First Quantum Minerals Stock

Good morning, and welcome, everyone, to the First Quantum Minerals Second Quarter 2026 Results Conference Call. Today's conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Bonita To, Director, Investor Relations and Capital Markets. Please go ahead.

Thank you, operator, and thank you, everyone, for joining us today to discuss our second quarter results.

During the call, we will be making forward-looking statements, and as such, I encourage you to read the cautionary notes that accompany this presentation, our MD&A and the related news release. As a reminder, the presentation is available on our website and that all dollar references are in U.S. dollars, unless otherwise noted.

On today's call are Tristan Pascall, our Chief Executive Officer; Ryan MacWilliam, our Chief Financial Officer; and Rudi Badenhorst, our Chief Operating Officer. And with that, I will turn the call over to Tristan for opening remarks.

Thank you, Bonita, and thank you, everybody, for joining us on the call today. It's been a very busy half -- the first half of the year for First Quantum and the broader markets. So I'm pleased to have this opportunity to discuss these updates alongside our second quarter results.

During the second quarter, we continued to deliver steady operations, and it was pleasing that the S3 circuit at Kansanshi continue to operate above expectations, which Rudi will discuss later in the call. We remain well positioned for further production in the second half of the year with continued solid performance from S3, debottlenecking work at Sentinel and the processing of stockpiled ore at Cobre Panama. With our hedging program concluded, as Ryan will discuss later, we are once again fully exposed to spot copper prices. Alongside stronger production, this will position the company for improved free cash flow generation at current copper prices. We remain well positioned in terms of our cash flow, liquidity and balance sheet to cope with ongoing market volatility, even as we continue our focus on cost management across the business.

At Cobre Panama, we continue to work on the stockpile processing program during the quarter, with an acute focus on safety, equipment integrity and operational stability. This measured approach allowed for the successful recommissioning of 1 of the sites 3 milling [indiscernible] in May and the production of first concentrate in June, which is earlier than our third quarter target. I'm very pleased with performance, and I would like to thank the team at site, including the approximate 1,000 skilled Panamanian who have rejoined or newly joined Cobre Panama. This achievement reflects their hard work and the effectiveness of the Preservation Safety and Management Program, maintained over the past several years that enables a high level of readiness and reliability across the operation. Following the successful recommissioning, the focus was on operational stabilization, and I'm pleased to report that Train 3 achieved stable operations and a total of 2.1 million tonnes of ore was processed through the second quarter to produce approximately 3,200 tonnes of Copper in concentrate.

Stockpile processing through Train 3 has performed well with both mechanical and operational performance, tracking within expectations. Cobre Panama now has approximately 3,000 people on site, and we have restarted procurement amongst local Panamanian suppliers. Our activities to date continue to provide confidence in the team and in the asset. Environmental stewardship remains a core priority and the stockpile processing will mitigate environmental and operational risks associated with the prolonged on-site storage of mineralized material. Through quarter 2, the remaining unit Train, Train 2, along with the regrind and column areas were undergoing inspection repairs and preventative maintenance to support the next phase of the stockpile processing program. So far, indications are that the extent of the repairs are similar to Train 3 and the other concentrate common areas, respectively.

Subsequent to the quarter end, processing was successfully swapped over from Milling Train 3 to Milling Train 2 as part of the maintenance cycling strategy. The Power Station and Port continue to operate well, and we expect our first concentrate shipment in August. Concentrate growth will be lower, while we continue inspection, repair and preventive maintenance of the regrind and columns area of the Cobre Panama process plant. Due to the global shortage, there is strong demand for the concentrate, and additionally, at the [indiscernible] processing rates and spot copper prices, we expect free cash flow from Cobre Panama to be neutral to positive. Moving forward, we will remain focused on maintaining this conservative and measured approach in order to ensure the highest quality operations. We have an estimated 38 million tonnes of mineralized ore containing approximately 70,000 tonnes recoverable Copper. We anticipate that we have sufficient stockpile to support around 12 months of processing at current rates.

Also in the quarter, the comprehensive audit of Cobre Panama was published and is now available to the public on the “MiAmbiente” website. The audit process span approximately 8 months and involves the preparation and submission of thousands of documents, participation in interviews and support from numerous site inspections and fuel [indiscernible]. This was undoubtedly the most extensive and rigorous independent review ever undertaken at Cobre Panama and one of the most thorough independent audits of any mine globally. The audit concluded that Cobre Panama is a professionally managed and technically sound operation with a high degree of regulatory compliance, achieving an overall score of 87.73 out of 100. Importantly, the report found that the project's core systems, infrastructure controls and management processes are functioning effectively.

[indiscernible] comprehensively of this nature, the audit also identified areas with further improvements can be made. 361 out of 372 commitments were fulfilled with 7 areas being in partial compliance, but with no areas fundamentally absent Improvements required in these areas are related primarily to long-term reforestation, biodiversity and restoration programs that are correctable and not considered acute environmental incidents. We welcome these finding as continuous improvement has always been a fundamental part of how we operate and review the recommendations as a valuable opportunity to further strengthen an already robust operation. The audit is now being reviewed by a high-level industrial commission led by the Ministers of Commerce and Industry, Economy and Finance and the Environment.

As communicated publicly by government, the Ministry of Commission is undertaking a comprehensive technical evaluation of the audit findings and will provide an informed recommendation to the mine to the presidents in due course. In the meantime, we remain focused on the safe execution of the stockpile processing program and we remain ready to engage constructively with the Government of Panama to achieve a fair and durable resolution for the mine.

Additionally, we continue our efforts in workforce and community initiatives in Panama. It is pleasing to share that our recruitment initiatives to support the hiring staff for preservation activities over 50% participation from communities in the mine's local area of influence and the participation rate from women was approximately 17%. Our educational program added over 500 students during the quarter and now supports over 4,000 students in Panama. While our entrepreneurial program graduated over 700 individuals during same period, taking the total to over 1,000 graduates to date.

We have also launched a new Environmental Education Initiative which is expected to reach more than 50,000 students in schools across Panama.

Moving over to Zambia. I want to thank the team at Kansanshi for cohosting the 2026 International [indiscernible] Competition. This was a significant achievement not only for Kansanshi and First Quantum, but also for Zambia, as it's the first time when African nation has hosted discipline. The competition brought together 22 teams from 10 countries across 4 continents and tested participants under real world emergency response scenarios. We are proud to have played a role in bringing the global mining community together in Zambia towards improving safety performance across our industry.

Continuing at Zambia, I am proud to share that 2026 marks a significant milestone for First Quantum as we celebrate 30 years of partnership investments and shared growth with the people of Zambia. Over the past 3 decades, we have invested not only in world-class mining operations, but also in the people, communities, local suppliers and local businesses, helping to create lasting value and opportunities across the country. Our success is closely linked to the success of the communities in which we operate and that belief continues to guide our approach today. The recent example is the handover of infrastructure and learning materials valued at more than ZK 12.9 million to several schools [indiscernible] helping create better learning environments and opportunities for young people. Ultimately, digital talent, dedication and ambition of Zambian that power our operations and position us for the future. As we celebrate our 30-year milestone, we remain committed to operating safely, responsibly and transparently and continue to be a long-term partner in Zambia developments.

Thank you, and I will now pass the call to Rudi to discuss our operational results.

Thank you, Tristan. Higher production at Sentinel and the commencement of stockpile ore processing at Cobre Panama led to a 4% quarter-over-quarter increase for total copper production of just over 100,000 tonnes in the second quarter. Copper sales totaled 93,300 tonnes, approximately 7,000 tonnes below production due to timing differences between sales and production.

At Kansanshi, copper production in the quarter was 44,000 tonnes, down approximately 1,000 tonnes from the previous quarter due to lower throughput as the S3 and mixed circuits underwent planned maintenance during the period. The S3 Concentrator, however, delivered the highest monthly throughput in May since commissioning and operated above design capacity throughout the second quarter. This performance was driven by increased operating time, strong utilization and milling rates, which supported the processing of long-term lower grade stockpiles. S3 continues to take a higher proportion of feed from surface stockpiles, which are [indiscernible] and lower grade than freshly mined ore. Copper production guidance for 2026 remains unchanged at 175,000 tonnes to 205,000 tonnes, whilst gold production guidance is 110,000 ounces to 220,000 ounces. This will be supported by continued strong performance at S3.

Additionally, while ore will continue to be predominantly sourced from low-grade stockpiles, fresh ore from the Southeast Dome that is harder and high-end grade will be gradually introduced in the S3 circuit during the second half of this year. Also at Kansanshi, we opportunistically sold surplus sulfuric acid during the quarter, through proactive management of higher acid consuming oxide ore and acid inventories, we generated surplus asset available for third-party sales totaling approximately 36,000 tonnes and expect the sales to continue into the third quarter.

At Sentinel, copper production was 50,000 tonnes, an increase of 5,000 tonnes from the previous quarter. This increase was attributed to higher grades and recoveries offset by lower throughput. A result of the planned 5-day total plant shutdown at Trident that was completed in June. We continue to effectively manage through bolt fatigue with Ball Mill 2 and expect to resolve the issue permanently during the annual planned maintenance downtime in 2027 with the replacement of a section of the [indiscernible] and discharge end. Production guidance for 2026 remains unchanged at 190,000 tonnes to 220,000 tonnes of copper. Production is weighted towards the second half of the year with improving mill throughput and an improvement in grades as mining progresses within Stage 2 of the pit.

Enterprise produced just over 11,000 tonnes of nickel, a 9% decrease from the previous quarter, mainly due to the aforementioned total plant shutdown. Production items for 2026 has maintained a 30,000 tonnes to 40,000 tonnes of contained nickel. We are continuing to focus on improving ore quality and great control through ongoing RC drilling while also refining mining practices, including reducing the ore bench heights to minimize dilution and enhance recovery. All grades at Enterprise are expected to be lower in the third quarter but in line with the mine plan. The development of permanent ramps is underway to improve mining productivity and the pit dewatering Stage Tank Pad is scheduled to be handed over to our projects team in early July, after which mining activities will focus on increasing the ore footprint through lowering current cutbacks, some development and South Wall mining and preparation for the upcoming rainy season.

Lastly, looking at Guelb. Copper production was 2,000 tonnes and gold production was 6,300 ounces, which includes output from reprocessed tailings through the CIL plant. Production guidance for 2026 remains proximately 7,000 tonnes of copper and 30,000 ounces to 40,000 ounces of gold. The operation will continue processing sulfide copper ore plus gold containing tailings through the CIL plant with intermittent stockpiled oxide gold ore treatment to support the most favorable transition to full oxide ore gold production. In summary, as Tristan noted, we delivered consistent operations in the second quarter and we have set up well to deliver stronger copper production in the second half of the year.

Thank you. And with that, I will turn the call over to Ryan for the financial review.

Thank you, Rudi. The copper price remained strong in the second quarter, trading between $5.50 and $6.40 per pound. This was due to tariff-related stockpiling in the U.S., a tight copper concentrate market, and sulfuric acid supply concern. Continued strong demand meant global warehouse inventories climbed significantly towards the end of the quarter with a 62% drop in [indiscernible] deliverable inventories quarter-over-quarter.

Turning to our financial performance. Revenue increased by 8% to $1.5 billion, driven by higher copper prices and increased sales. As Rudi noted, we opportunistically sold our surplus sulfuric acid, contributing around $12 million in revenue. EBITDA increased by 23% to $400 million, a stronger revenue more than offset the impact of higher fuel and contracted costs. It is also worth noting that EBITDA was impacted by hedge losses and PS&M costs at Cobre Panama. Both headwinds fall away for the second half of the year with the hedge program now complete, and Cobre Panama stockpile processing underway with first shipments expected in August.

Excluding Cobre Panama, our copper C1 costs were $0.03 lower quarter-over-quarter, benefiting from improved Zambian production, which was partly offset by higher fuel costs and reduced gold [indiscernible] credits. Including Cobre Panama, C1 cash costs were $0.03 higher with a $0.06 impact relating to elevated production costs from stockpile processing. As expected, the increase in fuel prices was a headwind on costs, along with the weakening gold price. Diesel prices through the quarter averaged $1.59 per liter in contrast to the $0.91 per liter paid in Q1. With the 2- to 3-month lag in fuel deliveries, elevated fuel prices are expected to continue flowing through our cost base in the third quarter. While Q2 saw pockets of improved diesel availability and some easing from peak prices, recent developments in Russia and the Middle East have reintroduced volatility in global fuel markets. As a result of this unpredictability, we have left our C1 cash cost guidance unchanged.

However, as disclosed last quarter, should current fuel, kwacha and gold prices persist, there is a roughly $0.25 upside risk to our cost guidance. Capital guidance, which already includes Cobre Panama stockpile processing also remains unchanged. We've incurred around $60 million for the Cobre Panama processing program to date. This is within the $250 million of required spend previously guided to.

In the rest of the business, capital spending broadly aligned with expectations at the start of the year. Our hedge program for both copper and gold is now complete. We incurred hedge losses of $159 million for copper and $5 million for gold during the quarter. This program was put in place to provide greater cash flow certainty through the S3 project delivery period. With strategic hedge book now fully settled, we have no further hedges in place, giving us full exposure to spot copper and gold prices going forward.

As Tristan noted, our stronger production expected in the second half of the year, with that stronger production, we're all -- we are well set up for free cash flow generation at current copper prices.

On the balance sheet, we are pleased to close out the Cobre Las Cruces and Cayeli transactions during the quarter. These sales reflect our disciplined approach to portfolio management and focus on our core strategic priorities. They delivered a gain on disposal of $271 million, with the net proceeds deployed towards short-term debt. Net debt increased by $123 million to $5.4 billion. This reflected planned CapEx, tax interest outflows, partly offset by EBITDA generation and favorable working capital movements. We closed the quarter with a strong liquidity of about $2 billion, including $771 million in cash and $1.25 billion of undrawn revolver capacity.

Overall, it was a solid financial quarter, with strong execution, driving resilient margins. We're maintaining a disciplined approach to capital management, keeping balance sheet strength, liquidity and a continued focus on de-leveraging at the center of how we make decisions. Combined with our full spot copper price exposure, this positions us well to navigate market volatility while continuing to advance our strategic priorities.

With that, I'll hand the call back to Tristan.

Thank you, Ryan. On to our development projects. During the quarter, we were very pleased to publish a technical report for our La Granja project in Peru. The report provided an updated mineral resource containing an estimated 23 million tonnes of copper, 600 million ounces of silver and 6.7 million ounces of gold, which positions the project as the second largest greenfield copper resource globally. The report also included geological and metallurgical work that indicated a significant portion of the [indiscernible] mineralization is structurally controlled and associated with higher grade copper. Based on work completed to date, we believe [indiscernible] can be effectively managed by segregation, blending and through commercial offtake arrangements. And that, as a result, the mine can develop for the large-scale open-pit operation with a conventional floating flow sheet. It is still early days for La Granja.

However, the technical report underscores the project's potential to become Tier 1 multi-generational mining operation. Our focus is now on advancing the permitting process and our key priority includes the progression of baseline environmental and social studies continued stakeholder engagement and preparation for the detailed environmental impact assessment.

At Taca Taca, we continue to progress work to derisk the project. This includes the mining ESIA, which is expected later this year following completion of the public consultation process. In parallel, ongoing water supply assessments are evaluating incremental supply opportunities that could provide greater flexibility. We are also finalizing our application under Argentina Regime Investment Incentive application and tend to submit it once the ESIA approval and required water use concessions have been secured. As I noted earlier, it has been a busy first half of the year with our operations and development projects. However, our priorities remain very clear.

First and foremost, the priority is to progress towards a durable resolution at Cobre Panama; secondly, maintaining safe, leading and productive performance across our operations. And thirdly, strengthening the balance sheet to ensure the company is well positioned to support future growth in a disciplined manner.

With that, operator, I am happy to open the line for questions, please.

[Operator Instructions] We'll take our first question from Orest Wowkodaw at Scotia Bank.

Hoping you could provide us an update on Cobre Panama. And I'm wondering specifically if there's any expectation on when you would expect the government in terms of the next steps of their audit review in terms of conclusion moving forward? And then secondly, I'm also curious if you can comment on the media report recently that spoke about Panama setting up a state mining company that was looking for interest in the mine.

Orest, thanks for the question. Sure, in terms of timing of the audit process and the recommendations coming out of the Ministerial Commission, our engagement with the government of Panama has been focused on the preservation and safety management plans and more recently on the stockpile processing programs. The Ministerial Commission that was announced on the 14th of July, has established a regular schedule of meetings that made public statements on their goal to produce results as soon as possible, and the recommendations around that into [indiscernible] need to look through the technical report and the substantial amount of effort involved in the thousands of pages there, but also associated economic, environmental and legal implications of the audit reports and around the mine.

Orest, we remain ready to engage as the process advances and the government -- but it will be the government that determines the next steps and time line. We don't have a clear time line as yet regarding the decision-making process, but we know that they're very focused on this topic. And now with all the facts in hand from the audit, we think they are moving into a decision-making phase. -- what for us and while we await next steps from government, our focus is on executing the stockpile processing program safely and responsibly, preserving the environments of the site, working with the communities around and ensuring the integrity of the assets at Cobre Panama.

In terms of your second question around, yes, we saw the article from Reuters. As you know, Orest, we don't comment on media speculation. As I said, the government of Panama have completed that audit and they formed the Ministerial Commission to review those results, and make recommendations on the future of the mine. But presently, has been clear that the [indiscernible] regarding the mine will be communicated by the government once that review is complete and not before. And until then, I would suggest any updates from unconfirmed sources budget speculation [indiscernible].

We take our next question from Richard Garchitorena at Barclays.

Great. Just a follow-up on Cobre Panama. I guess in terms of the final audit, was there anything specific that surprised you anything that you weren't expecting that may cause you to sort of change the plan going forward in terms of the prep work that you're doing ahead of a decision from the government?

Richard. Yes, thanks. Look, the audit overall was a very thorough process. We were very satisfied with the level of engagement from SCS, the independent auditor, but also with government as we went through a lot of interviews, a lot of site visits. It was extremely comprehensive. I think overall, the mark the 87.7 out of 100 score, I think, reflects a high level of compliance. There was 361 areas of full compliance. And then 7 areas of partial compliance. I think there are 2 areas of [indiscernible] allocation, but it's 7 areas of partial compliance. And the areas that we've drawn out in particular, rehabilitation by diversity, we were a bit aware of. So for example, on rehabilitation -- reforestation, I'm sorry, we were aware that during the during the period of closure or suspension of the mine, but we haven't been able to do that work. So it's no surprise that some of those reforestation areas have slid backwards. We were some 54.7% completion of target, which was over the life of the mine.

But we had lost ground because during this closure, we haven't been spending money on those areas with the lack of clarity. Similarly biodiversity, ecosystem conservation, species protection, we're very aware and we think this provides the opportunity to strengthen what is a very high level of compliance already. But what we did see is in those noncompliances, there wasn't any broad rate down in environmental management, there were no acute environmental issues that were of major concern, instead [indiscernible] identify are further work where we need to document further and we're reviewing and identifying those areas and certainly, we're keen to address those and ensure that we continue to improve the standards of Cobre Panama.

Great. And on the cost $60 million incurred in the second quarter impact for the full year guidance. The cash cost expectation of $450 million, is that still on track? Or is there anything that you've seen maybe scope that you could do better than that?

Thanks, Richard. Ryan, do you want to take that question on costs so far at Panama?

Yes, sure. So Richard, in short, circa $4.40 C1 costs. We have expected at Cobre Panama. We still expect to be in line that through the balance of the year. So I'd say we're on track for guidance. We're on track for cost in Panama following the successful ramp-up of the stockpile processing in Q2.

We'll move to our next question from Lawson Winder at Bank of America.

Thank you for today's update. Just on Cobre Panama again, just thinking around timing, what is your latest thinking on how long it required to ramp up Corporate Panama to run rate once the fiscal framework is in place and all approval is secured?

And you noted the workforce at 3,000 people, but that's really impressive. How do you expect that ramp-up to trend for the balance of the year? And just trying to think of like what place you might be in at year-end in terms of total employment and that ability to ramp up the mine?

Thanks, Lawson. Well, thanks for the question. First thing to note, we're not in that mode yet of a full staff, and we're working through the government process. As I said, we will wait for governments around that timetable. If and when that comes through in terms of our time line to full production, the stockpile processing activity at now [indiscernible] areas, really, it's mining, the mining activity, in particular, drill and blast or waste stripping or full fleet mobilization that we're not involved at this stage. The fleet has been well maintained during this period of closure.

But ultimately, the full restart will depend on our ability to restart mining, both in Batika and in the Kalina area to catch up with those processes [indiscernible], that's really the challenge. So that will come back to people, which you point out, they're on-boarding and training the workforce, getting operators and maintenance personnel back. We've been very pleased how the Panamanians have responded and come back into the workforce, some 1,000 people already, most of those -- well, everybody on a truck right now that's involved in stockpile processing, a truck operator was previously hired at Cobre Panama, and we're very excited to have those people back and give the, again, meaningful employment. The context of a large unemployment number in Panama, some 10% of the country is searching employment -- for an employment. So it's a [indiscernible] population of Panama to 2 million, that's 200,000 people that are out there looking for work.

And I think that gives us opportunities to bring people back. We will need to get up to some 6,000 people. In the event we do move to a full production ramp-up. But the constraint will be how quickly we can bring people on board and train them. I think it will be done at the highest level skills that will be the harvest. We will certainly be able to get to 80% or 90% of our throughputs within the 6 to 9 months that we've spoken about, and we think that guidance remains relevant as good as we have for the time being. But the last 10% to 20% of optimization will take time and rely on really those high level of skills. So, that's how we see it. It will still take 6 to 9 months, I think.

We'll move to our next question from Matthew Murphy at BMO Capital Markets.

More questions on Cobre Panama. So -- and congratulations on the restart. But this Ministerial Commission, okay. So first, it's a regular schedule meeting that's happening between the ministers. Do you have any insight into when those meetings happen, how frequently? And then is it your understanding you could be engaged at any time? Or like similarly regardless of what they say, they'll have to engage with you. But do you know is your expectation that, that process has to finish. There has to be some recommendations made to the President, and then you'd be consulted? And then if you have any insight into what's on the government's agenda right now, do you think the mine is like first and foremost? Or are there other events going on in Panama?

Yes. Thanks, Matthew. So look, in regards to the Ministerial Commission, certainly the commission has established a schedule of regular meetings. And I don't think they -- not all of those are published, but the indication when they first announced around the 14th of July which was sort of 2 to 3 times a week. There's a lot to go through. I think at that time when Minister [ Chipoka ] Minister of Commerce spoke around what was involved, and he made it very clear how much effort would be involved going through in a diligent way through the entire comprehensive audit. And we respect that process. We don't necessarily think that there can't be engagements in parallel that would be an opportunity.

However, we will take our guidance from government around this time table. And certainly, there's an indication from the Minister, the Minister of Commerce around their commitments to go through this in a serious manner and report that to the present their recommendations for what the future of the mine will be.

We'll take our next question from Anita Soni at CIBC World Markets.

Tristan. So my question was just around restart costs. So I think we established -- or you guys have indicated that was around $250 million, including some capital to get the processing plant restarted. The second leg, you restart the mine operations. Could you give us an idea of what the capital would look like for that portion of it?

Sure, Snita, thanks for the question. And again, we're not at that phase yet, and we will follow the process around engagement and the steps forward from here. But if and when that happened, we said previously before that we think the total involved would be some $350 million to $500 million, of which this $250 million for the initial stockpile processing would be inclusive. And we have no reason to change that -- those numbers at the moment. We think that's reasonable. Ryan, we gave some guidance around the cost of those operations, maybe you could just fill in on the cost side of things. The operating cost side?

Yes, sure. So as you said, Tristan, $250 million and turn that ramp-up is appropriate. We've spent around $60 million of that as of June 30. The rest of that will come through in the balance of the year. And then to go from there, if we get to the point that, as Tristan said we are moving to full operations, that's an incremental $200 million split across additional operating costs, working capital and CapEx. But in that respect, we're obviously waiting for the government's guidance on next steps before we get into that. But broadly, in line with expectations in terms of Cobre Panama stockpile processing across both the ramp-up and start-up costs and the operating costs we're seeing coming out of that.

We'll go next to Ian Rossouw at Barclays.

Just coming back to Cobre Panama and the stockpile processing. Just sort of curious what determines the decision in terms of the throughput rate? Obviously, you say it's 38 million tonnes. Obviously, I guess, one, that's basically the one line for a year. But if you wanted to increase the throughput rates, would you be able to do that and perhaps 2 lines. Just wanted to get your sort of thoughts around that. And Ryan, just on that sort of spending within you mentioned in Q2 the $60 million. I see you stripped out some of that about $40 million out of EBITDA. Will you do that again in Q3? Or is that -- was that just a one-off?

Thanks, Ian. So yes, in terms of what could be done with the stockpile ramp-up, we were pleased to have the first production come through from Train 3 and I guess it's a testament to the amount of efforts by the team there in the preservation activities over the last 2.5 years and the investment made by the company to ensure asset integrity that we've been able to see those start up well. There's been a lot of acute focus on safety, really a focus on making sure we do things reliably rather than with velocity or excess speed really that with a solid platform. And Train 3 started up very well. We had -- we had liners there that we want to exhaust and we've now used those liners. So we've now taken Train 3 down, and we're moving some to -- we've moved across on to Train 2.

And -- your question is whether we could bring on, say, Train 1 as we go into the reline on Train 3. And it's a possibility, its really limited by people and bringing people that we, at this stage, the 3,000 that we have on site feels appropriate. We're only able, for example, to give out on contracts at the moment because of the nature of the limited activities that we're allowed to do. And so at the higher skill level, that will be a challenge until -- and if and when we get a green light that we would be able to provide people greater clarity around their employment. And so we could potentially add another train. But at this stage, we're focused around moving now on Train 2. And at that level, we consider we have enough stockpiles for around 12 months of operation. In terms of the costs, Ryan, could you take that question?

Sure. , the $250 million in restart for the stockpile processing is broken up in three components. The first is $50 million of working capital outflows. So that doesn't report to EBITDA. The second is $100 million of CapEx. So that also doesn't go into EBITDA, and then to the crux of your question. Third is $100 million of operating costs associated with the commissioning. That's what we've adjusted EBITDA for. We've taken that out of adjusted EBITDA. Usual $40 million adjustment in Q2, and we expect to take the balance of the $60 million adjustment as we spend that in the second half of the year out of EBITDA. So in short, none of that $250 million is flowing through to EBITDA.

We'll move to our next question from Myles Allsop at UBS.

Great A few quick questions. Maybe first on Taca Taca. Is there -- should we be concerned that the ESIA and the water permits are taking longer to come through? I mean is this could it take another 12 months and we missed a RIGI deadline and we're in trouble. I mean what's happening there? That's the first question.

Sure Myles. So Taca Taca, yes, there have been some slight delays. We apply for the ESIA and water permit with the provincial authorities in Salto. There have been some roll changes there. And so as new people have come in, I think it's natural that they take a while to get behind the desk. But as we see things, we -- in terms of questions and [indiscernible] looking forwards, we think we're sort of through that question around. And our understanding is the process will move forward in due order. We've we've had confirmation that the application is under review, and we haven't received any further information requests for some time. So that fits to us that it's now in the series stage of review, obviously, with those rule changes, it has taken a lot longer, but we're not concerned about that given the feedback that we're getting from [indiscernible].

Okay. Reassuring. And maybe secondly, a question for Ryan on the unit cost inflation. You say that you got $0.25 kind of risk from currency and fuel and additional risk if current conditions persist. So if we say your midpoint of guidance is what $228 million at spot kind of diesel and currency, how much should we kind of think unit costs will be? Is it $0.30, $0.40 higher than the midpoint of the current guidance range?

Yes. So in short, that $0.25 is if you take our current guidance and you inflate the rest of the year costs for spot fuel, spot quite and spot gold. So we get a slight tailwind on the gold side, but headwinds on both fuel and the kwacha. So I take the midpoint of our cost guidance and add the $0.25 in if we assume we see a higher cost environment that we're seeing today continue in a pretty static manner for the balance of the year.

We'll go next to Cody Hayden at Deutsche Bank.

Just on Taca Taca. I think you've previously spoken about the potential to bring in a strategic partner. And I was wondering if your thinking has evolved on this or if there are any updates you can share regarding partnership discussions or funding considerations at this stage?

Thanks, Cody. Thanks for the question. Ryan, do you want to talk about potential partners and partnerships at Taca Taca?

Our real focus on Taca Taca at the moment is on derisking the project. Those activities are the ones that Tristan's talked about around the ESIA work around preparing the RIGI application. From a funding perspective, I think we're fortunate that we have a range of options. We've previously talked about the fact that we can look at putting a project financing case. We've signed a working agreement with IFC in preparation for that potential work stream. We've talked about the fact that we could bring a partner in. We've talked about the fact that there are significant gold byproduct credits associated with Taca Taca that would be amenable to streaming. And we will consider all of those options in due course. But it is early stage in terms of looking at funding options. I'd say our real focus at the moment is on derisking the project in advance of those considerations.

Got it. And secondly, if I may, just back to Cobre Panama, following the environmental audit, have you observed any meaningful shift in public sentiment towards the mine through your community engagement? Just kind of wondering how that maybe progressed with recent updates.

Sure, Cody. So on the public perception side, yes, we're actually selling a new poll just in the last 24 hours or so. So that was a group called [indiscernible]. They're one of the authorized holding companies in Panama alongside Gallup so it's not quite the same methodology as Gallup, but what we see compared to the last Gallup survey in May, which was a 55% approval rating, the [indiscernible] were reporting the 63% favorable opinion of Cobre Panama. Alongside that, some of the questions that were asked, 55% of Panamanian supported President and negotiating a new agreement with Cobra Panama, 68% people believe mining creates jobs, 63% believe it contributes to economic growth and 67% believe it generates significant revenues for the country. That's in the context Cody, where we have been continuing our outreach efforts and social media affairs, live events. I think to date, since this year, we've had some -- and last year, some 420,000 direct engagements in [indiscernible] suspension. And really, that's been about educating people around the benefits of the mine to discuss the [indiscernible] of Panama over its national resources to talk about contributing to economy what that means in a local context on the ground with people and our commitment to mining responsibly with the highest standards.

Next question comes from Craig Hutchison at TD Cowen.

I just wanted to ask on the African assets. The sales have lagged production here for a couple of quarters in a row. Can you just maybe talk to some of the logistical issues there and whether you think we could see that reverse itself in the third quarter?

Thanks, Craig. Ryan, do you just want to talk about production versus sales?

So Craig, where we saw the big difference was in Q1, and that was really just a function of ending the year-end last year with very low finished good inventories. And I'd say, to some extent, what you've seen is that normalized through mostly Q1 but also coming into Q2. So the export channel is working well through the variety of transport corridors and ports that we're using. And as I say, that delta is principally driven by the low starting inventories at the end of last year, and we expect a fairly stable sales versus production for the balance of this year.

Okay. Great. And just on the sulfuric acid, you flagged potential surplus in Q3 here. Is that something that could be material and potentially lower cost? Or is it fairly small volumes.

Yes, Craig. So what we saw is an $18 million benefit from selling that sulfuric acid in Q2. We're seeing that continue. In Q2, that had around $0.05 benefit to our C1 costs because the asset reports as a byproduct. We see potential for similar sorts of sales through the second half of this year, so potentially another $0.05 benefits. But obviously, that's very contingent on what happens in Middle East and do we see sulfuric acid come back to the market. But I would say for Q3, we both expect higher diesel prices to hit our costs, and that will be a tailwind. And then we do expect some sulfuric acid sales in Q3 to somewhat offset that -- those diesel costs.

And we'll move next to Marcio Farid at Goldman Sachs.

Just a quick one on my side. I know you talked about the cost to process the stockpile of Cobre Panama at $4.5 per pound in terms of C1, and we've talked about the CapEx and operating cost for the ramp-up as well. Just wondering if it's maybe too early, but how should we think about what's Cobre Panama eventually at steady state and nameplate capacity. How should we think about C1 and operating cost for that operation, considering maybe 3, 3.5 years of cost inflation that we have observed will be -- that would be great.

Thanks, Marcio. Ryan, are you able to take that question on costs?

Yes, I think it is too early to put out specific guidance. As Tristan notes, we're laser-focused on the stockpile processing, doing that in a stable environmentally responsible and safe manner. If the government takes next steps. At that stage, we'll consider both more detail around the ramp-up cost of full operations and also the operating costs associated with those operations. One, we would expect the operating philosophy and approach would be similar to what it previously was, in terms of cost performance.

So if you take those operating costs that we saw 3 years ago and inflate that by what you've seen across large copper mines in the industry, I think that would be a sensible way of and considering what would that look like on a full restart. So you're getting closer to the -- probably before we were [ 1 to 150 ] C1, and that we're probably going to be somewhere between [ 150 and 180 ] at C1.

Okay. That's great. And a quick follow-up, obviously, the gold and copper hedges come to an end this quarter. Full exposure to spot now. Is that a plan to eventually review the hedging policy and had some hedge again? Or are you planning just to stick with sport exposure for now.

We think about hedging as an insurance tool. So we've put in hedges when we've had periods of high capital spend, combined with leverage on the balance sheet. And we did see that last year with Panama offline and S3 project underway, with S3 now being completed, the strong copper price has meant that we've let those hedges roll off. Our plan would be to stay unhedged, but we always had as a tool in the toolbox if we see capital spending coming or we think the balance sheet needs extra protection, we will revisit that. But as I said, we sit here today, because of the strong outlook for the second half of this year at spot prices into next year. There's no near or medium-term plan to go back into hedging.

And we'll take our final question today from Myles Allsop at UBS.

Just a quick follow-up question on Cobre Panama. I mean, obviously, if the government gets to aggressive with the proposal as and when it comes. I mean how quickly can you revert back to arbitration? And how confident are you that you can kind of defend shareholder value here?

Thanks, Myles. Sure. Look, our arbitration remains in suspension, but all the company's rights are protected Myles, and we can reinitiate that. The panel was established. But what we see is that we've seen constructive progress in Panama. They've been good progress to date, and we can point to really concrete progress milestones around the preservation and safe management plan approval last year and then moving into concentrate sales restart of the power plant and then more recently, processing of the stockpiles, both for -- to ensure integrity of the assets are moreso environmental [indiscernible], but that is a step forward in terms of reemployment hiring back 1,000 people.

So we see that as good faith. Arbitration is not the preferred outcome, and we would look to deal with the matter in a constructive mode. And in terms of [indiscernible], we think that it needs to be balanced between economic realities and reputation, but also consciousness of providing benefit to Panamanians and full transparency around that process. So that's our focus. As I said, arbitration is not a preferred to come, but all our rights are protected.

And that concludes our Q&A session. I will now turn the conference back over to Tristan Pascal for closing remarks.

Thank you, operator, and thank you, everybody, for your valuable time today.

And this concludes today's conference call. Thank you for your participation. You may now disconnect.

Hello, and welcome to the Annual General Meeting of Shareholders of First Quantum Materials (sic) [ First Quantum Minerals Ltd ]. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information during the meeting, you'll be deemed to consent to the recording, transfer and use of that personal information. If you disclose the personal information of another person in today's meeting, you'll be deemed to represent and warrant to Computershare and First Quantum Materials (sic) [ First Quantum Minerals ] that you first obtained all required consents for the disclosure, recording, transfer and use of such personal information from all appropriate persons before your disclosure. [Operator Instructions]

It is now my pleasure to turn today's meeting over to Kevin McArthur, Chair of the Board. The floor is yours.

Okay. Thank you, and welcome to the 2026 Annual General Meeting of First Quantum Minerals, which I will now call to order. My name is Kevin McArthur and as Chair of the company, I will act as Chair of the meeting. This year's meeting is being held in a hybrid format to allow shareholders to join in person or via audio webcast as they prefer. I would be grateful if shareholders and guests present in the room would turn off all phones or turn them to silent during the meeting.

I'd now like to take this opportunity to introduce the current members of the Board of Directors who are with us here today, and I will ask each of you to stand as I introduce you. Joining me today on stage is Tristan Pascall, our Chief Executive Officer. And in the audience today are Ms. Alison Beckett, Mr. Peter Buzzi, Mr. Geoff Chater, Ms. Kathleen Hogenson, Ms. Juanita Montalvo, Mr. Brian Nichols, Mr. Simon Scott, and Mr. Kevin Xia. Okay, you can be seated. Thank you very much.

Also present today is Ryan MacWilliam, our Chief Financial Officer; and Rudi Badenhorst, our Chief Operating Officer. Our auditor, PricewaterhouseCoopers, is also in attendance. Our transfer agent is Computershare Investor Services, Inc. Given the hybrid format of the meeting and in order for us to expediently undertake discussions on any matter proposed for a vote, we will pause during the meeting to provide an opportunity for shareholders or proxy holders to ask questions on the business before the meeting prior to voting on the resolutions.

We would encourage registered shareholders or duly appointed proxy holders participating online who have specific questions on a formal item of business to submit any questions now by clicking on the Q&A tab and then clearly identifying the applicable item of formal business as well as your name and contact information. Such questions will be addressed prior to voting on the motions.

Following completion of the formal part of the meeting, Tristan Pascall, our CEO, will provide a brief update on the affairs of the company. At this meeting and during management's presentation, we will make statements containing forward-looking information and refer to certain non-IFRS financial measures.

I bring to your attention the cautionary note regarding such forward-looking statements and non-IFRS financial measures, which for those of you here attending in person has been printed and made available for you and for those participating online is available by clicking on the highlighted documents drop-down icon at the right -- top right of your screen and on our website.

I will ask Ms. Sarah Comber to act as Secretary of the meeting, and I appoint Computershare Investor Services, Inc. through its representatives attending in person and via virtual platform to act as scrutineer of the meeting. I have before me a copy of the affidavit of mailing from Computershare confirming that the notice and access document, combined notice of meeting and management information circular dated March 12, 2026, and where applicable, form of proxy, voting instruction form, AGM guide for virtual meeting, consolidated financial statements and financial statement request form were mailed to security holders on March 26, 2026.

I have before me a preliminary scrutineer's report indicating that 130 shareholders have voted 705,355,130 common shares of the company by proxy, representing approximately 84.6% of the issued and outstanding common shares of the company. As the articles of the company require the presence of 2 shareholders in person or by proxy holding at least 25% of the total shares entitled to vote at the meeting for a quorum to exist at shareholder meetings, I declare that a quorum is present and that the meeting is regularly called and properly constituted for the transaction of business.

I would ask that the scrutineer compile the report regarding the results of voting on all business matters and results will be published by the company on SEDAR+ and by press release later today. For the purpose of the meeting today, voting on all matters will be conducted by ballot. If you are a registered shareholder or a duly appointed proxy holder and have already voted by submitting your proxy form in advance of the meeting, it is not necessary for you to vote again today since your vote will be recorded in accordance with your proxy instructions.

If you are a registered shareholder or a duly appointed proxy holder attending in person and you have not yet voted or would like to change your vote, please ensure you have a ballot. If you have not received one, raise your hand when requested to do so and a scrutineer will provide you with a ballot.

To complete your ballot, mark an X in the appropriate boxes, clearly sign it and print your name. When you have completed and signed the ballot, please indicate to the scrutineer who will come and collect it. Each shareholder and proxy holder attending in person should have received a ballot at registration. If you did not receive one and need one now, please raise your hand.

If you are a registered shareholder or a duly appointed proxy holder participating virtually, having -- have properly logged in with your control number or invite code and you have not yet voted or would like to change your vote, you will be able to vote after the presentation of the items of business to be put forth at today's meeting. When you are invited to vote, you will receive a message on the Computershare virtual interface requesting you to register your vote for each item of business.

For the purpose of this meeting, motions are not required to be seconded. Once the discussion has concluded on all items of business, I will declare the voting closed on all matters of business. The summary of the votes will be announced prior to the close of the meeting. The last annual meeting of the company was held on May 8, 2025. I have minutes of that shareholder meeting before me, and I ask for a motion to approve them.

I move that the reading of the minutes of the 2025 Annual General Meeting held on May 8, 2025, be dispensed with and that the minutes of the said meeting be taken as read and approved.

Thank you, Sarah. I would now like to move to the formal business of the meeting and the resolutions for consideration before the meeting today. There are 6 resolutions as follows: I present the consolidated financial statements of the company for the year ended December 31, 2025, and the report of the auditor thereon, copies of which have been mailed to each shareholder of the company who has requested it. Electronic copies of the consolidated financial statements are also available for viewing on SEDAR+ at www.sedarplus.com.

The next item of business is to fix the number of directors to be elected to the Board of Directors. The management information circular provided for the number of directors to be fixed at 10. Next is the election of the 10 directors of the company for the ensuing year. The company's management has nominated the following persons for election as directors: Alison Beckett, Peter Buzzi, Geoff Chater, Kathleen Hogenson, Kevin McArthur, Juanita Montalvo, Brian Nichols, Tristan Pascall, Simon Scott and Hanjun Kevin Xia.

Please note that in accordance with the company's majority voting policy, this resolution requires you to vote for each individual director and not a slate of directors. Next item of business is to reappoint the auditor for the ensuing year. It is proposed that PricewaterhouseCoopers LLP chartered accountants, be reappointed to serve as the auditor of the company for the ensuing year and that the directors of the company be authorized to fix the auditor's remuneration.

Next is to approve by ordinary resolution the continuation and reconfirmation of the company's existing shareholder rights plan as more broadly described in the management information circular. Next is to approve the nonbinding advisory resolution to accept the company's approach to executive compensation as described in the management information circular. It should be noted that this is an advisory vote and that the results will not be binding on the company. However, the Board will take the results of the vote into account as appropriate when considering any future compensation policies, procedures and decisions.

May I have a motion for each of the resolutions?

I move that the consolidated financial results of the company for the year ended December 31, 2025, be received, that the number of directors to be elected to be fixed at 10, that each of Alison Beckett, Peter Buzzi, Geoff Chater, Kathleen Hogenson, Kevin McArthur, Juanita Montalvo, Brian Nichols, Tristan Pascall, Simon Scott and Hanjun Kevin Xia be elected as directors to hold office until the conclusion of the next annual meeting of the company. That PricewaterhouseCoopers LLP chartered accountants, be appointed as auditors of the company to hold office until the close of the next Annual General Meeting of the company and that the directors be hereby authorized to fix the remuneration to be paid to the auditor.

That the continuance and reconfirmation of the shareholder rights plan, the terms and conditions of which are set out on Pages 11 to 14 of the company's management information circular dated March 12, 2026, be hereby ratified, confirmed and approved and that it be resolved on an advisory basis and not to diminish the roles and responsibilities of the Board of Directors of the company that the shareholders accept the approach to executive compensation as disclosed in the company's management information circular delivered to shareholders ahead of this Annual General Meeting.

Thank you, Sarah. Is there any discussion of these matters from those here in attendance in person? Let us now pause to account for any delay in the broadcasting of the online meeting to allow questions to be submitted by registered shareholders and duly appointed proxy holders participating virtually.

Okay. I will now ask the registered shareholders and duly appointed proxy holders present in person, please complete your ballots and hand them to the scrutineer. Those shareholders and proxy holders online, the poll is now open for a moment, and I ask that you cast your votes.

[Voting]

Thank you. I now declare the poll closed. I would like now to invite Tristan Pascall, our Chief Executive Officer, to make a short presentation on the company's performance over the past year. Tristan?

Thank you, Kevin, and thank you, everybody, for joining us for this year's Annual General Meeting. First Quantum began 2025 with a clear set of priorities. And throughout the year, we made strong progress against these objectives. We proactively managed our balance sheet by extending debt maturities and ensuring strong liquidity. In August last year, we entered into a $1 billion gold stream agreement with Royal Gold to provide long-term unsecured non-debt capital, which significantly enhanced our liquidity whilst maintaining full exposure to all copper production and the majority of gold production from the Kansanshi mine in Zambia.

Also during the third quarter, we executed a series of senior notes transactions that successfully pushed out our debt maturity profile to 2029 and reduced our cost of capital. Our hedging program fulfilled its intended role as a risk mitigation during the construction of the Kansanshi S3 Expansion and is now planned to reduce, allowing us to regain full exposure to spot copper prices by the second half of this year.

I'm particularly pleased with the successful delivery of S3, which declared commercial production in December 2025 and continues to ramp up well. We met our overall 2025 copper production target of 396,000 tonnes and both gold and nickel production exceeded our revised guidance ranges. The business generated $2.1 billion in operating cash flows and $1.7 billion in EBITDA, supported by strong realized copper and gold prices, and we also reduced net debt by $338 million, reinforcing our continued focus on strengthening the balance sheet. These achievements were only possible with the commitment and hard work of our entire team at First Quantum for which I'm deeply grateful.

Turning to our operations. At Kansanshi, the completion and commissioning of the S3 Expansion was a major milestone. Commercial production was declared in December after S3 consistently operated at 90% of design capacity, a milestone which the team achieved within 5 months of first production. The strong performance continued into 2026 with the S3 circuit operating 25% above design capacity in the first quarter. With a 25 million tonne per annum throughput capacity, S3 is one of the largest brownfield copper projects delivered globally in recent years, and I would like to extend my sincerest thanks to the entire team involved in this achievement.

At Sentinel, production was impacted by high maintenance and by lower grades in the mine. A rectification plan for the bolt fatigue challenges at Ball Mill 2 has been implemented and through ongoing maintenance, we will manage the situation through 2026 with a permanent solution scheduled for early 2027 once the parts become available. In 2025, we also approved several debottlenecking initiatives at the tailings thickeners and at the tailings lines, which are now underway in 2026 in order to improve throughput to mitigate lower grades in the mine.

Safety is our biggest priority when it comes to our operations. I was deeply saddened by the tragic fatality at our Sentinel operation in 2025, which was extremely distressing for everyone at the mine and in First Quantum. The Board visited the mine shortly after the incident, and it is a stark reminder that our focus on safety must remain constant and ever vigilant. We continue to strengthen our safety leadership, culture and systems across all sites.

In 2025, we deployed a new critical control management program to build and support our think approach to safety, and I'm pleased that we are now at the implementation phase of this effort. The critical controls effort aims to help our frontline operators and supervisors prioritize and validate all the right controls are in place for their work site so that they can ensure their job is safe.

In Panama, we made meaningful progress in 2025. Following constructive discussions with the government of Panama, we received formal approval for the Preservation and Safe Management plan at Cobre Panama, which allowed for responsible environmental stewardship of the site. This permitted the export of copper concentrate, restart of the power plant and most recently, we received authorization to process stockpiled ore.

Key activities commenced during the first quarter of 2026 to support the processing plan. We expect preparation and pre-commissioning work will take up to 3 months until processing can begin. With the creation of 1,000 new positions required for the stockpile processing, we have launched a recruitment campaign and received strong interest from Panamanian seeking employment. Processing and stock local procurement activities are expected to generate additional jobs through local Panamanian suppliers and contractors and also through indirect employment.

The government also initiated a comprehensive audit of the operation led by SGS Global, an independent and internationally recognized firm, and we are expecting the final report to be published shortly. Public outreach in Panama continues, and we remain committed to transparency, engagement and finding a durable resolution that benefits stakeholders, the government and the people of Panama.

The Taca Taca project in Argentina is our most advanced greenfield project. And this year, we released an updated NI 43-101 technical report for Taca Taca. The report highlighted the strong economics of the project and the value created when we apply our in-house competencies in project planning and development. Taca Taca has great potential to be First Quantum's next cornerstone project once our balance sheet and our other operations are in the right condition, while recent economic reforms in Argentina continue to strengthen the country's attractiveness as a mining jurisdiction.

The optionality of First Quantum's project portfolio is further enhanced by both the La Granja and Haquira projects in Peru, which have potential to be long-life mines in the future.

2026 has begun on a strong footing in terms of progress against our priorities, and I remain confident in the outlook for the company. Operationally, we remain on track in Zambia with production in line with mine plans and stronger performance expected in the second half of the year as we access higher grades.

More recently, the conflict in the Middle East is driving heightened global uncertainty and is impacting important global supply chains. In response, we have been actively diversifying our fuel sourcing, closely monitoring other key inputs and implementing cost-saving initiatives across the business. The situation in the Middle East further reinforces the accelerating global shift towards electrification, a structural trend that is expected to support copper demand and prices over time.

We see that copper continues to grow in its strategic importance for the world. With the balance sheet actions taken over the last 2 years and our focus on safe and productive operations, I am confident in our ability to manage through the current period of global volatility.

At the same time, we remain focused on our priorities. Firstly, to progress towards a durable resolution of Cobre Panama; secondly, to maintain safe and productive performance across our operations with a strong focus on cost management; and third, to continue to strengthen the balance sheet to support future growth. Together, these priorities position the company to deliver sustainable shareholder value over the long term.

On behalf of the Board and the management team, I would like to thank our employees for their commitment and hard work and our shareholders and partners for their continued support. Thank you.

Thank you, Tristan. I have now been advised that the scrutineer has completed the tabulation for each of the items of business. Based on provisional results, I declare that all resolutions have been approved and that the requisite majorities have been obtained. I would like -- I would ask the scrutineer to compile the report regarding the voting results on all business matters, and I direct that the results be included in the minutes of this meeting.

The results of the voting will be announced in a press release in accordance with the policies of the Toronto Stock Exchange and filed on SEDAR+ under the company's profile. There being no further business, I would ask for a motion to conclude this meeting. May I have a motion?

I move that the meeting be concluded.

Thank you, Sarah. I now declare this meeting closed.

This concludes the meeting. You may now disconnect.

Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quantum Minerals Q1 2026 Results Conference Call. [Operator Instructions] I would now like to turn the call over to Bonita To, Director, Investor Relations and Capital Markets. Please go ahead.

Thank you, operator, and thank you, everyone, for joining us today to discuss our first quarter results. During the call, we will be making forward-looking statements. And as such, I encourage you to read the cautionary notes that accompany this presentation, our MD&A, and the related news release. As a reminder, the presentation is available on our website and that all dollar references are in U.S. dollars unless otherwise noted. On today's call are Tristan Pascall, our Chief Executive Officer; Ryan MacWilliam, our Chief Financial Officer; and Rudi Badenhorst, our Chief Operating Officer.

And with that, I will turn the call over to Tristan for opening remarks.

Thank you, Bonita, and thank you, everybody, for joining us today to discuss our first quarter results. 2026 has begun with important progress milestones at First Quantum, including strong performance above design capacity at the new Kansanshi S3 sulfide processing circuit, as Rudi will later discuss in more detail. However, this is against the backdrop of heightened global macroeconomic uncertainty, driven by ongoing conflict in the Middle East and its implications for critical global supply chains. We are seeing the impact of direct and indirect pressures on our cost structures as a result, particularly in relation to prices for some of our major inputs such as fuel, but also from the Kwacha exchange rate in Zambia. Ryan will speak more on these cost impacts later.

As fuel supply from the Middle East has become increasingly uncertain, our priority is to safeguard the continuity of our operations in this challenging environment. This has required rigorous monitoring and planning, and the team has been proactive in enhancing our fuel sourcing strategies. These actions include securing alternative supply routes, building contingency inventories, and site initiatives to identify and implement fuel savings. Our operations consume approximately 320 million liters of diesel annually, and we currently have sufficient diesel at site to support at least 2 months of operations. And through active monitoring and careful supply management, we expect to extend coverage beyond this time frame.

Based on these precautions, we believe fuel supply can be actively managed to avoid any impact on production. At our operations, we are prioritizing measures that can be readily deployed without compromising future production. These initiatives include stricter operational disciplines on truck haul routes, on idle fuel-burn rates, and on rationalizing non-frontline equipment. For example, we are addressing placements of in-pit fuel bowsers to reduce travel distances to refuel. These actions complement the existing innovations that have been applied across our operations that not only drive tangible improvement in cost, safety, and productivity, but also fuel efficiency. These are not pilots or concepts, they are technologies operating at scale and delivering measurable outcomes.

We have highlighted a number of them in our quarterly presentation, including in-pit crushing and conveying, the recently commissioned railroad conveyor, as well as the electrification of our fleet and the extensive use of Trolley Assist, which put all together, greatly reduce the fuel intensity of our operations. Sulfur supply has also been directly impacted by the Middle East tensions and further exacerbated with export restrictions from sulfur-originating countries, including Zambia.

The current environment underscores the strategic value of our smelter at Kansanshi, which is a significant regional producer and generated approximately 1.1 million tonnes of sulfuric acid in 2025, almost all of which was consumed on-site in our leaching circuits for cathode production. We are currently self-sufficient on sulfuric acid; however, we expect to be potentially in a surplus position by the end of the second quarter when the smelter expansion is fully ramped up. And depending on the geology in the mine at that time, we will evaluate additional revenue opportunities for our potential surplus sulfuric acid.

There is heightened risk in today's environment. However, with the balance sheet actions taken over the last 2 years, our focus on safe and productive operations and building resilience ahead of potential challenges, First Quantum is in a strengthened position today, and I'm confident in our ability to manage through this period of market volatility. Thank you, and I will now pass the call to Rudi to discuss our operational results.

Thank you, Tristan. During the first quarter of 2026, both Zambian operations effectively managed the above-normal seasonal rainfall. However, total copper production declined 4% quarter-over-quarter to 96,000 tonnes due to lower production at Sentinel and Kansanshi, reflecting lower grades in line with the mine plan. Copper sales totaled 90,000 tonnes, approximately 6,000 tonnes below production due to the timing of shipments and the restocking of inventory at Kansanshi following strong sales volumes in the fourth quarter of last year.

Turning first to Kansanshi. Copper production in the quarter was 45,000 tonnes, down 2,000 tonnes from the previous quarter, driven by lower feed grades and recoveries, partially offset by higher throughput levels attributable to the S3 concentrator circuit. It is pleasing to report that S3 throughput increased steadily during the quarter and milling rates stabilized approximately 25% above design capacity. This supported increased processing of long-term, lower-grade stockpiles, which lowered overall feed grade compared to the prior quarter. We expect this grade impact to diminish as stripping activity increases at Southeast Dome, exposing fresh ore for direct feed to the S3 circuit.

At Sentinel, copper production also totaled 45,000 tonnes, a reduction of nearly 3,000 tonnes from the previous quarter. This decrease was due to lower grades and recoveries, although partially offset by improved throughput, which benefited from improved reliability of the primary crushers and higher tailings thickener throughput. During the quarter, 2 new upgraded tailings thickener feed wells were installed and commissioned, with the third expected early in the second quarter. In-pit Crusher 4 was decommissioned for relocation. The rail run conveyor transition from commissioning to full operations and expansion of the trolley-assist network continued.

Enterprise continued to deliver excellent performance with record quarterly production of 12,000 tonnes of nickel, a 41% increase from the previous quarter, driven by higher grades and recovery. Milling rates in the quarter were moderated to sustain these recoveries. Our priorities at Enterprise remain focused on improving ore quality, grade control, and mining productivity. At Guelb Moghrein, copper production was 2,900 tonnes and gold production was 7,700 ounces. With the timing change in the transition to CIL processing, Guelb will continue sulphide processing for the remainder of this year, and the transition to a primary gold-operation has been deferred to 2027. As a result, we have revised 2026 copper guidance to approximately 7,000 tonnes and gold guidance to between 30,000 and 40,000 ounces. Thank you. And with that, I will turn the call over to Ryan for the financial review.

Thank you, Rudi. I'll start with the copper market. Copper entered 2026 with strong momentum, peaking at a record price of $6.28 per pound. Amid the macro-uncertainty created by the situation in the Middle East, copper prices then bottomed at $5.36 per pound towards the end of the quarter, but have since recovered and remain well above historical averages. It was notable to see buying pick up in China as industrial players there took advantage of lower prices to build copper stocks, thereby cushioning the impact of the macro-uncertainty.

On the nickel side, we continue to see positive signs of the Indonesian government pursuing policy to restrict supply growth, which has resulted in a strong start to the year for the nickel price. This, combined with the strong operational performance, which Rudi described, meant that Enterprise had the best margins of all our assets in the first quarter. Turning to the first quarter financial performance. Revenue was down 5%. This was primarily due to lower copper and gold sales volumes. This lower revenue, together with increased hedge losses, drove a 30% reduction in EBITDA for the quarter.

Adjusted loss per share of $0.18 reflects this lower EBITDA. Copper C1 cash costs rose [ 14% ], driven by lower Zambian production and higher labor costs. The continued strength of the Zambian Kwacha is a key driver of these costs. This was partly offset by stronger gold prices, which delivered a $0.12 per pound by-product credit and continue to provide valuable cost support in a volatile environment. Nickel C1 cash costs improved by $0.60 per pound due to strong production. Turning to cost guidance. We generally update our guidance later in the year in respect to the performance of our assets and any changes in key input prices.

We've continued to take this approach this year where we have not made any changes to guidance for the recent movements in oil, gold, and copper prices nor the Kwacha exchange rate. We have, however, adjusted our guidance to reflect 3 structural changes in our business in the first quarter. The first and largest change is the inclusion of low-grade stockpile processing in Panama. Secondly, as Rudi discussed, Guelb Moghrein switched to a copper-focused production strategy for 2026, which results in increased by-product credits as gold is now treated as a by-product rather than a primary product.

And thirdly, we have updated guidance for the sale of Çayeli. As a result of these changes, we have updated our C1 cash cost range to $2.15 to $2.40 per pound, up $0.20 from prior guidance. This revised guidance continues to be based on the commodity assumptions used at the start of the year of our initial guidance, namely a Brent crude oil price of $70 per barrel, a gold price of $4,000 per ounce, and a Kwacha U.S. dollar exchange rate of 25. Clearly, the impact of the conflict in the Middle East represents a risk to our cost guidance due to the impact of higher fuel prices. Fuel accounts for roughly 15% of our cost base, including about 8% direct exposure, with the balance coming directly through contractors, freight, and other costs.

The current gas oil futures would equate to a potential $0.20 increase on unit costs relative to our revised guidance based on our direct exposure to fuel and our estimate of the indirect impact on things such as freight costs. Further to that, a sustained Zambian Kwacha would increase costs by around another $0.10. Lastly, higher consensus gold prices are estimated to provide a partial offset of approximately $0.05, meaning the combined impact of all these changes would be a potential increase of approximately $0.25 per pound to our copper cost guidance.

A lot of this would come through in the second half of the year as we see cost impacts typically lag commodity prices. Fuel generally reflects gas with a 2-month lag. Contractors and freight costs respond almost immediately, while other costs follow over 3 to 6 months. For capital expenditure, we've increased full-year 2026 CapEx guidance to reflect a $75 million to $100 million in project-specific capital associated with Cobre Panama stockpile processing. In addition to the CapEx, we also expect to incur approximately $100 million in operating costs and $50 million in working capital, resulting in a total of about $250 million for the 3 months of pre-commissioning ahead of stockpile processing.

Any proceeds from the copper concentrate sales will be reinvested directly into the PS&M program, supporting community engagement and regional supply chains. Now turning to the balance sheet. Following strong bank support and the improvement in our credit outlook after establishing the new syndicated term loan and RCF in February, we successfully issued an upsized $1.5 billion 10-year unsecured bond due 2026. This is our longest bond tenure to date and lowest coupon, which reflects the strong market confidence in our balance sheet and long-term copper exposure. Proceeds were used to repay a portion of the RCF and repurchased the remaining $1.35 billion of 2029 secured notes.

This simplifies our debt structure and returns the bond portfolio to a fully unsecured profile. Our nearest bond maturity is now 2031, and our final bond maturity is extended to 2036. We also announced the sale of Chile and Turkey, further simplifying the portfolio and unlocking $340 million of cash proceeds, including a $50 million advance received in Q1. On to hedging, the collars settled in Q1 resulted in a $144 million loss. We have some remaining hedges in the second quarter. On these remaining positions, we estimate potential losses of approximately $154 million on copper and $8 million on gold at current spot prices. We have no hedges beyond Q2, and we'll have full exposure to spot prices starting in the second half of the year.

Given that margins remain healthy at prevailing copper prices, we're comfortable having this exposure and do not plan to enter any new hedges for the time being. And lastly, net debt increased by $92 million to $5.3 billion, reflecting planned CapEx, interest, and tax outflows, partially offset by EBITDA generation, the Cayeli advance, and favorable working capital movements. To wrap up, although copper fundamentals continue to be supportive, elevated Middle East tensions have created headwinds for our cost profile outlook. Against that backdrop, our focus remains firmly on cost and capital discipline, controlling what we can to protect margins and keep the business well positioned.

With that, I will now hand the call back to Tristan.

Thank you, Ryan. As Ryan noted, we have updated our 2026 guidance to reflect the processing of stockpiled ore at Cobre Panama. We were pleased to receive a formal approval to proceed with the removal and processing of stockpiled ore on April 7, 2026, with the passing of Resolution #27, which also confirms that this material was mined while the concession was in force and is therefore the property of First Quantum. This is also an important step in the responsible environmental management of Cobre Panama.

Our updated guidance includes 30,000 to 40,000 tonnes of copper production from Cobre Panama. With much of the site under Preservation and Safe Management since November 2023, we will be taking a conservative and measured approach to recommissioning the processing facilities in order to ensure the highest quality of operations that is practically achievable after a long period of shutdown. While we have made solid progress in the first quarter on the work required to prepare for stockpile processing, there is still a significant amount of work ahead of us as we prepare the facilities for the introduction of first ore in the third quarter.

At site, our operational readiness program is well underway with maintenance and refurbishment activities progressing across the process plant, the mine fleet, and supporting infrastructure in preparation for commissioning. Initial inspections indicate that overall, the asset integrity remains strong, albeit minor repairs will be required, primarily related to the Second Cleaner, Column Flotation and concentrate handling circuits. Once in operation, we expect to run the processing facilities at approximately 1/3 of nameplate capacity and will follow a program that will allow us to test all 3 circuits.

With the creation of 1,000 new positions required for stockpile processing, we have launched the Sumate al Empleo recruitment campaign and received over 60,000 applications and expressions of interest for employment, demonstrating a strong talent pipeline to support the stockpile-processing operations. We have also commenced contract reactivations for the procurement of supplies. Our local procurement activities are expected to generate further employment through local Panamanian contractors and indirect jobs across local industries.

These jobs are being created at an important moment for Panama, especially for nearby communities that are facing elevated levels of unemployment. We continue to await report 6 and the final report 7 of the comprehensive environmental audit being undertaken by SGS, both of which are expected imminently, and we remain ready to find a resolution for the situation at the mine with the Government of Panama. When Cobre Panama was operational between 2019 and 2023, the mine created over 38,000 direct and indirect jobs and received goods and services from over 2,000 Panamanian companies.

Cobre Panama has always operated at the highest environmental standards and has the potential to be a meaningful contributor to the country's economy and provide tangible benefits to the people of Panama. In the meantime, public support for a resolution is critical, and we continue our outreach efforts. During the first quarter of 2026, a total of 214 events reached approximately 82,000 people directly in face-to-face interactions and over 2,000 direct community engagements were recorded that aided in strengthening our local relationships.

While Panama remains our immediate priority, First Quantum remains a growth-oriented company. We continue to progress our growth projects to maintain optionality and position ourselves to move decisively when the balance sheet is ready. The Taca Taca project in Argentina is our most advanced greenfield project and one of the largest, highest-quality undeveloped copper assets globally. During the quarter, it was pleasing to deliver the 43-101 technical report for Taca Taca, which confirmed the scale and quality of the asset. Additionally, the technical report represented an important step in the ongoing preparation of our RIGI application and the evaluation of future funding options.

Taca Taca is expected to follow First Quantum's tried-and-tested design of large-scale SAG mill processing trains. The project will initially be developed with a processing capacity of 40 million tonnes per annum that will self-fund an eventual expansion to 60 million tonnes per annum. Average annual copper production is expected to be approximately 291,000 tonnes over the first 10 years of operation and approximately 200,000 tonnes over the life-of-mine per year. The project economics are compelling with an 8% after-tax NPV of $5.9 billion and an IRR of 19.3% at conservative commodity price assumptions.

During the quarter, we signed an agreement with the IFC to align Taca Taca with IFC's Performance Standards, which are globally recognized benchmarks to ensure the project is developed in line with international best practices while creating sustainable benefits for communities and the economy. This agreement is a strong endorsement of Taca Taca and strengthens the project's position for potential funding options whilst promoting responsible and sustainable mining practices.

Having been part of the teams that developed and constructed both Sentinel and Cobre Panama, I'm greatly excited about the opportunity at Taca Taca and the benefits our in-house project planning and development team can bring to the project. This team has built the two largest greenfield projects by throughput capacity in the last 2 decades. And more importantly, these projects were delivered according to plan and at low capital intensities. We envision Taca Taca will be built in a similar profile to Sentinel and Cobre Panama. With an initial mine life of 35 years and a large resource base, Taca Taca has great potential to be First Quantum's next cornerstone project.

There remains further work to de-risk the project and position it for construction readiness. We will continue to advance the ESIA and prepare for submission of the RIGI application. In parallel, we are evaluating the optimal financing structure and ensuring the balance sheet is well positioned to support growth. Any future decision to sanction Taca Taca will be taken in a disciplined manner, taking into account the financing plan, balance sheet capacity, and the status of our other operations. In closing then, while recent tensions in the Middle East and the resulting volatility have created challenges, they have reinforced the appropriateness of our priorities.

These priorities allow us to navigate near-term uncertainty while protecting our long-term growth plan. First and foremost, our priority is to progress towards a durable resolution of Cobre Panama. Second, we wish to maintain safe and productive performance across our operations. And thirdly, we will continue to strengthen the balance sheet to ensure the company is well positioned to support future growth. Together, these priorities provide resilience through the current environment while positioning the company for sustainable shareholder value creation over the long term.

Thank you. And with that, operator, I'm happy to open the lines for questions.

[Operator Instructions] Your first question is from Ralph Profiti with Stifel Financial Corporation.

Tristan, thank you for the thorough review of supply-chain issues. My question is whether your team has done some work on sort of the absolute order of magnitude of that 320 million liters annually that's consumed? And what could be a realistic target for savings? Is 10% the number that's too conservative? Or do you think you get higher efficiencies?

Thanks for that. Yes, there's a lot of initiatives underway. And yes, we definitely -- I mean, just in terms of haul distances, particularly an interim measure on short-dumping because we expect, ultimately, the Middle East situation will resolve, but we're definitely going to live with something that's going to be here for -- even if it's fixed today for probably 6 months or so in duration, that does present the opportunity for short-dumping on waste dumps, but then in longer-term behavioral patterns in adjusting our idle around shovels.

In particular, in hang-time, our shovels currently were switched on a higher idle that makes them all ready, but there is the opportunity with the OEM to switch that to a lower idle without impacting cycle-time, and we're taking those kind of opportunities to adjust elsewhere within the maintenance shop and seeking to get those idles right on the trucking fleet. So 10% is definitely a realistic target in that, and we would seek to put into place those long-term practices that we would then hold on to as part of our ongoing operations into the future.

Your next question comes from Orest Wowkodaw with Scotiabank.

Nice to see the progress at Cobre Panama. I'm curious whether -- is it fair to say that you've been given permission to operate everything at Cobre Panama outside of fresh-ore mining?

Thank you. Yes. Look, the stockpile approval to remove and process that surface material and material in the mine is very important. It has an environmental impact, but also that we get the assets running. And very definitely, our focus is on building a sustainable platform, and preparing the operation, and getting it in a good state, but we need to move into the phase of official discussions, formal conversations around what happens next. We -- yes, in its entirety, we will be moving material, and it's pretty much everything that would be involved, but not drill and blast and obviously, not load and haul in the mine, but we will be doing some of that activity.

We need to get at least 12 trucks running as the initial estimates to haul from the stockpile and then all the way through the process plant, everything through to the Port. At this stage, we'll be starting up one train at a time and working through. So for example, starting with Train 3, we've got quite a bit of life left, a few months left on a set of liners in there. We want to run those out before we would change those liners and then move through and trial each processing circuit. But yes, overall, it's pretty much all the operations except that front-end drill and blast.

Okay. And do you still think you need 6 to 9 months to ramp up once you -- assuming there is a deal to restart fresh mining. I'm just wondering if there's a big pre-strip that needs to be caught up on, or whether that 6 to 9 months could be quicker now, just given you've got the soft-start in terms of operating the plant ahead of that?

Thanks, Orest. Yes. Look, we don't have a full approval to restart and if and when that comes through, but this is an important step, both environmentally and ensuring the assets are well maintained. Look, there's a lot of focus. The main challenges now are on people, hiring, onboarding, making sure that people are retrained and have re-induction training so that the muscle memory comes back. We don't want people rushing in. We want to make sure that things are done sensibly and safely as we start. Yes, that would be part of moving towards full operations, if and when that comes through.

But the full restart will depend on mining rates catching up with processing rates, and that would take time. So we still think we need 6 to 9 months to get ready for that operation. It's less about pre-strip ore, but more just getting those rates in the mine up and running. Probably the bottleneck is going to be in mine fleets and bringing all of those back online. It's a substantial piece of work, so we still think 6 to 9 months is appropriate.

Your next question is from Ioannis Masvoulas with Morgan Stanley.

First question on Cobre Panama again. Could you talk about the public opinion and how it's shaping up across the country going into the completion of the audit and also the expected update from the President because we've seen conflicting headlines. So interested to hear what you're seeing based on your engagement with people around the country and also with your own polls that you might be running.

Yes, sure. Look, public perception around the mine is critical. And we have done detailed work in polling and trying to understand that across the country. There's been a lot of science applied to that. We've been using Gallup, which is an organization authorized by the Tribunal -- the Electoral Tribunal of Panama. And in order to obtain that status, they have high standards and a proven methodology by which they go about compiling their polling data. Their last survey was in April, and we saw support for reopening the mine, ensuring that there was a transparent process in place and that the tangible benefits from the mine do come through to people.

So majority see the reopening as positive and support for resuming operations is growing. Gallup at that time said there's indication towards reactivation as long as it's under those conditions of transparency and tangible benefits flowing through. So, 61% of people believe that the reopening will have a positive impact on the economy. There are other polls out there, and you'll see commentary around that. As far as we know, Gallup is the only polling authority being publicized at the moment that is authorized by the Tribunal Electoral, the Tribunal there and is of that standard and of that quality.

Very clear. And just one clarification. You mentioned that the proceeds from the processing of the stockpiles will go towards the cost of the P&SM program. From a financials point of view, when we look at your EBITDA and cash flow for the coming quarters as eventually the mill restart, how do we think about it? Is it a function of the proceeds just offsetting that $16 million per month of costs? Or is there an incremental financial benefit?

Thanks, Jonas. Yes. So the way we look at is that the processing of the stockpiles and using that material, for example, to take that feed through the cycling facility and the corrective actions at the tailings dam, repair of erosion, and so on, all of that's been costing, and that's a $15 million per month number. That increases as we start up because of more people and more activity, that cost is increasing. And the way we look at it is over the stockpiles, which is about 70,000 tonnes of copper contained, it's roughly neutral on a cash basis. We put the money in upfront and Ryan talked through the capital elements, the operating costs and the working capital elements. And basically, over the period of that stockpile, it's basically on a neutral basis.

Your next question comes from Anita Soni with CIBC World Markets.

First question, just the commissioning costs, I think you talked about $90 million to $100 million. Is that included in the cost guide that you just -- that you increased the cost for processing the stockpile? Or is that over and above? And where would that show up in?

Yes. Thanks, Anita. Ryan, do you want to comment on that?

Anita. So there are 3 elements to the cash outflows we'll incur. The first is $75 million to $100 million in CapEx and getting the plant ready for processing, and that's the reason for our change in CapEx guidance for the year. The second is around $100 million in operating costs, which is included in the guidance you see for our revised C1. And then the third is the incremental $50 million working capital build, which we expect as part of getting that plant back online. So, a total of $250 million cash outflows, of which $200 million are included in, firstly, that CapEx guidance and then secondly, that increase in our C1 cost guidance for the year.

Okay. That's clear. Secondly, I just wanted to understand with Kansanshi, how -- on the mixed-ore grades and recoveries, they were -- you mentioned they were negatively impacted. How long do you expect that to persist? Is that all year or this half year as, I guess, you get through some of the stripping that you're doing there?

Yes. Rudi, do you want to take that?

We're currently progressing quite well with the Southeast Dome stripping. And as we move towards the back-end of the year, we'll expose fresher ore for direct feed to the S3 circuit. And that obviously allows for both improved recovery as well because we transition from a mixed-tonnage oxidized type of material that is prevalent in the long-term stockpiles to fresher sulphide product. And we will definitely see some improvements in recoveries there. Currently, on the stockpile material and on some mineralized waste material going through the S3 circuit, the rougher recoveries are actually quite good at 90%. But as we progress through the rest of the plant, we do lose some recovery. Once we're on fresh sulphide, that changes dramatically, and we will see that in the back-end of the second half of this year.

Your next question is from Cody Hayden with Deutsche Bank.

First, and this was kind of touched upon already, but you mentioned numerous fuel-reduction initiatives. I was wondering if you could maybe speak about where you expect to get the greatest benefits and how quickly you expect those to see those flow through? And then second, are you able to provide a bit of an update around some of the work streams at Taca Taca and how you see that project progressing throughout the remainder of the year?

Cody, well, perhaps, Rudi, do you want to take a question on fuel? And I can just -- a couple of questions on Taca Taca.

As Stefan mentioned, there's various initiatives in play already and planned for the remainder of this year. Our biggest asset that we've always employed at both our sites and at Cobre Panama is the use of our trolley-assist network that is rapidly being expanded at both Kansanshi and Sentinel. And obviously, the measures around short-dumping on waste dumps and really parking unnecessary equipment where it's not needed is our greatest short-term benefit, but the employment of those initiatives on all of our sites will continue because that really makes a lot of sense as far as fuel consumption is concerned.

And Cody, sorry, your question on Taca Taca was on the work plans. Is that right?

Well, sorry, I might have been missed there. But yes, as I understood your question was on the work plans and the milestones here and the timing around that. Our process at the moment, we released the 43-101 technical report during the year -- during the quarter, and that basically underlines the scope and scale of the project. I think that we talked around the NPV and the economic scale of the project and certainly stacks up well from here. That flows into the RIGI application. We currently still working on and expect imminently the ESIA approval to come through from provincial government, and that includes a public consultation period and then the water permit shortly behind that. The RIGI, I think we need to hold for that public consultation to occur.

And we've also seen the extension by 12 months for RIGI application. So our focus at the moment is to make sure we can compile the highest quality application that we can. And we've seen that well-constructed applications are positive -- have met with positive receivable in the Federal Government, but it's around a 4- to 7-month process for the approval of RIGI, as it seems. So we -- as I said, we'll make sure that we have the highest quality application and then expect sort of 4 to 7 months for approval of that.

In the meantime, we're making progress and have commenced on the financing plan, and that includes the agreement with IFC around structuring that, but we'll look across all our options for that financing plan. And together, all of those elements build up towards providing a pathway for Taca Taca. But very importantly, as we've been clear, we'll make sure that the balance sheet is in the right position to proceed and also our other operations are in the right position to proceed.

Your next question comes from Lawson Winder with Bank of America.

Can I ask about some of the other bottlenecks that have been kind of referred to on this call and in the release and the things that we've heard about in the press. So one, for example, is we've heard about shipping backlogs at some of the ports in Africa, particularly Dar es Salaam. What about some of the other ports like Walvis Bay and Durban? Are you seeing any disruptions there? And then if I could just ask a follow-up after you addressed that question on input availability.

Sure, Lawson. So yes, we -- so certainly, the situation in Middle East has had an impact on shipping. I mean, I don't think it's the same level as what we saw in the Suez Canal with the Ever Given, the ship that ran aground or indeed during COVID with the situation in Shanghai. But certainly, when you have a situation anywhere in the globe where ships are contained, the global availability of shipping is affected, and that affects the transport time. There just aren't enough ships remaining to cover the normal cycle time between the major ports, and that can have a knock-on effect. We haven't seen that significantly yet in African ports. Dar es Salaam, we do ship material out there, typically cathode and anode.

We also ship from Walvis Bay. And Walvis Bay, there's been more and more traffic heading towards Walvis Bay. I think just as a comparison to the previous destination in South Africa through Durban port. So less about the situation in the Middle East right now and just more of that regional story. And so there has been congestion in Walvis Bay, and we're accommodating that in terms of the direction of where our -- where we're sending our product out from. In terms of supplies coming in, we use all of those ports and the overland routes. But just as it was during COVID times, some of that's a little bit unpredictable. So, definitely in the Middle East for chemical precursors.

So everything from HDPE has been impacted. Certainly, the ammonium nitrate supply chain has been impacted to some degree, and those are the ones we're watching closely. But we're also just monitoring as we did during COVID because you can end up with a widget that's unforeseen that has an issue. So, we're just in a heightened mode around -- and it's very difficult to predict, but you might end up with a widget that just doesn't get from the original manufacturer to your supply-chain and then come through. And that's what we're focused on. We lived through that experience in COVID. And I'm certainly those experiences will see us well as we look to mitigate and make sure that we have adequate redundancy and capability in the system.

And then just thinking about some of the variable cost inputs that you guys would have, explosives, grinding media, other processing chemicals. Are you seeing any issues accessing those? Or are those just more a function of a price?

Yes. Thanks, Lawson. No, we haven't seen that knock-on into availability. It's mostly on price. We haven't seen the big move yet. It's just that given the situation, so for example, fuel takes 2 months to get to our site in Zambia and other supply chains are longer or shorter in that time. It hasn't really happened yet, but it will come through on the cost side. We haven't seen anything on the availability. And as I said, we're just preparing the ground to make sure that we got the contingency in place, and we're monitoring closely those -- each of those major inputs.

Your next question is from Matt Murphy with BMO Capital Markets.

Can I just ask another one on the Cobre costs? Because the $0.20 a pound increase across firm guidance, to me, I get like a mid-4s cash cost for Panama. Does that sound right? And like how quick do you see that coming off as the year progresses?

Matt, sure. Ryan, could you take that question?

Matt, that's spot on. So we expect C1 from stockpiles to be around $4.50, as one has fully ramped that up and you get into the stockpile-processing next year, falls closer to $3.50, but certainly you incur higher costs, particularly at the beginning when you're running for lower-throughput as you ramp-up production.

And then can I just ask a follow-up on Zambia. So, interestingly, on your chart with the diesel price, it looks like it dropped a bit in March. What are you seeing in April in terms of your diesel price? And how should we think about the increasing cost at Sentinel versus Kansanshi? It looks like Sentinel has been increasing a bit more.

Sure. Matt. Firstly, we didn't see the impact of high diesel prices through the quarter. As we noted, there's around a 2-month lag. And you see in that chart that prior to the Iran conflict, diesel prices were around $0.85 per liter. Currently, we're seeing around $1.60 per liter as high as $2. And then in the forward curve, that's coming off to around the $1.40 to $1.60 through the second half of the year. That's obviously changing a lot day-to-day. But as we sit here today, I think broadly, you can think about it as double the price what we saw 2 months ago, and that will start flowing through later in the quarter. Just remind me of your second question, Matt?

Sentinel. So Sentinel costs, the difference there, Matt, clearly, Kansanshi, we have the tailwind from gold prices. So at Sentinel, it's a double whammy of lower grades, stronger Kwacha and then no by-product credits. We do expect some of that to change in the second half of the year, particularly as we get better grades, you will see -- we do expect the Sentinel cost to come down. Therefore, comfortable with the overall cost guidance, with the exception of some of those market-related costs.

Your next question is from Myles Allsop with UBS.

A couple of questions. Maybe first of all, with Cobre Panama and the more permanent agreement that you'll be looking to strike with the Government. Have any discussions started yet? I mean how is your kind of thought process evolving around the type of structure you could agree to with the Government on a look-forward basis? That's the first question. I'll come back with the second.

Thanks, Myles. So yes, we -- look, it's just too early to say. All we can see is that it will be a new agreement. I mean the Law 9 situation and Law 406 is quite clear that it will be different from that setup, and the Government has said that publicly. We have not engaged on formal conversations, official discussions around that, but we're keeping an open mind on the structure. We've certainly done our homework in terms of what that could look like. It needs to be durable. It needs to make sense for all stakeholders. It needs to make sense for shareholders, but also for Panamanians.

And on Kansanshi and the smelter expansion, what's the incremental sulphuric acid that you'll be producing? Is it kind of meaningful? And what revenue could that be generating?

Sure. Ryan, can you take that one?

Sure. So at the moment, we're selling around 10,000 tonnes per month in acid. There's potential to increase that to 20,000 tonnes. That's contingent on the grades we see in the pit, as Rudi noted. But if we did sell that incremental amount at the current spot price for sulphuric acid we're seeing in Zambia of around $250 per tonne, that would be around $3 million in incremental revenue per month. With the caveat being it's a fast-evolving situation. Let's see how we go through Q2.

Your next question is from Craig Hutchison with TD Cowen.

Most of my questions have been answered. So, maybe I'll just ask a question on Guelb. The deferral of production this year of, I think, 35,000 to 40,000 ounces, how should we think about that being spread out over the next few years? Should we assume it gets spread out over 2027, 2028, and 2029 -- or I did see you guys update your guidance going forward there.

Craig, will you take that one, Rudi, please?

Yes. The main reason for the change at Guelb Moghrein for this year is driven by the procurement and delayed deliveries and construction of a treatment plant that we need to build in the back-end of the CIL circuit in order to reduce the Weak Acid Dissociable cyanide levels reporting to the tailings. So, as a result, Guelb will continue to process sulphide ore with intermittent oxide treatment during the course of this year, every month or 2 months to support the transition to full-rate production next year.

And maybe just to note, then for the balance of our guidance period, what you should assume is the Guelb we expect to produce this year will move to year 2 and 3 of the guidance period and the incremental copper production that we're showing this year will move out after 2 years of the guidance. We'll update that 3-year guidance in January of next year to account for that.

Your next question is from Ian Rossouw with Barclays.

Just a quick question on the Cobre Panama side. You obviously gave us some -- an idea of the CapEx, OpEx spend and the working capital build. But just wanted to get a sense of the funding situation at Panama. How much cash is at the asset level? And will there need to be some loans or, I guess, funding from First Quantum and KPMC to fund some of this, I guess, processing of the stockpiles. And then just second question or a follow-up question on the cost side, I guess, from what Matt was saying as well, I mean, it seems like the incremental cost seems to be a lot more than the $100 million OpEx you've mentioned within that if you try to back-calculate it from the C1 cost. So, just trying to understand what else contributes to that $0.20 increase in the C1 costs other than the Cobre Panama side?

Thank you. I'll ask Ryan to take those 2 questions.

Sure. From a cash perspective across all our assets, we predominantly hold cash at a group-level and then fund down into the business as required. So you should assume that we will be funding that $250 million of cash flow needed to restart for the stockpiles. And obviously, that will then be refunded as we move into production and producing cash there. The second question, Ian. So yes, the C1 costs, we expect for the stockpiles to around $450 million. And then incremental to that, you have the around $100 million of CapEx, plus another $50 million of working capital build.

Your next question is from Anita Soni with CIBC World Markets.

My follow-up, I think, has been asked, but I'm just going to ask one last one on Enterprise. The grades were fairly strong, and I think you delivered like a pretty solid first quarter. How does Enterprise look over the course of the year because you're tracking very well to your guidance of 30,000 to 40,000 tonnes?

Anita, Rudi, can you answer that one?

Yes, spot on. We're tracking very well to our guidance. We're seeing the start of the second quarter very strongly again. And as the nickel price also has responded favorably, we will reevaluate some stripping activity at Enterprise probably in the second half of this year, depending on the fuel situation. But Enterprise is very nicely set up on the bottom of the pit and in its developmental work in the next stages to deliver a strong year, and we don't foresee any changes to the guidance.

Operator, we're coming up to the hour, so we'll take one more question.

Your next question is from Orest Wowkodaw with Scotiabank.

Again, just coming back to Cobre Panama. Outside of the completion of the environmental audit, which I assume now is due -- I think you said imminently here over the next couple of weeks. Is there anything else outstanding from your perspective that may be required to start the engagement with the Government on a new agreement?

Yes, so the comprehensive audit, we believe, is pretty imminent. So, the fifth report came out in early April, and that was 88.84% progress. So 147 of the 371 total commitments have been analyzed, 223 remains to be closed out. And -- but the overriding finding was of no environmental damage. Certainly, there were areas of focus on reforestation on reporting and so on. The next interim audit, audit 6 -- the Report 6 is due out imminently and then the final Report 7. We see that as being an important part of the process. It's not necessary that things have to be completely sequential. But certainly, I think the answers that come from the audit are an important baseline to frame conversations, but we're not aware of any other elements, major elements that would be impacting on that.

The three constructs that will be required to answer it on that environmental side, on the legal structure, and on the commercial arrangements. And we just need to get into those formal conversations to understand the government's view across those areas, and obviously, critically continue to focus on public perception. The team in Panama has done a fantastic job in direct engagement and talking to people around the mine, and we need to keep moving that forward. Very clearly, Panamanians are asking to see transparency and asking to understand how the benefit from the mine will impact ordinary Panamanians in the country.

There are no further questions at this time. I'd like to turn the call back over to Mr. Pascall for any closing remarks.

Thank you, operator. And I'd like to thank everybody for joining the call today for all our analysts and investors in Toronto. I'm looking forward to seeing you at our Annual Dinner next week. Thanks, everybody, and have a great day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quantum Minerals Q4 2025 Results Conference Call. [Operator Instructions]

I will now turn the call over to Ms. Bonita To, Director, Investor Relations and Capital Markets. Please go ahead.

Thank you, operator, and thank you, everyone, for joining us today to discuss our fourth quarter results. During the call, we will be making forward-looking statements. As such, I encourage you to read the cautionary notes that accompany this presentation, our MD&A and the related news release. As a reminder, the presentation is available on our website and that all dollar references are in U.S. dollars unless otherwise noted.

On today's call are Tristan Pascall, our Chief Executive Officer; Ryan MacWilliam, our Chief Financial Officer; and Rudi Badenhorst, our Chief Operating Officer. And with that, I will hand the call over to Tristan for opening remarks. Thank you.

Thank you, Bonita, and thank you, everybody, for joining us today to discuss our fourth quarter and year-end results. We entered 2025 with 4 clear priorities and our steady delivery on these throughout the year has now positioned us well for a strong 2026.

Firstly, we set out to strengthen our balance sheet and enhance our financial flexibility, and this was achieved through the support of our investors in a series of bond transactions that extended the company's debt maturities and reduced our cost of capital.

Additionally, we completed a $1 billion streaming transaction with Royal Gold that also represents the largest U.S. corporate investment in Zambia to date. Our hedging program, which we put in place in 2024, fulfilled its intended role as risk mitigation during the construction of the Kansanshi S3 expansion, and we expect to regain full exposure to spot copper prices by the second half of the year, on which Ryan will speak in his financial review.

Our next priority, safe and productive operational performance remains a continued focus, and the company achieved its 2025 production targets, which Rudi will cover in his operational review. Also a priority in 2025 was the execution and delivery of the S3 expansion project at Kansanshi. I'm very pleased with our progress at S3, which achieved a major milestone with the declaration of commercial production last December, and I will speak in more detail on this towards the end of my prepared remarks.

Our fourth priority continues to be achieving a long-term resolution for Cobre Panama. Whilst we await the start of formal discussions with the government of Panama on this matter, we have made meaningful progress on the preservation and safe management plan to ensure the assets remain in good condition and the site is safely and well environmentally managed.

During the fourth quarter, Unit 2 at the power plant was successfully commissioned and synchronized to the grid. The unit achieved its full design capacity of 150 megawatts output in December, reflecting the effectiveness of the maintenance program undertaken at site over the past 2 years. The plant is currently operating steadily at an average output of around 120 megawatts, consistent with the site's power requirements and broader national grid demand.

The remaining unit, Unit 1, moved into commissioning in early February and is performing according to expectations. Subsequent to quarter end, in January, the President of Panama announced that the government would approve the removal, processing and export of stockpiled ore at Cobre Panama.

It is important to emphasize that processing of the ore stockpiles does not constitute a restart of mining operations and processing of this material is intended to address environmental and operational risks linked to the long-term stockpile storage, such as acid rock drainage while also supplying necessary material for reinforcement of our tailings management facility. We continue to await formal approvals.

However, on a preliminary basis, we expect that processing of the stockpiles could begin roughly 3 months after receiving formal regulatory notice and would take approximately 1 year to complete. From the stockpile, we estimate production of approximately 70,000 tonnes of copper, and this activity would support the cost of ongoing asset and environmental management at the mine.

We are pleased with the government's decision to authorize the processing of the stockpiles. Alongside allowing proper environmental stewardship, this will generate significant income for the country and create jobs for over 1,000 additional Panamanians, along with broader indirect employment across local procurement such as equipment supply, transportation, logistics, camp and food services.

We continue to await the formal approvals for removal and processing of the stockpiles, which will be carried out in close coordination with the government of Panama and in full compliance with our preservation and safe management plan. It is important to reiterate that the processing of the stockpiles is not a reopening mine, and we echo the President's call for transparency and engagement. The resources at Cobre Panama belong to the people of Panama.

We remain committed to dialogue to achieve and remain -- achieve an amicable and durable resolution of the mine. for the country and the Panamanian people. In parallel, the integral audit conducted by SGS commenced in the fourth quarter. Our team in Panama continues to cooperate fully with the audit, providing all requested documentation and cooperating in the field visit inspections.

We welcome the audit, and we are confident that it will confirm that Cobre Panama has always operated at the highest environmental standards. The integral audit is expected to be concluded in April 2026. Separate to the integral audit and as part of our ESI obligations, the authorities continued with the statutory biannual audits of Cobre Panama's compliance.

We are pleased to share that the most recently published audit achieved 100% compliance. The latest external audit field phase was completed in November, and we expect a final report during the first quarter. I will now pass the call to Rudi for his operational review.

Thank you, Tristan. We are happy to have closed out 2025, achieving our revised guidance ranges. For the year, we achieved copper production of 396,000 tonnes within the revised copper guidance range, while annual gold production of 152,000 ounces and annual nickel production of 23,000 tonnes were above the top end of the respective revised guidance ranges.

Looking to 2026, we remain focused on cost management and safe operational execution across all our sites. During the fourth quarter, total copper production was approximately 100,000 tonnes, a 4% decrease from the previous quarter as Sentinel continued to be impacted by both fatigue maintenance and rainy season power interruptions. Copper sales were strong at 108,000 tonnes, exceeding production by approximately 8,000 tonnes.

At Kansanshi, we delivered a solid quarter with 48,000 tonnes of copper, up 774 tonnes from the previous quarter. This improvement was driven by a successful ramp-up of S3 expansion, which contributed to higher overall mill throughput. Notably, the site achieved a record monthly mill tonnes in October. Following successful commissioning and strong performance across all key production indicators, S3 declared commercial production as of December 1.

The crushing and milling circuit performed well with significant improvements in stability and uptime as enhancements to the conveyor routes took effect. Work on tailings storage facility 2 is progressing well and remains on track for completion in the second quarter of this year. In 2026, Kansanshi is expected to produce 175,000 tonnes to 205,000 tonnes of copper and 110,000 ounces to 120,000 ounces of gold.

Of this, S3 is expected to contribute over 84,000 tonnes of copper, sourced evenly from low-grade stockpiles and fresh ore from the Southeast zone. At Sentinel, copper production totaled 48,000 tonnes in Q4, a reduction of 3,000 tonnes from the previous quarter. This decrease was due to lower throughput and lower grades. Throughput was impacted by ongoing maintenance related to B fatigue on Ball mill 2, while grades were affected by a higher proportion of material from Stage 3.

Looking ahead of 2026, production at Sentinel is expected to be between 190,000 and 220,000 tonnes of copper. The operational focus will continue to be on increasing throughput and improving consistency through optimization of blast fragmentation, maintaining stable crush ore stockpile volumes, improving milling rates and the flotation recovery. Grades are expected to strengthen modestly as we access previously sterilized Stage 1 and Stage 2 ore following the crusher relocations.

Stage 4 ore is expected to come online in the second half of this year. Regarding Ball mill 2, in collaboration with the original equipment manufacturer and specialist consultants, we have established a long-term fatigue management strategy. We will continue managing the fatigue through this year with full remedial work planned for the first half of 2027 when new parts become available.

This approach ensures ongoing performance while enabling a permanent solution through next year's planned upgrade. Enterprise delivered excellent performance, achieving record quarterly production of 9,000 tonnes of nickel, a 52% increase from quarter 3. This improvement was driven by improved recoveries and mining of fresh, higher-grade sulfide zones at lower elevations in the bottom of the pit.

For 2026, Enterprise is expected to produce 30,000 to 40,000 tonnes of contained nickel. Our focus at Enterprise remains on maximizing ore supply, improving comminution efficiency and maintaining an optimum run-of-mine stockpile to support blending and stable throughput. Grade control drilling will continue to help reduce dilution and improve recoveries. At Cobre Panama, we continued detailed inspections and preservation activities during the quarter.

Working closely with original equipment manufacturer teams, we completed reviews of the ultra-class haul trucks, production drills and road shops. The findings are being integrated into our ongoing preservation strategies to ensure to ensure equipment integrity and future reliability. Thank you.

And with that, I'll hand the call over to Ryan for his financial review.

Thank you, Rudi. Starting with commodity markets, which ended the year on a buoyant note, a sentiment which has continued into 2026. During Q4, the copper price averaged $5.03 per pound, peaking at $5.71, a strong performance driven by both supply and demand. On the supply side, 4 of the world's top 20 largest copper mines are currently running at reduced production.

And on the demand side, copper stockpiles continue to grow in the U.S. due to the threat of potential tariffs on future imports. We would note that it is important in times like these where prices start to rise that we remain laser-focused on costs. This helps avoid the margin compression that can occur as the benefit of stronger commodity prices on the revenue line are offset by a rising cost base.

In this respect, it is helpful that despite generally strong commodity markets, oil prices remain fairly subdued with resilient U.S. and OPEC production keeping the market well supplied. Turning to our fourth quarter results. Revenue was up 10% quarter-over-quarter, underpinned by higher metal prices. This drove a 7% increase in EBITDA and a $73 million improvement in net earnings.

Copper C1 costs rose by 13% to $2.21 per pound, reflecting the lower production that Rudi spoke to, along with higher power, labor and maintenance costs. Oil price tailwinds resulted in elevated byproduct credits, providing a $0.14 offset. The enterprise quarterly nickel all-in sustaining costs came in at $3.96 per pound against nickel prices, which averaged $7.

These strong margins are a reminder of the high-grade nature of the enterprise nickel sulfide ore body. Nickel prices were depressed for much of last year with the market being in surplus, but have recently rallied following production cuts announced in Indonesia. At Cobre Panama, the P&SM program continues to incur between $15 million and $17 million per month to support the environmental stewardship of the mine and local procurement.

$45 million was incurred in Q4 and $400 million has been spent since the mine was placed on PSM. Operating costs to process the stockpiled ore will cost between $12 and $12.50 per tonne mill. Upfront cash investment will be required with cash outflows peaking at around $250 million. On the basis that formal approval is received shortly for the stockpiles, we would expect to be broadly cash flow neutral by year-end at Cobre Panama, inclusive of P&SM costs.

Further, on care and maintenance, the sale of Las Cruces both simplifies our portfolio and delivers approximately $30 million in annual cost savings while paving the way for development of the project under a new owner. On the balance sheet, it is pleasing to announce our new syndicated term loan and revolving credit facility. This frees up about $360 million of liquidity in this year, while also securing a larger RCF and extending both maturities to 2029.

The refinancing process has underscored the strong backing we continue to receive from our banks with the participation of several new lenders in a highly oversubscribed transaction. The availability of the facilities is subject to customary closing conditions. Furthermore, we've also announced a new $1.35 billion 10-year unsecured bond offering this morning. And lastly, I'm pleased to highlight that this week, the rating agency, S&P, has moved our B rating to a positive outlook, recognizing our progress in strengthening the balance sheet and their positive expectations on the return of Cobre Panama later this year.

Moving on to guidance. Across the 3-year guidance period, we've lifted our copper C1 and all-in cost guidance ranges to reflect the updated production guidance, higher costs and the incorporation of inflationary pressures, which are somewhat offset by stronger gold prices. These higher costs are driven by the appreciation of the Kwacha, the Zambian collective bargaining agreements and increased maintenance across Sentinel and Kansanshi.

Both copper C1 and all-in costs trend downwards across the 3-year guidance period as production improves with higher grades expected to be fed into the Kansanshi S3 circuit from the new Southeast Dome pit. While cash cost guidance in 2026 and 2027 benefited from higher assumed gold prices, Guelb Moghrein gold sales will no longer be treated as byproduct credits as gold production is expected to pause from Q2 2026.

On CapEx guidance, we spent about $240 million less in 2025 than initially guided on, with some of that moving into 2026, such as planned replacements at Kansanshi. 2026 guidance also includes added work on Sentinel's Ball mill 2, input crusher for relocation and the third tailings pipeline. CapEx reduces over the course of the 3-year guidance period, driven by the wind down of Southeast Dome pre-stripping at Kansanshi and the completion of Zambian tailings facility works as well as the crusher installation at Kansanshi and the crusher relocation at Sentinel.

On to hedging. The collars that rolled off in Q4 yielded copper and gold hedge losses of $42 million in aggregate. Our 2026 planned copper and gold production both remain roughly 20% hedged for the full year and 50% hedged for the first half of the year. At current spot prices, we anticipate losses of around $220 million and $23 million, respectively, on our copper and gold hedge positions.

Hedging has been an important tool in providing us with stability and downside protection during the S3 construction and ramp-up. However, at this stage, our existing hedges expire by midyear, and we do not anticipate adding more hedges given our strong margins at these copper prices. During the quarter, net debt increased by $441 million to $5.2 billion.

This was driven by 2 key factors. Firstly, an increase in working capital as accounts receivable increased due to late shipments in December. And secondly, the sharp rise in copper prices at the year-end necessitated higher margin deposits associated with our short-term customer QP hedges. Both of these are expected to unwind through the current quarter at stable copper prices.

Liquidity remains very strong at $1.9 billion, comprising of $644 million in cash and a fully undrawn credit revolver of $1.3 billion at quarter end. In short, we closed the year with supportive copper and gold markets, a disciplined cost management approach, a strengthened balance sheet and solid liquidity, positioning us very well for 2026. I will now hand the call back to Tristan.

Thank you, Ryan. Over the last 2 years, it has been a highlight of my prepared remarks to speak on the progress at S3. However, with the announcement of commercial production, this will be part of Rudi's operational review going forward. I am extremely proud of our delivery of the Kansanshi S3 expansion project. This has been a product of huge collaborative effort across our projects and operations teams and a supportive investment climate delivered by the government of Zambia.

As Rudi noted, the S3 expansion delivered strong performance across all key production indicators, which supported the declaration of commercial production. Broadly speaking, while several metrics were considered, commercial production was declared once S3 demonstrated consistent performance at 90% of its design capacity. This was accomplished within 5 months of initial production. This is a significant achievement for a project of this size.

At a throughput capacity of 25 million tonnes per annum, S3 is one of the largest global brownfield copper projects delivered in recent years, and I would like to congratulate and express my gratitude to the entire team that delivered this successful outcome. In terms of new project opportunities at First Quantum, I'm pleased to announce that we will be shortly releasing an updated 43-101 technical report for the Taca Taca project later this month.

Taca Taca is one of the world's largest undeveloped copper assets, and Argentina is emerging as an increasingly competitive mining jurisdiction, supported by recent economic reforms aimed at attracting greater foreign direct investments. Globally, there are several growth projects being advanced to address the anticipated supply deficit in the copper market. However, I firmly believe that First Quantum is uniquely positioned to deliver on this growth.

We expect Taca Taca to follow First Quantum's tested and proven design and construction approach of large-scale SAG mill processing trains with expansion optionality. Taca Taca will involve, for example, installation of First Quantum's seventh and eighth SAG mill at a 40-foot size and will leverage from the company's extensive experience in development and operations at Sentinel, Cobre Panama and most recently, the S3 expansion at Kansanshi.

We look forward to sharing the updated technical report, which represents an important step in derisking the project as we continue to advance the ESIA, prepare our RIGI application and evaluate the optimal financing strategy for the project. Whilst Taca Taca is important to First Quantum's long-term growth options and similarly, this year, we will also advance the La Granja and Haquira projects on their own merits.

I want to clearly state that our priorities for this year 2026 remain: firstly, progressing towards resolution at Cobre Panama; secondly, to ensure continued safe and productive performance at our operations, including ramp-up of the Kansanshi S3 expansion project; and thirdly, to strengthen the balance sheet to ensure that the company is well positioned to support future growth.

We had meaningful achievements in our priorities for 2025, and I'm extremely proud and grateful for the dedication of the entire team at First Quantum. Our position today is a direct result of their hard work. We have collectively accomplished a lot over the last couple of years, and I am confident in the outlook for First Quantum because of the deep talent pool within the company, our meaningful participation and long-term relationships in our host countries and the growing strategic importance of copper.

Thank you, operator. I'm happy to open the lines for questions.

[Operator Instructions] Your first question comes from Ralph Profiti with Stifel.

Tristan and Rudi, when it comes to the potential for the same remedial work and permanent solutions that you're seeking in Ball mill #2 at Sentinel, transferring that over into ball mill #1, are you going to wait for the review to make that conclusion? And when will that review be concluded?

Yes. Thanks very much for the question, Ralph. Rudi, do you want to take that one?

Yes. No problem. final repairs to ball mill 2 as established with the OEM and ourselves will take place in the first half of 2027. Now we have ordered an additional end can and discharge -- upgraded discharge end period to make -- take advantage of the foundry slot that we've had. And we effectively run with one strategic spare. Ball mill 1 is getting a review principally because it's from the same vendor and no other reason. It is currently performing well, and we do not have any issues with it.

And it looks as though that there's going to be some degree of throttle back on the throughput. But also, Rudi, some of your comments in your pre-prepared comments talked about increasing total throughput as well. Just wondering how you're balancing the 2 between risk mitigation and desire to increase throughput.

Rudi?

Yes. Thanks, Tristan. We indicated that we will be doing a couple of projects at Sentinel this year, primarily to debottleneck the back end of the circuit and those relate to the installation of upgraded feed wells to our tailings thickeners, but also the installation of a new tailings line and the reline of an existing one.

Effectively, what that does, it helps us to increase throughput through the back end, which is currently the bottleneck. So the first one of those have already been replaced in January. The second one will replaced this quarter and the third one during the end of the second quarter, followed by the tail of Q3. So debottlenecking the circuit allows for the opportunity to increase throughput, albeit maintenance stoppages on Ball mill 2.

Your next question is from Orest Wowkodaw with Scotiabank.

A couple of questions on Cobre Panama, please. You mentioned, Tristan, that the company is yet to start formal discussions on a new agreement in Panama. Can you give us an idea of what the hurdles are? Is it -- are you just basically waiting for the completion of the environmental audit? Is that expected to kick the process off?

Orest, thanks. I think in Panama over the last -- since the middle of last year, you've seen concrete milestones passing and that revolves around approval of the preservation and safe management plan, export of the concentrate, the restart of the power plant and the commencement of the environmental audit. And then most recently, the announcement by the President that the government will approve the removal of the stockpiles and processing associated with that.

Looking forward, the President has made announcements around dealing with the matters at Cobre Panama. And I think as you point out, the environmental audit is one of the key elements in that timetable. So we do expect the audit will be completed in April. We'll have to assess the next steps and timing from there. But certainly, that does seem to be one of the key elements in terms of the pathway from here.

Okay. And as a follow-up, thank you for the disclosure around some of the partial restart costs here to turn on one mill train to process these ore stockpiles, the $230 million to $280 million range. I'm just curious, is that a good rule of thumb in terms of incremental costs to eventually restart all the mill trains?

Yes, Orest. It's a little bit of a moving target at the moment because you can paint different scenarios to restart around the timing and ramp-up of that in terms of stage of approvals. But if we follow a pathway -- well, if we just look at the stockpiles and the restart of the plant is important to that stockpile reprocessing that allows us to remove that material, which is -- does cause some acid rock drainage and will greatly improve our water quality control at sediment Pond 2 and the discharge in the Pika side and also in terms of feed to the tailings dam and being able to cope with high rainfall and erosion and so on that we do get on the tailings dam.

If we just look at that, it's probably 3 months to get that moving, and it would be on the basis of the cost that we outlined there around $12 to $12.50 per pound per tonne milled and hence, those capital costs that you referred to there. If something else comes through in terms of timetable, and we don't have that clear as yet, that would shift around disclosure from the government of Panama around that.

Your next question comes from Chris LaFemina with Jefferies.

So I just wanted to ask about the overall unit cost guidance. You guys have a lot of operational improvements that you're going to be delivering across the portfolio over the next couple of years. If I look at Sentinel, for example, where you're commissioning the railroad conveyor system, you're expanding the trolley assist network, you're expecting slightly higher grades.

Volumes across the business are going to be rising, which should lead to some fixed cost dilution. Yet your unit cost guidance is effectively at the middle of the guidance range, you're basically guiding to cost being flat over the next few years. And I'm wondering, is there a potential for cost to be significantly lower than what you're guiding to? Is your guidance conservative? And if not, I'm wondering what are the offsetting inflationary factors?

And you mentioned some of the cost inflation that you're seeing in the business now, but I'm wondering what the inflationary factors are that you're kind of baking into your assumptions here where those inflationary factors are offsetting the benefits of some of these operational improvements that you guys are expected to deliver.

Thanks, Chris. And I'm sure Ryan will add a comment. But just -- I mean, big picture, the trade-off at Sentinel is between volume and you're seeing the throughput, you're seeing the effort that's been put in there and to deliver throughput and you're seeing that in terms of the front end of the plant and the dry plant pushing there. And as Rudi mentioned, debottlenecking in the back end to continue that trend.

We have had -- that is offset by grade and our management of that as we get into fresh material beneath Stage 3 and also open up Stage 4 over the next year, couple of years, we'll be able to offset that grade, and we'll see good material come through. On the cost side, it's really a story around commodity inflation, as Ryan pointed out, and labor.

But Ryan, do you have anything else to add there?

Sure. Thanks for the question, Chris. So we do see cost guidance fall, albeit fairly slightly through the 3-year period from $1.95 to $2.20 for 2026, down to $1.85 to $2.10 in 2028. And in terms of the swings and roundabouts there, as Tristan notes, we will -- in 2028, we actually see slightly weaker production from Sentinel due to lower grades that year, which somewhat offsets the fact by that at that stage, we expect to be fully feeding S3 from Southeast Dome higher-grade material.

So some positives and negatives on the production side there and similar on the cost side, where we're seeing strong gold byproduct credits, albeit our gold price guidance is potentially conservative. It's quite a lot below current spot prices. The flip side is we're seeing a strong quatcha in Zambia as they make continued progress with reforming their economy. The Catcher now sub $20 quatcha to the dollar that has impacts on our labor costs and slightly higher contract and maintenance costs through the period.

We've also been cautious and fairly conservative in our electricity cost guidance, where we assume through most of the guidance period that we'll continue to buy power from external sources. And if we see stronger rainfalls in Zambia and we move more back to the ZESCO contracts as a portion, that will be another cost tailwind through the period relative to what we have in our guidance.

Your next question comes from Cody Hayden with Deutsche Bank.

Great. And apologies for that. Two questions for me, if I may. First, considering greenfield projects and specifically Taca Taca, you kind of alluded to it earlier, but does Cobre Panama need to be up and running before you consider any major new investments here or set any other greenfield projects? And then second, given the ongoing activity in the sector, are you seeing any interest in your assets at the project partnership level, say, beyond the JV with Rio?

Cody, thanks for those questions. Yes, look, so our progress on Taca Taca this year will be on its own -- on the project's own merits. And what I mean by that is we will pursue the RIGI application. Well, first, as I referenced, we'll be releasing the Taca Taca, the 43-101 technical report very shortly this month, we expect. And then that builds a pathway towards RIGI application.

And in the meantime and around that timetable, we'd like to see the ESIA and the water permitting come through. And really, that builds an underlying pathway for a financing to explore financing options. I think Cobre Panama is important to that, but we do need to make progress on those on their own standing. The balance sheet and our financial capacity is also important to that. But again, the more that we're able to progress the project on the own merits, the market does appear strong in terms of supporting that, and we'd like to progress it and see where that gets to.

RIGI is a timetable, and we -- we're anticipating that timetable as well. But balancing all of that through, we have a clear plan, and it revolves around our execution capability in terms of developing a strong plan and something that meets the expectations of Argentina and again, also reflecting the stronger investment climate in Argentina.

In terms of interest around the project around that project, look, we wouldn't speculate on that too much other than to say, I think that buy versus build is a strong challenge and pipeline where you have options to be able to develop copper projects in the very near future and the capacity to do that with the execution capability that is, for example, available at First Quantum is hard to find.

We're taking a team that built Sentinel, that built Cobre Panama that has just completed S3. They're currently looking at the maintenance and the preservation of Cobre Panama and all of that lends itself to a capacity to look at something like Taca Taca or indeed La Granja in the long term, and that's just not readily available out there in terms of that execution capability.

Your next question comes from Myles Allsop with UBS.

Just a few quick questions. Maybe just a bit of clarity on that last Taca Taca question. What was the best case case for FID if we kind of put Cobre Panama aside, but in terms of getting RIGI through and then the environmental and water permits, is best case kind of early 2027? Or is it going to take longer? That's the first question.

Thanks, Myles. Look, our main focus is derisking. But Ryan, do you want to comment further on that?

I mean, to be clear, before Cobre Panama was placed on PNSM, our priority focus as a company on was on debt reduction. Nothing has changed in that regard. So we continue to be focused on debt reduction. It's pleasing that despite Cobre Panama being on P&SM over the last 2 years, we've actually made progress on debt reduction, but that continues to be the focus.

As Tristan said, pleasing to have a variety of growth options within the portfolio, but those need to come in due course as we focus on deleveraging the balance sheet. Clearly, strong commodity prices help in that respect. Clearly, if Cobre Panama comes back online, that would help.

But we're not yet at the point where we're talking to specific timing milestones for approving Taca Taca because we first need to work through that deleveraging pathway that's ahead of us.

Okay. And second question, maybe just related to that as well, in terms of the balance sheet, I mean, where do you want to get to? Is it investment-grade kind of metrics? Is there a net debt target? Do you kind of think job done, let's kind of pivot the focus?

I don't think Myles we're ever going to be complacent on the balance sheet, and I don't think they'll ever be job done. What we've talked to is being responsible and prudent in managing the balance sheet. A big part of that is looking to work with others on our projects. A good example of that was the partnership at La Granja, which was referenced in the previous question.

So when we do get to these future project builds, we don't put all of that on our balance sheet. We finished last year at 3.3x net debt to EBITDA. And we've generally talked about you want to be around or below the 1x net debt to EBITDA before you start a next greenfield project build.

That being said, at Taca Taca at the moment, the work is really focused around derisking the project. We're focused around bolstering the balance sheet, and we'll make decisions in due course when that moment comes. But we're not there yet, and we don't expect to be there in the near term.

Your next question comes from Marcio Farid with Goldman Sachs.

A couple of follow-ups on my side. Maybe first on Panama. You obviously provided some details around cost and CapEx to start the drilling process, which is great. Just wondering if you have early estimates in terms of total CapEx for a full restart as well, including on the mining side?

And if you can comment on how the momentum has been for the use to restart the power plant. Obviously, not as relevant, but just to try and understand the state of the preservation of equipment.

And then maybe secondly, Las Cruces just got sold a few months back. Just wondering if you want to -- there's consideration to sell other minor operations as well and to focus on the core operations, Zambia and, Panama and eventually Argentina and Peru as well.

Thank you for that question, and we'll try and cover all of that. So firstly, on cost to restart for the full possibility of restart in Panama. Look, I think it's -- again, we're following a process in Panama that will be governed by the President and by the government of Panama. It requires transparency and engagement, and that is our focus.

The stockpile restart, as we spoke about there, I think there's a good amount of disclosure there to paint that picture. But in terms of restart beyond that, it's really around working capital deployment and it will depend on the condition in the plant. We've been doing a lot of work in that preservation safe management to make sure that areas are in good condition.

But we haven't been -- so we certainly looked after the big major assets really well, the mills, the major elements, rope shovels and so on. But there will be work to do on small ball piping on reticulation pumping, these kind of elements. And so getting to grips with that is the major area in the plant and then working capital of getting suppliers in Panama reestablished credit terms around their employees, local Panamanians coming to work and so on is where the major cost and that's potentially sort of $300 million to $500 million in that range.

How much of that is borne out in the stockpiles versus a restart down the track will have to come to bear. In terms of the power plant and its restart, it's really been pretty neutral because of the selling power into the grid, but the fuel cost at the moment is at a higher level. And so generally, it comes out roughly neutral. We haven't seen any large major CapEx in that area. Our main focus was on the boiler and making sure that, that was in good condition. It was nitrogen filled.

And there were some areas where we did some work on the soot blowers, erosion on the soot blowers that was present, but that wasn't major in terms of capital work, but that's the kind of level of work that went into it. I think by and large, the team has done a fantastic job of looking after that asset.

And you see that in terms of the ramp-up that we see on Unit 2, and we're now switching over to Unit 1. It's already in hot commissioning as we stated, and we're working through that unit. On Las Cruces and that sale, maybe, Ryan, if you take over from there on that question around asset sales and other operations.

Yes, we're pleased to conclude the Las Cruces sale in Q4. Obviously, that had been in the mix for a long time. So to have that completed is pleasing. one, because it further simplifies our portfolio. Two, it removes the $30 million of care and maintenance cost per year that we were bearing. And three, it allows that project to be developed under a new owner for the benefit of the team there, for the benefit of Andalusia and Spain more broadly.

Beyond that, we're not proactively looking to sell any of our other assets. But of course, when it comes to some of our smaller assets, we'll always assess what makes sense for shareholders. We're pleased that at Guelb, we see strong EBITDA driven by the gold price and maybe referencing a question that Chris asked earlier, why we see our cost guidance increase through the next couple of years. Part of that is just because Guelb is becoming purely a gold mine.

We therefore don't get the byproduct credits as a byproduct, we just get them in as additional revenue. So we don't see it in our C1 numbers, but we certainly see the benefit of Guelb in our cash flows. And then lastly, on [ Shaeli ], that's been one of the real success stories in First Quantum over the last 12 months in terms of the extension to the mine life. So we're pleased that both those assets part of the portfolio. But as people externally express interest, we'll always make an assessment as to what serves our shareholders best.

Your next question comes from Lawson Winder with Bank of America.

On Taca Taca, you noted that there will be a feasibility study update in Q1 of this year. So first of all, do we expect that will be filed in Q1 2026? And then are there any changes to the scope of any aspects at all of the project that will be part of that updated TR?

Lawson, thanks for the question. Yes, we -- look, Taca Taca remains a strong project on its own merits, and we're seeing that the investment climate in Argentina is really developing. The reason for the technical report now, and it will be -- we expect it later this month inside Q1 is part of the application for RIGI.

And as you point out, they're painting a clear picture of the engineering study for what the project can look like. Beyond that, in terms of scope and otherwise, I wouldn't want to steal from that report and the impact of that, but there isn't any major sort of change in scope or otherwise. It remains a robust project that extends on beyond 40 years and with inferred resources towards 70 years.

It continues to be a project that will, in the first 10 years, deliver very strong copper production. And then after 10 years, there's a reason -- a good reason for expansion at that point in time. So that is consistent with the previous technical report that put out.

This is really an update that gives clarity around capital, around the development pathway and paints pretty clearly what is an asset that is one of the strongest potential projects for copper in the world in a region now that's attracting a high level of interest in terms of investment.

Fantastic. If I could ask one more question, it would just be on the Kansanshi stream that you guys signed in August. I mean that's worked really well. It's done a lot to shore up the balance sheet. Now that your debt metrics have improved and are continuing to improve, -- how do you think about prioritizing the buyback of the 30% interest in that, particularly in light of the higher gold price?

Thanks, Lawson. That's a great question. Ryan, do you want to take that one?

Sure. We liked the stream from a financial perspective when we entered into it, but we also like it from a structural perspective, the fact that it was equity rather than debt, the fact that the copper price we get paid will increase over time and most importantly, that there was a buyback option we were able to embed into it.

So Lawson, we still have to make more progress on deleveraging. There are leverage thresholds that we have to meet in order to exercise that buyback option. We don't expect to meet those in 2026. But certainly, as we come into 2027, we hope to be in a position to exercise initially the 20% buyback and ultimately, the second buyback, which is for an incremental 10%.

Your next question comes from Anita Soni with CIBC.

I just want to get a little bit more color on the question Marcio asked because I was going to ask that as well. It's -- so the restart cost for the entire project, I know you don't want to get ahead of yourself, but it sounded like you were saying around $300 million to $500 million total. And would that include the $230 million to $280 million that you just announced? Or would that be additional?

Yes, Anita, we don't want to get ahead of ourselves. It's important to follow the pathway outlined by government. And there is a headline on that in terms of the President announcing that beyond the environmental audit coming back in April, but we'll have to assess those next steps and the timing from there.

And it will require engagement. It requires transparency. And with a broader population in Panama, that's our prime focus. But in terms of that capital and those indications, yes, the stockpile processing would net off against that. So the $300 million to $500 million would include the $250 million to $280 million, yes.

Okay. And then just a question on the $12 to $12.50 per tonne in processing costs. Could you help frame that in dollars per pound? Does that include your G&A and TCR seeds? And I understand there will be some noncash component because this ore has already been mined. But I'm just looking for sort of the cash component of what it would be in dollars per pound.

Ryan, do you have that to hand? I don't have that to hand.

Sure. We expect it to be around $2.90 per pound from a cost -- unit cost perspective. And what we would expect is at the moment, we're incurring around $15 million to $17 million in PS&M cost at Cobre Panama once we receive formal approval for the stockpiles, we would expect to produce around 70,000 tonnes of copper and the sales from that will contribute towards the PSM and other environmental-related activities that are ongoing at site, and we would end the year broadly cash neutral at Cobre Panama.

Your next question comes from Ian Rossouw with Barclays.

Just a follow-up on Cobre Panama and around the operational readiness and some of the comments you already made at the site visit last year. If you do get approvals to start treating the stockpiles, does that change the operational readiness for the eventual restart? Obviously, I understand these are 2 separate processes, but can you actually test switch between the processing trains and ultimately be able to restart the entire plant once that decision comes much quicker than previously expected?

Yes. Thanks, Ian. So our focus on the stockpile restart will be environmental, and that is removing that material that does have some acid rock drainage elements and pushing that through one circuit of the process plant at Cobre Panama. So our focus is around that. We do have the opportunity to cycle through the trains.

And I think that's useful in terms of ensuring good preservation and safe management practices. The common areas, obviously, are needed for 1 or for 3 trains. So that's the cleaner circuit, the columns, the concentrate areas and so on are needed for and most importantly, the cyclone plant for the tailings facility. Again, the focus will be environmental and the cyclone plant gives us the opportunity to produce the sands that are needed at the tailings dam in order to ensure that we can deal with erosion and so on that's built up over the last 2 years.

So that's the focus. But having the plant in a condition that's able to run on one train solidly and cycle through the trains, I think, is overall good in terms of ensuring the ability of the plant to start up well in the event that we get to that.

Okay. Great. And then just a follow-up on Taca Taca. I guess Ryan's comments around the balance sheet and I guess, the priority to gear the balance sheet and your comments around buy versus build is ultimately the sort of options around funding when you get to that decision. Will you look at the balance sheet and decide whether I guess, you funded a loan or you consider a stake sale.

Obviously, value will be one option to consider. But do you actually think of sort of Panama -- sorry, Argentina as a sort of -- from a risk mitigation perspective, it would make sense to sell? Or just trying to think how you would think about the funding options at that stage once you get to that?

Thanks, Ian. Look, again, the reason to be progressing the technical report is it's part of the RIGI process, and that's important. There's some deadlines around that, and we're conscious of those. It also underlines the opportunities when we come to looking at funding options. But again, our priority is on Cobre Panama.

We spelled that out very clearly in terms of what our focus is this year and on debt reduction before we would be ready getting the balance sheet into the right position. In terms of progressing the project on its own merits, so if I put those 2 elements aside and just look at the project and to progress it on its own merits is appropriate. That is push forward lodge the RIGI application, get the 43-101 out, which is the pathway for RIGI application, look at options around financing, what could be done.

The market is looking at Argentina more, and there's opportunity in that in terms of making progress on that. But again, we have a clear milestones there around the balance sheet and around Cobre Panama that lend into that. In terms of broader opportunities in the business to make Argentina happen, we'll look through options with partnership. We think we said that publicly before, but there's a number of tools in the toolkit in terms of looking at -- and we've used those, for example, at Kansanshi on the gold stream.

We've been deploying those tools. But really, this is about making sure that Taca Taca on its own merits begins to stand as a project, which we believe it is, which is really worth looking at and stands up very well compared to any of the other projects out there for copper development in the near future.

Your final question comes from Dalton Baretto with Canaccord Genuity.

A couple of quick ones, if I may. Just first on Cobre Panama. Tristan, your disclosure referenced support at 75% to 80% in the communities around the mine. Can you perhaps speak to sort of the broader country, particularly in Panama City, just what the -- what your metrics are showing you and maybe where some of the historical opposition is soon trucks, the NGOs, those sorts of things?

Thanks, Dalton. Yes, so that's very much a focus of our activities in Panama and broader support for the mine is around 50%, 55%. That's been steady at that level for some time now. And we see that a key element is really around transparency and engagement as to what the process from here looks like and walking through cleared pathways. What we are seeing is a huge amount of curiosity. So last year, there were some 241,000 engagements one-to-one between people at Panama, our employees, our advocates, our people that are speaking directly to the community. And in those, what we hear is a lot of curiosity about the mine, its place.

We note, for example, discussion at Panama on the interconnector between Panama and Colombia, and that's a big power line and connection between really to connect all the way in the group from North America through Mexico and into Costa Rica and Panama for the first time to connect to across Latin America to South America. That's a huge interconnector for the continent and underlines the impact that electricity can provide in terms of uplifting communities and uplifting the standards of living and provide the opportunity for things like data centers modern technology and opportunity and employment to come through.

But of course, interconnectors and electricities require copper. And it's that debate with society around responsibly and environmental and with a strong biodiversity program and community programs that's important now in terms of Panama. Again, we're probably 50%, 55% in the broader community. We'd like to see that lift up. And what we're seeing is a level of curiosity to understand the mine and understands how Panama can play into what is a global theme.

There are no further questions at this time. I'll now turn the call back to Mr. Tristan Pascall for any closing remarks.

Thanks, Carly, and thank you, everybody, for joining the call. We're looking forward to a strong 2026. I hope you have a great day. Thank you.

This concludes today's conference call. Thank you all for participating. You may now disconnect.

Ladies and gentlemen, thank you for standing by. My name is Desiree, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quantum Minerals Third Quarter 2025 Results Conference Call. [Operator Instructions] After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

I would now like to turn the conference over to Bonita To, Director, Investor Relations. You may begin.

Thank you, Desiree, and thank you, everyone, for joining us today to discuss our third quarter results. During the call, we will be making forward-looking statements. And as such, I encourage you to read the cautionary notes that accompany this presentation, our MD&A and the related news release. As a reminder, the presentation is available on our website and that all dollar references are in U.S. dollars unless otherwise noted. On today's call are Tristan Pascall, our Chief Executive Officer; Ryan MacWilliam, our Chief Financial Officer; and Rudi Badenhorst, our Chief Operating Officer.

And with that, I will turn the call over to Tristan for opening remarks.

Thank you, Bonita, and thank you to everybody for joining us today to discuss our third quarter results. During the quarter, we made meaningful progress on our priorities for 2025, and I'm pleased to be able to provide an update on these. Firstly, we continue to proactively strengthen our balance sheet and manage our liquidity. In August, we announced a $1 billion non-debt gold stream agreement with Royal Gold and undertook a series of bond transactions to extend our debt maturities, which Ryan will cover in more detail in his financial overview.

Secondly, we remain focused on safe and leading productive operational performance. We were pleased to host analysts and investors to our Zambian operations in September to showcase our cornerstone assets, and we continue to see quarter-over-quarter improvement in production. We remain on track with our guidance for the year, which Rudi will review. Thirdly, at the Kansanshi S3 Expansion, we successfully reached substantial completion on most construction areas during the quarter and produced first concentrate in August, which I will cover in more detail in my closing remarks.

On our fourth priority, in Panama, there were several positive developments during the quarter, and we continue to make progress on the preservation and safe management program that the government approved earlier this year. During the quarter, we shipped the remaining concentrated site along with subsequent shipments of supplies and equipment. These all took place safely at our port without incidents. With regards to the power plant, we commenced precommissioning activities and mobilized specialists to site ahead of the restart, which remains on schedule, with the first 150-megawatt unit expected to be fired and synchronized with the grid in November.

The power generated will support on-site preservation activities, while surplus energy will be made available for dispatch to support the national grid as required. During the quarter, the government of Panama through MiAmbiente initiated the comprehensive audit of Cobre Panamá and awarded the contract to SGS Global, an independent and internationally recognized audit firm. SGS has commenced the 6-month audit process and is currently working with the various ministries.

The company has always sought to conduct its operations with transparency and in full compliance with international environmental standards, including achieving 100% compliance on our environmental commitments in the most recent ESIA audit published earlier this year. Our team at Cobre Panamá is ready to provide all the necessary information to support SGS and the government to complete the audit. Today, the company's work with the government has been centered around the preservation and safe management program for the mine with a priority focused on safety, asset integrity and environmental stewardship.

However, we remain prepared for when the government is ready to discuss more broadly a resolution for the future of Cobre Panamá. Understandably, any potential new agreement will need to clarify that the mineral resources belong to the people of Panama. This is well understood by First Quantum and hence, our willingness to find a durable agreement for a fair fiscal structure that reflects this as well as the $10 billion investment that First Quantum has made into the country. I believe both sides will be motivated to reach a fair, equitable and mutually beneficial resolution.

Had Cobre Panamá remained in operation since 2023, contribution to the country of Panama could have reached $1 billion to the treasury and USD 2 billion to local Panamanian supplier companies. It is important to First Quantum that the contributions of the mine, such as employment and growth can deliver tangible benefits to the people of Panama. At the same time, a fair and balanced agreement would position Panama as a destination for foreign direct investments and a pivotal step in confirming the country's reputation as a stable and attractive environment for international capital. Our focus remains on reaching a resolution for the mine that serves the best interest of our stakeholders, the government and the people of Panama.

Thank you, and I will now pass the call over to Rudi for his operational review.

Thank you, Tristan. It is pleasing to report that operations continued to improve into the third quarter of this year and operated uninterrupted from power constraints. Total copper production was 105,000 tonnes, a 15% increase over the second quarter as both Sentinel and Kansanshi reported higher production. Copper sales volumes totaled 119,000 tonnes. During the quarter, as Tristan noted, we benefited from additional concentrate shipments at Cobre Panamá.

However, sales volumes in Zambia were lower than production due to the replenishment of inventories following the smelter shutdown in quarter 2. Ryan will cover this in more detail in his overview. Year-to-date, we produced 295,000 tonnes of copper and are on track to achieve our 2025 tightened guidance range of 390,000 to 410,000 tonnes. At Kansanshi, the operations reported 47,000 tonnes of copper production in the third quarter, an increase of nearly 7,000 tonnes from the previous quarter.

The improvement was mainly driven by higher mill throughput with the commissioning of the S3 expansion. The ramp-up of S3 has surpassed expectations, achieving first production in August and contributed approximately 6,000 tonnes of copper production to the quarter. Looking forward, copper and gold production in the fourth quarter are expected to exceed third quarter levels as stable circuit performance is running ahead of schedule, leading to a better-than-anticipated ramp-up of the S3 concentrator, which Tristan will cover in more detail in his closing remarks.

With respect to 2025 production guidance for Kansanshi, we have narrowed copper production to a range of 175,000 to 185,000 tonnes, while gold production guidance has increased to a range of 110,000 to 115,000 ounces. Over to our Trident operations. Sentinel reported copper production of 51,000 tonnes in the third quarter, an improvement of over 8,000 tonnes from quarter 2. Mill throughput averaged over 5 million tonnes per month, representing a 14% increase from the second quarter levels, benefiting from improved ore fragmentation, improved reliability and performance of the primary crushers and excellent management of the crushed ore mill feed stockpile.

The relocation of In-Pit Crusher 2 has been completed and will be commissioned in the fourth quarter. The innovative low-energy consumption rail run conveyor, which was showcased on our Zambian tour for analysts, investors and lenders in September, will require some modification as performance testing continues towards final commissioning of the asset. During the quarter, we also continued to advance the maintenance program to address the gold fatigue issues on Ball Mill 2. Work is ongoing with the original equipment manufacturer and specialist engineering consultants to develop a long-term corrective procedure to ensure sustainable performance and an update will be provided once this is established.

Any remedial actions will be timed to the best of our ability with planned maintenance downtime in order to mitigate the impact on production. Copper production at Sentinel is expected to continue to improve for the fourth quarter as higher grades will be accessed as mining progresses to the bottom of Stage 1 pit for sump development ahead of this wet season, along with the transition to higher primary sulphide ore volumes reporting from Stage 3. That being said, due to the year-to-date production, we have updated our copper production guidance for Sentinel to a range of 190,000 to 200,000 tonnes.

At Enterprise, it is pleasing to report a 44% quarter-over-quarter improvement in nickel production to nearly 6,000 tonnes during the third quarter. While nickel grades continue to be impacted by transitional ore from the Stage 3 area, throughput improved with increased nickel ore supply and plant performance. Production guidance for the year has narrowed to between 18,000 and 23,000 tonnes of contained nickel. The continued focus at Enterprise will be on maximizing ore supply, improving communition efficiency, to increase throughput as well as enhancing plant performance when processing complex nickel ore types.

At Cobre Panamá, we continued our preservation and safe management work during the quarter, which included refurbishment of subsystems in the flotation area and the conveyor belts. Inspections of the plant and stockpile feeders have concluded that these areas are in fair condition. Additionally, detailed inspections with original equipment manufacturer specialists are being conducted on the mobile fleet to ensure asset safety and integrity.

These inspections and reports are expected to be concluded in the near future. Preservation and safe management costs during the third quarter averaged approximately $16 million per month and included services related to the copper concentrate shipments and commissioning activities for the restart of the power plant. Thank you.

And with that, I will hand the call over to Ryan for his financial review.

Thank you, Rudi. For the third quarter, we reported EBITDA of $435 million and an adjusted loss of $0.02 per share. This financial performance positively benefited from the solid operational results, which Rudi just described. Additionally, the copper price increased 2% from Q2 due to supply disruptions at several large copper mines across the industry. Financial results, however, were negatively impacted by two key items.

Our revenue grew by 10% quarter-over-quarter, benefiting from higher copper sales volumes and improved metal prices. This was mainly driven by the 24,000 tonnes of concentrate shipped from Cobre Panamá. However, as Rudi noted, sales volumes from Kansanshi were negatively impacted by the replenishment of anode inventories following the smelter shutdown. This impacted EBITDA by $45 million and third quarter earnings of $0.03 per share.

Additionally, royalty costs were $25 million higher at Kansanshi this quarter due to the smelter shut, which resulted in an increased proportion of local sales, which in turn resulted in an earlier crystallization of royalties. With inventories largely replenished, we expect sales volumes and associated royalty costs to normalize, subject to normal timing lags.

Moving on to the rest of our financial results. As I noted earlier, during the quarter, we shipped the remaining concentrate at Cobre Panamá. These shipments contributed approximately $160 million to third quarter EBITDA. At the Zambian operations, we had a late shipment of anodes in the quarter. While revenue was booked in the quarter, it also resulted in elevated receivables at the end of September, which is expected to unwind in Q4. During the quarter, we slightly added to our copper hedges while maintaining our gold hedge portfolio.

We're not currently adding additional hedges as our long-term strategy remains to be unhedged, thereby retaining full exposure to spot commodity prices. We've engaged in selective hedging as a tool to support our financial resilience and safeguard the balance sheet while S3 ramps up and as we work towards resolution in Panama. Copper C1 costs of $1.95 per pound improved by 3% from Q2, helped by higher production and lower fuel costs, but negatively impacted by reduced gold by-product credits and less capitalized costs.

Remaining input prices and Zambian power rates were stable during the quarter. We've narrowed our full year C1 cash cost guidance to $1.95 to $2.10 per pound. While gold prices have been strong, the strengthening Zambian kwacha and higher expected Zambian power costs in Q4 all offset this benefit. Our all-in cost guidance has also been narrowed to $3.10 to $3.25 per pound, reflecting our lower guidance on sustaining and capitalized stripping spend. We have lowered 2025 CapEx guidance by approximately $175 million to a range of $1.15 billion to $1.2 billion.

This is due to lower capital spend year-to-date and the expectation that S3 project will come in under the $1.25 billion budget. Some of the reduction in sustaining capital is expected to be carried forward to next year, such as some of our mobile fleet replacements and mobile component change-outs. As Tristan noted, during the quarter, we continued to take proactive steps to further strengthen our balance sheet by executing two milestone transactions.

First, we completed a $1 billion gold stream with Royal Gold, which provides long-term unsecured non-debt capital. This transaction allows us to maintain full exposure to copper production at Kansanshi, while leaving most of our gold production exposed to spot pricing over the long term. Proceeds were largely deployed towards debt repayments with net debt ending the quarter at $4.8 billion. Second, we issued $1 billion in senior unsecured notes maturing in 2034. The proceeds were used to retire the remaining 2027 notes and a portion of the higher coupon 2029 secured notes.

Following this refinancing, our nearest bond maturity has now been extended to 2029. These combined actions have improved our near-term liquidity by approximately $1.6 billion, resulting in liquidity of $2.3 billion at quarter end. This comprised of $960 million in cash and a fully undrawn revolver of $1.3 billion. After thoroughly evaluating alternatives, the stream agreement was the best strategic and financial outcome for First Quantum. As such, there are no further financings or stake sales planned for Zambia at this time.

Thank you. And I will now hand the call back to Tristan for his closing remarks.

Thank you, Ryan. During the third quarter, First Quantum achieved 2 milestones that demonstrate our commitment to safety and sustainability in our broader business. At Çayeli in Turkey, our colleagues delivered over 3 years without a lost time injury. I congratulate them on this achievement, a testament to our THINK! Safety Program, which drives engagement and a measurable reduction in incidents.

Also at Çayeli yesterday, we published an updated 43-101 Technical Report on the new South Orebody, including a life of mine plan, which extends the mine life of Çayeli to 2036. In Finland, and I call this Pyhäsalmi mine, a 13-megawatt solar photovoltaic generation project was commissioned on the filled tailings pond by the municipal-owned development company, Callio, connecting into the existing electrical infrastructure established by the mine. As part of our commitment to responsible mine closure, we're supporting the transition of legacy assets into renewable energy that benefits local communities.

It is pleasing that I can conclude today's call by discussing the substantial completion of the company's latest brownfield expansion project. During the quarter, the Kansanshi S3 expansion project was successfully completed and all but 2 circuits were handed over to operations in October. The full copper circuit was put online in stages with a focus on tuning the circuit and ramping up towards steady state and nameplate capacity. As Rudi noted, to date, the ramp-up has exceeded expectations and the plant is now maintaining 24-hour operations with support from the commissioning team and vendor specialists.

Only the gravity gold circuit and some concentrate filter upgrades at S3 remain to be completed and handed over to operations. In addition, the smelter expansion works are complete, while acid plant 5 is currently in the hot commissioning stage. Ongoing project capital works on TSF2 are expected to be completed in the second quarter of next year. I would like to take this opportunity to congratulate the in-house First Quantum teams responsible for the successful delivery of the Kansanshi S3 expansion.

And on behalf of the Board and the company, I would like to extend my gratitude to all involved in building and making operational the project for their remarkable work. These are the same in-house teams that successfully built the Sentinel and Cobre Panamá projects, allowing us to learn and improve on each of the six 40-foot SAG mill processing trains across our business. The new processing plant at Kansanshi designed to treat 25 million tonnes of ore annually, incorporates cutting-edge technology and automation, such as the integrated operations center that make the Kansanshi S3 expansion one of the most advanced copper projects in Africa.

At the peak of construction, over 2,500 Zambians and 535 local Zambian companies worked on the project alongside our in-house teams, gaining skills and capacity that will serve long after S3 is complete. We see the capital intensity for copper projects is a growing challenge, particularly as the mining industry faces relatively higher cost of capital compared to other market sectors. As a result of declining grades and an increasing infrastructure burden for new projects, the industry average capital intensity to build a project is moving steadily towards $30,000 per tonne of annualized copper production.

In contrast, by building our own projects largely in-house, our experience at First Quantum is that we are typically able to exert greater control on quality, productivity and capital intensity. This has allowed us to build a brownfield project at the Kansanshi S3 expansion at $12,000 per tonne of annualized copper production. Our latest greenfield projects at Cobre Panamá, including a Port and power station was built at $18,000 and Sentinel was built at $12,000 per tonne of annualized copper production.

As we look forward to applying our experience to future projects within our portfolio at the most responsible and correct time for our balance sheet position, we see our most likely near-term project to be Taca Taca in Argentina. The midterm election results in Argentina over the weekend provides an endorsement by the electrodes of the economic reforms underway in the country and the administration's initiatives to attract greater foreign investment into the country.

We continue to work towards a RIGI application with Taca Taca well ahead of the July 2026 time line. In closing then, the Kansanshi S3 expansion is the latest of our projects to deliver on schedule and under budget. This is an important milestone for First Quantum, which will move Kansanshi back to a 200,000-plus per annum copper producing mine, extending its life beyond 2040 and returning the company back to a position of positive free cash flow generation.

With that, operator, I'm happy to open the call to questions.

[Operator Instructions] And our first question comes from the line of Ralph Profiti with Stifel.

Tristan and Ryan, congratulations on performance of budgeted capital targets at Kansanshi. What's your outlook for copper recovery improvements and targets in that S3 circuit over the coming months and quarters, looking at that 74% in the context of the low-grade stockpiles and as you optimize the circuit?

Ralph, thanks for that. Yes, look, it's very pleasing to see S3 performing better than our expectations so far. As I said in my comments, there are some areas that need to be finished off the 2 circuits being the gravity gold and the filter upgrades. So we will continue to remain conservative and stick with our guidance at this stage, and we only provide guidance this year. We will relook at guidance next year in late January.

But again, the ramp-up is going well. We continue to see -- to target an 80% of design throughput by the end of the year. More broadly, as we look into next year, we will be commencing on stockpiles, which means the grade is lower. And so that will have an impact on production and costs as well. But then as we get into 2027, the outlook is we'll get into much more fresh grade, which will increase production from the overall circuit with a corresponding impact most likely on cost as well.

Okay. I appreciate that. And as a follow-up, what are the critical path items for Kansanshi's TSF2 completion by the second quarter of '26? Is this just maintaining civil earthwork rates?

Yes, not complicated, Ralph. We're just putting in a large buttress there and going about the works. We're comfortable around deposition rates. We're comfortable around rates of rise. It's really just steady progress on both moving volumes. I mean as we get into the Southeast dome and have much more confident rock available, that gets easier and easier for us as well.

Our next question comes from the line of Orest Wowkodaw with Scotiabank.

I'd like to just say congratulations on the deleveraging efforts, both with the stream and the terming out -- the refinancing of your debt that really eases the pressure in the next couple of years. But my question had to do with Cobre Panamá. And I'm just curious, with the environmental audit now underway, do we -- do you think that we have to wait till the conclusion of that audit before formal negotiations could begin with the government on a potential new deal? Or could that begin earlier? And I'm just wondering what milestones we should be looking for here?

Thanks for this comment. Yes, look Panama, we recognize the concrete progress in the country, and there has been the evidence in terms of that progress, the approval of preservation and safe management plan, the export of the concentrates that were completed during Q3. We continue to see the power plant coming online and the permits are granted to get that restarted, and we expect to start up in the first train in November and the environmental audits now underway is good solid momentum.

In terms of future milestones, we're not really anchoring around those. We remain disposed to the government's table. We will seek -- it will be the President that sets out that timetable and the pathway to those milestones and for progress. From our side, we put aside the arbitration, suspended arbitration, and we're committed to a constructive process. We will work step by step with the government.

And again, we'll follow the President's guidance in that timetable and to work things through. In terms of the timetable for the audit and how that relates, we'll take direction from government. The indication from government is sort of 4 to 6 months timetable. And how things go whether in sequence or in parallel, we take guidance from the President and from the government of Panama.

Okay. And just as a quick follow-up, is there any potential visibility on processing the existing ore stockpiles on site at Cobre Panamá under the preservation plan in terms of turning on a mill?

Yes, sure, Orest. Thanks. There hasn't been any discussions on that to date. And again, we wouldn't anchor things around future milestones. We want to be constructive and move towards resolution that deals with the matters at Cobre Panamá in the best interest of all stakeholders, the government of Panama, the people of Panama, but also shareholders.

Having said that, the stockpiles, we do think there's some good rationale to move forward. The providing that feed to the cyclone plant at the tailings dam would give an important source of material that we can use to counter erosion from the high rainfall. That is important work that the stockpiles would provide. But we don't have that on the critical path. We remain constructive towards resolution and engaging with governments in that regard.

Next question comes from the line of Marcio Farid with Goldman Sachs.

And congrats on getting S2 on time and below budget. Yes, my question is on -- maybe to Ryan on the hedging strategy. Ryan, probably it made more sense to be more active on hedging before you take the -- you've done the actions related to refinancing, but also the streaming deal as well. Just wondering how we should think about it going forward as well now that the balance sheet is cleaner. What's the sort of strategy you're going to be taking on the hedging program?

Thanks, Marcio. Ryan, can you take that?

Marcio, yes, absolutely, you've seen 3 big tailwinds for the balance sheet. The first is the stronger copper price. The second is the strong performance at S3 coming in on track at this stage under budget. And then the third is the Royal Gold Stream, which significantly adds to our liquidity.

As a result of that, that we haven't recently added additional hedges either on the copper or gold side and we'll continue to monitor that month-to-month. Those hedges roll off as we get into this first half of next year. But absolutely, the liquidity and stronger balance sheet gives us more flexibility in terms of planning for future hedging, noting our overarching goal is to be unhedged over time.

Great. And as a follow-up on Trident, obviously, it seems like some progress has been made around the issue with the Ball Mill 2. But it seems like you're still doing a lot of long maintenance as well, right? So just wondering what's the path for a final solution around Trident and the Ball Mill 2 , please?

Thanks, Marcio. Rudi, will you take that one on the fatigue issue?

No problem. Marcio, as you would have noticed that -- from the production results, we saw a steady increase of production from the second to the third quarter, which just is a clear indication of how comfortable we are getting with the maintenance strategy around the fatigue on Ball Mill 2, which really equates to something like 20 hours a month now. We are quite comfortable with the way we're handling it. We're working with the OEM to try and get to a final fix. We're almost there.

And as we continue into next year, we are happy to continue with our current maintenance strategy, but we will come back to the market and give a clear fulsome update once we have finalized the final approach for this Ball Mill. We certainly don't want to do any intermediate measures because we're quite comfortable with the current maintenance strategy.

[Operator Instructions] Next question comes from the line of Myles Allsop with UBS.

Maybe just on Cobre Panamá, you're saying you're kind of working towards a fair outcome. How should we think about fair from a First Quantum perspective? Is that something broadly aligned with the previous license agreement? And do you think the government has a similar kind of expectation in terms of how value is shared as we go into these...

Myles, thank you. Yes. Look, I think it's too early to get into that. We -- but I think first of all, we understand, for example, the recent comments in Panama, the mineral resources, it's very clear ownership of those belong to the people of Panama. And we're absolutely willing to find a durable arrangement that deals with each of the stakeholders that is the government and the people of Panama, and they need to see reasonable and tangible benefits coming from the mine, but also that it deals with the $10 billion investment that First Quantum has made into the country and there's reasonable recognition on that basis.

And we will look at those as the main principles and be constructive around any conversation. Again, the timetable from that, we will take direction from the President and the government of Panama as to when they're ready to commence.

Yes. And ramp-up, how would you [indiscernible]. I presume there will be quite a big working capital build to get Panama back up to it's full operational level.

Yes. Thanks, Myles, you broke up a little bit, but I think you were asking what does the start-up and capital and working capital look like in the event that there is a positive outcome and resolution. And yes, look, as we go through the inspection process, there's been a lot of focus on that through the preservation and safe management plan now approved by the government. And so dealing with corrosion, dealing with the situation on site, we're pleased in that the resolution to those corrosion has been fairly straightforward.

It's really around man hours for welding, for painting and to work our way through that. I think the team continues a good job -- to do a good job in making sure that the main assets on -- the mills, the road shovels remain warm and in good condition. But certainly, we will need to repair some of those minor items. And that -- as that comes online, we'll understand timetable more because inspection means that we will be able to open up and see areas. But at this stage, we think that's something like 6 to 9 months as we work through those issues.

But again, the timetable for that we might see. So we don't see major capital items in that regard, and it will really be getting people back on site and getting the supplies back on site, that are the sort of the key drivers of that, and that's largely around working capital to pay salaries and also to remobilize supply chains in order to get there. I'm sure as we get closer to our reforecast at late January, we'll provide a clearer picture of what we see there, but also as we understand progress in Panama around resolution of this matter.

Next question comes from the line of Lawson Winder with Bank of America.

Tristan, Rudi and Ryan, thank you for today's update. I just want to -- If I could ask about Çayeli. I mean I don't think that was something that was on everybody's bingo card. So first of all, well done on extending the life to 2036, I mean I think that's an extraordinary development. But also as you think about longer-term growth and the benefits for jurisdictional diversification, how would you characterize Turkey as a country in which to grow going forward, both in terms of the regulatory environment and the geological prospectivity?

Lawson, thanks for the question. Yes. Look, I think the team at Çayeli has done a remarkable job here. The history is that certainly, the mine was looking at end of life and then a lot of work over the last decade on exploration and the discovery of the South Orebody, which is very productive for us. It's improved ground conditions compared to the existing Orebody.

We still have more work to finish off in the existing Orebody, and that gives us a very good transition period across to the new South Orebody. And as we spell out in the 43-101, we see life out to 2036. I think beyond that, that's been very well developed both by the local team at Çayeli, but also our exploration group working hand-in-hand.

And we do see that Turkey has those opportunities for exploration. I would just frame those a little bit in that what we see is this reasonable grade, but it's really around scale that we see challenges, both permitting and particularly an example like Çayeli, where there's an extremely good relationship with community and so on and an established operation that's been one of the leading training grounds for technical capacity in the country, having run for many decades, it does set up a good basis in the country. But overall, there is opportunity in Turkey. It's just around questions of scale as to whether they really move the needle for a company like First Quantum.

Okay. Understood. That's helpful perspective. If I could ask a follow-up, I would love to ask about Taca Taca. And the last technical report that you guys studied showed a project with very low capital intensity. And I mean, clearly, there's been CapEx inflation in the industry. But perhaps could you give us a sense of how we could think about that CapEx intensity today? Would that be approaching global averages? Would it still be slightly below global averages? And then when might First Quantum think to update that technical report?

Thanks, Lawson. We're working on that at the moment. It's mostly around the engineering studies. We would like to have a technical report of 43-101 out at the end of this year or early next year. We're dotting the Is and crossing Ts on the engineering studies around that. There's been a lot of -- the drilling and the resource definition is well in hand, but also around in terms of the environmental and water permitting process around what the project looks like will define that final picture.

We believe that those permits are in good order and they continue to move well in Salta Province, and we look forward to receiving those in the near future. In terms of capital intensity, Taca Taca will remain competitive. Once we have that final picture in the 43-101, we would release that and make it very clear that capital picture. But I think we don't see it evolving to the $30,000 per tonne annualized capital intensity. No, it will remain at a reasonable picture. Obviously, there's been some level of inflation, but we think that the project remains well in hand.

Our next question comes from the line of Anita Soni with CIBC.

Tristan, Ryan and Rudi, most of the questions have been asked and answered, but I just have a couple of follow-ups. So could you just talk about inflationary pressures, if there are any in Zambia that you're seeing and any offsets that you see, obviously, such as the ramp-up at S3. But can you just give us a context of what we should be thinking about going into 2026?

Thanks, Anita. Ryan, could you take that question on inflation?

Yes. Anita, what we've seen in Zambia in terms of pushing costs up, there's principally been two things, slightly higher employee and maintenance costs. And then secondly, we started this year with the kwacha around 28 kwacha to the dollar. More recently, because of the strong fiscal reform that the country has made, that's got closer to 20 kwacha to the dollar. So that's pushed our costs up.

Conversely, the strong gold price, the strong gold production from Kansanshi has pushed our costs down. And the net-net of those two has meant that we've narrowed rather than changing cost guidance. And we expect those similar dynamics to play out as we go through next year. You know S3, as we ramp it up, the early phase of S3 is -- has higher costs because we're processing stockpiles. And then as Tristan noted, as you get into 2027 and we start putting Southeast Dome ore through it, that's when you really see the cost position improve and therefore, the positive impact on our cost position as a company.

Okay. And then just on Cobre Panamá. In terms of the time line, thanks for all the color that you provided. And I think Orest asked a little bit about the environmental audit and whether or not something the negotiations can start. Is the time line for a restart, once it's all passed through Congress, still 6 to 9 months? Or has that evolved at this stage?

Thanks, Anita. Yes, I think, look -- that's the best estimate that we have at this stage. As we go through inspection and detailed understanding on the preservation stage management plan as we open up areas, it may adjust, but that's the best estimate that we -- that's really to get the three rains operating. It's important to note that optimization would take longer, getting 100 million tonnes is a very large throughput and a lot of work to get there. So we qualify that to say, optimization to the 100 take a level of refinement over a longer period.

But at this stage, the 6 to 9 months seems reasonable based on what we know today. Again, we need to go through the process with the government. That's not a straight line. There'll be some ups and downs, but we've seen constructive progress in all of the concrete milestones that have achieved this year. We need to keep working on public perception. And certainly, we'll follow the timetable provided by governments on the overall process.

And our last question comes from the line of Dalton Baretto with Canaccord Genuity.

Tristan, I wanted to follow up on a comment you made in your prepared remarks there around Panama, where I think you said that First Quantum recognizes that the resources belong to the people of Panama, but that any agreement would need to recognize the $10 billion investment made. And I'm just wondering, it sounds like there are being markers laid down and negotiating positions ahead of the actual official discussion kicking off. And I'm just wondering, are there background discussions happening around a potential framework and sort of defining what the nonnegotiables are ahead of actual official discussions with the President?

Yes. Thanks, Dalton. Look, we're very -- it's been pleasing progress so far this year in terms of the concrete milestones that have been achieved on the preservation and safe management plan and so on. And certainly around those, there is conversation with the government on the preservation and safe management plan around bringing in feedstock for the power plant, the technical issues around these topics. So there are discussions at that level. We welcome the environmental audit now, the comprehensive audit to be done by SGS, and that's commencing now as we understand.

And certainly, that will take a lot of work from our side, but we're ready to provide all information and to comply with that audit fully and to go through that with the environmental authorities, with the selected independent expert there in SGS. All of those form a framework around which conversations and feedback is in process. But more broadly, no, there is no formal conversation. We're waiting for that timetable to come from government that once the President and so on provide that timetable, we will be constructive.

In terms of those royalties, just to point out and we understand that criteria. Certainly, because we were paying royalties before, those royalty payments do recognize that it is the people of Panama that own the resources, and we understand that, that's important in terms of the profile of the mine and the profile of extraction in Panama.

Great. And then just one follow-up for me. If and, let's say, when Cobre Panamá is back up and running again and looking at what you're doing at the rest of your portfolio in terms of partnering in JVs and so on, is it your intention to bring on another partner there in addition to Franco and the Koreans or may be even getting the Koreans to re-up their stake? Or are you happy with the way things are?

Yes, Dalton, I think it's -- we need to go step by step with the government of Panama. I think it's too early to get into that. It's not something we're looking at, at this time. We're just working our way through each step as they present. Our focus at the moment is the preservation and safe management plan, the restart of the power plant, the environmental audit that's right on us now. And certainly, we're waiting. We're ready for conversation to happen when -- if the timetable to be chosen by government. It's too early to get into those areas at this stage.

That concludes the question-and-answer session. I would like to turn the call back over to our CEO, Tristan Pascall, for closing remarks.

Thanks, operator, and thank you, everybody, for joining the call. Should you have any additional questions, please don't hesitate to contact us. Thank you again. And I would like to wish everybody well for the remainder of the year. Thank you, and goodbye.

Ladies and gentlemen, that concludes today's call. Thank you all for joining in. You may now disconnect.