also be joined by our SVP, Technical Services, Peter Amelunxen, and our SVP, Risk, ESG, and General Counsel, Wendy King, who are 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'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, and around the globe.

Today, we are pleased to present our third quarter 2026 results and achievements. We delivered a solid quarter of financial performance, supported by robust copper prices in Q3.

As highlighted on Slide 5, our operations produced 45,200 tonnes of copper at consolidated C1 cash costs of $2.95 per pound in Q3. We achieved record EBITDA for the eighth consecutive quarter despite conducting planned maintenance across our portfolio.

This performance was underpinned by strong contributions from Cozamin, Mantos Blancos and Mantoverde. With 3 quarters of the year behind us, we note that we expect to finish at the low end of our production guidance range and the high end of our cost guidance range.

Our production so far this year has been impacted by more unplanned maintenance at Pinto Valley, in part due to the deferral of the maintenance shutdown from May to September, plus our decision to lower cathode output at Mantoverde to maximize cash flows.

Our unit costs have been impacted by the lower production in addition to higher input costs, notably on diesel and sulfuric acid.

We have also increased our capital expenditure guidance by $40 million, mostly resulting from higher capitalized stripping due to higher diesel prices plus changes in the mine sequence at Mantoverde.

Q4 is set up to be our strongest quarter of the year, supported by the Mantoverde optimized ramp-up and higher grades at Mantoverde and Mantos Blancos.

Our performance year-to-date has generated almost $280 million in free cash flow from operations, enabling us to redeploy capital into our accretive growth opportunities.

During Q3, this included completing critical project tie-ins for our MVO project, advancing the study to define the next phase of growth at Mantos Blancos, and progressing detailed engineering ahead of a sanctioning decision at Santo Domingo.

This third quarter, we were also excited to announce our acquisition of the San Pietro project as illustrated on Slide 6. San Pietro adds approximately 16,000 hectares to Capstone's district-scale land position in the Atacama.

Not only did this transaction provide an immediate increase in mineral inventory, but it also provided a platform for further resource growth through substantial exploration upside.

We look forward to leveraging our regional expertise to advance optimization opportunities, identify potential synergies, and progress a coordinated district development strategy.

Moving to Slide 7. To ensure we are well positioned to advance our peer growth pipeline, we took steps to streamline our portfolio and further strengthen our balance sheet during Q3.

In September, we announced the divestment of Cozamin to Luca Mining for up to $385 million in total consideration, including $275 million in upfront cash.

Cozamin has been an important part of our portfolio, providing stability and strong cash flows as Capstone matured into a diversified copper producer.

We extend our sincere thanks to everyone at Cozamin for their dedication to operational excellence and safety. Given the strong operational track record of the Luca team in Mexico, we believe they will be excellent stewards of the mine.

It is an ideal time to optimize our portfolio through this divestiture, which we expect to close in the fourth quarter.

This transaction not only enhances our financial position, but also allows leadership to focus on advancing high-return copper organic growth opportunities in Chile and the United States.

And with that, I'll pass over to Ram for our financial results.

Thank you, Cashel. We are now on Slide 9. In Q3, we recorded copper production of 45,200 tonnes.

LME copper prices averaged $6.40 per pound in the quarter, up 6% compared to $6.05 per pound in Q2, and we realized a higher copper price of $6.61 per pound.

After subtracting our C1 cash cost of $3.95 per pound, we delivered strong gross margins of $3.66 per pound or 55% in Q3. We continue to experience cost pressures and volatility in energy and commodity prices, including oil, steel, and sulfuric acid.

Rising energy costs during 2026, particularly diesel prices, have impacted our costs by approximately $80 million annualized or $0.16 per pound compared to 2025.

Sulfuric acid prices, meanwhile, have approximately doubled, although we have taken steps to reduce our exposure and have locked into fixed-price contracts.

Notwithstanding those impacts, we reported record adjusted EBITDA of $358.3 million, which increased 1% quarter-over-quarter and 44% year-over-year.

This marks our eighth consecutive quarter of record EBITDA. Lastly, we reported adjusted net income attributable to shareholders of $93.8 million or $0.12 per share in Q3.

Now turning to Slide 10. Our available liquidity at quarter end was maintained at over $1 billion, including $263 million of cash and $826 million of undrawn amounts on our corporate RCF.

The decrease in our consolidated net debt to $564 million, combined with record EBITDA, drove a further reduction in our net leverage with a net debt-to-EBITDA of 0.4x at the end of Q3.

With the expected closing of the Cozamin sale in Q4, we forecast a net debt-to-EBITDA ratio of approximately 0.2x at the end of the year.

Our balance sheet is in great shape, and we are well positioned to advance our accretive growth pipeline.

Moving on to Slide 11. In Q2, we spoke about some of the proactive steps to protect margins and maximize cash flow amidst the current inflationary environment.

This included temporarily causing higher calcium carbonate feed to the Mantoverde heap leach to reduce our exposure to elevated sulfuric acid prices.

We view our cathode business as incremental, with most of our cash flow generated by the sulfides. This is illustrated through the charts and the graphs on the slide using Mantoverde as an example.

Prior to the completion of the Mantoverde development project or the concentrator in 2024, 100% of Mantoverde's production was the cathodes.

In 2025, once MVDP was ramped up, Mantoverde's mix shifted to almost 70% sulfides, which represented 96% of Mantoverde's EBITDA.

This theme has become even more pronounced in 2026 year-to-date with the implementation of the cash flow optimization strategy last quarter to prioritize higher-margin sulfide production.

Having the ability to adjust our business, the sulfide-to-cathode split at Mantoverde gives us very valuable flexibility in how we respond to input cost pressures.

To protect margins and to reduce exposure to asset prices, we will continue to prioritize lower-cost sulfide production through projects and cash flow optimization strategies.

With that said, in 2027, we expect a similar level of copper cathode production to the 2026 forecast based on current elevated sulfuric acid prices.

We will retain the flexibility to increase the cathode production if asset prices decline or copper prices increase further. To further protect margins in 2027, we have entered into approximately 6,000 tonnes of copper collars to ensure margin on a portion of our cathode production.

Now I'll hand it over to Jim for the ops review.

Thanks, Raman. We are now on Slide 13. We will start with our Mantoverde operation. For Q3, total production yielded 20,806 tonnes of copper at a combined C1 cash cost of $1.77 per payable pound.

This represents a $0.20 per pound improvement in combined cash cost compared to Q2, a direct result of our cash flow optimization strategy to protect margins by prioritizing lower-cost sulfide production.

Plant throughput averaged a strong 33,000 tonnes per day for the quarter, 3% above our design capacity despite the 15-day planned shutdown in September for the MBO sulfide concentrator tie-in.

This included a record monthly average throughput of 40,386 tonnes per day in August.

For Q3, we are pleased to see strong recoveries at an average of 87.7%, while copper grades of 0.65% were slightly below expectations due to inclement weather in Chile, which occasionally caused safety concerns in the mine that meant we had to pull from lower-grade stockpiles.

Thankfully, given the location of Mantoverde at low elevation, the weather impacts were limited to a modest deferral of higher-grade material.

We expect grades to improve further at Mantoverde in the fourth quarter. In Q3, we continued to implement our cash flow optimization strategy at Mantoverde in response to elevated sulfuric acid prices by temporarily pausing heap leach production.

Heap leach production resumed in September once we progressed into oxide ore with lower calcium carbonate grades requiring significantly less acid.

Taken together, strong throughput and flexibility in our mine planning enabled Mantoverde to deliver Q3 combined unit cost about 20% below the low end of its cost guidance range.

Moving now to Slide 14. We are excited to announce that the sulfide concentrator tie-ins for the Mantoverde optimized project are complete.

During the planned shutdown period, over 1,000 contractors from over 40 different companies were on site to complete the remaining work on the concentrator tailings facility and desalination plant.

We are proud of the team at Mantoverde for safely and efficiently executing this high-return brownfield expansion project, which represents an important step in our Mantoverde Santo Domingo district growth strategy.

In October, we completed commissioning and began ramping up the new design throughput rate. We have hit several record throughputs so far, with our highest individual day over 53,000 tonnes.

So far in October, we are averaging about 30,000 tonnes per day, including the last 2 weeks at approximately 47,000 tonnes per day. We continue to work towards safely and efficiently sustaining these higher throughput rates, and we are proud of our teams for the great work they have done so far.

Turning to Slide 15. Mantos Blancos continued to deliver solid performance in Q3. Total sulfide and cathode production yielded 12,011 tonnes of copper at C1 cash costs of $3.96 per payable pound.

Throughput averaged above design rates at 21,000 tonnes per day in Q3 despite completing 3 days of planned maintenance during the quarter.

Our throughput performance has continued to improve following the debottlenecking project completed in Q3 of 2024. Sulfide copper grades of 0.66% were modestly impacted by the heavy rainfall in Chile, with higher grades expected in Q4.

Unit costs at Mantos Blancos were impacted by higher diesel and sulfuric acid prices, which added $0.22 and $0.29 per pound, respectively, in addition to higher maintenance spend.

We continue to work towards releasing a pre-feasibility study, including details of increased throughput from the concentrator plant and increased cathode production via historical tailings re-leaching expected in Q1 of 2027.

Moving to Pinto Valley on Slide 16, which produced 6,358 tonnes of copper at a C1 cash cost of $6.11 per payable pound during Q3.

In September, a tremendous amount of work was undertaken to directly target the main areas that have a constrained plant throughput throughout this year, including the primary crusher and the filter plant.

Over a 16-day shutdown period, the filter plant was rebuilt, and then the mill was restarted using mobile crushers at approximately 1/3 availability, while the primary crusher rebuild continued.

The commissioning of the primary crusher commenced on October 21, during which time additional required repairs were identified. These repairs are expected to be completed by November 2, at which point operations will restart.

In Q3, operating rates and the timeline of the planned maintenance were also impacted by an increased frequency of localized storms and strong winds in Arizona.

These severe weather events have continued into the fourth quarter. Unit costs at Pinto Valley this quarter were impacted by the lower production as well as higher maintenance spend and input cost pressures.

The work done in Q3 was a significant step forward in delivering improved performance at Pinto Valley. Our near-term goal continues to be increasing availability rates to 90%.

A coordinated effort between our asset management framework and people strategy has been focused on 4 key areas: people, mine, mill, and water.

In 2025, we hired a new General Manager and a new mine manager while improving mine movement by over 40%. This year, we have continued to replace key management positions, completed important work in the mill, and improved on-site water infrastructure.

Looking towards next year, we want to see what the plant can do following the work performed on the primary crusher and filter plant. Once we understand the new baseline, we will evaluate the best path forward to further increase throughput and recoveries.

In parallel with improving production in the near term, we continue to work towards unlocking the strategic value of Pinto Valley on a longer-term basis.

We remain committed to reviewing and evaluating numerous upside opportunities at Pinto Valley, both on a stand-alone basis and with a view to integrating district resources.

In Q3, Cozamin delivered another quarter of strong, consistent results as highlighted on Slide 17. The operation produced 6,044 tonnes of copper at a C1 cash cost of $1.64 per payable pound.

Cash costs year-to-date continue to be below the lower end of guidance, driven by higher silver byproduct prices. As Cashel mentioned, we announced the divestment of Cozamin during the third quarter.

I wanted to reiterate our thanks to the entire team at Cosmin for your contributions to Capstone over the past 20 years. We believe Cozamin will be well positioned under Luca's ownership.

The Luca team has the regional experience, focus, and commitment to invest in the mine's future for the long-term benefit of the workforce and surrounding communities.

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

Thanks, Jim. At Capstone, we remain focused on unlocking meaningful production growth while prioritizing disciplined capital allocation and sustainable free cash flow.

On Slide 19, we highlight some of the key catalysts delivered to date and those we look forward to executing over the next few quarters in pursuit of this goal.

This includes MV Optimize, which represents another milestone successfully delivered at our flagship Mantoverde mine.

With the sulfide construction tie-ins complete, we look forward to executing the next phase of our Mantoverde Santo Domingo district growth strategy, which aims to expand our world-class mining district in Chile, as seen on Slide 20.

During Q3, we continued to advance towards a sanctioning decision at Santo Domingo, which is now expected in Q1 2027. This included progressing detailed engineering towards our target of approximately 60% completion, while evaluating the optimal financing strategy for the project and advancing potential infrastructure opportunities.

Our financial position is in great shape, but we will continue to deleverage through internally generated cash flows prior to a sanctioning decision.

In the fourth quarter, we also expect to receive the upfront cash proceeds from the Cozamin divestment, which will further enhance our balance sheet.

Since the last feasibility study in 2024, we have made significant progress, both in terms of optimizing the project and maturing our company to ensure we are well positioned to enter a growth phase.

We have improved the economics of the project in several ways, including forming a joint venture with a buyback option and acquiring surrounding properties to unlock the district-scale potential.

Importantly, copper prices have steadily increased from an assumed price of $4.10 per pound in the study to spot prices of around $6.65 per pound today.

As a company, we have materially improved our financial position, streamlined our portfolio, and enhanced our existing operations to form a strong foundation for future growth.

While Santo Domingo is a key growth milestone in our pipeline, it is not our only opportunity to deliver incremental production.

As shown on Slide 21, our multilayered growth pipeline includes low-risk accretive opportunities to deliver value in the same top-tier mining jurisdictions as our existing operations.

In addition to Santo Domingo, this includes district-scale opportunities in Chile and Arizona and exploration upside across the portfolio.

Most importantly, our growth pipeline is well aligned with the copper outlook, reinforcing the importance of continuing to accelerate growth to deliver value.

We are committed to putting capital to work in order to sustain and optimize our assets, through investing in high-return growth projects and maintaining 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 flagship growth project in Santo Domingo, and district scale optionality, which provides a strong foundation for Capstone to deliver the copper the world needs now and into the future.

And with that, we are now ready to take questions.

[Operator Instructions]

Your first question comes from Dalton Baretto with Canaccord.

Congrats on some really great numbers here. I wanted to start by asking about the MVDPO ramp-up.

I think Jim said that over the last couple of weeks, it's been running steadily at 47,000 tonnes per day. And I'm just trying to understand what it's going to take to keep it going and any bottlenecks that you see between now and steady state?

Thanks, Dalton. One of the curiosities is, of course, that we entered the shutdown at more than what the previous nameplate was. It was 32,000 tonnes a day, and we were somewhere between 38,000 and 40,000.

So we were very hopeful that we could enter, or we could ramp this up very quickly to 45,000. If you remember the way the guidance was constructed, we thought we'd end the year at 450.

So I'm really pleased to see that the Montoverde team has been able to reach that number very early. But I'll leave it to Jim.

I do believe there are minor things we can do also that can maybe be part of the completion of the MVO project and might provide the opportunity for future upside. Jim, did you want to add something there?

Yes, sure. I can speak to that, Cashel. Thank you. So just talking about the concentrator, yes, a really successful ramp-up. It's good to see the team hitting the numbers and above the averages.

As Cashel mentioned, we took a bit of a conservative view. You're not quite sure you get into these expansions. And so in Q4 of this year, we're expecting to walk our way up to January. So as mentioned, yes, it's great to see us hitting those numbers.

So in Q4, we don't really have any maintenance planned, any major downs. We'll be getting into our regular maintenance cycle again through next year.

We'll be guiding to that, but we're basically designing that around the average design of a nominal 45,000 tonnes per day. So we've got great expectations for the year 2027 as far as throughput.

Right now, the focus of the team is consistency, and that consistency drives recovery. And so that's where the short-term focus is right now.

As Cashel alluded to, there's a second piece of the MBO project, which is the BioOx leaching project. This was something that was carried out kind of in parallel, but the focus is obviously on the concentrator.

We have just finished bidding the construction contracts for that portion of the expansion, and we'll be building that in the heap leach pads through the next couple of quarters.

We do expect to see first improved and increased leach production at the end of Q2 of next year. Again, we'll be guiding to that through the full-year budget, but it's that additional part of the MBO project that I don't think we talk about enough.

So concentrator, yes, in great shape and ready to go, looking forward to 2027, and we've got the BIOX project just around the corner that we'll be bringing in as well through the 2027 year.

And then maybe staying on this topic of consistency. At Pinto Valley, what gives you comfort that once you're through this primary crusher rebuild, filter plant rebuild, that you'll actually get to 90% availability?

Yes. So I'll pass it on to Jim in a second, but I look at it in a very simplistic way. When you debottleneck something, you drive the critical or the bottleneck to a different area in the plant.

And if we go back a couple of years on this journey of the asset management framework and the debottlenecking exercise we've had underway at Pinto Valley, it did start with the secondary and tertiary crushers, and then it went to our conveyances, and then we went to our mills and our thickeners, and we had to address some of the water infrastructure and some of our tailings.

And what really gets me, I guess, sort of excited, or what convinces me that there's light at the end of the tunnel, and we're on the cusp of sort of debottlenecking Pinto Valley, is if you look at the assets we addressed over this shutdown, they were at the extremities of the plant.

It was the primary crusher, so at the very start of the plant, and the copper filtration at the very end. And we've pushed the bottlenecks to the extremities.

And so that really gives me a lot of hope, or I guess, well, it gives me a lot of confidence that we will be able to now start marching towards that nameplate capacity and experience much less unplanned maintenance and therefore, have greater throughput and greater production of copper.

And so over the next year to 1.5 years, march our way towards its nameplate capacity in its current configuration, which we believe is closer to 56,000 tonnes a day. I don't know, Jim, did you want to add something to that?

Yes. Thanks, Cashel. I can just add a couple of points. I don't think it can be underestimated the amount of work that went on during the shutdown.

I mean, we talk a lot about the primary crusher, and we talk a lot about the filter because they're single-line pieces of equipment. If they shut down, they will take down the entire plant.

But really, the focus is there, but there was a massive amount of work that was going on through all other sections of the plant. We attacked the fine crushing plant, which is between the primary crusher and the grinding circuit.

We're into the grinding circuit. We went through the flotation circuit, through the tailings area, into the water distribution, and also something that even I was surprised about: through the electrical distribution, we were changing and rerunning major high-voltage distribution lines through the plant to eliminate problems.

So, with work going on the lines and the switchgear, adding isolation valves, really protecting ourselves against future downtime was the focus of the shutdown. And so, as I said, we were able to get a massive amount of work done.

The primary will be coming up basically new and rebuilt. We've been able to rebuild the filter plant, which protects the back end. And so we're really looking for a strong November and December with respect to throughputs and closing off the year in a good space with respect to guidance.

And then maybe just one last quick one for me. On Santo Domingo, you're marching your way towards 60% detailed engineering. Any sense for what the CapEx number is looking like?

Yes, it's a good question. I think we feel more or less under the same scope as what was published in September of 2024 in the technical report that outlines the cost in 2023 dollars.

I think we're really holding true to what the inflationary pressures would have been on that original scope, somewhere in the order of 20%. That original scope, keep in mind, contemplated that Capstone would build its own port for the iron ore concentrate.

And we remain very optimistic that we'll be able to utilize existing infrastructure within the region, and we continue to work a dual path: one, to self-perform the port; and two, to utilize the port that currently exists.

That would be a binary opportunity, I suppose, in the overall CapEx number. But we believe that we're holding true somewhere in the order of 20%. We look forward to completing this detailed engineering to the level where the major components and infrastructure are addressed.

And like we said, that will be concluded in the first quarter and really allow us to move on to FID.

Your next question comes from Orest Wowkodaw with Scotiabank.

Can I just clarify: with the Mantoverde optimized, did I hear you say that the mill averaged -- was it 40,000 tonnes a day in the last 2 weeks or 47,000 tonnes a day?

It was 47,000.

47, so above nameplate already. Is that continuing here? Are you seeing that on a regular basis? Or was there something maybe, say, softer ore or something that would have artificially inflated that?

No. I think that's an entire possibility. I will keep in mind; I would like to declare victory, and I'm very positive we have.

I would point out to average 45,000 at some point, you do 47,000 and at some point, maybe you do 43,000. But I would say all indications are that maybe that average is different.

What we need to do is continue running the plant to understand exactly what it is, but it's not an ore characterization that's enabling that. It's just the current installed capacity that enables it.

Okay. Is there any reason to think that you might not operate at something close to nameplate for the rest of this quarter? Or is there still some scheduled sort of stop-starts here?

No. Like it's up and running now. I think in the beginning, in the first 2 weeks, we might have had a day of minor interruption.

Maybe, Jim, you can give some more color, but I believe it's been operating quite consistently since we brought it up.

Yes, Cashel, I could just add a couple of points. Obviously, there were a lot of equipment change-outs during that process.

I mean, the main equipment was left in place, but all the motor drives, a lot of the pumping lines, the pump systems, controls, and a lot of electrical and instrumentation were worked through.

So we're still trying to work through that. We're doing it on the fly. Once we got the plant up and running, really, we're starting to pick up some things.

But with our maintenance team, we're actually able to stay ahead of them. So that's not to say we're not going to be at 100% run time for the next couple of months. That's not going to happen.

But I think if we're focused on the nameplate of 45 per day, we're definitely well positioned to be able to hold that and get to the end of the year and hit a strong 2027.

You mentioned also just trying to manage recoveries here. Should we expect a bit of a dip in recoveries here in Q4 overall just from the tie-in? Or do you think you can get back to that 90% level?

The recoveries are variable, dependent on where we're mining, anywhere between 87% and 91%. So we feel we're within that range. But Jim, if you want to give some more detail on that?

Yes, sure. On average, I mean, we are expecting, as I said, when we put this together into our budget, when we put it together in a recent view on the forecast, we still assume that we're going to be working through some things.

So even though we're a bit bullish on the throughput, I think that what we put into our outlook until the end of the year was probably about 88% to 90% recovery.

And that's going to take consistency and retuning the control loops around the flotation circuit at the higher flow rates. So yes, there's some work to do there. It will continue.

But again, high 80s, that's a pretty good positioning for Merdi on recoveries.

No, that's fantastic. And just a final one, if I could. Just the decision to move the FID on Santo Domingo to Q1 from, I believe you were telegraphing previously, Q4 of this year.

Is that intentional in the sense that you want to get the engineering to a certain level, perhaps get a third-party port agreement? Or is there something that's actually driving the, I guess, the pushback in that decision?

Yes, Orest, really, it's just the way things conspire to the end of the year; if something slips a couple of weeks, there's not much value in doing it over the Christmas period.

And so we know that there are certain metrics with respect to engineering.

There are certain processes underway with respect to bids on our desalination, bids on our port construction, and concurrent evaluation of utilization of existing infrastructure that have all just progressed, matured, but are just taking a little more time.

And we feel that the prudent thing to do is to responsibly work through those items such that we have a very robust estimate and a very robust project to announce when we bring it to the Board for FID.

The next question comes from Marcio Farid with Goldman Sachs.

Is there any reason for the marginal delay in terms of potential FID for Santo Domino to early '27 versus I think expectations were for this year? Is there any specific in terms of -- is it the engineering that is running lower?

Or is it just the final details around funding and potential agreement with the parts partner as well?

Yes. Again, very similar to the response I gave to Orest. It's the maturation of the engineering. It's the maturation of the bidding process on the desalination plant, the bidding process on the port, and also the maturation of discussions to utilize existing infrastructure in the district.

And the way those are all progressing is really well, and there are no problems. It's just that things take a little more time. And we feel that the prudent approach is to finalize those processes before we're ready to bring the project to our Board for FID.

So we establish certain standards we would maintain. And that's why this has slipped a month or 2 into Q1, so that we can reach those standards and be able to give a very robust estimate and a very robust project to our Board to approve for FID.

Just a quick one on Pinto Valley. Shutdown was a little bit longer than expected. I think you are still in the commissioning phase of the crusher there.

When can we expect the mine to be running at full capacity and potentially some operational stability and improved costs as well?

Yes. Basically, Jim has told me he'll have this running very shortly. So I think he said November 2. So that's just a few days away. I'm looking forward to that.

But maybe Jim can talk briefly about why this took a little bit longer. I know we had some surprises in some inspections.

And so we took the prudent approach to be able to repair those things such that when we do get running, we can run sustainably and reduce our unplanned maintenance events. So Jim, do you want to give a little more color on that?

Yes. Sure, Cashel. I mean, in perspective, this crusher rebuild is just not like a top-end rebuild.

We took this right down to concrete and started at the base. So there was a lot of work going on with respect to getting back to original alignments, original design, and having that all stacked up so it worked correctly. We went through one sequence. We started up.

We weren't happy. We had some fit issues around the shaft and around one of the eccentric bushings. So we're back into that. We're taking care of that right now.

We'll be recommissioning that primary crusher starting most likely Sunday night, and then we'll be bringing the circuit back up very quickly next week.

Your next question comes from Steven Hansen with Macquire.

I'm going to ask one on Santo Domingo after this one because you've answered a lot on it already. But just on asset pricing, could you just give us an update on how you're seeing the market into '27?

I understand some of the contracting happens around LME Week. So post that, it would be good to get your thoughts on how that's looking. And maybe any potential mitigants you're looking at.

to keep costs down and under control. I think Jim mentioned the BIOX project, which I assume is one of them, but just some color around that would be great.

Yes. We have a couple of projects.

We have the MVO BIOX project. And earlier this year, we sanctioned a $45 million project for our pyrite augmentation, whereby we put pyrite in the agglomeration bins, and we'll be able to reduce and offset our costs, I think, conservatively by 20% of the volume we typically use in the dynamic heap leach.

But maybe what we'll do is we'll give some color. Maybe, Raman, you can give some color on the asset cost and price, and recognize that our pyrite augmentation is for the production year of 2028.

And maybe, Peter, after you talk about diesel, you can talk about that and our BIOX program and the benefits we'll get from both of those.

Thanks, Cashel. Yes, just from a sulfuric acid market price, currently, there's not a lot being bought on the spot market.

But in Chile, the current published price is around $360 a tonne. So that's off the highs that you saw earlier this year at like $485 a ton. And November is the annual cycle where the sulfuric acid purchasers and the sellers or traders will get together and lock in an annual fixed price for a portion if you wanted to commit to a price for next year.

Otherwise, you let it ride spot. CRU forecast for next year is roughly about $275 a tonne, so lower than spot. And we believe it should come in under a 3 handle as well, in the $250 to $300 a tonne range for next year for fixed contracts that we could put in place towards the end of this year.

With that, I'll give it to Peter.

Yes. Thanks, Raman. Yes, there are 2 major projects on course at Mantoverde that will result in significantly reduced acid consumption.

The first one is the BIOX conversion. The existing heap leach has been a conventional acid heap leach. We're converting it to a biooxidated heap leach by adding a bacterial augmentation system where we grow bacteria and add them to the ore before it goes on the heap leach, together with an aeration system underneath the pad to blow air into it and feed the bugs.

They react with the copper sulfide in the ore and, in the process, create some acid byproducts as part of the chemical process undergone. It's not too much.

I think it's about 5 kilograms per tonne, or maybe about 5% to 10% of the heap leach consumption in that pile.

But when we add the pyrite augmentation, which has been approved recently and detailed engineering and equipment purchases are progressing, the pyrite adds a lot more sulfur that can be converted to the asset, and that's another about 15 kilos per tonne roughly.

So when you add them 2 together, you're in the range of about 20% to 25% acid reduction in the heap leach. The pyrite project will be online starting early 2028, and the BIOX project will be online starting roughly at the end of Q1, early Q2 2027.

Those are the 2 projects we've got.

I just wanted to go back to Santo Domingo, Kash. Can you give us any color on some of the outstanding issues that are coming up when you're having these shared infrastructure discussions?

And it might be worthwhile touching on the options. I mean, I guess you're talking about port contracting. Just what you'll do if these discussions with potential partners don't progress as you'd hoped?

Yes. Look, on a long-term analysis, whether we believe we do port sharing of infrastructure or we self-perform, we believe they're more or less NAV neutral.

So there are other benefits to owning a port in the region. We're building what we believe is a Tier 1 district. And there's the opportunity to move other products through the port, principally our copper concentrate or some of our consumables received in the port in the future, maybe like acid.

So there are operational benefits to having our own port. Conversely, when we look at sharing existing infrastructure, you remove that CapEx requirement from the project construction period, and you also remove a bit of execution risk.

So to us, it's a wash, and it really comes down to those economic evaluations. And you need to know in detail what both costs and benefits are. And that's part of this detailed engineering we're pursuing, whether it's on the port, the desal plant, the plant itself; we need to understand with certainty, and we feel that we need to get our detailed engineering to a certain standard such that we're making the right decision.

For the sake of adhering to the timeline, we previously disclosed that we thought we'd be ready for FID at the end of the year. We're happy to wait another month or 2 to ensure we have the exact right answer. What I would say is those processes are maturing really well.

There are no problems with them. We're just waiting for the detail around those answers such that we can make the right decision for our shareholders and for the right decision for the long-term viability of the district.

Your next question comes from Craig Hutchison with TD Cowen.

Most of my questions have been answered, but just one more on Santo Domingo. You guys are obviously looking at incremental copper production optionality.

I was just curious whether we could get an update on exploration or if there's a plan to provide some of the upside optionality on the copper side before you guys make a final investment decision.

Yes. I don't believe that exploration is a requisite for our FID process. However, exploration is important to show the viability of the district.

We've been very successful in adding on prospective land with historical mineral resources to a few of the properties we've added in Nami, San Pietro, and Sierra Norte.

We've conducted quite a bit of exploration, some at Santo Domingo, some at Sierra Norte, and some at Mantoverde over the last number of months or the balance of this year.

So I think we will be disclosing a narrative on that exploration and some of the results of that exploration between now and Christmas. So expect that to come out.

And that will speak to the prospectivity and what we're seeing and the direction to which the district is going for future optionality and future opportunity that will only enhance in the future the current or the FID metrics that will come out within the first quarter for the sanctioning of Santo Domingo.

So it will be additive to it, but won't be inclusive of it and is not required for us. We don't need, for example, success in that exploration to move ahead with it.

But what I would say is it's extremely interesting, and we'll be more than happy to be able to disclose that between now and the end of the year.

Your next question comes from Ricardo Ma with Monta.

I have 2. The first one is on capital stripping. So you guys revised up the CapEx guidance for the year, mainly due to higher diesel and also changes in mine sequence at Mantoverde.

So I wonder if you guys could give us some color on how that should evolve in the coming year? Do you think we may see a structural change or step-up in CapEx?

I know it depends on diesel, but if you could quantify the effect of diesel on that, it would be great.

Okay. Raman, would you mind commenting on that, please?

Yes. So the increase in the capital guidance was half due to diesel costs for this year. And then the other was, as you know, we talked about the oxide business and shifting more to sulfide production.

So that required some of the areas where we would have done oxide ore mining only for oxide purposes. We've shifted now to those trucks to the sulfide business.

So it means we're stripping more into the mine plan. So it's changed the mine plan. So it's just a ratio between waste to ore has increased, which means you capitalize a bit more to that figure. So that's kind of the change for the $40 million that you talked about.

I don't think it's our cost. It depends on your view on diesel costs going forward. My plan changes are separate from, you could say, stripping costs being higher for longer.

So I think if you look at the oil markets currently, they're calling for a return of WTI oil per barrel back to like $80 or less. So I wouldn't say you should be caring for these higher stripping costs related to diesel onwards, but it depends on your outlook on the diesel on what's going on.

And the next question on Santo Domingo. Iron ore is a meaningful part of the project's revenue. And recently, we saw a lot of volatility, not only in the price, but also in freight.

So correct me if I'm wrong, but I think you don't have an offtake for the iron ore concentrate. And I wonder if you guys are actively engaging with Orion or any of its affiliates to start out once the project is ready, who will buy the iron ore?

Maybe if you could give us a bit of color on the terms that you guys are discussing, because freight could be very punitive. So it would be great to hear from you.

Yes, I'll start. I think, like the previous answers with respect to when we're ready for FID, all these types of negotiations are part and parcel of that decision process. And so we are in discussions with various groups to be able to market the products out of Santo Domingo, including the iron ore concentrate.

And so because we're in these discussions and these processes, I think a lot of that will reveal itself with FID. And some of it, you can imagine, is binary with respect to the scope we decide to choose, whether we're using existing infrastructure from an existing iron ore port or we're building our own; you can see that in that decision tree, we would choose very different paths.

And those different paths have different structures to them. I don't know, Raman, did you want to comment any more on that?

Yes. I'd say, look, on the iron ore offtake, there's a very active market, as you can imagine, for that offtake.

So I think it will be highly sought after. And really, our focus is on what product we'll produce and targeting the higher-grade iron ore products so we can demand some of those premiums that are associated with, like, the 65% iron ore is our focus.

And I think, look, freight is elevated currently, $40 a ton, but we're talking about the project now, from like by the time we build it 3, 4 years out, that's the view on freight that matters a bit more in the tech report for us than the elevated prices that we're seeing in the market today.

Your next question comes from Thiago Ojea with Citi.

My first question is on Mantoverde. When we look from the recovery perspective, you really improved a lot from the third quarter; 2 years ago, we were at 68.

Now with the optimization plan, you are reaching close to 88. I think the design range is now 87% to 91%. Given that the flow sheet is 45, you're running even a little bit over this.

Maybe I would like to know if there is any additional flotation optimization that's still to come, or if you can even consider a higher design range? And on top of that, of course, is there any limitation on your environmental license to run the plant above 45,000?

You mentioned in the release that you reached 53 at a certain point. Could it be like 45 more as a floor than anything? That's the first question.

Yes. So, with respect to what we're allowed, I believe we could average as much as 55,000 tonnes a day per the permit that exists at Mantoverde, optimized.

The plant, it was designed to be able to deliver with the characteristics, 45,000 tonnes a day. Obviously, we're delighted that we're exceeding that at the moment.

The other thing I'll point out is that whenever you make a modification to a circuit, especially when it's modifying throughput, the first thing you optimize is the throughput and then you optimize after you have steady state, you optimize the recovery.

My understanding is we're range-bound between 87 and 91. There probably are items that we can do that are around the edges and optimization and flotation.

Maybe, Peter, do you want to talk to that particular question around recoveries?

Yes, sure. So one of the ways we got the tonnage up to above 45,000 was by coarsening the grind slightly from about 180 microns to 212 microns; it sounds like a large change in the grind size.

But from the recovery perspective, that's only about a 0.9% drop in the average weighted copper recovery for all of our ore types. Now there are a few ore types that behave a little bit differently.

But for the most part, we thought it was a good trade to give up a little less than 1% recovery in exchange for a 40% increase in throughput. We also redesigned the cleaner flow sheet.

So we have a simpler cleaner flow sheet right now with the existing equipment. We didn't add any new equipment, but we reduced one cleaning stage and extended the residence time in the scavengers, which is going to make it a little bit easier for the operators to operate the circuit.

That said, it's only been 2 weeks in. And in 2 weeks, it's difficult for Nielsen's team, mill management, and the operators to actually go through and tune all the control loops and make sure the pumps are running perfectly.

So I wouldn't be surprised if we start to see a little bit of upset, but I don't think we're going to see much of a step change in the overall recovery until we get the pyrite scavenging cells in as part of the pyrite augmentation process.

That will add another stage of copper scavenging to the back end of the plant, copper that will eventually come out in the form of copper cathode. So that's going to be a key step change in the performance of the integrated oxide sulfide plant.

So that will be the next thing to look for. And like I said, that's early 2028; we're expecting that.

I think, piggybacking on this, Peter, the augmentation project has an NPV of, I think, $200 million at the current price of $350 million. This includes the cobalt that you are getting on the project, or is this without the cobalt?

I can't verify that number. I'm not sure where that came from, but I don't think we would have included cobalt in it because the cobalt requires a separate ion exchange or hydrometallurgical recovery step to recover it.

So once that pyrite, which contains the cobalt, starts leaching and releasing the cobalt, the cobalt grades will build in the circulating leach solutions.

And then after 6 months or a year, we'll be able to take a small bleed stream out and recover that through an ion exchange circuit, and that would be late 2028 when that happens. We're doing the engineering for that right now, and it should be at a PFS stage by the end of the year.

Yes. Those metrics don't include the beneficiation of cobalt.

And so we'll do that next year. Peter's team is working hard on getting that to a feasibility stage such that we can build on that refinery to produce that cobalt.

And my second question is on the asset contracts. You mentioned, I think, in August that you had 80% of the asset contract at $190 per ton for the remainder of the year.

Is this still the case because I think Mantos Blancos recorded higher than that? And how much of 2027, if any, asset contract is already priced?

Yes. At Mantos Blancos, we have some contracts that are tied to -- like we've committed- but they're committed to publication prices.

So they're tied to the annual publication price that comes out in Chile monthly. So that's why Blancos technically has the supply contract, but the price is floating, let's call it.

And when we talk about the fixed-price contracts, we were referring more to Mantoverde's asset purchase commitments.

And for 2027, have you already settled any contract or not yet?

No. Like I was mentioning earlier, November is the key month where you can decide how much you want to fix versus kind of float.

We have a pre-existing contract at Mantos Blancos for about 60,000 tons for next year. And then we have about another 19,000 for Mantoverde. So that's like 79,000, and we need roughly about 400,000 tons for next year.

So we'll be entering into those discussions here in November and December.

Your next question comes from Anita Soni with CIBC.

I just wanted to go through a little bit on Pinto Valley. I think there's some pretty good disclosure in terms of the throughput. But I just wanted to clarify.

So when you're talking about running at 1/3 of the capacity, I guess, up until November 2, is that at the run rate of like 40,000 tonnes per day, I guess, which is kind of the higher number that we've seen in the last few years? Or is that more like your 50,000 tonnes per day rate?

Maybe, Raman, you want to address what the actual throughput is. But what I will say is, when we say 1/3 of the capacity, it's not of the previous run rate; it's the total. So 1/3 of the 60,000 or 1/3 of the 56,000 tonnes a day, Raman?

Yes. And that was during the third, referring to when we had the mobile crushers on site in that disclosure in the MD&A, Anita.

And then as we started commissioning the primary crusher, obviously, we found a few more things to repair. So currently, we'll be restarting full operations on Monday there.

So when we're looking at these 100% throughput rates, it should be more along the lines of 50,000 tonnes per day?

Yes, there will be a ramp-up period for us to get to 50,000. We're hoping, based on the work we've done, that it's achievable that we'll exit the year at 500 and then, during next year, move it up towards its nameplate capacity.

Okay. And then just going to Mantoverde. In terms of the dump leach and heap leach operations, what you delivered in terms of tonnage and grades, is that a fair run rate going into Q4 and into next year at this stage?

Yes. If you look at the forecast run rate that we're doing, this is about 20,000 to 22,000 tons of code for the combined mines; that's what we've guided as an indicator for next year.

And then just lastly, on the pyrite recovery plant. When do you think you'll start spending on that? It's been approved, right? It's been an hour with this disclosure before we have to start asking questions.

I apologize if I can't remember, but I think that said that it's been approved and you'll start ramping that up. Can you give me the CapEx spend and when that will be?

Most of it will be next year. There's very little this year. There'll be some ordering of equipment and long lead items and some engineering. It was a $45 million project. There'll probably be a couple of million this year, but the bulk of the spend will be next year.

And then I guess one last question, if I may. The grades at Mantoverde in the fourth quarter at the sulfide plant, can you just give us an idea? I think originally, it was supposed to be ticking up into some higher grades going into 2027.

Is that still the case? Are you still expecting a quarter-over-quarter increase in grade and then also higher grades in 2027?

Yes.

There are no further questions at this time. I will now turn the call over to Cashel for closing remarks.

Thank you, operator. With a major maintenance quarter behind us and multiple key catalysts on the horizon, Capstone is well positioned as we look towards Q4 and 2027.

We look forward to updating you in early February with our Capital Markets Day, followed by 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.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Good afternoon, and welcome to Capstone Copper's Second Quarter 2026 Results Conference Call. [Operator Instructions]. 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.

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 logging 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, James Whittaker; our SVP and Chief Financial Officer, Ramanpreet Randhawa; and our SVP, Risk, ESG and our General Counsel, Wendy 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, who 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'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 Americas, the Americas, Europe, Australia and around the globe. Today, we are pleased to present our second quarter 2026 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 delivered exactly that, as highlighted on Slide 5.

Our operations delivered consolidated copper production of 51,800 tonnes at consolidated C1 cash costs of $2.82 per pound in Q2. 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 costs.

Near-term growth is driven by our MV-O 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 continue 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 three-year collective bargaining agreements with all unions, providing important stability as we continue to operate and advance growth in Chile.

Since 2022, our company has matured, and we have delivered improved output from a diversified base of four 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'll pass over to Raman for our financial results.

Thank you, Cashel. We are now on Slide 6. In Q2, we recorded copper production of 51,800 tonnes, marking improved output over the previous quarter. LME copper prices averaged $6.05 per pound in the quarter, up 4% compared to $5.83 per pound in Q1, and we realized a higher copper price of $6.22 per pound.

After subtracting C1 cash cost of $2.82 per pound, we delivered strong gross margins of $3.40 per pound or 55% in Q2 despite global inflationary pressures. Record adjusted EBITDA of $354 million increased 8% quarter-over-quarter and 64% 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. Another quarter of record financial results builds on success of Q1 and forms a strong foundation for H2 2026. Next, as highlighted on Slide 7, we finished Q2 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.

This is down significantly from the peak during construction of the Mantoverde Development Project. The improvements made to net debt, leverage, liquidity since completing MVDP 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 Optimized coming online.

On the far right, we have profiled our future growth with expected EBITDA close to $3 billion with both MV optimized and Santo Domingo run rate production. We have a strong platform to deliver peer-leading growth of approximately 70% compared to our 2025 production 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, Mantos Blancos performing well following project ramp-ups with both on track towards full year guidance. These two assets combined have generated approximately 70% consolidated EBITDA year-to-date.

As a testament to the benefits of the diversified portfolio of assets, Cozamin is tracking towards the upper end of its site level production guidance range, partially balancing Al 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 maximize cash flow amidst the current inflationary environment. More importantly, copper markets have remained strong. Our operating locations and robust supply chains have ensured continued supply security. So to mitigate diesel volatility in the second half, we took advantage of a temporarily lower price to hedge 40% of the Chilean exposure at $0.82 per liter versus current spot of approximately $0.93 per liter and 50% of our U.S. 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 the sensitivities on the slide. We view our Cathode 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 site flexibility to temporarily reduce higher calcium carbonate ore feed to the Mantoverde heap leach, which will lower our cathode production by approximately 5,000 tonnes and eliminate the requirement to purchase approximately 200,000 tonnes 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 5,000 tonnes and is thus net neutral to consolidated copper production and a plus to optimized cash flow. The rest of the cathode business, including the dump leaches is unchanged and continues to generate cash.

For the remainder of the year, approximately 80% of our asset consumption is fixed at a price of approximately $1.90 per tonne compared to spot prices around $4.50 to $4.70 per tonne.

The Pyrite project will improve the economics of our oxide business going forward to reduce acid requirements and provide incremental copper production. Given first half cost performance and our expectations for a higher proportion of lower-cost sulfide production in the second half, we are reaffirming our 2026 cost guidance.

And with that, I'll hand it over to Jim for the operations.

Thanks, Raman. We are now on Slide 12. We will start with our Mantoverde operation. For Q2, total production yielded 22,485 tonnes of copper at a record low combined C1 cash cost of $1.97 per payable pound. Plant throughput averaged a record 36,300 tonnes per day for the quarter, 13% above our design capacity despite completing five 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, 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 stockpile 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 heap leach production at Mantoverde. 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 heap leaching at that point, albeit at lower levels than previously 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 costs 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 five-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 regrind tanks as well as the complete replacement of key pumps and water systems. The remaining project tie-ins will be completed during an extended 15-day maintenance period in September, followed by a ramp-up period in Q4.

Our expectations around capital costs and timelines are unchanged, with the increased sulfide throughput capacity of approximately 45,000 tonnes per day expected to be sustained starting in early 2027.

Next on Slide 14, we are excited to highlight the Mantoverde Pyrite 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 requirements by a material 20% while increasing heap leach copper production by approximately 3,500 tonnes per year. At an assumed sulfuric acid price of $200 to $450 per tonne, 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 tonne. However, this increases significantly to approximately $350 million at spot prices. The project boasts a very high NPV to CapEx ratio of approximately 4x at longer-term prices and 7x 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 costs by proxy of increased production but also reduce absolute costs.

Turning to Slide 15. Mantos Blancos continued to deliver on plan in Q2. Total sulfide and cathode production yielded 12,483 tonnes of copper at C1 cash costs of $3.93 per payable pound. Throughput averaged above design rates at 20,900 tonnes per day in Q2. Sulfide copper grades of 0.66% were in line with mine sequencing with the lowest grades of the year expected in Q2 and Q3. 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 pre-feasibility study by the end of the year, including details of the increased throughput from the concentrator plant and increasing cathode production via historical tailings releaching.

Moving to Pinto Valley on Slide 16, which produced 10,047 tonnes of copper at C1 cash cost of $4.17 per payable pound during Q2. Pinto Valley delivered incremental throughput improvements over Q1, and we see a clear path to future gains. The planned 10-day shutdown in Q3 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, as shown on Slide 17. The operation produced 5,745 tonnes of copper at C1 cash cost of $1.52 per payable pound. Cash costs in Q2 came in towards the low end of the guidance range, driven by higher silver byproducts. And with that, I'd like to pass it to Wendy.

Thank you, Jim. In Q2, we released our 2025 sustainability report, detailing the meaningful progress we made on our sustainable development strategy as highlighted on Slide 18. We were particularly proud of the improvements to safety, driven by the implementation of a new HSE roadmap, including a 22% reduction in recordable injuries year after year. We are also tracking well towards our GISTM implementation across all tailings storage facilities by 2028, achieving 80% conformance in 2025 compared to 48% 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 8,000 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, the stability was reinforced this quarter with new three-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 three 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.

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 detailed engineering to approximately 60% completion. We are evaluating the optimal financing strategy for the project, and we are advancing potential infrastructure opportunities.

Our balance sheet is already in great shape, but we will continue deleveraging through internally generated cash flows prior to a sanctioning decision. Santo Domingo is transformational growth project that will deliver material improvements to our consolidated production and cost profile. 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, established 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 opportunity to deliver value by upgrading the plant to sustain sulfide throughput of 45,000 tonnes per day at a low capital intensity.

As MV-O 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 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 consistent, 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're ready to take some questions.

[Operator Instructions] Your first question comes from Orest Wowkodaw of Scotiabank.

The question around this pyrite project at Mantoverde. I mean, looking at the economics here, it seems like it's a no-brainer. I'm just curious on what the plan is for 2027, given that this project won't be online until early '28. Like, would you think about curtailing if asset pricing stays elevated, should we expect you to curtail cathode, at least the heap leaching through '27 until this is ready? Or how are you thinking about that transition period?

Orest, I can probably take that one 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 mix pit. So you're mining through them to get to the sulfide. So that's kind of like incremental oxide feed. And then basically, what we will be running the cathode business when you look into 2027 because that's a kind of a cutoff grade question that you triangulate with the calcium carbonate. So a lot of our material is actually low calcium carbonate. And if you're mining through it anyways, once we know the price of acid and start looking at that later in the year and the copper price, we can do a balancing act to make sure that's profitable.

But then what this has kind of proven is we have that flexibility. If we were in an oxide-only pit and it had a higher calcium carbonate, there's no point in 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 into oxide-only pit.

Okay. Is there any opportunities to reduce acid consumption at Mantos Blancos?

I'll give that to Peter.

Yes. We're evaluating it right now, Orest. The Mantos Blancos doesn't have a heap leach. It's a run-of-mine leach that generally consumes less acid anyway, but we're in the process of optimizing that as well. And another thing that is currently in, we're workshopping is asset swaps, for example, some assets has been repurchased. So we're looking at different opportunities.

Yes. And just to add to that, Orest, there is that future opportunity of leaching at Mantos Blancos that of course tails from the ripios. And in that process, we'll evaluate any of these initiatives we have. But keep in mind, that's likely a chloride leach. So it requires some testing to see if there's some compatibility or not.

Fair enough. Just finally, if I can. What kind of timing do you think we can expect for an exploration update at Mantoverde?

Yes. I think what it is, is we've concentrated a lot of the drilling to date, I guess, on the near pit inferred. So I think we've sort of said like the middle of next year is when we consolidate those mine plans. There'll probably be some conversion of inferred indicated and therefore, we'll evaluate its inclusion in the life of mine process. Outside of that, we've got a few drills running up to the north. And when we sort of consolidate a bunch of results, we'll put it out. We'll put those out. So maybe not necessarily the next quarter, but the quarter after that, we'll probably have enough meat on the bone to be able to sort of guide what our exploration plans for the region are and what the results are.

Your next question comes from Fahad Tariq of Jefferies.

At Mantoverde, is there an opportunity to displace more than 5,000 tonnes from the oxide to the sulfides? Or is it constrained by the 15-day tie-in in the third quarter?

No, not really. I mean that sort of movement is sort of built in with the mine. And we're being somewhat what I would call conservative on what the throughput capabilities are. I mean we've now disclosed what the production rates were, obviously, in June, and you're seeing similar performance through July. We're optimistic that perhaps the ramp-up will go faster than what we've built into our guidance, number one. And therefore, it's really up to the cadence of the mill to be able to accept more tonnage than necessarily the 45,000 tonnes a day and in a faster ramp-up.

Obviously, internally, we're very optimistic that, that is indeed possible. And that's where we would see an uptick beyond that 5,000 replacement of sulfide over cathode and the opportunity therein. And we've 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.

Got it. Okay. And then maybe just switching to Santo Domingo. Any update that you can provide on any potential discussions on the 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 time line is different.

Yes. 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, 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're sort of working towards what we call 60% detailed engineering, and it's sort of at that time, we can provide that certainty of CapEx for the project going ahead.

Your next question comes from George Eadie of UBS Financial.

Nice update here. Can I ask again on the 200,000 tonne reduction in asset at Mantoverde. What are the trade-offs there operationally to reduce this, I guess? And does it have any impact specifically on recovery, too?

No, it doesn't. It's 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's 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 are just simply assigned to the capacity that we know exists within the sulfide plant. And therefore, we're just pulling those tonnes from there.

The benefit, of course, in the short term is those tonnes have a higher margin and therefore, lower the cost overall. But in the long term, we still remain 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'd add the other step change in the future. We mentioned it in the phone call where we're working on a feasibility study to add another byproduct credit to further enhance the economics of the oxide material to produce cathode, which is to produce a salable form of cobalt. And so, we're excited about that. And so next year, that will be another increment of cost reduction in our C1 to produce the copper.

Okay. That's clear. And then just back to Mantoverde Optimized, again, like just the comments early '27 and the sort of commentary before, could we realistically see that 45,000 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've done the tie-in as well this quarter?

Yes. Look, we're on time. The project is working as designed. So again, when we stated our guidance at the start of the year, we were always a little conservative in the ramp-up rate. If I'm to take the current performance of the plant as what we experienced in June and seems to be what we experienced in July, I'd be now more positive that we'll be able to ramp it up before the end of the year, to 45,000 tonnes a day, but we're not going to restate our guidance or that sort of contingency. That's sort of where we're sort of sitting. And what we put built into that guidance is the midpoint for Mantoverde itself was a throughput rate of 36,000 tonnes a day.

And in June, as we disclosed, we were at 40,000 tonnes a day. So, we're very close to the nameplate already, which gives us encouragement that there might be possibility in the future to exceed what we've designed it for, the 45,000 tonnes a day. But the proof is in the pudding. We've got to run it through to see what it will do.

Your next question comes from Marcio Farid of Goldman Sachs.

Congrats on the quarter, definitely a good operational setup there. I want to spend some time on the Mantoverde. Clearly, running above nameplate capacity for the full quarter and with selective trade, I think, in June at above 40,000 tonnes per day, it's quite remarkable. Just trying to understand what sort of level of throughput you think you can maintain going into the second half of the year? And if you look at the 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 sort of maintained the expectation for grade for the year as well. Just wondering if there is a scenario here, we see stronger throughput combined with stronger grades into the second half of the year, which could bode very well for overall output as well.

Yes, you're exactly right, actually on what you explained. The project is going really, really well. We budgeted $176 million. We had about $142 million committed. So, the project burn rate is going very well. We're 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 plant very quickly.

As Cashel mentioned, we have all the indications that we'll be able to push that as much as possible. I think in our estimations, we're pointing around 41,000 average for the first quarter, but we're going to be trying to hit that as soon as possible. We are planning an increase in grade in the fourth quarter. We'll be going from 0.7 in Q3 up to 0.79 in Q4. That's our current plan. And recovery should basically be in line with plan. So yes, you're right. And yes, we are very optimistic about Q4 this year.

Great. And just one on Santo Domingo. How should we think about potential hedging before CapEx is committed? Is there any plan to do some sort of hedging both on either byproducts on the cost side or on copper per se, to reduce risks going into the CapEx plan?

Yes. Good question. So I mean, as we get closer to FID, we can look at hedging. But when you look at our balance sheet, and we're running multiple different scenarios. But at lower copper price environment, it still shows our balance sheet is in a strong spot. And as you can tell, we're delevering our target was 1x and we're at 0.5x and got another few quarters here to go underneath our belt. So we'll be in a very strong spot. So I think it gives us the ability to make that decision if we like. But where copper is trading right now, we're very comfortable with the balance sheet and then we'll consider at that time if we want to layer in some protection.

Sounds good. Would Cozamin or is Cozamin part of that kind of portfolio or balance sheet protection as well?

Look, that's kind of trading, like if you look at it, that just kind of reduces your equity intake. So it's not a requirement for funding Santo Domingo.

Your next question comes from Rafael Barcellos of Bradesco BBI Company.

I have just one 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's any sort of strategic optionalities in both Pinto Valley and Cozamin.

Yes. Look, we've been working on the asset integrity and plant availability and utilization at Pinto Valley for some time now. We had identified last year some critical elements that required upgrading 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 want to take the plant down once. So, we deferred it to September. And unfortunately, there was some production interruptions unplanned.

But what I'd say is we've done a tremendous amount of work on inspection and evaluation of the integrity of the asset. We're going to address a lot of the deficiencies in the 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'll be up, and we'll be closer to 50,000 tonnes a day beyond that correction or that shutdown.

That's sort of where we're going to take off from. And then we believe over the next year, we'll be able to get it up to its nameplate. And its nameplate is probably in the mid-50s. And so that's our goal there. So, we're very encouraged. It's sort of, there's light at the end of the tunnel. We really wished we had been able to address these issues in May, but we're going to address them in September, and we're looking forward to continuing with it. What I'll say about a strategic process on Cozamin versus Pinto Valley. Pinto Valley is a 1 billion tonne deposit at over 0.3% copper. And it actually comes over in the life of mine over the next five to six 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 tonnes of copper year-over-year and driving down the unit cost with it. So we think it's still very core to Capstone.

Your next question comes from Daniel Morgan of Barrenjoey.

Just on, at Mantoverde, I mean, it's pleasing to see that that's 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 the mining rates or any other constraints that might come to mind?

I suppose it depends how high it goes, but we feel, on average, I believe our allowance is up to 55,000 tonnes a day under the permit. So that would be an ultimate constraint. The other constraints are simply mine planning sequencing and how much material movement there is. We believe that there is opportunity to exceed the 45,000 tonnes a day with the current assets we utilize or the current mine fleet to keep up with it. Certainly, there's 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 in the future. And then we could decide incrementally to present those in if we needed to reduce truck count. But sort of as you point out, Dan, that would be a terrific problem to work on. So we look forward to that.

Yes. And maybe just obviously, acid, I mean, the question, I guess, twofold just about the market itself and then what you're doing about it. So what is happening to the acid market in Chile right now is obviously, Middle East events has impacted global supply. But is there also a feeling that other miners are taking actions like you to reduce acid use and maybe we're seeing some impact on production in the industry? And then part 2, how do you think about asset purchases for '27?

Yes. Good question. I mean, yes, so Chile is subject to global pricing, as you know. So we kind of quoted you a spot price like $450, $470 a tonne. And to be honest, not a lot of people are buying at those prices, just like us, have we reduced 200,000 tons of exposure. And so you are seeing some of those actions taken, which are reducing some of that cathode production that would have been purchasing. And the flip side of that is that that's a bonus to copper price, right?

So it's lower cathode or lower asset purchases means holding copper prices stronger and supports it. 2027, it's I think there's hopefully a pathway here to resolution towards the end of the year. And really, asset prices does not really get set in this market until later in the year, really November, December. And you don't even have to fix it and you can kind of keep negotiated into the new year. So I think it will be a moving target. I'm hoping for a lot of that forecast are calling for the prices to ease as we see some resolution here.

Your next question comes from Anita Soni of CIBC.

I was just trying to figure out, I'm really just kind of know exactly what's happening with the cathodes at Mantoverde. So if I could get a little bit more color. Is the idea that you're going to stop producing cathodes at this point or just play it by year? I think Orest was asking a little bit about this. Like what does 2027 look like in terms of your cathode output? And then how exactly is this going to reduce the sulfuric acid consumption that you're producing your own and then won't need to buy out in the market or you're reducing just in terms of the kind of ore you're processing?

Yes, it's a good question. I mean, so simple terms, the cathode now that we have the sulfide is an incremental business unit. So we have that flexibility to figure out what throughput we want to send to the heat. We have some dump leach, which is always going to 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 played with a cutoff of what we want to place there to make sure it's economic and generates cash. And some of the pits that they're only oxide only and high calcium carbonate, we've diverted those trucks on to the sulfide and the mill is running well.

So the offset is we're getting higher sulfide production and cut back on our cathode and reduce our exposure to acid. The pyrite that you speak about will generate a pyrite that will be put into the heap leach agglomerator. That will reduce our acid required on the heap leach by at least 20%. So if we used to consume 400,000 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're acid proofing ourselves. So when you look at the sticker price of acid in the market, take 80% of that because we're going to have a 20% reduction of what we need.

Okay. Sorry, can you just reiterate how much acid you're consuming maybe in dollar amounts just at spot prices or even in the tonnes great?

At Mantoverde, typically, we consume about 600,000 tons a year. With our forecast, we've reduced that to 400,000 tons. And our price is about $190 a ton is what we fixed and the market price is around $450.

Again, $190 and $450 Okay. So you assumed it was, the budget was $190 million and currently at spot, it's $450.

Yes, but we've also fixed at $190 million. So we're not buying anything at $450.

Okay. And how long does that fixed rate last?

For all of this year.

Okay. And then next year, you're exposed to spot?

Yes. Next year, we'll go through the same kind of like by then, like I was mentioning on the last question, the forecast out. So forecast, it should normalize, assuming some resolution in the State of Hormuz.

Actually, I have another question. On M&A, I just wanted to get an idea of what your current thinking is about divestitures. I mean, I know that there's been some chatter about closing them. Given it's obviously its consistency, I just want to understand why you're thinking about divesting that asset. And then wondering if you're looking at other assets in nearby jurisdictions.

Yes. You always function or you operate a business as a portfolio, and you're always evaluating the components of the portfolio when it's optimum to either move off them or invest in them. The growth profiles that we have our brownfields and greenfields opportunities around Pinto Valley and also around Mantos Blancos and Mantoverde 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 between 15,000 and 20,000 tonnes of copper per year in Mexico at an isolated mine. The mine has been absolutely tremendous over the last 10 years. It's been a very consistent producer.

Much of the residual resource lies also in zinc, and it's a slightly different combination for a copper equivalent going forward outside of the next four or five years. And so to us, it's sort of maybe our portfolio is outgrowing the size of what Cozamin is. Now with that being said, we wouldn't obviously divest it if we felt that the value of 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's the case. So we have that sort of strategic consideration where we're evaluating the possibility if someone was to buy it, then maybe we would sell. So it's sort of like a portfolio rationalization.

One of the things you keep in mind is what is the present market and what is the present value of a copper pound. Obviously, if you were sitting here this time last year, the copper price was lower, but it's been sustained over $6 for some time now, and that operation will cash flow really well this year. So it's 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. I guess it's a wait-and-see story.

And Anita, just on the absolute numbers on the asset, just for reference, if we had bought $600,000 at budget was $190 million, that would be $114 million of asset spend in Mantoverde. We're currently going to spend $400 million at $190 million, so that's $76 million. But if we had continued with plan, a, with that additional cathode, we would have had the same tonnage in acid at a blended price, and we would have spent $166 million because we would have bought 200,000 extra tons at spot prices. So really, it's a saving of $90 million in absolute.

Okay. And one final follow-up on that. What kind of recovery rates is that run of mine getting within the mill? If I was trying to model that.

A dump recovery, I think it's 40%, 40% to 45%.

Yes, low 40s.

[Operator Instructions] There are no further questions at this time. I would hand over the call to Cashel Meagher for closing comments. Please go ahead.

Thank you, operator. With Mantoverde Optimized tie-ins ahead and sanctioning decision on Santo Domingo expected in Q4, second half is set to be an exciting one for Capstone. We look forward to updating you in October with our Q3 results. Until then, stay 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.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.

Good afternoon, and welcome to Capstone Copper's Q1 2026 Results Conference Call. [Operator Instructions] This call is being recorded on Wednesday, April 29, 2026.

I would now like to turn the call over to Daniel Sampieri. Please go ahead.

Thank you, operator, and thank you, everyone, for joining us today to discuss our first 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 Head of Technical Services, Peter Amelunxen; and our SVP, Risk, ESG and our General Counsel, Wendy King.

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'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 and around the Globe. Today, we are pleased to present our first quarter 2026 results and achievements. Over the last 3 years, we have enhanced our portfolio of assets, delivering a 37% increase in production and matured our processes and systems to align with the scale of company we are today.

2026 marks a year of operational stability and cash generation. We are well positioned in the current environment of heightened geopolitical volatility. To-date, given our scale, operating locations and robust supply chain, we have not experienced any operational impacts from the conflict in the Middle East. We continue to see strong copper demand in the current market and believe the fundamentals support continued strength over the medium- to long-term.

At the same time, cost pressures, principally related to diesel and sulfuric acid reinforce the importance and continued focus on cost discipline, operational excellence and maintaining a strong financial position. Through the remainder of 2026, we are looking forward to delivering reliable results from our portfolio of assets while advancing our organic growth opportunities.

Starting on Slide 5. In Q1, our operations delivered consolidated copper production of 48,000 tonnes at a consolidated C1 cash cost of $2.66 per pound. Our 2026 guidance is unchanged, including 200,000 to 230,000 tonnes of copper at cash costs between $2.45 and $2.75 per pound.

Solid production, combined with exceptionally strong commodity prices drove record EBITDA for the sixth consecutive quarter. Mantoverde quickly returned to design throughput rates following the strike action in January and is again performing reliably and consistently.

We were particularly pleased to see the sulphide plant achieved record recoveries in Q1. Reflecting on the strength of our diversified asset base and the improvements we've made across our mine sites, the overall impact of the strike on quarterly performance was approximately 5,000 tonnes of copper, which was incorporated into our annual guidance.

The Mantoverde optimized project remains on budget and on schedule. Our team is eager to demonstrate the full potential of Mantoverde by delivering meaningful incremental production at a low capital intensity.

Mantos Blancos had another strong quarter as we continue to progress the next phase of growth with the Mantos Blancos Phase 2 project. We plan to submit an EIA permit application for the low capital intensity brownfield expansion during Q2, followed by a prefeasibility study during Q3.

At Pinto Valley, we experienced unplanned maintenance during the quarter, which was partially offset by higher grades. As part of our broader asset management framework, we are further refining our maintenance processes, and we are already seeing the benefits from improved tracking of performance metrics. In line with our district growth strategy, we remain focused on unlocking the significant value of Pinto Valley and the surrounding area.

Cozamin delivered another quarter of consistently strong performance in Q1, achieving record low cash costs supported by higher by-product credits. Our exploration team continued to make strong progress on the various programs underway this year, including reaching 94% completion on the original 2-year drill campaign at Mantoverde.

On the corporate front, we continue to strengthen our financial position by reducing net debt by more than $40 million compared with the year-end 2025. Our balance sheet is in excellent shape, and we will continue to capitalize on strong commodity prices with further deleveraging through internally generated cash flows. This provides a strong platform to navigate any macroeconomic volatility and advance our growth strategy.

And with that, I'll pass it to Raman for our financial results.

Thank you, Cashel. We are now on Slide 6. In Q1, we recorded solid copper production of 48,000 tonnes despite the 35-day strike action at Mantoverde. LME copper prices averaged $5.83 per pound in the quarter, up 16% compared to $5.03 per pound in Q4. And we realized a higher copper price of $5.92 per pound. LME copper prices are currently around the same level.

Q1 cash cost of $2.66 per pound increased slightly year-over-year, driven primarily by the denominator impact of lower production, partly offset by strong byproduct prices. We realized strong gross margins of $3.26 per pound or 55% in Q1, which is relatively consistent with Q4.

Record adjusted EBITDA of $329 million increased 83% year-over-year. And lastly, we reported another record adjusted net income attributable to shareholders of $95 million or $0.12 per share in Q1. A solid Q1 forms a strong foundation for the rest of 2026 as we continue to deliver results and take advantage of higher commodity prices.

Moving on to Slide 7. In Q4 2024, we had just achieved nameplate throughput rates and delivered the first 2 shipments of copper concentrate following construction completion of the Mantoverde development project. This slide underpins our ability to build new mines. Since then, we've delivered consistent quarter-over-quarter improvements to both adjusted EBITDA and EBITDA margins. This is now the sixth quarter in a row we've generated record EBITDA as we continue to realize the benefits of our robust foundation of assets amidst a strengthening copper price environment.

Next, as highlighted on Slide 8, we finished Q1 with a consolidated net debt of $738 million, which represents a reduction of $43 million from the prior quarter. As you can see in the chart on the slide, the decrease was primarily attributable to strong operating cash flow supported by high copper prices or commodity prices.

Included in operating cash flows this quarter was a negative impact of a $30 million repayment on the early deposit under our Gold Stream with Wheaton Precious Metals. This repayment eliminates the associated early deposit delay payments and a liability on our balance sheet of $22 million. Financially, it made more sense to repay the $30 million compared to ongoing more expensive delay payments in spot gold ounces. Now the full $290 million remains available to fund the construction of Santo Domingo.

Turning to Slide 9. The decrease in absolute net debt drove a further reduction in our net leverage with a net debt-to-EBITDA ratio of 0.7x at the end of Q1. In line with our commitment to strengthening the balance sheet between growth periods, this ratio has come down significantly from a peak of 3.6x at the end of 2023 following the construction of MVDP, and we've always said we want to be below 1x for Santo Domingo FID, and we have achieved this criteria.

Our available liquidity as at March 31, 2026 was greater than $1 billion, including $394 million of cash and cash equivalents, and $652 million of undrawn amounts on our corporate RCF. Available liquidity has been maintained at over $1 billion since the beginning of 2025, which ensures we are well-positioned to move into the next phase of growth.

The chart on the right-hand side of the page illustrates our EBITDA sensitivity at various copper prices based on 2026 expectations as well as upside related to MV-O and Santo Domingo at run rate production. The midpoint of our 2026 guidance represents EBITDA in the range of $1.3 billion to $1.7 billion at copper price between $5.50 to $6.50 per pound.

And as we look into next year, with MV-O completed and higher grades at Mantos Blancos, we expect to see a significant increase in our EBITDA approaching $1.8 billion to $2.3 billion or close to a 40% growth year-over-year. This level of EBITDA generation will enable us to continue to generate cash during the construction of Santo Domingo, further enhancing our financial position and providing a strong platform to delever peer-leading growth.

Next on to Slide 10. We have profiled some of the sensitivities to input cost pressures amidst the ongoing conflict in the Middle East. While the situation continues to evolve to date, our assets continue to operate normally, benefiting from operating locations and robust supply chains. We continue to monitor the pressure from higher diesel and sulfuric acid prices on cost. However, we've been -- we've seen offsetting benefits from strong copper and byproduct prices.

We expect to consume approximately 134 million liters of diesel for the remainder of 2026. Our diesel supplies purchased domestically and in Chile imported primarily from the Gulf Coast. We estimate that each 10% move in diesel prices impacts direct costs by $13 million from April onwards, comprising of $9 million or $0.02 per pound on consolidated cash costs or $4 million related to cap stripping. We had used $60 a barrel as a proxy for guidance. We're continuing to evaluate and monitor indirect oil-linked impacts to understand how best to mitigate inflationary pressures as well as the protections we have within our supply contracts.

Sulfuric acid is used for our copper cathode production, which makes approximately 15% of our total production. We view the cathodes as an incremental business unit with the majority of our cash flow generated by the sulphides.

Our cathode production today continues to generate cash, and we have some fixed price protections. Largely, the acid we consumed in Q1 and Q2 was fixed at a price of roughly $185 per tonne or will consume in Q2. We evaluate the cost on an incremental basis and if we identify the cathode business starts to lose cash, we can either wind down or reduce production levels and continue the sulphides.

We expect to consume approximately 590,000 tonnes of sulfuric acid for the remainder of 2026, of which 55% is fixed at a price of $185 per tonne. The remaining 45% is exposed to spot pricing with a variable price supply weighted to the second half of 2026. We have estimated that each 10% move in sulfuric acid prices impacts direct costs by approximately $5 million or $0.01 per pound from April onwards, and we have confidence in the security of supply for the rest of 2026 with approximately 70% currently contracted from Chile, Peru, Asia, excluding China.

On a consolidated company-wide basis, year-to-date, we have seen higher byproduct prices compared to our guidance assumptions, which helped offset some of the upward cost pressure, a 10% increase in byproduct prices would reduce our C1 by about $14 million or $0.03 per pound. As we navigate through this period of macroeconomic uncertainty, we are focused on protecting margins to ensure the benefits of stronger commodity prices flow through to the bottom line.

With that, I'll hand it over to Jim for the Ops.

Thanks, Raman. We are now on Slide 12. We will start with our Mantoverde operation. For Q1, total production yielded 19,018 tonnes of copper at combined C1 cash cost of $2.59 per payable pound. Plant throughput averaged 27.7,000 tonnes per day for the quarter and above our design capacity in February and March. Copper grades averaged 0.61% in Q1, driven by the processing of lower-grade stockpiles. We were very pleased to see recoveries achieved a record 90.3% during the quarter.

Now on Slide 13, we are excited to highlight the progress made on Mantoverde optimized. In the first quarter, we began taking deliveries of key equipment in addition to starting construction at the concentrator plant. In Q2, we will receive the remaining equipment, materials and supplies on site while executing construction at the concentrator plant, the tailings storage facility and the desalinization plant.

Our expectations around capital costs and time lines are unchanged with majority of project tie-ins scheduled to be completed during an extended 15-day maintenance period in Q3, followed by a ramp-up period in Q4 2026. The expanded sulphide throughput capacity of approximately 45,000 ore tonnes per day is expected to be sustained starting in early 2027.

We are eager to imminently deliver production growth at our flagship asset through MV-O, which adds 20,000 tonnes per annum of copper production at a low capital intensity of approximately $9,000 per tonne.

Turning to Slide 14. Mantos Blancos continues to perform well to begin 2026. Total sulphide and cathode production yielded 12,301 tonnes of copper at C1 cash costs of $3.02 per payable pound. Throughput averaged 19.7,000 tonnes per day in Q1 with the site completing 4 days of planned maintenance during the period.

Sulphide copper grades of 0.73% for Q1 were in line with mine sequence expectations. We continue to expect higher copper grades to return in 2027. As Mantos Blancos continues to deliver stabilized results, we are preparing for the next phase of growth as we work towards submitting an EIA permit application in Q2 for our Phase 2, followed by the release of a prefeasibility study expected in Q3.

Moving north, we will now discuss Pinto Valley on Slide 15, which produced 10,711 tonnes of copper at C1 cash cost of $3.46 per payable pound during Q1. This is the third quarter in a row of improved cash cost at Pinto Valley. In Q1, we experienced unplanned maintenance at the filter plant and the concentrate storage facility. We are prioritizing increasing operational capacity through our people strategy and asset management framework.

On the human resources front, we made progress this quarter filling a number of key roles at site, including the site maintenance manager, the tailings and water manager and a health, safety and environmental manager. During Q1, we also progressed improvements to our operations management systems, including better tracking of KPIs around maintenance schedule compliance and operational targets.

We are planning for an approximately 10-day maintenance shutdown in Q3 to rebuild the primary crusher mainframe and enhance the filter plant and concentrate storage areas. In addition to near-term reliability enhancement initiatives currently underway, this is expected to reduce unplanned mill maintenance issues and support more stable plant operations.

It has been a hot start to the year in Arizona, and we continue to monitor our water balance, including performing water simulations that incorporate the past 30 years of precipitation data. At this stage, we do not anticipate production-related impacts from drought conditions like in 2025.

Cozamin delivered another quarter of reliable, consistent results in Q1, as shown on Slide 16. The operation produced 5,930 tonnes of copper at record low C1 cash cost of $0.71 per payable pound, benefiting from higher silver byproducts, which continue to represent a tailwind for the rest of 2026.

Strong operating margins drove record quarterly EBITDA of $65 million for Q1. Throughout this year, we will continue to conduct exploration to evaluate the potential for mine life extensions or improvements to the production profile.

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

Thanks, Jim. Turning now to Slide 18. During Q1, we continued to progress our exploration programs, building on the strong foundation we established in 2025. Our initial 2-year exploration program at Mantoverde has reached a completion rate of 94% with 5 drill rigs currently operating on site. We plan on sharing more results from this program later this year.

At Santo Domingo, 4 drill rigs are on site with the goal of delineating oxide mineralization while also testing potential sulphide extensions. We haven't started drilling at Sierra Norte. The team has been busy progressing the re-assay program, geochemical sampling and geophysical surveying in preparation for the 19,000 meter drill program planned later this year.

Overall, in 2026, we are focusing our exploration efforts on advancing upside opportunities or incremental copper production in the Mantoverde Santo Domingo district, especially those eligible for contingent consideration under our joint venture arrangement. Our team is eager to unlock the significant value of this region through exploration in pursuit of our strategy of building a world-class long-life copper district in Chile.

Moving to Slide 19. At Santo Domingo, we continue to progress the remaining work streams required before making a sanctioning decision expected in Q4 of this year. This includes evaluating the optimal financing strategy in collaboration with our joint venture partner. Based on the work performed to date, we feel confident that we will be able to achieve attractive terms in the current environment.

We also continue to progress detailed engineering to approximately 60% completion as well as advancing upside opportunities and potential infrastructure opportunities. We will continue to strengthen our financial position, particularly during this period of strong commodity prices by deleveraging through internally generated cash flows and reducing our net debt leverage further prior to a sanctioning decision.

In addition to advancing Santo Domingo, on Slide 20, we have highlighted our priorities for execution during 2026, consistent with what we communicated at the start of the year. Each of these represent an opportunity to deliver value. As Jim discussed, the team at Mantoverde is hard at work upgrading the plant to sustain 45,000 tonnes per day, funded through internally generated cash flows. We also made good progress towards submitting the Mantos Blancos Phase 2 EIA permit and releasing the study. The brownfield expansions ongoing in Chile are great examples of the type of growth we'd like to execute as soon as possible.

Finally, on Slide 21, you can see our clear path to transformational growth, which is well aligned with the copper outlook supported by fundamental demand drivers and emerging trends. This reinforces the importance of continuing to accelerate our growth to deliver value.

Beyond our permitted growth of Mantoverde Optimize and Santo Domingo stands a strong pipeline of low-risk, high-return projects. Our organic growth opportunities are unique as they are located in the same top-tier mining jurisdictions as our existing operations, allowing us to leverage real experience to mitigate project execution risk. This includes a brownfield expansion opportunity at Mantos Blancos, which we are working to move into the permitted category, optionality to unlock incremental copper production in the MVSD district and the potential doubling of throughput at Mantoverde.

At Capstone, we are proud to have created a peer-leading pipeline supported by a resilient diversified foundation of operating mines. As we progress through 2026, we remain focused on delivering safe and stable results towards our unchanged annual guidance, and we are committed to strengthening our balance sheet and responsibly advancing our organic growth projects. 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 now ready to take questions.

[Operator Instructions] Your first question comes from the line of Orest Wowkodaw with Scotiabank.

I was hoping to get some more color about the copper cathodes, just given the sulfur price environment. Given that your -- the cathode operations are already significantly high on the cost curve, do you have full flexibility to pause that, say, if these high asset pricing continues into '27 and '28? And are there any potential impacts to the sulphide mining if you pause on the oxide?

Yes. Thanks, Orest, for the question. It's certainly something that's got a lot of our attention now. Just to clarify, we've been assured by our providers that really the supply of acid isn't an issue. Really, what we're exposed to is the cost. And as you sort of pointed out, the cost of acid is pushing up against what one could perceive as a pretty high cost when you take all the costs in.

The purposes of the integrated operations, certainly at Mantoverde, the stripping of the oxide material is part of the normal stripping required to expose the sulphide for the sulphide process plant. And so one way or the other, we're bearing some of that under a fixed cost. So that's part of the consideration we're looking at. This material, this oxide material is a high consumer of acid.

With that being said, the first half of this year, more or less, as Raman alluded to in his commentary is: that the first 6 months were sort of fixed in our asset cost more or less and we become more exposed to spot acid near the end of the year. However, there is buoyancy and that's in the copper price. And so, while the asset price has gone up, we're maintaining some margin of profitability against the copper price. So it's not only the asset price that we're focused on. It's also the realized spot price that we're selling our cathode for and the premium we get for it.

I don't know, Raman, did you want to add some more to...

Yes. Some of the COMEX we've sold forward into contracts at a premiums that and there was the arb earlier, which has kind of shrunk away. But also when you're looking at C1 or just on the cathode look higher, but we take kind of a full costing method. So when we're in a mixed pit with sulphide, you work your way through the oxide to the sulphide, we've allocated the mining cost between the 2 tonnages coming out.

When we look at it from a pause or moment, we do an incremental analysis. And then you say basically, you would incur the mining cost anyways when you go up to the top of the pit, we decide that we take it to the leach or should we take it to the waste dump. And if you do that at both sites, it probably knocks off about $0.60 to $0.70 a pound of the numbers like we have in our MD&A. So that's quite a bit of a difference to when you're looking at the breakeven cost of the cathodes.

Can I assume you're fully exposed to market prices for assets starting in '27?

Correct.

And just finally, where -- can you give us a sense of where spot asset pricing is right now in Chile?

Yes. It was about $400. It's bumped up to about $420, $430 right now today -- I hope today.

So it's continued to rise?

Yes.

And the next question comes from the line of Ralph Profiti with Stifel.

Thanks for the added color on the cathodes. Jim and Cashel, on Pinto Valley, you said the hot start having to manage the water balance. What's the strategy around securing extra water storage? Are you in rationing mode? Is that playing into the strategy? And how much of a buffer is there on the guidance with respect to what we saw in Q1 and the current drought conditions?

Yes. I'll start and then Jim could add some detail. The -- what I would say is, it's not -- it's requisite on anyone operating in the American Southwest that they ration and they value water, either their sources or their return water. And so we've been on a continuous improvement process of improving our water return from our tailings stand and then so too on the security of the storage empowerment areas we have.

We have a particular advantage this year during the drought season and next year during the drought season, which will give us runway to be able to address some of the infrastructure issues that require some time and remedy and maintenance time to be able to address some losses of water in those systems. And that's -- that we're doing a pushback in the open pit at Pinto Valley. That pushback is what we call our Northwest wall. It's where we've stopped deepening the mine for the moment, and that will last over the next 18 months or so, where we push back the upper Northwest wall, and we're getting our ore from it. So that's allowing us to use the pit itself as a storage of water.

And compared to normal, we can store almost 50% more water. When we sort of do the back calculation that was equipped like what Jim had in his narrative during the phone call, that allows us to sort of what I call drought-proof ourselves for a similar situation as last year. So last year, we were impacted quite severely by the drought because our storage facilities didn't have the amount of water we're currently storing now. So what we would say is, the month of March or -- was probably warmer than typical. However, April is actually cooler than normal. We were told today by our GM. And so far, the forecast, I'm not sure how accurate the forecasts are, but it's looking like May 2 will be a little cooler on the macro forecast going ahead.

So with that, it gives us a lot more confidence we'll have the amount of water to mitigate the loss of production we experienced last year and therefore, have that uptime at our plant and not the downtime due to lack of water.

Now Jim, did you want to add any more to that?

Just in addition to that, a couple of comments. As I mentioned in the presentation, a key thing is leadership. We have been going through some changes. We have a specific new manager position in the tailings and water area, which we didn't have before, which is key and also supported by a new maintenance manager, which will help so much in having the security that the assets are going to work as we need them to and that operations has the uptime to do what they need to do with them.

Cashel did mention related to the TSF construction, sand production is very important. As we increase sand production, we get better water return from the tailings area. And as we mentioned, I think it was last -- well, in fourth quarter, we've been making continuous investments in our water wells. We've been looking for more water wells with pile holes. And also, we've invested in the connection piping to make sure that we're getting that water to the plant in a related area. So apart from the massive drought situation, which is kind of hard to deal with, I think we've really done a lot of work to be able to withstand the variability of weather. But as I would always mention in Pinto Valley, our real focus is on uptime in the process plant.

For those of you who have been following Capstone for a few years, there was a lot of work going on in the milling section for a long time in the milling motors, and then we slowly stepped to the extremities. Right now, some of our downtime in Q1 was caused around the primary crusher, and it was also caused at the back end of the concentrate management area and the filter area. These are 2 areas that we have planned for major shutdowns. But in that path to get the parts and get the materials that are required to have a rebuild in those 2 areas, we may have some downtime. We're not planning for it, but it's really our focus on that -- on the maintainability of those circuits to get us to the third quarter and to have a successful year in Pinto Valley.

And the next question comes from the line of Daniel Morgan with Barrenjoey.

Just a quick question on how has April been tracking so far across the various operations? I mean we're basically done with April?

And certainly, thanks for the question. It's been going quite well, I would say. Cozamin steady as usual. Antos Blancos, good throughput. We did have a scheduled shutdown at Mantoverde during April. And so that was part and parcel of the guidance we put out. However, we've been getting extremely good throughput irrespective of that. And while the nameplate capacity and what we budgeted was 32,000 tonnes a day, they were up closer to sort of to like 38,000 tonnes a day as a realization. So that's a real testament to the team there on how they're doing at that metallurgical complex.

And I'll sort of just plug them also on their consistency on achieving recoveries also. Due to the strike and some various blending, we had little lower grades at Mantoverde, but they were able to offset and achieve a great recovery during the first quarter and maintain that through April.

We're doing a little better at Pinto Valley than what we did in the first quarter, and that's now where we're sort of approaching -- we've improved on the first quarter performance, and we're edging our way up to where we think we should be, and we're sort of approaching around 44,000 tonnes a day for April there. So everything is moving and trending in the right direction.

Just on the diesel and acid, I mean, I know we've talked about the cost stuff, but just more the assurance on getting it. And I guess I'm a little bit more worried about sulfuric acid. Can you just touch on how your team is looking through your supply chain, what assurances you have that you can get the acid you need? And then maybe you could also touch on perspectives on the industry and what industry impacts we might see ahead on supply.

Yes. It's definitely a bifurcated sort of issue. There's obviously Orest's question focused on the cost issue. Here in the Americas, we're just a little different supply and logistics routes than what Australia or Asia might be in or Africa to that measure. Where we source it from are the sort of the local smelters in Peru and Chile. We do have some offshore supply. We've gone through -- we have about -- between traders and suppliers, we probably have a list of 8 different ones that supply us acid to our operations.

And of all of them, we were only exposed to this year about 10% of our acid requirements coming from China. And we've been told by those suppliers or traders that we're going to maybe source that small amount that they've been successful in sourcing it from elsewhere. So we are exposed to the cost, but we've got very strong confidence in our suppliers and traders that we'll be able to source to our operations through the balance of this year, the assets.

So really, I think it's just a different narrative in the Americas than it might be sort of in Africa or Asia or Australasia to that matter. So it's a different sort of paradigm. So again, our risk is more on exposure to cost than supply as we have these conversations with those suppliers and traders.

And just on the question earlier, I think, at the top of the call, which was if you do discretionarily decide to reduce production from this -- from your cathodes. You do have surplus capacity to maybe in your SX-EW circuits to like just hammer the production. So could you just stockpile the oxide ore and then at a future date when acid supply comes down, could you increase production discretionarily?

Yes, there are many levers. And so there is a certain proportion, and we've done it in the past. We've had -- since my 4 years' experience here at Capstone Copper, we've had occasions where some of the long-haul low-grade oxide or high acid consuming oxide but we've decreased in the past some of the delivery to heat or dump, specifically at Mantoverde. So we do have, within the mine plan, opportunistic options in the future to be able to evaluate those, and our teams are evaluating those. We don't see the necessity now.

As I sort of mentioned to Orest, there is that ratio of the price of copper and the premium to the price of copper we get relative to the rise. And if we still see a margin, then it's worthwhile because some of those costs would need to be borne irrespective in the stripping profile, as Raman was explaining, to access the sulphide that we require.

There's the technological advances that we have. There are several. Part of our MV-O is a BIOX leaching, which will reduce some of the dependency on acid. But even more exciting is in the next couple of years, I know it's not for this year, but we've spoken in the past about our pyrite agglomeration and the substitution that pyrite has in our active heap leach to offset some of the requirements of acid. And that will be to the tune of about 1/3 or 30% offset of the sulfuric acid requirements to leach to provide the same leach kinetics to the oxide mineral.

So that's an exciting one. That's -- sometimes we talk about as we are now as a sort of a sulfur abatement program, which could present in the order of 30% less required acid. But the obvious byproduct credit that we get provided with that also is our cobalt ambitions to be able to produce at Mantoverde some 1,100 tonnes of cobalt a year. And in the future, close to 4,000 tonnes of cobalt out of Santo Domingo. So that's another project that we're quickly looking at trying to bring forward to be able to offset some of these asset prices.

And the next question comes from the line of Fahad Tariq with Jefferies.

I just wanted to ask about Cozamin. There was a media article talking about potentially divesting that asset. I'm cognizant there's only so much you can share, but just thoughts around the asset and hypothetically, if it were sold, what would be the use of proceeds?

Yes, we've certainly seen those articles, too. Just as a sort of blanket statement, those are speculation by the market and the process. We've always sort of stated that we're a holder of a portfolio and rationalizing and evaluating our portfolio, whether it's our -- as we was talking about just now or what can we do with the oxide operations at Mantoverde and Mantos Blancos. There's always speculation that the Cozamin may or may not be an opportunity for sale in the future.

I can say what it is, is Cozamin is our steadiest producer. It always creates a margin, and those margins are terrific, especially at these high metal prices. So I'd have to say that in the past, we've had unsolicited bids. We're always evaluating our portfolio. Strategically, we're always considering options. If somebody came forward and knocked our socks off, we'd have to consider it. But right now, they're -- we're so happy with the way Cozamin is performing. There are some options for mine expansion and mine life expansion. So it remains a critical piece of our cash flows.

If, like you said, under the consideration that it was for sale, obviously, it would just go to bolstering our balance sheet for the delivery of our growth ambitions in the future, potentially, we could raise less debt and deliver some growth ambition like Santo Domingo is probably the best use of that capital in our portfolio if it became available.

And then maybe just switching gears to Santo Domingo. One of the criteria for FID was observing macro trends. Is there anything that's happened so far this year, whether it's the copper price volatility, sulfuric acid, which I guess maybe doesn't apply to Santo Domingo. But anything else you're seeing that maybe changes your views on Santo Domingo going forward or not yet?

Look, there -- we're always sort of watching those macro things. So just to begin with, what I'll say is, is it doesn't change the actions we need to take place. We sort of said in the narrative here that it's likely a Q4 decision. And that's because we have a number of tasks we need to complete to derisk the sanctioning and FID of Santo Domingo. One is progress and mature the engineering of the project. Another is to determine what infrastructure is in or out and under what scheme are we building it, whether it's a design, build, operate, a BOOT contract or utilizing existing infrastructure that is within the district.

All of those are pretty big swings at what the ultimate CapEx requirement for raising to deliver something like Santo Domingo. So it doesn't change what we're doing to get ready for Q4. I think what you're asking me is, if we were in Q4 now and under the current conditions, what would we do? What I would sort of say is, is when you run the sensitivities in the spider diagrams on a project like Santo Domingo, the steepest curve is the copper price and the copper price is very strong and the long-term of the copper price is very strong. So there is a strong impetus for us to continue with the activities we have such that we're ready by the fourth quarter to bring to our Board a financing decision.

And the next question comes from the line of Craig Hutchison with TD Cowen.

Just on Pinto Valley, Cashel in your remarks, you mentioned throughput is back up to around 44,000 tonnes a day. Curious once you get through the maintenance in Q3, what are you trying to exit the year on throughput? And then just the grades were a bit higher than I expected in Q1. Are those kind of grades around the 0.36 level, 8% recoveries? Are those sort of sustainable into Q2 here?

Look, that Northwest wall, we've been experiencing a little higher grade than we thought. So I think it's probably early yet to say that we'll sustain those grades. A lot has to do with dilution control and management, I think they're a little high, to be honest with you. They're probably going to come down a little, those grades. So yes, I think it was sort of -- it wasn't opportunistic. It was more, I guess, fortunate that we saw those during this period of time.

As per the ambition, look, when I look at the instantaneous capacity of the plant, it's somewhere in the order of 62,000 tonnes a day. The reality is a plant of that vintage, what you can expect is sort of a 90% utilization rate. And that's a factor of a combination of planned and unplanned maintenance. I think with a plant of that vintage, you always have to have that component of unplanned. So at 90% utilization, that would mean the best you could sustain production over a period of time would be about 56,000 tonnes a day.

I think that's a little ambitious to think we can get there by the end of the year based on the challenges we've had in the past. But I can tell you, the team is very focused on that sort of target of around 55,000 tonnes a day. I think though, if you handicapped it, made it more reasonable, if we achieved sort of 52,000 to 53,000 tonnes a day coming out of the last quarter, that would be a strong achievement.

And just on Mantoverde, good to see the sequential uptick in recoveries there. Do you feel like you've really turned the corner there, the 91% you guys reported there in March. Maybe just can you just talk what those improvements have been? Is it more how you guys have managed the pit? Or is it more the than the reagents and you feel like you kind of sustain those type of levels in the low 90s?

Yes, Craig, I'll let Jim answer that because his team is pretty close to it.

Yes. That's a great question. I don't think we're going to be strained too far off where we thought the midpoint of the guidance would be if you want to think about the ranges of where Mantoverde should be from a planning perspective. We have been able to, over time, take advantage of more uptime and stability in the plant, and it just makes it a little bit easier to be able to tweak and look for recoveries that we need to.

And also in the mine, we are getting to the point where you've been following us for a while when we were having some difficulties. I think it was the beginning of the 2025. We were running through a mixed ore zone. Now we're like at the base of the mine. We're in a very good part of the cycle. We have a lot of clean mineralization. That also helps a bit as well. So these things as well, they come in cycles, this is something we really have to get a hold of on our 5-year planning to make sure that we're not getting surprised with that altered material or oxidized material as we did at the beginning of 2025. But really, we're in a good spot right now for the recovery. So it's just the focus on the throughput and making sure that we're clearly targeted at our full year guidance with the ongoing work that we have at the same time in the MV-O project.

And the next question comes from the line of Anita Soni with CIBC World Markets.

I was just wondering if you could provide a little bit more color on the process of getting a partner for the port infrastructure at Santo Domingo?

Yes, sure. I'd love to. Yes. And with that, that's the real swing factor in this project. We published in 2024, the fall of 2024, our technical report that was based on 2023 dollars. So our base case always assumed a BOOT contract on the desal plant. So that capital was never part of the original estimate. And that total capital outlined a project about $2.3 billion and self-perform and build a port. So in that particular study, the port was about $300 million.

We expect escalation, obviously, since 2023 dollars. And one of the big components that we can affect is either use an existing port in the region, and there are existing port owners in the region, but the most proximal one is owned by a Chilean iron ore company. What I can say is there's dual interest in utilizing port capacity, any of the ports to increase product through it to increase the efficiencies of those ports. So we're inspecting that. That's been an opportunity that has been available to us.

So what I can say is we're continually negotiating the probable access to those existing ports within the region for the copper concentrate out of Santo Domingo and the iron concentrate out of Santo Domingo. Balance with that, we need a base case that we can rely on, which is either self-perform on a port or much like what we considered with the desal plant, the BOOT contract on it.

And there are a number of parties that are interested in bidding on the opportunity to either build and own a desal plant on our concession and/or a port on our concession with the aim to offer the services and the capacity in those to other future users of the port and/or the desal plant.

So there are a number of iterations. There are probably 4 or 5 different iterations that are in advance negotiating stages. And really, in the next couple of months, we hope to be in a position to sort of wrap up what we're going ahead as our preferred negotiated alternative is.

My next question was on time line, but thanks in the next couple of months, we should expect to hear something?

Yes, that's right.

And the next question comes from the line of Emerson Vieira with Goldman Sachs.

So just a quick follow-up here on Santo Domingo. As the company advanced the engineering program, you guys are now at 60% complete. What are your thoughts on the updated CapEx estimates? What can you share with us in terms of installation risks or labor? I mean, anything could be helpful here.

Yes. I mean we're midstream. I've done a number of these major projects and CapEx estimations. And as you mature the engineering, which the 60% is actually targeted for September of this year, that's when you start driving down the certainty on the scope of elements of the work breakdown structure with respect to the contingency and the quotation. So there's -- we receive quotes every day, and we're updating every day what the CapEx requirement is.

What I would say is, is what we're not surprised by is that our original estimate of $2.3 billion was in 2023 dollars, and there is relative escalation per annum on that in sort of low single digits and compounded, that was probably somewhere between 10% and 15% escalation on the design and scope of what that project was, recognizing that the scope of that project was at a feasibility level, and there are certain guidelines around what contingency is considered around the feasibility level.

So our best path forward here is to continue with the detailed engineering, get the detailed vendor quotes in such that we narrow down the contingency and add up what the total CapEx is, and for saying what the total CapEx would be as per the last question around the off-site infrastructure really is the biggest swing around this. If we look at a port that could cost between $300 million or $400 million if we make a deal on the current port, well, then that would reduce the CapEx by that amount requirement. Obviously, the OpEx comes in to offset a little higher than owning your own port.

So I think it's premature right now to be able to say exactly what that CapEx number is. But certainly, we see that the very robust returns irrespective of the strategy we'll choose with Santo Domingo copper project coming online.

The next question comes from the line of Ben Wood with UBS.

I've just got a quick one on MV-O, please. So in the release, you've said that most of the MV-O tie-ins are expected to be completed in the third quarter during the planned shut. Just wanted a little bit more color around the risk, whether this presents much risk for the remaining activities in 4Q and whether sort of global supply chains at the moment are going to perhaps place these deadlines at further risk. So I just wanted to talk about that, if you could, please.

Yes. Thanks. Look, what we're doing in Q1 and Q2 is site prep, pouring cement, placing rebar, e-rooms, pipelines, everything. This augmentation of the capacity of the Mantoverde process plant is pretty straightforward. It's about larger diameter pipes, larger pumps and the required energy to manage those, so transformers and e-rooms to be delivered to be able to distribute that.

Yes, that tie-in is about a 15-day shutdown in late August of this year. Right now, we're on time, on schedule. I happened to be at the site last week or 2 weeks ago, I should say, and much of the material is being delivered and being received. We don't see, again, much like the asset and even more so with the delivery of the componentry required. We have validation from those suppliers that we're on time with deliveries. We're on time with manufacturing. We're on time with the fab testing of e-rooms, et cetera.

So we don't anticipate any delays at this stage. The real activities happen in Q2 and Q3, where we increased the number of workers on site to be able to execute it. But really, it's not a major risk to any of the componentry that would affect what our Q4 ambitions are for Mantoverde due to delays on goods being received. We just don't see that in the equation as of yet.

And the last question comes from the line of Stefan Ioannou with ATB Cormark.

Maybe just following up on MV-O. And I don't want to put the cart ahead of the horse here given the progress you're making there. But just wondering, is there any update or just, I guess, color as to looking beyond MV-O and a potential Phase 2 expansion at Mantoverde, if there's anything specifically going on, on that front right now? Or is it kind of all hands on deck with regards to MV-O at the moment?

Yes, Stefan, thanks. The -- look, this is what the 4 drills that are turning in MV-O, that's what they're focused on is, one, upgrading the 1 billion tonnes of resource that currently exists there, delineating it such that we can move it either into indicated or measured. And we actually have been speaking with Peter quite recently about what can we do to either extend the mine life currently at Mantoverde and provide more tailings room. So we're looking at those opportunities. But really, all this drilling is an aim to prove up the reserves such that we can validate that Mantoverde should merit an expansion. And what we envision is doubling the size of the plant to move it from 45,000 tonnes a day to 90,000 tonnes a day.

So I think it's later this year or actually, it's into next year, I think, is when we'll have those reserves ready this time next year, I believe it is, where we see the merits of those -- that mine planning and upgrading of that drilling we're currently doing and completing to see what that reserve or -- well, I guess it's more or less that infill drilling to upgrade the inferred resource and then therefore, what does the future stripping look like.

At the same time, we have a program underway on the remaining 10 kilometers of unexplored strike length, where we're testing geochemical and coincident geophysical anomalies such that we can see are there other satellite deposits on our current concessions that we could bring into that mine plan also. I'd say it's a little early yet.

We have an aim and an ambition, obviously, with the endowment of 1 billion tonnes of inferred resource to upgrade that, that we believe conceptually will be sufficient to merit the construction and doubling the size of the throughput at Mantoverde. But I'd say we have a considerable amount of drilling yet to do that. But like I said, we're looking forward to being able to disclose the drilling we have and show how that has upgraded our current inferred resource maybe to the indicated category in certain areas of the mine.

Times ahead in terms of even more growth then.

We have no further questions at this time. I would like to turn it back to Cashel Meagher for closing remarks.

Thank you, operator. We look forward to updating you in July with our Q2 results. Until then, stay safe. Feel free to reach out to Daniel, Michael or Claire, if you have any further questions. Thanks for your continued support, and have a good evening or a great day.

Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.

Good afternoon, and welcome to the Capstone Copper Q4 2025 Results Conference Call. [Operator Instructions] This call is being recorded on Monday, March 2026. I would now like to turn the conference over to Daniel Sampieri. Please go ahead.

Thank you, operator, and thank you, everyone, for joining us today to discuss our fourth 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'm joined today by our President and CEO, Cashel Meagher; our SVP and Chief Operating Officer; Jim Whittaker, our SVP and Chief Financial Officer, Raman Randhawa; and our SVP Risk, ESG and General Counsel, Wendy 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, who 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'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.

Thanks, Daniel. And hello to all of you dialing in from the Americas, Europe, Australia, around the globe. Today, we are pleased to present our fourth quarter 2025 results and achievements. 2025 represented an inflection point for Capstone, with record copper production and EBITDA generation, driven by execution of growth and a commitment to operational excellence. 2025 was also marked by the delivery of several key catalysts as we continue to grow, including sanctioning of our high-return Mantoverde optimized project and unlocking the value of our Santo Domingo project through a partnership agreement. This year, we are focused on disciplined execution and reliable results from our portfolio of assets. This will ensure we are well positioned to advance our next phase of value creative growth.

Starting on Slide 5. In Q4, our operations delivered record consolidated copper production of 58,300 tonnes at a record low consolidated C1 cash cost of $2.31 per pound. For full year 2025, we achieved our production and cost guidance, producing a record 225,000 tonnes of copper at a consolidated C1 cash cost of $2.44 per pound. This represents a 22% increase in output compared to 2024.

During 2025, Mantoverde increased its copper production by 65%. We achieved above design capacity at various points in 2025, culminating with our best month of the year at close to 37,000 tonnes per day in December. In 2026, we look to build on our success as we execute on Mantoverde optimize to deliver meaningful incremental production at a low capital intensity. Mantos Blancos had a very strong year, achieving a 25% increase in output over 2024 and exceeding the top end of its production guidance. Our team is hard at work preparing the Mantos Blancos Phase 2 study, which contemplates a low capital intensity brownfields expansion to increase throughput using existing sulfide mill capacity. Arizona was impacted by severe drought conditions during 2025, which resulted in constrained throughput at our Pinto Valley mine. For the next couple of years, we have a solution in place to mitigate the risk of impacted production from droughts. Meanwhile, we will continue to progress the implementation of our asset management framework to improve the reliability of the operations, including a longer-term strategy around water. District growth, optionality continues to evolve, and 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. Cozamin delivered another year of strong performance in 2025. The site achieved towards the high end of its production guidance range, marking the third year in a row increased copper production at Cozamin.

2025 was a remarkable year for Capstone, with record results across the business as highlighted on Slide 6. Our diversified portfolio of operations delivered within guidance as we ramped up projects at Mantoverde and Mantos Blancos, providing a strong foundation of growth. We advanced our peer-leading growth pipeline on a number of fronts, including derisking and unlocking the value of Santo Domingo through a joint venture partnership. Meanwhile, on the corporate side, we enhanced our financial position through our balance sheet refinancing strategy and achieved a significant reduction in debt leverage. We will continue to build on this success in 2026 as we focus on delivering dependable operational outcomes. We will also advance our pipeline of executable organic growth opportunities, including delivering Mantoverde optimize and advancing Santo Domingo towards a sanctioning decision as well as progressing studies and exploration programs. Meanwhile, we will continue to capitalize on strong commodity prices by deleveraging through internally generated cash flows, ensuring we are well positioned to advance our growth strategy.

Our recently announced guidance as outlined on Slide 7, forecast total consolidated copper production of 200,000 to 230,000 tonnes at C1 cash cost between $2.45 and $2.75 per payable pound of copper. This represents largely stable production compared to 2025. While cash costs are expected to increase, driven by the impact of lower grade zones in the mine sequence at Mantos Blancos and Pinto Valley combined with modest inflation. Our portfolio of pure-play copper assets provides upside to strong copper prices, with the potential for continued cash flow generation to deleverage and reinvest in our pipeline of high-quality growth projects. For 2026, sustaining capital is forecasted to be approximately to $270 million as we continue to focus on optimization and improvements through our asset management framework as well as ESG and tailings initiatives. Expansionary capital guidance of $225 million is primarily comprised of $150 million to execute Mantoverde optimize as well as $15 million at Mantos Blancos and $60 million in Santo Domingo to advance future growth at those assets. Capital stripping and exploration are guided at $225 million and $70 million, respectively.

Moving to Slide 8. A year of stability in 2026 will set us up for a strong 2027 and beyond as we work towards delivering the next major change in production with Santo Domingo. Taking a look at the bigger picture. The chart on this slide illustrates what sets Capstone apart from our peers, and that's our sector-leading permitted and executable growth. Over the past 2 years, we have increased copper production by 37% and decreased unit cost by 16%. That is a significant accomplishment in our industry and a testament to the executable nature of our growth opportunities and our best-in-class mine build and operating teams.

Looking towards the future, our permitted growth pipeline alone has the potential to increase production by a further 70% and decrease unit costs by 30%. Beyond our permitted growth stands a robust pipeline of low-risk, high-return projects in top-tier jurisdictions. This includes a brownfield expansion at Mantos Blancos to drive incremental copper production, optionality to unlock synergies in the MV-SD district and the potential doubling of the capacity at our flagship Mantoverde operation. Our growth strategy is well supported by a strong copper price environment and growing consensus of increasing future demand, reinforcing the importance of retaining optionality within a portfolio to drive returns.

With that, I'll pass over to Raman for our financial results.

Thank you, Cashel. We are now on Slide 9. In Q4, strong copper production and commodity prices drove record quarterly revenue of $685 million. Copper sales were around 2,600 tonnes below payable production levels, primarily due to timing of sales of Monteverdi, which would have increased EBITDA by approximately $24 million.

LME copper prices averaged $5.03 per pound in the quarter, up 13% compared to $4.44 per pound in Q3. We realized a higher copper price of $5.36 per pound. LME copper prices are even stronger today at approximately $6 per pound. C1 cash cost of $2.31 per pound decreased by $0.11 from last quarter, marking the fourth quarter in a row, our team has delivered lower cash costs. Solid production and cost control allowed us to realize strong gross margins of $3.05 per pound or 57% in Q4, which represents an 11% increase over Q3. As commodity prices reached all-time highs to close out 2025, we remain focused on protecting margins through cost control across the business. Record adjusted EBITDA in Q4 of $308 million increased 79% year-over-year. The sales [ lag ] as noted primely would have increased EBITDA to approximately $332 million. This is the fifth quarter in a row, we generated record EBITDA as we continue to realize benefits of our recently ramped up mines in Chile and missed a strengthening copper price environment. We reported strong operating cash flow of $287 million before working capital changes.

Adjusted net income attributable to shareholders more than doubled year-over-year to $75 million or $0.10 per share in Q4 2025. A record Q4 marks the end of a strong 2025, driven by increased production, lower cash cost and strong commodity prices.

Moving on to Slide 10. On the bottom left-hand side, we summarize our available liquidity, which has doubled year-over-year to greater than $1 billion at year-end, including $304 million of cash and $711 million of undrawn amounts on our corporate revolving credit facility. We finished the quarter with consolidated net debt of $780 million. Absolute net debt increased in the quarter driven by a negative working capital adjustment of $109 million, tied primarily to timing of accounts receivable collections. We have continued to see our net leverage decline as we deleverage our balance sheet ahead of Santo Domingo with a net debt-to-EBITDA 0.8x at the end of 2025 compared to 1.5x at the end of 2024.

The chart on the right-hand side of the page illustrates our EBITDA sensitivity at various copper prices based on 2026 expectations as well as our near-term growth with Mantoverde optimized at full rates, increase in grades at Mantos Blancos next year and the normalization of throughput in Mantoverde and Pinto Valley. The midpoint of our 2026 guidance represents EBITDA in the range of $1.2 billion to $1.7 billion at copper prices between $5.50 to $6.50 per pound. As we look into next year, we -- 2027 and beyond, we expect to see a significant increase in EBITDA approaching $1.7 billion to $2.3 billion or close to 40% growth [indiscernible]. And this is also indicative of our free cash flow growth potential as mentioned in 2027 and beyond. This level of EBITDA generation will enable us to continue to generate cash to delever our balance sheet, further enhancing our financial position as we prepare for the next phase of growth.

Moving to Slide 11. As we experienced a period of robust commodity prices, we are focused on protecting margins to ensure that the benefits of higher prices flow through to the bottom line. Our operating costs for 2026 remained consistent with prior years with an expected 4% increase in absolute dollars, reflecting modest inflationary impacts, largely related to labor and sulfuric acid. The increase in our C1 cash cost guidance compared to prior year is more reflective of a denominator effect driven by lower copper grades as a result of mine sequence at Mantos Blancos and Pinto Valley.

On a consolidated company-wide basis, year-to-date, we have seen much higher byproduct prices compared to our guidance assumptions, which should provide a tailwind for cost in 2026. At current spot prices, our C1 cash cost guidance would be reduced by $0.10 per pound.

Now I'll hand it over to Jim for the operations review.

Thanks, Raman. We are now on Slide 13. We will start with our Mantoverde operation. For Q4, total production yielded 23,819 tonnes of copper at a combined C1 cash cost of $2.32 per payable pound. In Q4, plant throughput averaged 23,400 tonnes per day as the site conducted repairs to address the reliability of the mill motors, which resulted in approximately 16 days of downtime. The repairs to the motors included upgrading components, installing additional protections enabled the sulfide plant to reach record average throughput of approximately 37,000 tonnes per day in December. Today, all 5 motors are on site, which includes 4 motors in operation and 1 rebuilt spare, have been upgraded with additional protections installed to prevent the breakdowns we experienced last year from reoccurring. We have also enhanced the electrical delivery system with additional condition monitoring and changing out cables. As an extra layer of contingency, we have also ordered the second spare motor scheduled to arrive later this year.

Copper grades of 0.79% in Q4 continue to reconcile well with the mine plan and block model. Q4 recoveries averaged 83.7%, impacted by the downtime in the mill associated with the motor repairs. Copper production and cash costs are forecast to remain stable in 2026. The as more consistent throughput from sulfide mill is offset by periods of impacted production, including a 15-day maintenance period to complete the construction tie-ins for the Mantoverde optimized project.

On Slide 14, we have provided an update from Mantoverde optimized. Throughout Q1, we will plan to complete the final stage of procurement and commence Civil works before executing key construction contracts for the concentrator desalinization plant and the tailings facility in Q2 once the required equipment and supplies arrive on site. Our expectations to our capital cost of $176 million and time lines for the project remain unchanged. To reiterate, in Q3, we are planning to complete the project tie-ins for MBO before ramping up throughout during -- throughput during Q4, with a goal to exit 2026 at throughput levels of approximately 45,000 tonnes per day. We are eager to deliver near-term production growth at our flagship asset through MBO, which adds 20,000 tonnes per annum of copper production at a low capital intensity of around $9,000 per tonne.

Turning now to Slide 15. Mantos Blancos finished strong in Q4 to close out a remarkable year. Total sulfide and capital production yielded a record 16,861 tonnes of copper at C1 cash costs at $1.94 per payable pound. Through exceeded design was levels in Q4, averaging 21.400 tonnes per day. The significant reduction of variability in the milling processes in 2025 is a testament to the capabilities for our asset management framework, which we are working on integrating company-wide.

For 2026, we have guided to 48,000 to 56,000 tonnes of copper production at combined C1 cash costs of $2.85 to $3.15 per payable pound. The expected production decrease compared to 2025 is primarily driven by a 1-year period of lower copper grades, which are expecting to approximate 0.7% in 2026 due to mine sequencing with higher grades of 0.85% expected to return in 2027. The higher C1 cash cost at Mantos Blancos in 2026 also reflect the lower amount of capitalized stripping. As we continue to benefit from stabilizing throughputs in the sulfide mill, we are preparing for the next phase of growth at Mantos Blancos as we work towards releasing our Phase II study by midyear.

Moving to the United States. We will now discuss Pinto Valley on Slide 16. We produced 11,423 tonnes of copper at C1 cash cost of $3.53 per payable pound during Q4, which marked the strongest quarter of the year for Pinto Valley. Due to prolonged drought in Central Arizona, which resulted in water constraints, we operated at 2/3 availability with only 4 of the 6 mills online for October before returning to full availability in November and December. Internally, we have dedicated significant time to build the strategy around improving reliability at Pinto Valley. They are 2 main components to this strategy. Our first priority is water. In the near term, this includes improving on-site water infrastructure, utilizing the pit bottom as additional water storage and assigning dedicated positions to manage water-related initiatives, while in the longer term, we are evaluating potential agreements with other closed mines in the area.

Our second priority is increasing operational capacity through our people, strategy and asset management framework, including improving operations and maintenance management, integrated business and asset life cycle planning and our procurement processes. As part of this implementation, there is expected to be a 10-day maintenance shutdown, which includes replacement of the primary crusher mainframe. We now expect this shutdown to occur in Q3. The Pinto Valley mine development has already demonstrated a significant improvement with a 37% increase in material mine year-over-year in 2025.

Over 2026, we are focused on replicating this success across the remainder of the operation. As we focus on improving production and cost at Pinto Valley, in parallel, we remain committed to unlocking significant value through the evaluation of upside opportunities on our land package and within our broader district. Over the course of 2025 and into 2026, we have seen an increased focus from the U.S. administration on growing domestic copper production, which has provided further endorsement for the strategic position of Pinto Valley.

Cozamin delivered another quarter of strong results in Q4, as showed on Slide 17. The operation produced 6,170 tonnes of copper at a record low C1 cash cost of $0.98 per payable pound, benefiting from higher silver byproducts, which continue to represent a tailwind for 2026. Through this year, we will continue to conduct exploration to evaluate the potential for mine life extensions or improvement to the production profile.

And with that, I'd like to pass it to Wendy for a safety and sustainability review.

Thanks, Jim. We are now on Slide 18., where we will discuss our safety and sustainability highlights for 2025. In October, we published our 2024 sustainability report titled Concentrating on Performance, which details how we continue to build the capacity of our organization in pursuit of our business and sustainability goals. Key highlights from the report include the launch of an integrated health, safety and environment management system, which lays the foundation of a cohesive organizational approach. We also began to develop Capstone-wide standards for key areas of sustainability, setting minimum performance standards connected to our sustainable development strategy priorities. We continue to make progress on our sustainable development strategy during 2025, including advancing our climate risk assessment by developing a financial model to analyze various scenarios. Additionally, we were proud to receive the Copper Mark Award in recognition of responsible mining practices at Pinto Valley during 2025, joining Mantoverde and Mantos Blancos, both of which received the award in 2023. As a testament to our commitment to transparency responsible production, our Cozamin site also began the Copper Mark assurance process in 2025 and meaning all of our sites are now participants.

Last, but certainly not least, 2025 represented the first year of our health, safety and environment program that we call CU Safe. During year 1 of this 3-year initiative, we completed our first safety leadership module with site management and executed Phase 1 of our mobile HSC database. We are already seeing evidence of its effectiveness. As a result of this program, we've achieved a year-over-year reduction in recordable injuries of approximately 30%.

I will now pass it back to Cashel.

Thanks, Wendy. Turning now to Slide 20. Over the past few years, Capstone has navigated through a period of significant change as we built and ramped up mines. Following the execution of several key milestones, our portfolio of assets is now well positioned to support future growth. During 2026, we will remain focused on operational excellence to get the most out of our existing operations, while continuing to advance our pipeline of executable organic growth opportunities. At Santo Domingo, we have several remaining work streams ongoing prior to an FID expected in the second half of this year. These include securing an optimal financing strategy and progressing detailed engineering to approximately 60% as well as advancing upside opportunities and potential infrastructure opportunities.

In terms of our financial position, we will continue to capitalize on strong commodity prices by deleveraging through internally generated cash flows and reducing our net debt leverage further prior to a sanctioning decision. In addition to advancing Santo Domingo, we've highlighted our other key priorities for execution over 2026 on Slide 21. We will upgrade Mantoverde to sustain 45,000 tonnes per day funded through internally generated cash flows. We will also look to release the Mantos Blancos Phase 2 study midyear. Both these projects are great examples of the type of low capital intensity brownfield expansions we like to prioritize, especially beneficial during periods of strong commodity prices.

On the exploration front, we will continue to build on our success from 2025 with an expanded exploration budget of $70 million for 2026. One of our main priorities is to progress Phase 2 of the Mantoverde exploration program, with a focus on improving grades, adding mineralization and testing high-priority targets immediately north of the pit and along the 10-kilometer northern corridor.

At Santo Domingo and the nearby Sierra Norte deposit, we focus our exploration efforts on advancing upside opportunities for incremental copper production in the region, specifically those eligible for contingent consideration under our joint venture agreement. Our team is eager to unlock significant value through exploration in pursuit of our strategy of building a world-class long-life copper district in Chile's Tier 1 Atacama region. At Capstone, we are proud to have created a peer-leading pipeline supported by an enhanced diversified foundation of operating assets. As we enter into a new year, our strategy has not changed. We will continue to focus on operational execution, strengthening our balance sheet and responsibly advancing our projects to ensure we are well positioned to execute our goals.

The fourth quarter marked the completion of inflection year for Capstone. We achieved our guidance and delivered record results across a number of metrics, allowing us to realize the benefit of strong commodity prices. We also took tangible steps on our path toward transformative growth through execution of several key catalysts. 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 now ready to take questions.

[Operator Instructions] Your first question comes from the line of Orest Wowkodaw from Scotiabank.

Obviously, this year, based on your guidance is more of a transition year. When I look at your Slide 8, and you've got a target there of approximately 265,000 tonnes of copper and you've labeled it near-term growth. Is there any reason for us not to think that 2027 could be something in that range? When I look at what's assumed in that 265,000, just based on the fine print, it feels like all those pieces are in place for 2027. Just wondering if I'm missing something or if that's being too optimistic.

Yes. Thanks for the question, Orest. I would think that is the closest characteristic of what we expect to produce in 2027. As you know, we've sort of been giving 1-year guidance year-over-year. You're absolutely right to identify that all those pieces are in place. Obviously, there's some optimization and execution that's not dependent to deliver on that 265,000, but the range is sort of where we're sort of thinking about the probability and we're not ready to provide the range yet. We're maturing all our long-term plans now as we speak, such that we can provide maybe that accuracy, again, with guidance next year. But we would be disappointed if we weren't able to achieve that next year.

Okay. That's great. And just as a follow-up, I'm just curious what you assume as a normalized throughput rate for Pinto Valley for the next couple of years?

Yes, that's a great question. I'll just sort of lead in and preface it by the process improvement we employed at Mantos Blancos and the asset management framework and the team that facilitated that there with consultants and internal expertise as well as the management team is what our deployment is at Pinto Valley. We've now been on that journey sort of for a year at Pinto Valley. Obviously, we had the overprint of the drought last year, which was unlucky, but we've sort of drought-proofed ourselves going forward for the next 2 years, and we'll see sort of long-term solutions thereof that we believe are perfectly executable. But the way I look at it is the instantaneous throughput of Pinto Valley is 62,000 tonnes a day and best-in-class of an asset of that vintage would suggest 90% utilization, accounting for unplanned and planned maintenance periods. So that would mean 56,000 tonnes a day. So we see ourselves from the beginning of this year where we sort of have built into what we call our prudent and reliable guidance from a 50,000 working our way through the year up to sort of 52,000 tonnes a day and then next year incrementally taking that up again. As we make these improvements in our maintenance program, switching it from a reactive process to a proactive process, we see ourselves marching in the next couple of years towards 56,000 tonnes a day on a reliable prudent continuous basis.

Your next question comes from the line of Dalton Baretto from Canaccord Genuity.

Cashel, maybe I can start by asking what -- meant the Mantoverde mill averaged in February. You're past the strike, you're passed a lot of the stuff from last year.

Yes. Yes. Thanks, Dalton. So always bringing up a plant from an unplanned interruption always has its challenges. But the team there has done a terrific job. It's sort of hit nameplate, that 32,000 tonnes a day and just right around 85% recovery. So we're really looking forward to getting back to what we achieved in December, which was through continuous production after working through some of the items that Jim outlined with respect to the motor, where we achieved 36,400 tonnes a day in December. And -- so we're looking towards getting back to that and building against that prudent and reliable guidance that we put out that is in and around that 32,000 tonnes a day. So that's what we achieved.

That's great. And then just maybe building on what Orest was asking around 2027. For 2026, you put your guidance, your stock was down on the back of that. And now for your longer term, it's down to 375 versus 420. I'm just wondering maybe you could sort of contextualize all of that for us a little bit more. And maybe hit on some of the key assumptions for 2026, in terms of what you receive for ramp-up at [ MVDP ], Pinto Valley, that sort of thing.

Yes. Yes. Great question. And yes, and thanks for noting those differences. When we speak about guidance, what is most frustrating is when repeatedly companies don't meet guidance. And so there are ways to build your plans, and they can be -- we use -- there is a -- there are terms, we use prudent, stretch and breakthrough. And when you repeatedly put out stretch and breakthrough while ambitions and processes are there, you really can only build on what you're capable of doing and what you've done. We believe what we've put out for guidance is a prudent forecast of what we can achieve with a certain amount of bumps in the road, and we have left ourselves for upside. And that upside as you sort of indicated is, we're not assuming we're instantaneously going to achieve after the August shutdown and tie-in of MBO, which is a 15-day shutdown the 45,000 tonnes a day throughput, we believe that's going to take a certain increment to ramp up, recognizing that, that comes near the end of the year. And having been in the mining industry for 30 years, when you have high grade or ramp-ups at the end of the year and you have a month delay, it can really impact your guidance and thereof. So took what we call the conservative approach and didn't book that. We sort of booked a lower ramp up through that last quarter. It still gives us 4 months to ramp up essentially what our pumps and pipes to what we're already achieving some days over 45,000 tonnes a day through our crusher and grinding circuit. So we have high confidence we'll be able to exceed the expectations at Mantoverde and start out 2027 at that 45,000 tonnes a day there. And really, that production is a major increment to that increase of what Orest had previously pointed out, the 265,000 tonnes, which is indicative of what we believe our guidance will be in 2027, that combined with a little more throughput at Pinto Valley back through the sequence in higher grades at Mantos Blancos and less down days through the year of 2027 because we won't have the MV-O tie-in or some of the major equipment downtime we're having at Pinto Valley. So all those things conspire to sort of that run rate of that 265. And just for the last part of your question, you mentioned, so the discrepancy with respect to the 400,000 tonnes of copper at the turbine -- completion and ramp-up run rate at Santo Domingo when we build upon all our other assets. Part of it is just the maturity of these mine planning processes and that characterization I get of being prudent and reliable. So part of it is the mine planning. But what I would say is we have a number of operational excellence and improvement projects where we believe over time, we'll be able to build that back over 400,000 tonnes, by that time, we achieved full production at Santo Domingo, principally for Mantos Blancos cost. We have 2 programs there, one that could add 15,000 tonnes of copper and concentrate with Mantos Blancos to 7,000 tonnes a day by bringing on to existing mills. And then we have the opportunity of 20,000 to 25,000 tonnes of cathode at our heap leach opportunities with respect to the old ripios or spent ore and some of the coarse fraction of the higher-grade residual from the 1980s and 1990s in the order of 140 million tonnes available to us at 0.3 copper. So those are just 2 examples, not to mention some of the other byproduct credits we see coming. Later this year, we hope to put out a feasibility study around some of our cobalt production, for example. All those will be contributory that we'll get back over that 400,000. We've sort of characterized that 375 as executable, prudent and permitted. And so we have more growth beyond that by the time we get to Santo Domingo.

Your next question comes from the line of Daniel Morgan from Barrenjoey.

Cashel, my question regards Pinto Valley and just drought-proofing initiatives. Can you just expand on the actions taken there? It sounds like there's water retention you're doing at the bottom of the pit. Just wondering, does that -- is that going to continue into 2027 at all and have any impact on the early part of '27?

Yes. Thanks, Daniel. Yes. So we call it our Northwest wall. We're doing a pushback there. The highest grade at Pinto Valley is in the bottom of the pit. So we're in a sequence where we're pushing back the pit. We get the opportunity now to store that water rather than in an old tailings facility where we typically have stored the water. So we'll get an opportunity to drain that tailings facility, take a look at it, understand for future value and the sequence of the mine is such that we'll be able to use that for fully 2 drought seasons. The drought season in 2026, the drought season in 2027. And we've already almost stored the total amount required that would have mitigated the drought last year in the bottom of the pit currently. So we're well set up, and then we will address the issues of water management beyond 2027 over these next 2 years while we utilize that opportunity of the pit to be able to store the necessary water we need.

And then can you just remind us again on the Mantos Blancos expansion that you're studying and planning to put out on mid this year. I'm not looking for numbers, but just can you remind us conceptually about what needs to be done to achieve your goals there? Like what can you leverage and what needs to be installed or improved?

Yes. Thanks. So the major bottleneck is actually we will have exhausted our course tailings -- sorry, our [ fines ] tailings capacity 3 years from now. And so as it is currently with the administrative process of receiving permits in Chile, you can work on 1 site at a time. We have 3 things we have ambition to permit at Mantos Blancos, One is bringing on 2 mills that we currently use when we go into a reline on our mill #8. Mill #8 is the new mill that was added in 2021 and 2022. When we go into that reline, we actually do compensate for our production by turning on these other 2 mills. The only reason we can't use them now really is because of permitting constraints on throughput and some downstream capacity issues that we need to build in. That's what we call Mantos Blancos 2, and that would add that additional 15,000 tonnes of copper per year to concentrate. So that program would probably -- we could probably execute that in less than a year provided we had the permits. But the permit is for the fines tailings impoundment. The current impoundment site is a combination dam and open pit. Our next site is an open pit we're currently mining, that open pit is called Phase 22. That will be ready a couple of years from now for more tailings. But the way the Chilean administrative process is, is that it takes 2 years for a full EIA for a tailings dam. Now we don't know if this is going to be the case, but the [ CAS ] administration has indicated they might, in the future, accelerate administrative processes. We think this could be a candidate for that because this isn't an impoundment structure or filling a hole. But conservatively, we're saying we'll have the permit submitted near the end of this year. It will take 2 full years to go through an EIA and then we'll get the opportunity for this new fines tailing impoundment site as well as Mantos Blancos 2 with the 2 mills. There's that other separate project I was talking about, where we can utilize some of the installed capacity in our SX-EW where we could see upwards of 20,000 to 25,000 tons of cathode being produced by leaching some of the ripios and coarse tailings that have some high residual oxide in secondary sulfide grades. That project, we're still working with. Probably the guidance for that project will be more to the end of the year than the middle of the year. But we're still figuring out what we can do if there's a possibility maybe to bring some of that copper forward outside of that permitting constraint, but it will be for another quarter.

Your next question comes from the line of Craig Hutchison from TD Cowen.

I was wondering if you could just provide some more color on the grade guidance for Mantos Blancos this year. The 0.7%, it's pretty lower than the tech report. When I look, I think you're supposed to be a little bit above 0.9% this year. Is that a function of negative grade reconciliation? Are you smoothing out your technical report? Just any context around that would be helpful.

Yes. This -- good observations, Craig. The reconciliation isn't in question. It works well. the tech report sort of evaluated, I would say, more of a -- well, it was published in 2021, and it was part of the merger of the 2 companies. We will be replacing that tech report later this year with a new tech report with more resolution on the mine planning. I would say that one was sort of flatlined, more or less out in the future years with less detail in the present years. And the present years they were looking at were -- more the years of '22, '23 and '24. Well, now we're out in '25, '26 and '27, and it doesn't have the resolution required. The sequencing we have, we're just into a low-grade portion. It has no concerns or considerations for any reconciliation. All our reconciliation is working out within normal tolerances. So we will be back into plus 0.85% copper in '27, '28 and '29.

Okay. Great. And then maybe just a similar question for Pinto Valley just because you're in the upper benches to assume grades in '27 are quite similar to 2026?

Yes. Yes, exactly. Probably in the order of 0.29%, we're pushing back that Northwest well. And there is some variability in there. There is some opportunity for dilution but that will be all to the upside of the guidance we have.

Your next question comes from the line of Lyndon Fagan from JPMorgan.

Thanks for that. Look, I was hoping to just continue on the grade theme. Obviously, the guidance was pretty poorly received by the market for 2026. If we look into 2027, you've talked a bit about the Mantoverde grade. But what about the other assets? Are you able to give us a flavor for grades across the portfolio in '27 just to avoid that kind of sticker shock.

Yes. So I just sort of was talking about -- Lyndon, I was talking about Mantos Blancos, just to clear the deck here. That was, I think, the grade shock was the decrease to 0.7% from this year at 0.9% or 0.92%. And then so the next 3 years, like I said, what we are anticipating is to be above 0.85% for '26, '27 and '28. So that's Mantos Blancos. Pinto Valley will be at 0.29% for '27 -- '26 and '27. And then the following year during some time during the year, I can't say exactly just off the top of my head, what quarter yet, but we'll be back into the bottom of the pit. And the pit -- grade will start trending higher to the 0.32% to 0.33%, maybe even 0.34%. So that will be Pinto Valley sort of recovering. And Mantoverde, we're in 0.72% now, and we see ourselves in the next year in '27 sort of getting up for upwards of 0.9% -- 0.73%. sorry. So we're going to be pretty level going forward with the 0.7% to 0.73%. And Cozamin there's slight decrease in grades going forward right out to what we have as current end of mine life. Last year, we produced 25,000 tonnes of copper, and I believe 2031 is sort of scheduled for 80,000 tonnes of copper, and it's kind of more or less a decline from here to there.

Just to clarify, Mantoverde, do you mind just running through the '27 and '28 outlook? And also, while we're at it, talking a bit about the oxide. It looks like the grades have fallen there. I don't know if it's temporary in '26, but maybe a bit of flavor of what's going on there as well.

Well, yes, yes, good identification base. Yes. So we're in a 2-year sort of lower cycle on the grades at Mantoverde and then they'll start coming up again on the oxides, yes.

And sorry, the sulfide, what did you say again 'for '27 [ and '28? ]

0.72%, 0.73%. So the same grade.

Okay. Great. And then I guess the other part of guidance, which is pretty hard to get a handle on going forward is capitalized stripping. Are we trending around the [ '26 ] number for the next few years or going up or down, it would be good to get some flavor there, please?

Yes, yes. And again, as we've said, we're endeavoring to update a couple of our technical reports, certainly Mantos Blancos this year, and we hope maybe early next year, Pinto Valley because those are sort of the consumers of the larger strip and some of the capitalized stripping. Do have some sustainability and ambitions to meet certain standards and guidelines on some of the old infrastructure and tailings impoundment at both Mantos Blancos and Pinto Valley. So that will go this year and next year. Then we sort of see ourselves if you take off that -- so that run rate of capitalized stripping plus is in and around with sustaining CapEx, $600 million if you take off the expansion capital. So that -- we see that for 2 years. And then we see ourselves sort of maybe dropping to more like maybe $400 million to $500 million after the next 2 years for those 4 assets.

Your next question comes from the line of Marcio Farid from Goldman Sachs.

Quick one maybe on Santo Domingo. Obviously, you've reached our financial targets, moving on with the sanctioning, got the JV partner already. I think this the -- just a couple of things are missing. Obviously, the project finance facility hasn't been detailed yet. But also, I think just if you can provide some update in terms of where we are at in terms of the project finance discussions, but also any update on the development of Santo Domingo's profile would be great as well. Just trying to understand if the 2026 sanctioning [ the 2 ], a viable option.

Yes. Just maybe I'll just put it in a few words, and I'll pass it to Raman for exactly what our options are with respect to financing. But our goal is to be in a position in Q4 for sanctioning. And obviously, there's the macro environment. There are a lot of things external that might affect what that is. But our goal is to take what is in our control and be ready then. And so one is detailed engineering to 60%, another is to determine what is in -- within the scope of capital financing and what is out. As many of you know, there is a modular nature to some of the off-site infrastructure required for Santo Domingo like a desalination plant in a port. And there's everything from working with the current owner of a desalination in the port and a commercial arrangement to joint ownership to boot contract of infrastructure of our own assets to capitalizing our own assets. And it seems complicated. It's not that it's complicated, I suppose. It's just what is the best strategic outcome and the best value outcome. So we're working through those. We sort of set ourselves a goal to resolve that in the second quarter this year, such that we can then determine with that 60% detailed engineering, what a robust capital number is and what required financing we have. So with that, I'll just pass it over to Raman to talk about some of the ideas we have with respect to financing. And I'd just add, obviously, we did do the partnership agreement for the 25%.

Thanks, Cashel. Like Cashel mentioned, we got the Orion partnership, which brings in, obviously, $300 million and derisk kind of the financing plan when you look forward. And we're trading off a couple of alternatives. We got the base case of like traditional project financing, which could be done at the asset level that we've kind of kicked off already and that takes time, but it'll be in place for Q4 timing because you got to start that. But the other alternatives, we're also assessing in parallel are a potential mix of like a high yield and a bank debt piece that can be put in place as well to fully finance our project. As you know, the bank markets are open from a lending perspective in these robust copper price environment. So I think we're just trading off the cost of capital of the couple of alternatives and the restrictions and whatnot that come with it, assessing that and discussing that with our Board.

Your next question comes from the line of Adam Baker from Macquarie.

Just on the cathode production at Mantoverde. Looking back at the tech report, I think you had a rising to around 39,000 tonnes in CY '26. I know you noted on the call, lower grades driving lower cathode production. But do we have confidence we can get back up to the 39,000, 40,000 kt levels for cathode, noting the drop in this year's guidance.

Yes. I don't know if I caught the second part of your question, but let me get to the first 1 first, and you can repeat yourself maybe after that. The first part is, if you recall, we're -- versus the tech report, we're a little late on MV-O versus our ambition. And part of it was 5,000 tons of enhancement due to bioleaching and due to enhancements in our SX-EW and leaching processes. So that is one of the boosts we'll see is actually a gain in recovery that will happen in '27 versus '26. So I hope that sort of fills that gap for you. And did you have another part to your question?

Just to see if we could get back to 39 kt cathode production from Monteverdi, once MBO is fully ramped up. Is there anything to suggest that you can't get to those levels?

Yes, that -- and that is one of the key contributors there combined with some grade lift 2 years from now. So between the 2 of them, we'll get back closer to that 40,000 tonnes of copper.

And maybe just one for Raman on the taxation expenses, a bit of an uplift in the 4Q. A lot of that's obviously driven from higher profitability with higher copper prices. Can you just remind us of the income tax expense rates moving forward from here?

On the income tax rate, roughly kind of like it depends by jurisdiction. PV like 21%, Mexico is like 30%, you can use, and then Chile is not 30% to 35%. And just Chile's got that ad valorem tied to copper prices a bit, that kind of came up. But -- so slightly higher taxes perhaps in Q4 tied to a higher copper price.

Our last question comes from the line of David Radclyffe from Global Mining Research.

So I had a quick question on Pinto Valley slide. And the comment there in regards to district consolidation opportunities because that particular comment has been, I guess, flagged in the deck for many years. And today, we've seen a peer growing the U.S. business through M&A in the States. So maybe if you could comment to the extent you can on the potential for this to actually advance in '26. So any color you can provide and maybe what you see as the current roadblocks?

Yes. We continue to work with our neighbors and specifically with the exploration/amalgamation idea with BHP and Copper Cities. That has been ongoing as you've correctly identified for a couple of years. We are seeing, as you would see with either our peers or other letters of intent out there with BHP, that there is a renewed focus in the American Southwest to help generate more copper production. Obviously, we're well positioned having an operating asset for growth and incremental growth by bringing these things through rather than greenfield builds that are either shall be permitted or not permitted yet. So with respect to Copper Cities, we're evaluating the possible inclusion of other, I would call, satellite opportunities to see if they can enhance the prospects thereof. So all I can say is we really hope to be able to bring more light and more color to our plans later this year and that we're seeing more energy and more focus from our potential partners.

That's the end of our Q&A session. I will now turn it over to Cashel Meagher. Please continue, sir.

Thank you, operator. We look forward to updating you in April with our Q1 results. Until then, stay 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 evening.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

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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

Good afternoon, and welcome to Capstone Copper's Q3 2025 Results Conference Call. [Operator Instructions] This call is being recorded on Thursday, October 30, 2025.

I would now like to turn the conference over to Daniel Sampieri. Please go ahead.

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.

[Operator Instructions] First question comes from Ralph Profiti from Stifel.

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.

Next question comes from Orest Wowkodaw from Scotiabank.

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.

Next question is from Dalton Baretto from Canaccord.

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.

Next question is from Fahad Tariq from Jefferies.

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.

Next question is from Daniel Morgan from Barrenjoey.

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.

Next question comes from Craig Hutchinson from TD Bank.

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.

Next question is from Adam Baker from Macquarie.

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.

Next question is from Anita Soni from CIBC World Market.

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.

Next question is from Marcio Farid from Goldman Sachs.

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.

I'd now like to turn the call back over to Cashel Meagher for final closing comments.

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.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.