Ivanhoe Mines Stock

Good morning, ladies and gentlemen. Welcome to the Ivanhoe Mines Limited Third Quarter Earnings Call. [Operator Instructions] This call is being recorded on Wednesday, November 4, 2026.

I would now like to turn the call over to Tommy Horton, Vice President, Investor Relations and Corporate Development. Please go ahead.

Hello, everyone. My name is indeed Tommy Horton, and I'm the Vice President of Investor Relations and Corporate Development for Ivanhoe Mines. And it is my pleasure to welcome you to our third quarter 2026 conference call. This call is being recorded on Wednesday, November 4, 2026.

On the line today from Ivanhoe Mines, we have Ivanhoe Mines' Founder and Co-Chairman, Robert Friedland; President and Chief Executive Officer, Marna Cloete; Chief Financial Officer, David van Heerden; Chief Operating Officer, Tom van den Berg; Executive Vice President for Projects, Steve Amos; Executive Vice President for Corporate Development, Alex Pickard; and Executive Vice President for Technical Services, Simon Bottoms.

We'll finish today's event with a question-and-answer session. You can submit a question using the Q&A box on the webcast page as well as through the conference operator via the phone line. If we run out of time and we are unable to answer your questions, please do follow up with our Investor Relations team, and we will endeavor to get back to you.

Before we begin, I'd like to remind you that today's event will contain forward-looking statements and will involve and may involve risks and uncertainties that may cause actual events to differ materially from those in the forward-looking statements. Details of our forward-looking statements are contained in the Q3 2026 financial results press release, which you can find on SEDAR+ as well as on our website at www.ivanhoemines.com.

So it is now my pleasure to hand over to Ivanhoe Mines' Founder and Co-Chairman, Robert Friedland, for his opening remarks. Robert, please go ahead.

Good morning. I just -- I am taking off from California to Florida, and this is the first time I've done this from an aircraft. I want to welcome everybody to this call. We're at a turning point today in so many different ways, both politically and lots of concerns about war and peace and the new administration in the House and Senate. Lots of uncertainty but never a better time to buy Ivanhoe Mines. I'm extremely confident in the turnaround and the vision of our management team, and I'm very anxious to get everybody to listen carefully because this is one of those rare opportunities I can unabashedly say the time to accumulate shares in Ivanhoe Mines for your kids and your grandkids is now.

So with that, I'll turn this over to Marna, and we have a fantastic story to tell. Thank you.

Thank you, Robert, for those encouraging words. And on my opening slide, we see a picture of the widening of Platreef Shaft 2 shaft, where we are busy widening it from 3.1 meters to 10 meters...

I'm sorry, Marna. I'm just going to interrupt you. Operator, there seems to be an issue with movement of the slides. It's moving on my side, but it doesn't seem to be showing up on the main deck.

Okay. Thank you. Yes, that's the correct slide. I can see it moved on my side. Thank you. No. No problem. And when Robert was speaking, the picture in the background and on our opening slide is a picture of our solar farm that we've just commissioned at Kakula. It's a very -- yes, exciting. That's the battery storage. It's very impressive, and we are very impressed with the delivery of the 60 megawatts and what it's done. And we'll tell you a little bit about it when we get to Kamoa-Kakula about how we're using the solar to reduce our diesel cost.

Okay. So let's move into today's presentation. We start off on a sad note. We've lost one of our key team members in the Ivanhoe family, Ivano Manini, over the weekend. Ivano passed away at home. He will leave a massive gap. He was the Managing Director at our Kipushi project. The site is very sore at the moment. We will have a memorial and a funeral for Ivano on Friday and our condolences to his family, to our team members. Everybody is very inspired to ensure that we build on his legacy. I've printed the key statistics for Kipushi for this quarter, and Ivano has made such an impact. If I look at all the records that Kipushi achieved, it's 1, 2, 3, 5, 6, 7, 8, 9, 10 records for one quarter.

And to name a few, our feed grade was in excess of 41%. Our zinc recovery was in excess of 96%. And what makes this even more meaningful is that the full plant at Kipushi is operated by DRC nationals. So there's not a single expat working on the plant at Kipushi. I think that's a very impressive record. Our payable zinc tonnes sold was -- or produced was in excess of 77,000 and sold in excess of 69,000. We also had record EBITDA at Kipushi in excess of $108 million. Ivano ended his career at Kipushi on an absolute high note and the team there have taken it upon themselves to improve on that even further as a show of appreciation for everything that Ivano has meant for them.

We can now move into the third quarter highlights. At Kamoa-Kakula, we've produced in excess of 67,000 tonnes for the quarter. Our cash cost for the year-to-date is -- was $2.80 per pound of copper, and we maintain our guidance for the year. Our margins was also supported by a $0.47 per pound of smelter benefit, and we'll unpack that a bit further down in the presentation. We're tracking well to achieve guidance towards the bottom end of guidance for this year. And we also revised our 2027 guidance. And we've put out a bit of a taster in terms of what we're seeing the study results culminating in. We know that, that is probably what everybody on the call is most interested in. So just after this introduction, Simon Bottoms will take you through our revised thinking at Kamoa-Kakula.

And as Robert indicated in his opening remarks, we are confident that, that is a solid plan to create a sustainable Kamoa-Kakula for the future. We know that we are on the right track. A lot of technical work and technical data is going into this turnaround plan, and our team is confident that we will deliver on this plan. Also at Kamoa-Kakula, we sold in excess of 109,000 tonnes of sulfuric acid at an average price of $915 per tonne. Our Q4 contracts were well over $900 a tonne. So that's an increase of over 100% for the year-to-date. I've mentioned the solar plant earlier. It's been an absolute success. We plan to increase our capacity to 120 megawatts by late 2027 and then increase it even further thereafter.

I've mentioned Kipushi in the context of Ivanhoe. There, we have narrowed our guidance towards the upper end of our guidance limit to between 270,000 and 290,000 tonnes of zinc. And then earlier this quarter, we've also announced that we've grew the Western Forelands resources by 30% to over 12 million tonnes of contained zinc (sic) [ copper ]. That ranks us the largest and highest grade discovery in the past decade. So a lot of good news together with more clarity on our turnaround strategy at Kamoa-Kakula.

If we move over to the next slide. Our team has really focused this past quarter on health and safety, and we've launched the One Ivanhoe, One Road to Zero campaign. This campaign drives zero harm, healthy people, every shift. We want to make people aware that no task is so urgent that it cannot be done safely. If you feel that you are embarking on an unsafe activity, you should have the confidence and support to say, I will not do this task. This is not a safe environment for me to operate in. This campaign consists of a 3-phase strategy. We will do a gap analysis and implementation as well as verify and audit the outcomes of everything that we are implementing. And our initial focus is to improve our training as well as the implementation of a fatal risk control protocol and safety culture that we will embed across the organization. And we will focus on areas of high occupational risk such as fall of ground and the handling of equipment.

So with that as an introduction, I will now hand over to Simon to take you through our revised thinking. Thank you. Simon?

Thank you, Marna. So good afternoon, good morning, everyone. So firstly, we wanted to start by giving you an insight into the progress we've made with the ongoing technical studies. And how we see that impacting and changing the direction of the Kamoa-Kakula complex going forward. So if you progress to the next slide, please, Tommy.

So firstly, I mean, one of the core focuses of our life of mine planning and technical work has been to reposition Kamoa-Kakula to deliver a flexible, fully integrated and top-tier copper producer with ultimately with optionality for production rather than being heavily reliant upon single sources within the life of mine plan. And so as a result of that, we've -- you'll see we've introduced the commencement of multiple shallow high-grade open pit starter pits into the mine plan commencing immediately in quarter 1 next year. Along with this, we've also rescheduled and resequenced a number of the underground mines and updating a lot of our geotechnical, geological and hydrological parameters, which is enabling us to deliver a lot more flexibility and have a lot more optionality in our production plans relative to the plan you saw earlier in the technical report in March this year.

Obviously, the key outcomes are that we expect to achieve to fill the concentrator capacity by the second half of 2027, and we expect to start utilizing all of the smelter capacity, producing both copper anode and sulfuric acid by the last quarter of 2027. So this combined, particularly with the introduction of the open pits, not just as the initial starter pits, but the later in life larger pits we feel provide the foundation and really unlock and justify the incorporation of that Phase 4 concentrator expansion, which ultimately returns the complex back to that steady-state production of 500,000 tonnes. And I'll give you a bit more detail about that in the upcoming slides.

So if we progress to the next slide, Tommy. So firstly, we're not turning our backs on Kakula. We're still very much focused on the redevelopment and the repositioning of Kakula. The development of the key peripherals around the Kakula -- the peripheral ore drives around the periphery of the ore body is still underway. And despite hitting a record linear advance rate of some 127 meters per crew per month in quarter 3, the development has still been slower than anticipated. And so we are not yet getting around that eastern barrier pillar in time to be able to incorporate those high-grade stopes into the 2027 production. So as a result, those stopes, as you see the initial stopes in green blocks on the right-hand side of the schematic graphic that are now delayed out to 2028.

Additionally to this, you will have seen that our feed to the concentrator grades, grades have been very low. And the reason for this is we've taken a look at the current copper prices. And given that with these peripheral drives, both long-term and midterm accesses are actually developing through marginal ore material. And so looking at that processing cutoff, we have made the decision and have been feeding all material above 0.3% copper. So this has -- this provides, obviously, extra copper production and provides marginal -- in terms of marginal ore, but also enables us to get better utilization of our current concentrators. But as a result, as you've seen in the quarterly numbers, the concentrator grades have been lower than normal.

So now turning to the high-grade starter pits. So within -- in the first quarter of 2027, we expect to start commencement of mining on 2 small high-grade starter pits, where between 2027 and 2028, we expect to mine some 3.5 million tonnes at 2.5%. This is spread across 4 pits with variable strip ratios, some at quite high levels of 11:1 with some quite much lower strip ratios. The key being, though, is that these open pits provide an initial start an easy low capital, low technical risk start to high-grade copper tonnes, which sit only 50 meters below the surface of the current surface. And allow us to start rebuilding stockpiles, filling the concentrators and provide a lower cost source of ore relative to the -- even the cheapest underground to fill up our concentrator feed and rebuild a stockpile, which will give us operational flexibility.

These starter pits, as you can see in the graphics on the right, I mean, even the deepest portion of them has a high wall of some 90 meters depth. So they are by no means a significant technical undertaking. Drilling has already commenced on the starter pits to infill drill them to a grade control spacing prior to commencement of any production. But at the moment, we're still updating those open pit forecast as those results come in. And these grades and forecasts are based on the updated mineral resource models that we've completed through the course of this year.

So what this means for the complex is, as you've seen in our quarterly release, is we have reset the production guidance for 2027 as we've reduced that reliance on the Kakula tonnes, we've incorporated those initial shallow high-grade starter pits into 2027 with pre-stripping starting in the first quarter and then first ore expected to come in from August, utilizing filling the entire mill capacity across all of the concentrators by Q4. The result of this, though, this repositioning does -- it gives us a lot more flexibility, buys us more time to reset Kakula, but does mean that we've restated that production intentionally to reflect the variability in the timing of the development for accessing of those higher-grade blocks within Kakula.

So whereas the open pits, we feel provide a stable, steady state, consistent feed for the production profile. And then as you see into the pre-Phase 4 capacity, as we step forward into 2028 and beyond, we see those open pit grades increasing as well as the proportion of the overall concentrator feed increasing substantially from -- coming from those open pits.

Okay. Next slide, please, Tommy. So stepping away from the starter pits, looking forward to the larger pits, we see that the starter pits will provide an initial concentrator fill for our Phase 3 concentrators. Then as we push back into the larger pits, they effectively unlock the Phase 4 concentrator with a significant return on capital, very short-term payback and unlock a lot of that work that was put in place previously with significant synergies with the existing Phase 3 circuit.

So we're still updating and finalizing our technical studies, and we have engineering designs for a range of Phase 4 expansion scenarios, but we're expecting to add somewhere between 5 million and 6.5 million tonnes per annum process capacity to Phase 4 with -- as the open pits progress from those initial starter pits pushing back to the larger pits. So with -- we expect to indicate some selection of some options with our final technical report updates and our life of mine updates in March this year. But immediately thereafter, we'll be commencing detailed engineering and costing of that selected options.

So turning to the next slide. If we take a look at what the open pits are that we see longer term are potentially unlocking this Phase 4 expansion. Indicated on the graph on the right-hand side, we've taken a benchmark of all global copper operations scaled by annual production and grade. And we've highlighted the area where we see the potential for the Kamoa open pits situating. And as you can see, they're in a globally standout position with significantly high grades as well as significant production phases -- production levels. And these production levels, we expect to step up to about 40% of the overall feed after the Phase 4 expansion.

These open pits, it's not just one open pit. There are a number of open pits, which initially start as small high-grade starter pits, pushing back into much larger laterally extensive pits, but still only with the deepest pit at the moment that we've been modeling and designing being 190 meters deep. So still representing a very low technical risk. Added to this, the incorporation of open pits into some of the resources, which were previously reported as underground resources, but also unlocking some resources that were previously excluded from underground resources. It enables us to lower our cutoff grades, which adds significantly more metal and improves the extraction ratios substantially from that of the underground areas, where, as many of you will be aware from the updated geotechnical designs, we had previously limited the underground extraction ratios to about 65%.

The open pits will be extracting up to 97% of the ore situated within their pit designs. As well as this, even with current costs and we've applied or utilized a $4.50 a tonne mining cost for our open pit evaluation, assuming an initial contractor operation. Even with these quite high costs, given the current diesel price environment, we still expect the ultimate operating costs of these open pits to be substantially lower than that of the neighboring underground mines. And so therefore, these pits provide a very quick return on capital and have a lower longer-term sustaining capital cost than equivalent underground mines.

And now I'll pass you back over to Alex for the operational results -- sorry, David.

Thank you, Simon, and good morning and good day to everyone joining the call. If we move to the next slide, please, Tommy. So Kamoa-Kakula sold just over 67,000 tonnes of payable copper in the third quarter, and that's up nicely from the 61,000 tonnes sold in Q2. Copper in concentrate produced was up by almost the same amount quarter-on-quarter. And with the additional tonnes in slag concentrate and high-grade fines designated for sale, there was a slight increase in copper in inventory on hand to 43,000 tonnes at the end of the quarter.

Kamoa-Kakula's quarterly revenue exceeded the $1 billion mark for the first time. So the record revenue for Q3 was up more than 17% from the previous quarter because of the increase in tonnes sold, the higher copper price and the increase in revenue from sulfuric acid, which actually increased to over $100 million for Q3, up from $56 million in the second quarter. And that was with an average price for the third quarter of $915 per tonne. The average realized copper price for Q3 was $6.12 per pound of payable copper, but this was actually applicable to a relatively low number of tonnes with 62,000 tonnes still provisionally priced at the end of the quarter and remeasured at the end of Q3 at the quarter end closing copper price of $6.55 per pound.

The stronger revenue performance translated into meaningful improvements in EBITDA and margins as we can see on the next slide. Yes. But firstly, on the cash costs. The cash cost for the third quarter of 2026 was $3 per pound of payable copper. Energy cost was again higher and the copper grade of ore processed was lower in the third quarter, as Simon mentioned, leading to a cash cost increase on a per pound basis, but more details on that on the following slide. The cash cost for the year-to-date of $2.80 per pound of payable copper is right in the center of our guidance range, and we maintain that range.

While the quarterly cost number is elevated, 2 important structural mitigants are basically on our doorstep. The reduction of the diesel generation diesel needed in generation following the commissioning of the solar facility, and that's expected to be between $0.10 and $0.20 from Q4 onwards and then the benefit of the higher progressive grade and other mining efficiencies. Kamoa-Kakula's EBITDA for Q3 was $478 million, which is the highest EBITDA since the first quarter of 2025 and an almost 25% increase in the previous quarter. The EBITDA margin increased to 46% from 44% in Q2. That's a really strong outcome given that the operation remains below its longer-term production capacity and continues to carry elevated power and mining costs at the current rate. Higher copper prices, of course, played an important role, and we continue to realize significant smelter benefits.

And the next slide sort of isolates the benefits we are already receiving from the smelter. So this slide is really just again a reminder of why the smelter is so strategically and financially important for Kamoa-Kakula. Compared to the second half of 2025, the smelter has delivered approximately $0.86 per pound of gross benefits in 2026 to date through 3 principal channels. The largest benefit is approximately $0.46 per pound from sulfuric acid by byproduct credits. This benefit increased to $0.68 per pound in the third quarter, and that's expected to remain as high in Q4 2026.

We have also realized savings of approximately $0.30 per pound in logistics cost as the copper anodes contain significantly more copper per tonne shipped than concentrate and a further benefit of around $0.10 per pound arises from avoided treatment, refining and tolling charges. These benefits are partially offset by the smelter operating cost of approximately $0.39 per pound. The result is a net benefit of approximately $0.47 per payable pound even with the smelter currently operating at around 60% of capacity. Mining and processing costs, mostly linked to higher diesel have increased over the comparison period, which means the smelter benefit is not yet fully visible on the headline C1 number. But of course, without the smelter, current cash cost would have been quite a fair bit higher.

The next slide looks at the diesel price impact a little closer as also the longer-term cost expectation. Between Q2 and Q3, C1 increased by $0.16 per pound, of which approximately $0.09 per pound resulted from the higher diesel prices. Since the first quarter this year, the diesel component in C1 has actually increased from $0.34 to $0.61 per pound, an increase of $0.27 per pound. The balance of C1, excluding the diesel increased more moderately from $2.24 to $2.39 per pound over the same period. And importantly, the diesel costs shown are the direct diesel price impact. So it doesn't include the secondary impact of the diesel prices like the increased logistics charges, which is also contributing to the remaining C1 increase.

And the diesel burden is, of course, not expected to be a permanent feature of the cost base, but the current levels have been assumed for the guidance ranges. With the on-site 60-megawatt solar facility now fully operational, this is expected to reduce the energy cost by, as I mentioned, $0.10 to $0.20 per pound as the Kakula dewatering was switched over from being powered by backup diesel generators to the new facility in mid-October. For 2027, we are guiding to C1 costs of $2.50 to $3 per pound. And beyond the near-term recovery period, we see a clear pathway to below $2.50 per pound, supported by lower diesel consumption, improved operational performance, improved mining grades and then greater fixed cost absorption as production increases.

Despite the cost pressures in the quarter, the higher copper sales, copper prices and the acid revenue generated a very strong quarter-on-quarter increase in EBITDA, and that can be seen on the next slide. This waterfall bridges Kamoa-Kakula's EBITDA from the $385 million in Q2 to the $478 million in Q3, an increase of $93 million. And higher copper prices contributed approximately $59 million, while the stronger sulfuric acid sales contributed approximately $41 million. The increase in payable copper sales added a further $36 million. So these benefits were partially offset by changes in provisional pricing remeasurements, operating costs and logistics charges.

Kamoa-Kakula held approximately 43,000 tonnes of unsold copper at quarter end compared with a longer-term target inventory level of around 25,000 tonnes. And reducing the inventory levels represents a future working capital and cash flow opportunity and it's definitely a priority for the team. However, we're not assuming an immediate destocking of the full balance. Together with the Kamoa-Kakula recovery, Kipushi is, of course, becoming an increasingly important source of earnings and cash flow, and that's exactly where we're focusing next.

Okay. So Kipushi delivered another record quarter, as Marna mentioned. Revenue increased to $255 million from $146 million in the second quarter, and that was supported by higher zinc sales and a realized zinc price of $1.73 per pound. Kipushi sold almost 70,000 tonnes of payable zinc during Q3, and that was up from 43,000 tonnes in the second quarter. So payable tonnes sold was a little higher than produced, leading to a small decrease in inventory, which is sort of noted on this slide. The logistics constraints, which we noted in the second quarter eased in Q3, allowing the on-site concentrate stock to reduce by more than 60% compared to the second quarter.

Some provisional revenue relating to that destock inventory had not yet been received by quarter end and creating a nice benefit for future cash receipts. I mean, Kipushi will always have a fair bit of inventory en route to port. And with the majority of the inventory now in transit at the end of the third quarter, we do expect that sales in Q4 will exceed production probably by around 10,000 tonnes. So another very good quarter for Kipushi expected in Q4. Kipushi is definitely no longer simply an operation in ramp-up, but is really a meaningful second earnings and cash flow engine for the group.

If we move to the next slide. So the EBITDA more than doubled for Kipushi to $108 million from $51 million in the previous quarter. The EBITDA margin expanded to 43% compared to the 35% in Q2, so a nice increase there as well. So this really represents a substantial improvement from the $27 million of EBITDA at a 21% margin generated in the third quarter last year. Equally important, this performance is being delivered at a very competitive cost. Year-to-date C1 costs of $0.89 per pound of payable zinc remained at the midpoint of just below the midpoint of our guidance range, and we keep the guidance range unchanged. Keeping the cost this tightly controlled with a much higher than planned diesel price and other inflationary pressures, increased logistics charges, and that has really just been excellent.

And Kipushi also recently secured an additional 10 megawatt of grid supply power from a third-party providers, which is then expected to reduce power instability at Kipushi and as a result, reduced power cost from the backup diesel generators from the third -- from the fourth quarter. So Kipushi generated around $155 million of operating cash flow for the year-to-date, and we plan to start upstreaming the excess cash from the DRC operating subsidiary to our Canadian parent bank accounts in this quarter. And I think lastly, I think just -- I'm confident that the Kipushi team will honor Ivanhoe's legacy through just achieving even greater highs in the future. But I would also just like to add my voice to Marna's that Ivano will definitely be deeply missed.

We move to the next slide. So at the Ivanhoe Mines level, adjusted EBITDA increased to a record of $241 million for the quarter from almost $180 million in the second quarter and $87 million in the third quarter of last year. So this reflects Ivanhoe's attributable contribution from Kamoa-Kakula together with the strong improvement at Kipushi. The record adjusted EBITDA was achieved notwithstanding the increased investment in exploration expenditure of $44 million for the quarter, up from $15 million in Q2. But Alex will tell you a little bit more about exploration on the -- later on in the presentation. So profit after tax was $45 million, broadly stable compared to $46 million in the second quarter. And the Q3 result included $47 million of profit from Kipushi and $25 million from a share of profit from the Kamoa-Kakula joint venture. And this earnings picture is, therefore, really improving materially and while Ivanhoe continues to fund future growth through exploration and project development.

So if we turn to our capital expenditure plans just on the next slide. Firstly, at Kamoa-Kakula, the year-to-date expenditure was approximately $800 million, and that's trending towards the lower end of the CapEx guidance range. We have, therefore, reduced the upper end of Kamoa-Kakula's 2026 total capital guidance by $200 million and shifted that into 2027. So the range hasn't changed, but currently excludes the CapEx for the open pit, which Simon mentioned, which we estimate to be between $100 million and $200 million, but the work is yet to be tendered. At Platreef, the 2026 capital guidance has increased to reflect the weaker U.S. dollar against the rand and additional operating costs capitalized while the Phase 1 concentrator progresses towards commercial production. The spend at Platreef is accelerating quite nicely as the team approaches Phase 2 completion, which is expected in the fourth quarter next year.

We do expect Phase 1 on Platreef to reach its commercial production either late this year or very, very early next year. Platreef's funding position was strengthened by the senior project finance facility. And under that, we drew $187 million in Q3 this year. Kipushi sustaining capital remains, I mean, relatively modest relative to its growing cash contribution and spent $48 million on that year-to-date. And I mean, across the portfolio, our approach is to prioritize the capital that supports safe and sustainable operations and restores Kamoa to its full earnings capacity and of course, to advance the development of Platreef while preserving the appropriate liquidity headroom.

And yes, maybe then on that note, move to the next slide. So Ivanhoe ended September with $643 million of cash and cash equivalents on hand compared with $635 million at the end of Q2, so an increase in cash. On a pro rata basis, including Ivanhoe's attributable share of Kamoa-Kakula, cash and cash equivalents was $785 million. And then the net debt on a pro rata basis was almost $1.7 billion, and that's up slightly from the $1.5 billion at the end of the second quarter. The increase primarily reflects the drawdowns on the Platreef facility, which I mentioned and which took place during the quarter. Despite the increase in net debt, the stronger trailing earnings reduced the net leverage ratio from approximately 2.48x to 2.26x, and that further decreases to 1.75x if an annualized Q3 EBITDA is used. So we remain well funded with an appropriate focus on liquidity, but confident in realizing the expected growth in our earnings over the near term.

And with that, I hand over to Alex Pickard, our EVP, Corporate Development, to start the operations section of today's presentation.

Thank you, David. It's Alex Pickard speaking. What you're looking at here on the slide is a very nice photo of the concentrate thickeners for Project 95, which has been a big success story which I will come back to. I just want to start quickly by reiterating some of the key points that Simon made earlier. I think his line, unfortunately, was a little bit choppier, at least it was for me.

So the first point is the shift to a combined open pit and underground mining operation, we believe, will be a complete game changer for the future of Kamoa-Kakula. The open pits are a much more flexible, lower technical risk and also the lowest cost source of ore that you can find on the Kamoa complex. At a grade of -- in the range of sort of 2.5%, these are also some of the highest open pit copper tonnes that you will find anywhere in the world and at depth of, as Simon mentioned, starting from 50 meters. The open pits are also very scalable, and they will support the future Phase 4 expansion and a long life of 500,000 tonnes of production, but we also have the flexibility to determine when we want to commence that expansion. We don't need to hurry into it if we don't have to. Equally, if we have a strong operational and financial footing and the copper price maintains its strength, then we can move into that expansion very quickly.

And then just to reiterate on the guidance, we will just about hit the low end of our 2026 guidance at 290,000 tonnes. I think we fully acknowledge that there is disappointment on restating our 2027 guidance. But the new range that we are putting up of 300,000 to 350,000 tonnes of copper, I think, has a much higher level of confidence. And really, what we are doing here is taking the turnaround of Kakula completely off the critical path, which is the most technically complex activity that we need to do at Kamoa-Kakula. But that said, with time, we are still fully confident that Kakula itself will come good in 2028 and beyond. It will deliver high-grade tonnes, which will allow us to increase the production rates up to 400,000 to 450,000 tonnes before we do that -- the Phase 4 expansion.

So I just wanted to start by reiterating those key points, but we can go to the next slide, please, Tommy. In terms of the third quarter, and I know we're sort of running short on time, so I'll be brief. Look, I think it was a very solid quarter. We actually achieved a 12-month high in terms of mining and milling rates equivalent to 14 million tonnes. So that was up about 17% or 18% quarter-on-quarter. The grade of 2.2%, as Simon mentioned, we do have some very low grades coming in from development, but also supported by much more solid grades of 2.5% and 3% from the fresh run of mine. The mining rates themselves increased 20% quarter-on-quarter to over 14 million tonnes. That was partly driven by an 84% increase in stoping, so a lot more stoping in Q3.

And I'm also happy to say that in October, we've also hit new records in terms of the tonnes coming from underground. Looking at the concentrators, we are at about 70% of capacity at Phase 1 and Phase 2, and we are well beyond 100% of the nameplate capacity, but now safely operating at 6.5 million tonnes from Phase 3. We obviously have the benefit of the acid production, 118,000 tonnes for the quarter. And as Simon mentioned, we want to be filling these concentrators completely from mid-'27.

Project 95, that is something that we've talked about very often over the last year or so, but we really want to report back some good news that it has been a very successful project. Since it was completed in June, we now have a really good sense from the operating data that the recoveries have improved by approximately 5% at the Phase 1 and Phase 2 concentrators. We averaged 89% in Q3. But actually, over the last couple of weeks, we've been achieving recoveries of 91%, 92%, which is really, I think, quite incredible when you consider what we are milling today is a much lower feed grade. So from a grade recovery point of view, I think achieving 92% at feed grades of 2.1%, 2.2% copper is pretty stellar, and we're excited to try and push that up towards 95% as we start to get the feed grades up to where they're supposed to be.

So with that, I think I'll pass to Steve on the smelter.

Thanks, Alex. Smelter performing very well. We are at 60% of capacity, and we are consistently performing at 60% of capacity. The only reason it's 60%, not 100% is there's insufficient concentrate ahead of the smelter. So 60% is what we can smelt. Produced 76-odd thousand tonnes of salable copper in Q3 2026. And there's a fair amount of unsold inventory or stock in the smelter that we need to get rid of in the next couple of months. Planning a big shutdown in mid-Q2 2027, 35 days, rebricking and some repair on the tap holes.

Next, please, Tommy. I'll talk about solar at Kamoa. It's been a huge success. We recently handed over 60 megawatts of continuous power to the mine. The big advantage of the solar is the reliability, 95% plus reliable. Tariff is good, approximately $0.17 per kilowatt hour. And another advantage is that during the day, they're producing significantly more than 60 megawatts because, obviously, that's when the solar is really comes into its own, and we can buy that from the IPPs at a discounted rate as well. Two PPAs, power purchase agreements have been signed for Phase 2. So Phase 2 is basically a carbon copy of Phase 1. So a doubling of the capacity from 60 to 120 megawatts. Plan that roughly by the end of 2027.

In addition to that, we have -- we are negotiating with the 2 IPPs from Phase 1. They have land available, which we have compensated for an additional 15 megawatts each. So the plan is by mid-2028 to bring that additional 30 megawatts online, which will give us 150 megawatts. I think according to the energy balance, October is the first month that I can remember where we are not reliant at all on diesel generators. So that is good. And then the point, I think that David made as well is that the diesel consumption has fallen significantly in September due to the solar.

Next one, Tommy. Sulfuric acid, yes, we've really benefited from the -- well, one of the pros from the Strait of Hormuz issue, very, very high sulfur prices landed in DRC, which means sulfuric acid is selling at a premium. We're producing about 40,000 tonnes a month. That is at our 60% capacity. The market remains very tight in the DRC for the reasons that I've mentioned. Not only is sulfur expensive, a lot of the oxide producers have sulfur burners on site, burn sulfur, produce sulfuric acid and use that to leach copper. But the supply is also constrained due to the issue in the Strait of Hormuz. If I remember correctly, back in the early days, we budgeted $150 a tonne, and we're well north of $900 now, which has been a nice little upticker. Yes, and sales in October over -- averaged $950 a tonne, which is great for us.

Next one, please, Tommy. Kipushi, again, we've spoken about this at length. These guys are doing absolutely fantastically, 77,000 tonnes of zinc for the quarter. A mine grade of close to 42% zinc is astronomical. The mill is running fantastically. The recoveries are running very well. We're even seeing some small constraints in the concentrate filter, which is a good thing. But I think Kipushi is the shining star this year, in fact. And we've actually trimmed the guidance range to the upper end, 270,000 to 290,000 tonnes of zinc. And that is the -- set to be the world's third biggest zinc mine. So that's going very well. Also looking at solar at Kipushi, they are running a fair amount of diesel in the background. We're looking at a 10-megawatt hybrid solar PV facility with battery storage as well, pretty much a carbon copy of Kamoa, and we hope to bring that in Q2 2028. We'll sign the PPA Q1 2027, probably February 2027. So that's very positive for Kipushi, and it will obviously reduce the operating cost as well there.

Next one, please, Tommy. I'll talk a bit about Platreef, the project, Phase 2 projects at Platreef going very well. Shaft 3 was successfully handed over at the end of March this year. So we're busy ramping that up. That has more than enough capacity to feed the Phase 1 concentrator and it has capacity to feed the Phase 2 expansion. We've had a few hiccups on the Phase 1 concentrator with the tailings filter. We've installed an additional filter. Those hiccups are over, and we plan to meet nameplate capacity early 2027, if not earlier. Construction of Phase 2, the Phase 2 concentrator going very well. We started that in March, April this year. Our target completion date is Q4 2027, if not earlier. And of course, that really brings Platreef alive milling capacity in that mill of 3.3 million tonnes per annum.

The Shaft 2, so that's the big shaft, the one you can see in the picture in the background, 8 million tonnes hoisting capacity, one of the biggest shafts in Africa. We're busy with both what we call the slipe and line or the widening of the shaft. Marna mentioned that earlier from 3.1 meters to 10 meters. The plan is to bring that on for man and material late 2028. That takes significant pressure off Shaft 1, which is our -- currently the only shaft that is used for man and material. And of course, we're slinging a lot of material underground for the construction. So that's going well as well. I think Platreef Phase 2 project is going very, very well.

Thanks, Tommy. I think it's over to Alex now.

Yes. Thanks, Steve. I'll close out with a quick update on where we are with exploration. Look, Western Forelands, I think we had a really good quarter with the mineral resource update. As Marna mentioned, we're up to about 12 million tonnes of contained copper across inferred and indicated, so an increase of 30%, maintaining our record of discovering cost -- sorry, discovering copper at an industry-leading low cost of less than $10 per tonne. And we're now by far the largest and highest grade discovery over the last decade, and I would wager, we will be in production before probably any of these projects. So we're very excited about what's happening at the Western Forelands broadly.

I think we have a couple of slides just to take you through the near-term drilling plans. And actually, on that note, I would just recommend that anybody that missed the webinar on the Western Forelands that we did in September after the resource updates, you can listen to that. There should be a link on our website. So look, the drilling now is really in sort of 2 separate parts. We are still doing some expansionary drilling, but then there has been more of a shift in focus to infill drilling to prepare for development and mining activities. So in terms of the expansionary drilling, we did leave a lot of drilling on the table that wasn't in the cutoff for the resource estimate. So we think that we have at least a couple of million tonnes additional copper.

That's really in the zone that is marked as 3 on this map, the eastern extension to Makoko East but we also have some more work planned in between sort of Makoko and Kitoko, highlighted by the Zone 2 and also some thick zones that are between Makoko West and Kitoko that require some further drilling. So the growth story is still alive. But if we move to the next slide, what we really focus the bulk of our drilling this year on is infill, starting with 63,000 meters, which is testing the -- well, sorry, not testing. We know it's there. It's infilling the shallow mineralization less than 200 meters in depth. So that is highlighted by, I think, the pink triangles and the yellow triangles at the sort of top end of the map.

And then once we have that drill data, we've already started that work in September. But once we have that drill data next year, that will really underpin the start of mine planning and a scoping study that we will move into in 2027. And then we also have more drilling to plan -- sorry, more drilling to delineate the slightly deeper mineralization, but still less than 600 meters in depth, which is in 2 additional phases highlighted in red and in blue. So look, we're really excited about what's happening with the Western Forelands and this Makoko district in particular. We've also been spending -- I think David mentioned, we had quite a high exploration spend for the quarter. We've been busy with relocations to prepare for open pit mining. So those are very well advanced, I think, over 90% complete. And then we've also been building a new camp for the Western Forelands, which will really become the sort of base of the project and the future base of operations that camp will be fully functional by Q2 of next year. So a lot going on.

And then closing out with some of our drilling on our new horizons. I've focused this time just on Zambia and on Kazakhstan. So starting in Zambia, these are licenses that we acquired around a year ago. We've completed about 6,000 meters of drilling in the quarter. So that was really our first proper quarter of drilling, but I'm pleased to say that we've already confirmed an iron-ore-copper-gold or IOCG hypothesis. We've had several very promising intersections of albeit relatively weak, but chalcopyrite, which we're seeing across intervals of 100 to 150 meters from depth of only 70 meters. So that's a very nice place to start, and we just need to try and vector in on where the grades are going there.

And then moving a long way away, but across to Kazakhstan at our joint venture properties in the Chu-Sarysu Basin. We've done a lot of drilling there, 17,000 meters completed through Q3. And we have had also our first real notable intersect of weak chalcopyrite mineralization and a big intersect to 270 meters, but also sort of slightly, well, relatively deep at 670 meters. That being said, that doesn't put us off. We're actually very buoyed by the first significant demonstration that we are on to a sedimentary hosted copper basin. So it also gives us something to start vectoring in on, and we're quite excited by what is going on there. Drilling is also continuing in Angola and elsewhere, but that's the focus of the presentation today.

So I think we've run over slightly. I'll hand back to Tommy for Q&A as I think we can maybe take some more time.

Yes, absolutely. Thanks, Alex. So we'll now begin the question-and-answer session. And yes, we'll obviously be allowing extra time for the webinar to accommodate the questions that have come in. So covering analysts, you can submit your questions to the operator by the phone line. Questions can also be submitted through the webcast. As mentioned at the top of the call, if we are short on time and unable to address all the questions, then please do get in contact with our Investor Relations team, and we will endeavor to follow up.

So operator, we'll start by clearing the phone lines and then afterwards, we'll run through the message board. Thank you.

[Operator Instructions] First question from Orest Wowkodaw with Scotiabank.

Could you please give us some more color around Kakula? And specifically, the release talks about a reduction in the estimated maximum mining rate, can you please elaborate sort of what you mean by that and in terms of where you think ultimately Kakula can supply with respect to ore feed here?

Sure. So Simon here. So the reason we've been looking at a slightly different strategy with Kakula is as we've been going through some of the optimizations with the updated geotechnical and hydrological models, we've been repositioning the pillars. And a lot of the mining will be refocused on the high-grade core. So we're actually able to position some of the pillars in some of the lower-grade areas and which enables us to extract a little bit more of the high grade.

But ultimately, with the supplementing of the open pit, yes, we will be potentially reducing that Kakula production rate, especially once we bring Phase 4 online. So Kakula comes down to just under 20% of total ore feed post Phase 4 completion. But it's more of a revenue optimization, looking at the -- both the pillar positioning and in terms of geotechnical stability and also hydrological inflows. There are some key areas within Kakula where we've been able to identify as potential high inflow zones. And so therefore, we're adjusting the mine plan to try and avoid those areas for as long as possible in the mine plan before then extracting the final -- in the final years of Kakula's life.

And if I -- is it correct, if I look at your Figure 1 in the release that it's sort of doing some of the math that you think Kakula can get to now only about 5 million tonnes a year in terms of source or contribution ahead of any Phase 4 expansion?

No. We haven't capped it specifically at 5. We do have some years where it does exceed 5, especially once the stoping is active. Once the stoping is active, you'll see those tonnes do lift substantially. But whilst those -- whilst it's in more of a developing phase, yes, the production rates are closer to 5. So it's -- yes, I think the reason we put that graph is in the immediate, obviously, we've pushed out that stoping access to those high-grade stopes. It's no longer in 2027, now sits in 2028, and we're not -- it will only be later in 2028 when you start to get a full advancing stoping phase in that eastern block. So only really in 2029, do you see a full year of higher production rates coming out of Kakula.

Okay. And just finally, so does that mean that '29 would be the first year we should expect copper production to be in that 400,000 to 450,000 range?

No, no, not at all. No, that's why we're saying given the '27 guidance and then the guidance thereafter's being that 400,000 to 450,000 because that really being supported by the open pits more so than Kakula.

Okay. So you think '28, that's realistic?

Yes. That's where we're targeting.

Next question from Daniel Major with UBS.

The first one, I mean, you gave a similar message of confidence in the updated mine plan in the second quarter, and you've obviously cut the medium-term outlook again. What's different this time? Is it the inclusion of the open pits that's lower risk? Like why should we be confident now when the message was the same in Q2?

Daniel, yes. So look, definitely, inclusion of the open pit definitely provides a big derisk for us. But I mean, don't forget, in Q2, we were -- we started these mine designs and mine plans with geotechnical redesigns off of old models and old data. We said we were embarking upon a massive data collection process. We've been going through that process this year, and we're continuing that process. So what we're putting out now is, I suppose, we wanted to put it out early in response to criticisms that things were out too late before.

Even in advance of our technical report and this is what we're seeing in terms of the updated combination of resource geotechnical and hydrological models. But yes, we do see the open pit as a substantial derisking on that production profile. And then any advancements on Kakula become an upside rather than a dependency in terms of those production rates. So -- and I think as I said earlier, like we're not -- we're by no means trying to say, are we turning our back on Kakula or are we saying we're not going to achieve the recovery plan. That's not the messaging at all.

But we are -- we acknowledge we are behind -- tracking behind, particularly with that redevelopment to get to establish that eastern stoping block. And so with that, we were in a position where everything was pointing us towards, well, we needed to make the reset. And we were getting that updated data. And so we wanted to provide as much disclosure as possible whilst staying within the realms of 43-101 compliance.

Okay. Then maybe the second question, obviously, the whole strategy has pivoted a bit more towards the open pits. So 3 questions. Is there any permitting needed to access the ore tonnes you've got in the mine plan, particularly for 2028? Is there any difference in the metallurgy, the oxidation? And I mean, it seems quite quick that these are brought into the mine plans. I mean, how well defined is the kind of geology in the mine plan to give you the confidence to include about 20% of ore feed in 2028 from these open pits?

Okay. So starting with your first question. So permitting, no, there is no permitting requirements for us to start the open pit. The original Kamoa-Kakula permits included open pit mining and did envisage that as part of that. There is -- as the open pits progress, so as we progress beyond 2030, there will need to be some amendments to the permits in order for us to mine in a northern district where there wasn't necessarily previously open pit mining included, but we have plenty of time to be able to incorporate that.

We have commenced and are in the middle of a relocation process across the open pit -- the initial open pit mining area and that the government moratorium has been issued. The compensation has already commenced. Households are already being relocated as we speak, and that process will be completed by the new year to enable us to start the open pits. Now the first -- the reason we sequenced the open pits the way we have is the first starter pit might not naturally be the first choice, but it doesn't require any relocation, any community movement. So it's -- we have full access to that open pit now. So we're grade control drilling now. We're geotechnical drilling. We've actually started surface clearance and construction of some of the ROM pads and waste dump areas.

In terms of metallurgy, we've -- actually any material in the open pits that sits above 40 vertical meters, we've zeroed out in terms of the current assumptions. So we've treated them as if there would be no mineralization or no recoverable mineralization in that area. We know that is very conservative. We know from the other box cuts in the immediate vicinity with sort of less than a couple of hundred meters away from some of the open pits that we know that those box cuts have started feeding fresh material within about 35 to 40 vertical meters. However, where there are significant structures that truncate the larger pit, we know that depth of oxidation will be deeper.

But from the starter pit perspective and from 2027 and 2028, there are 4 -- basically '27 consists of 2 starter pits, '28 consists of another additional 2 starter pits. They are all part of indicated resources and existing underground reserve areas. So they're quite well defined. We're obviously updating our geotech assumptions and parameters around them. But for now, what we've done is just assume very conservative slopes on the single highwall that remains in each of those open pits. And we expect to be able to try and steepen that as we get some of the data. So in terms of the immediate ramp-up for the open pit, no, I think we're quite well defined, and we've got infill grade control drilling already underway. And we -- our strategy is to have them fully grade control drilled before we even start any stripping.

So there will be no surprises, nothing unexpected. And with that grade control drilling, we will be doing metallurgical test work in the top 40 meters to see if we can bring any additional material into the feed plant. But then stepping out longer term as we go in and over the course of the next couple of years, whilst we're doing the detailed engineering on Phase 4 and the sizing, as I discussed, we'll also be doing some step-out drilling and quite a lot of work on the additional bigger pit pushbacks, and that will need a bit of extra definition work, but I fully expect that to feature in our -- to meet potential reserve criteria in terms of our year-end update of this year.

Next question comes from Craig Hutchison with TD Cowen.

Just a question on the 2027 guide of 300,000 to 350,000. It's based on saleable production. Can you give us a sense of what the actual mine production in Kamoa-Kakula versus how much you guys plan to draw down from inventory? And maybe just as a follow-up on that. What sulfuric acid price are you guys using when you set your cash cost guidance?

So firstly, in terms of mine production, look, we're only planning to have a -- that production guidance is based upon purely on mine production at the moment. We do expect by the very end of 2027 to start building a small stockpile. By 2028, we expect to be building a much more substantial stockpile. And one of the key strategic targets of our new life of mine plan will be to build up over the course of the next few years, a 3-month full grade ore full plant process feed stockpile so that we do restore that flexibility in terms of the process feed control. So we haven't assumed any destocking at the moment in that current guidance range. That's additional optionality with those -- that guidance range is based on pure mining production.

And then in terms of the sulfuric acid assumptions, I'll just pass you over to David.

Yes, happy to take that. I mean, obviously, our guidance is a guidance range. So we've assumed to get to the range, we've looked at different prices on the up and the downside. I mean, we're in the sort of fortunate position that the sulfuric acid is -- has been a hedge to the higher diesel prices. So I mean, we've assumed current diesel prices in the in our guidance range, but probably catered for a bit of a reduction in the sulfuric acid prices just as a sensitivity on defining that range. But we are confident that if there is a reduction in the sulfuric acid rate, that's likely to be in an environment where there's also a reduction in diesel prices.

Okay. Great. Maybe just another follow-up. Just in terms of the grades for the second half of this year, you guys are focusing, I think grades were going to be at 2.6%, 2.7% on average, but it came in quite a bit lower in Q3. Is that a function just like are you seeing negative grade reconciliation in the second half here? Is there a risk into Q4 just based on the lower grades we've kind of seen in Q3 to date?

So no, the grades have been a function of us taking the decision -- the operational decision to feed that marginal ore, not just from Kakula, but we have also fed additional marginal ore from Kansoko. We -- the grade into Q4, we do expect to lift slightly with respect to this quarter, but it will be lower grade as we are feeding marginal ore material. So anything that we -- that is capital development that we have to develop through to access higher-grade stopes. It only has to meet a marginal threshold -- which is essentially just the processing breakeven. So we're feeding anything above 0.3% that we are developing through anyway. So there's quite a bit of extra tonnes that we've been putting through the process plants that were not in this year's forecast that it's better off milling them when we've got process capacity than sitting them on a marginal ore stockpile.

Next question comes from Dalton Baretto with Canaccord.

I want to stay on this open pit pivot here. Those are some really high-grade open pits. I mean, the grades look like they're in line with the Kamoa underground, and you're going to put them in production in sort of 6 to 9 months. And I'm just wondering why weren't these part of the mine plan right from the beginning?

Sure. So I mean, the key -- I suppose there's been 2 key pivots in terms of the open pit strategy. Open pits have been evaluated before. As I said mentioned earlier, they've even been included in the original Kamoa-Kakula license permitting process and ESIA. The first, I suppose, change was from an economic trade-off, obviously, with the updated geotechnical regimes last year that we put out in March that the extraction ratios are much lower in the underground than they were assumed to be previously.

But then secondly, and perhaps more importantly, is the influence of the concentrate grade on -- and our exposure to transport costs. Prior to having the smelter commissioned, we -- obviously, transport costs of the concentrate were a significant component of our costs. And so that -- the concentrate grade and maximizing the concentrate grade was a key criteria of the operation. So from that perspective, the open pits weren't necessarily the highest priority. Obviously, the starter pits are starting on some of the highest grade areas. Some of them, obviously, a slightly higher strip. So we start 2 pit -- starter pits, one with 11:1 strip ratio, one with a 7:1 strip ratio, but with very good grades equivalent to the underground because the starter pits are mining out previous underground resource and reserve areas.

Those pits then push back on to additional shallow mineralization, some of which was excluded from the underground designs. But really, that -- the incorporation of the smelter has removed that bottleneck from the project economics of needing to focus on concentrate grade. So we're now able to accept the lower concentrate grade and actually then smelt it without a massive impact.

And there is an additional benefit, which I perhaps neglected to mention during the presentation. With the open pits, there is an overlying unit that is very high in pyrite content. So we will increase the sulfide content in our concentrate quite substantially. So again, that has an additional marginal benefit on the smelter cost because we will have a much higher sulfide feed to the smelter from our concentrate. At the moment, the economics that we've run for first decision trade-offs have excluded all of that, treated all of that as waste and actually treated that as a cost for potentially acid generating material. So -- and the open pits are clearly much more economic and make -- and even at current diesel prices make a much better operating margin than the equivalent underground for those shallow areas of the ore body. So given that kind of clear positioning in the trade-off, we're now working through building in those additional benefits into the economics for that -- for those mine plan updates that we plan to put out in March.

Great. That's good color. And then maybe switching gears to the first question from Orest on the mining rates at Kakula. So I understand that there's sort of geotech conditions and water management and so on and your development rates are slow, but I don't think I heard an actual number in terms of what the production rate could be at steady state once you're stoping.

Look, it goes through a peak. We do peak close to -- close just above 6 million tonnes. But then we do back off again as the stoping phase advances. And in all honesty, look, we're redesigning Kakula right now with -- so we've got detailed designs for the first few years, which is what we put out at the moment. So -- and that we -- I do expect we will be looking to put together as we put more -- put larger wider pillars in the lower-grade areas, I expect we will be increasing the grade of Kakula resources and reserves, but probably decreasing the overall metal content and perhaps shortening the life there. But I mean, we're working through that hydrological model is going to be one of the key components that I suppose influences that long-term steady-state rate.

But right now, yes, anywhere between 4 million and 6 million tonnes is reasonable for that assumption. And we will certainly be looking at -- because of the significant pumping costs, we'll be looking to truncate any production tails where you see in the previous mine plans, you saw quite substantial tails. Now whilst you're still -- as you're in a typical -- any typical mine in the last few years of its life, and you would see that in the prior Kakula profiles, you'll see it reduced down to 2.5 million tonnes and carry on for a few years.

There's quite an overhead cost that you're carrying to continue the pumping on. So we'll be looking at that from a trade-off perspective of whether we can shorten the life or actually whether we are better off cutting off the pumping and shortening and leaving some of that material behind, particularly if it's in the lower grade areas.

Next question comes from Fahad Tariq with Jefferies.

For the underground different zones, can you just talk about where the mining like the ore feed is coming from next year, the western section, the mature extraction zone and the further eastern side?

Sure. So the majority of the ore production from Kakula is coming from the northwestern side. There is some that is -- that mining front is progressing into the center. I don't know if you've listened to some of the webinars and looked at the videos previously that the western side is much more like -- if you imagine, take a cereal bowl, cut it in half, that's what the ore body actually looks like in 3 dimensions. So as -- the biggest production front is in the Northwestern corner, where I think we even pointed to some stoping blocks in that slide. We'll then be progressing across to that central area, and there's some access development coming across there.

So it really is the western side that drives the 2027 production, not the east. The eastern side is very -- production is very much focused on development of those long-term and midterm accesses, getting around that eastern pillar so that we can set up for that stoping. So there are no stopes in that eastern section included in 2027 now as a -- which is one of the reasons why we've updated the guidance.

Okay. And in terms of -- I just want to clarify, so the 500,000 tonnes per year, which was the kind of previous steady-state target, is there any year in which that is achievable without the Phase 4 concentrator?

With the new strategy, we -- no, it would be achievable, but we have to -- we would have to really high grade and we'd have to incur substantial costs to do that. So we've tried -- we've been reoptimizing the whole life of mine plan on an NSR revenue basis. And so no, we're not targeting to exceed that 500,000 tonnes at any point without the Phase 4 production.

Okay. And then finally, on the Phase 4 CapEx, I know the detailed engineering is going to begin. But like is there any way we should be thinking about what that CapEx may look like? Just what the level would be broadly speaking?

Yes. So I mean, it's similar to some of the prior expansions, as we pointed out on the slides, there's a lot of synergies there. There's a lot of infrastructure already in place. So even when we use sort of a 15% escalation on the prior concentrator costings, you still end up in the region of sort of $400 million to $450 million for the concentrator installation, plus then the subsequent upgrades to install the next effective Project 95, what we call Project 92 (sic) [ Project 95 ] as -- for additional recovery. So -- but again, some of this, we're going through -- we haven't even locked in the ultimate capacity at this point. So there's still a lot of value engineering to be done and work through with that. But yes, I mean, I think if you take a 15% escalation on those prior costs, it gives you a reasonable number.

The next question comes from Andrew Mikitchook with BMO Capital Markets.

Yes. All kinds of great questions have already been asked and equally answered by the team. Just wanted to come back to the smelter with the next year's 35-day shutdown, was that in line with expectations sooner or later? Normal course of affairs? How should we expect -- understand that?

So we actually took the decision, Andrew, to bring that shutdown forward because there was no -- we wanted to have it in the first half of the year whilst we weren't filling the concentrators. So it made complete sense to have it in the first half of the year. Originally, it was scheduled to be more towards the tail end of the year. So I think it's fair to say we brought that shut forward by between 4 and 5 months in terms of the schedule. And it's just linking it up with the mine sequencing.

And 35 days is just normal state of affairs for a smelter of this scale and there's nothing surprising there from what you guys have seen?

Yes. It's just -- it's a planned shut with a number of upgrades. Steve, do you want to comment?

It's totally normal. It's a rebrick. 35 days is normal, yes, Andrew. It's nothing untoward.

We have no further questions on the line. You may proceed.

Okay. Wrapping up the phone lines, let's just run into a few from the message board. We've got a few minutes to go to the top of the hour, and I think that's probably a reasonable time to draw a line on the call.

So this is a question for David. So given the change in sort of production profile and cost profile and CapEx at Kamoa-Kakula, most notably, but also the CapEx increase at Platreef. Are there any concerns around funding? And is there a sort of a target debt-to-equity split that you would aim to maintain on a go-forward basis?

Yes. Thanks, Tommy. On the -- maybe just in terms of our cash flow requirements over the next few years. So we definitely expect Kamoa-Kakula to generate sufficient cash flow from its operations to fund its own cash flow requirements. At Platreef, I mean, that's a key draw and has been a key draw on our cash flow facilities, but we are only funding 1/3 of the required Phase 2 expenditure because of the senior debt facility we've got in place. So it's a decrease in what we need just to get that up and running. And I mean -- then that the cash flow and EBITDA from Phase 2 operations at Platreef is really on the doorstep. So a good positive there. We are -- and you would have seen we are now receiving quite substantial cash generated from Kipushi. And obviously, we hope for that to continue.

So there's -- depending on our exploration expenditure and at what level we sort of put align that on, then we -- it gives us quite a bit of flexibility around whether we actually need any additional funding or not. So we are pretty much the masters of our own destiny, so to speak. And it is something that we obviously constantly look at and manage. Just in terms of the debt level that we feel comfortable with. I mean, we have said we would like a 1x net leverage ratio over the -- through the cycle, and that's, of course, still our target. And if we don't take on additional debt with the forecasted increase in EBITDA from Kamoa-Kakula with Platreef coming online and Kipushi operating at these levels, we get there pretty quickly over the near term. So there's room for us to take on additional debt if required, but it's not needed just yet with our quite comfortable cash balance.

Okay. And look, we're almost time, but there's just one more question and sort of a follow-up to that in terms of Platreef and what our internal expectations are in terms of contribution to earnings once Phase 2 is ramped up.

Yes. That is obviously still -- it is very metal price dependent, Tommy. But yes, we definitely think that Platreef will be a -- from -- already from 2028 onwards, will be a nice substantial contributor to our EBITDA and pass Kipushi quite comfortably.

Okay. Thanks, David. I think we're at time. It's top of the hour. So I'm going to say this concludes Ivanhoe Mines' Third Quarter 2026 Financial Results Conference Call. Thank you all for attending and -- attending all the way through and for your various questions, and we look forward to speaking with you again soon. Thank you very much.

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

Good morning, ladies and gentlemen. Welcome to the Ivanhoe Mines Limited Western Forelands Exploration Update Webinar. [Operator Instructions] This call is being recorded on Tuesday, September 8, 2026. I would now like to turn the call over to Tommy Horton, Vice President, Investor Relations and Corporate Development. Please go ahead.

Thank you, operator, and good morning, everyone. Yes, my name is Tommy Horton. I'm the Vice President of Investor Relations and Corporate Development at Ivanhoe Mines. And I'm delighted to welcome you to our Western Forelands Mineral Resource Update Conference Call. This call is being recorded on Tuesday, September 8, 2026.

On the line with me today from Ivanhoe Mines, we have Founder and Co-Chairman, Robert Friedland -- Executive Co-Chairman, Robert Friedland; President and Chief Executive Officer, Marna Cloete; Executive Vice President for Corporate Development, Alex Pickard; Executive Vice President, Technical Services, Simon Bottoms; and our Vice President for Geosciences, Tim Williams.

We will finish today's event with a question-and-answer session. You can submit questions using the Q&A box on the webcast page as well as through the conference operator via the phone line. If we are unable to answer any questions today, then we will -- we do encourage participants to contact our Investor Relations team, and we'll endeavor to respond to any of your unanswered questions.

Before we begin, I'd like to remind everyone that today's event will contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Details of our forward-looking statements are contained in this morning's press release as well as on SEDAR+ and on our website at www.ivanhoemines.com.

It is now my pleasure to hand over to Ivanhoe Mines Founder and Executive Co-Chairman, Robert Friedland, for his opening remarks; and our President and Chief Executive Officer, Marna Cloete Close, for their opening remarks. Robert and Marna, please go ahead.

Well, since I'm in transit addressing all of you from New York, I have to fly to Washington, D.C. We're just beginning the period where you remember September 11, 2001, was actually 25 years ago. And this image was taken in 2008. If I do my math, [ '26, ] this was 18 years ago. And in that orange shirt, I was standing there with [ Dave Brown ] and Dave Edwards at the very first drill hole for the discovery of sedimentary copper in the Western Forelands basin in the Democratic Republic of the Congo. And although that 18 years has gone very quickly, this is the kind of time frame it takes in the mining industry to do something new.

And during that period, I would say Congo is probably #6 or #8 or #9 in the production of copper on the world ranking. And today, Congo has leapfrogged up to #2, passing Peru as the largest producer of the metal. And that's through the discovery of this type of copper, which is completely different from the porphyry coppers so many of which are slowly dying as their grades are declining in Latin America. So the sedimentary copper is like oilfield geology. It's completely different. And it's like finding a liquid that once you find it, it just keeps going. And this basin, which contains this copper is the richest source of copper metal on our planet.

If we were coming from Mars and our flying saucers are made out of green cheese and masters around Mars, we would have to go to the Democratic Republic of Congo to look for copper and incidentally, a lot of other critical metals that are necessary for our modern existence. But this was a test or a theory that the copper belt went further to the west and the geology was obscured by what geologists call Aeolian sand. Aeolian sand is a fancy way of saying the sand blew in from the Kalahari Desert. But it obscured the underlying geology. In Eastern Congo further to the East, there was so much copper in the soil, the trees couldn't grow. They call those copper clearings in a place like Tenke Fungurume, the Belgians found the copper sticking out of the ground.

But where the sand had blown in from the Kalahari Desert, the geology was obscured, and we decided to go out there into terra incognita, and there it is, hole #1. It's sort of a humble beginning. And Dave Edwards was there on the right with the yellow half. He stayed there for 10 years and had his babies right there. He never went back to England. He just was so dedicated. And Dave Broughton came from the Colorado School of Mines. I knew his PhD Professor, Maria Hitman who ran the geology department there. And I knew we must have had 100 people from the Colorado School of Mines come to the Congo now.

So that is the discovery of copper in the Western Forelands. And today, we're announcing that another discovery has occurred there on ground where that exists outside of our joint venture, Zijin Mining. It's a ground held only by Ivanhoe Mines. It's an area about 6x larger than our joint venture area, and it's growing faster in high-grade copper than anywhere in the world.

Now if you think of a basin as being shaped like a bowl, the original discovery was 200, 300 meters deep, about as deep as the height of the Eiffel Tower, for example, you just stand up and look at the Eiffel Tower. But we've now found the edge of the basin. So the lip of the bowl is coming up to the surface and the same style of mineralization is not only open pitable, but will constitute some of the world's, if not the world's highest grade open pit mines for copper.

And that's extremely significant to the growth of Ivanhoe mines because we own all of this resource. We don't share it 50-50 with any other partner. And while there's no shortage of people that are interested in joining our efforts in the Western Forelands, this is the world's single best location to find high-grade copper. And we don't even count the copper if it's less than 1%, even if it's open pitable. And so our cutoff grade is much higher in grade than the largest copper mines in the world in Latin America.

And applying open-pit mining to these grades is going to propel a very rapid additional period of growth in the company, and that's why I'm so happy to announce this today. And amazingly enough, we're making this announcement on a day that copper is trading at the highest nominal price in the history of our species. And we'll be talking about it in Washington, D.C. later today and later this month.

And with that, I've made my opening remarks, and I'll try to stay for 10 or 15 more minutes, but I'm in transit, and this will be turned over to Marna and the very capable hands of our technical people. Thank you very much, Marna. Go right ahead.

Thank you, Robert, and I can mainly echo some of the comments you made. Of course, we timed to make this announcement on the day that copper is at an all-time high. Very excited to show that we've grown our resource that we announced or that we updated last year with 30%. The team has been working all out on the Western Forelands. And it's important to note for everybody listening that the Western Forelands is a multitude of licenses. We basically own 35 different licenses on that land package. Kamoa-Kakula is a portion of that.

The announcement today pertains to 3 different licenses. And it's like Robert always says an ocean of copper out there, there's still many unexplored licenses that we are still getting access to. So this is really just the start. And if we think about creating shareholder value, adding copper, more copper to our portfolio, you can't find it cheaper in the world. We pay less than $0.01 a pound of copper discovered. And this is the way that Ivanhoe has made its name and Ivanhoe intends to grow over the next couple of years.

So I'm not going to bore you with more details. I'm going to ask our team to take you through our exploration agenda, also talk you through the resource update, and we'll start with Alex, who will give you a bit of an overview about today's announcement. Over to you, Alex.

Thank you, Marna, and thank you, Robert, for the opening remarks. It's Alex Pickard first to try and set the scene, although I think the scene has been very well set there by both of you. So I'm sure I'll be recapping to some extent.

You can go to the next slide, please, Tommy. So this map is really just showing the scale of the Western Forelands licenses. As Marna mentioned, this is a district. It's a collection of more than 30 licenses, spanning 2,500 square kilometers. So 6x the size of the Kamoa-Kakula mining complex, which is one of the largest copper discoveries in history, which is highlighted in the red. And if you look at it sort of laterally, it's 120 kilometers from tip to tip Southwest to Northeast. So it's a very, very large portfolio of exploration properties that we've been systematically exploring.

The focus today is on the mineral resource update in the Makoko district. So a very small part of the overall picture. You can see that new mineral resource outlined in red. And Makoko district is a cluster of deposits that have now been joined together into one sort of complete picture. That's Makoko, Makoko West and Kitoko.

And just recapping on something that Robert mentioned there, what is very important is that Ivanhoe Mines controls this district up to a maximum 80% shareholding as stipulated by the DRC Mining Code, where the government will have a 10% interest and 10% will be for the benefit of Congolese nationals. So that leaves a lot of flexibility in terms of how we think about the Western Forelands going forward.

We look at this chart because I think it really puts into perspective the scale and the quality of what Ivanhoe Mines has achieved at Kamoa-Kakula and then more recently in the Western Forelands over the last 20 or 30 years that Robert was referring to. So this is by far and away the largest copper discovery or copper system discovered for many decades. We are now over 55 million tonnes of contained copper and counting. So that's more than 2x the global annual mine supply in terms of the discovered copper in this region.

And as Robert mentioned, 30 years ago, it was thought to be completely unprospective. Tim Williams will give you a great overview of the exploration journey we've been through in the Western Forelands. And then what sets the district apart and has always set us apart is the grade that we've managed to continue through our exploration in this sedimentary basin. So roughly in the range of 2% to 2.5% copper.

The Western Forelands is a very similar resource grade on the whole to Kamoa-Kakula, and that is an order of magnitude greater than the global average of 0.62%, although as we see copper grades continue to decline and mines get older and older, there's many operations substantially below 0.5%, even below 0.3% or 0.2% is not uncommon these days and then even more important, I think, in the context that we're now thinking about open pit mining, which is something that Simon Bottoms will touch on later on.

Yes. Next slide, please, Tommy. This slide is also just highlighting some of the key differentiating factors why we firmly believe this is the best copper hunting ground in the world. I mentioned it before, but we show it again, the grade is the major differentiator. 1.8% to 2.7% copper is the range of the indicated inferred resource grade. And that has huge implications from an operating cost and from a capital cost point of view.

Looking at the exploration costs, this is also a statistic that we like very much. Basically, we're looking at the total cost of exploration, including all of the setup costs, including all of the drilling and dividing that by the denominator, which is the amount of copper that we've discovered, and we get to a cost of actually below $10 per tonne of copper discovered. I think Marna and Robert both mentioned that today, we sit with copper breaking $14,800 per tonne as compared to less than $10 per tonne discovery cost. And it's difficult to find benchmarks across the industry, but we did find numbers in the range of $200 per tonne. So we are a fraction of that, which really speaks to the return on investment that we get from our drilling.

In terms of development time lines and CapEx intensity, these are not really estimates, these are actually proven from what we've done at Kamoa-Kakula. We developed Kamoa-Kakula from drill hole to production in a 5-year or 6-year time line. That's the benefit of being shallow and being high grade. And the CapEx intensity, a similar story. We were well below $10,000 per tonne at Kamoa-Kakula and expect that Western Forelands will be in that region. And I think we've spoken enough about the land package, that we really have the dominant position in this style of geology and in this basin.

And my final slide here, just to set the scene is that despite copper trading at close to $15,000 per tonne, the industry success rate at discovering new deposits is pitifully low, and that's not really for any lack of trying or any lack of expenditure. You can see that really we are in a declining environment when it comes to copper discoveries, especially in the last 10 years. And I think Ivanhoe Mines has been responsible for much more than its fair share of those discoveries.

So with that, as a lead in, I will hand over to Tim Williams, our VP of Geosciences, who will bring you up to speed on the developments from the Western Forelands.

Thank you very much, Alex, and good morning to everybody. I think it's going to be hard to add or beat on what Robert and Marna have mentioned, but what I'd like to do is just take you through a little bit of a voyage of discovery in terms of the discovery history of Makoko and how it actually ties into the Western Forelands picture. Just looking at the graphic in front of you, that's just a number of members of our team and over 250,000 meters of core that we've amounted drilling on the Western Forelands in the last 8 or 9 years.

So next slide, please, Tommy. So I think just looking at this from a geological perspective and zooming into the western side of the DRC Copper Belt in the center of the picture on your right-hand side is Kolwezi, which is really the locus of the copper cobalt deposits that make up the vast majority of the mines that were previously identified in the DRC Copper Belt.

When we take a look at the background to the Western Forelands discoveries, starting with Kamoa in 2008, there was very little confidence in this area known as the Western Forelands shelf as being prospective and it really took the discovery of Kamoa and Kakula another 8 years after 2008 to actually turn that story around and turn this Western Forelands shelf into a very exciting and highly prospective area for these high-grade high tonnage sediment-hosted copper deposits. What sets these deposits apart from the DRC Copper Belt style of mineralization is everything to the east of Kolwezi and including the Kolwezi area itself are copper cobalt dominated on a line, which is roughly demarcated by that black fault line is copper dominated.

When we look at the Western Forelands shelf style of mineralization, we see that this copper mineralization is largely sediment hosted. It is, to a large extent, unfaulted, which is not what we see in the Kolwezi area and the Tenke Fungurume area. And it is hosted higher up in the stratigraphic sequence, which is really the reason that it was never discovered in the past. And it really just talks to the original strategy, which was really go beyond the areas that have been looked at before step out into the unknown, embrace uncertainty and test new geological ideas. And these ideas really work was coming out of the Marna Cloete's work that was carried out by the Colorado School of Mines that Robert mentioned earlier on in the piece, starting in about the early 2000s.

So we can go to the next slide, please, Tommy. Just looking at this in terms of the discovery of Makoko. So the Makoko was discovered 2 years after the discovery of Kakula. There was an element of projection and trendology, and the first hole was effectively drilled directly east of Kakula on trend. And the discovery hole was drilled in 2018, picking up mineralization at depths of 300 to 400 meters below surface.

From 2018 through to the announcement of the maiden resource, which came out in September of 2023, there was 61,000 meters of diamond drilling completed on very wide spaced holes initially. You can see the fence lines of holes space roughly a kilometer apart from the top northeastern corner down to the Southwest. And those fence lines picked up 2 broad trends and ultimately led to the definition of just short of 5 million tonnes of contained copper and roughly 280 million tonnes of resource.

If we go to the next slide, and this is really now talking to the rapid discovery of additional resources, you can see the significant growth not only in the meters completed. So between 2023, the maiden resource and the 2025 disclosure update, 86,000 meters of drilling was completed. And that drilling largely focused on extension of the resource to the Southwest into the Makoko West area and it included the discovery of Kitoko down dip of Makoko West. Those holes are all still very widely spaced. And it is this wide space drilling and the lateral continuity of the sediment hosted copper style of mineralization that allows the discovery of copper at the rate that was mentioned earlier. So for every 1,000 meters of drilling, we are discovering in the region of about 45,000 tonnes of copper.

If we go to the next slide, this really now talks to the current estimate and disclosure. So from the end of 2024, which was the data cutoff for the 2025 resource estimate to March of this year, we completed another 64,000 meters of diamond drilling. And this program of drilling has really extended the mineralization from roughly 13 kilometers along strike in the 2025 update to 16 kilometers along strike. You can also see that quite a number of the gaps that were indicated on the previous slide have now been closed off. And we've also started to tighten up the drilling -- infill drilling in certain areas of the resource, certainly where there was indications of higher grade.

So the message that I'd like to leave here with is that the successive updates of this resource have seen anywhere from a 30% update or increase in resource tonnage as we see from '25 to '26 to as much as a 50% -- well, in fact, sorry, a lot more, close to 90% increase from '23 to '25. So the story is not finished, and we certainly believe that the mineralization is open ended, both along the strike. If you look at the far eastern side of the graphic, we have started very wide space drilling there at roughly 800-meter centers. And the intention is that progressively as we go forward, we will continue to tighten up on the drilling and bring those resources, which are currently in the exploration resource category into the inferred and progressively into the indicated category.

We are currently sitting at a 12 million tonne contained copper resource. Simon will speak a little bit more about the definition of that resource. But I think just to -- if we go to the next slide, Tommy, if we can just state that the story is not completed. There are certainly -- there's a significant amount of drilling still to come, not only in this year through to the end of December, but also planned into 2027 and 2028. So the 3 main areas that we are looking at growth in the Makoko area or Makoko district, if we look at it in green, #1 there, we are testing a thick zone of plus 3% copper, which is down dip of Makoko West, that is certainly an area that we would like to bring into the pre-feasibility study going forward.

Just to the northeast of that, we have the second zone there, which is really testing an undrilled zone northeast of Kitoko, a connection between Makoko West and Makoko. And then on the far right or eastern side of the resource, where I mentioned, we have already embarked on a very wide-spaced drilling program. We will be coming in with tighter drilling, which will then bring that resource area into the indicated -- inferred and indicated category.

So the story here is that we continue to add to the resource. We anticipate that the infill drilling will uplift the resource from largely inferred resource to a significant proportion, 30% to 40% being brought into the indicated category. And that indicated category will be, to a large extent, the 0 to 400-meter depth Echelon.

Go to the next slide, please. This really talks to the continued commitment of Ivanhoe to drilling on the Western Forelands, particularly in the West in the Makoko area. One can see the progressively increasing expenditures on exploration and 2027 is going to be no different. Current year 2026, we anticipate spending $40 million on exploration on the Western Forelands, and we anticipate the number for 2027 to be upwards or around about the 30% to 50% increase on that number.

Go to the next slide, please. This is the final slide in my section. I think this really just talks to our exploration strategy within the Central African copper belts. If we take a look at on the far northern part of this graphic, that is really the focus around Kolwezi and the Kamoa-Kakula and Makoko, Western Forelands area. And that's really been the first part of the strategy. Back in 2023, we acquired a very large land package in Angola, which is the step out in the far southwestern area. And then last year, we picked up 7,700 square kilometers in Zambia. And these domains have been picked up primarily because of the potential of the Western Forelands style of mineralization, but also because they are largely sand covered and to Robert's point earlier, covered under a blanket of Aeolian Kalahari Sands.

This is both a challenge, but also an opportunity. And the opportunity is that nobody else has been able to look through these. We are making use of a number of sophisticated geophysical techniques for mapping and followed up with diamond drilling and air core drilling. So we hope to be able to add to this Western Forelands success story progressively as we come to grips with our exploration targets in both Zambia and Angola.

Thank you very much. With that, I'll hand over to Simon.

Thanks, Tim. So if we turn to the next slide, this time. So as Tim has already alluded to earlier, with only 150 kilometers of additional drilling over the last 2.5 years since the original maiden resource. Our estimates of the copper endowment within the Western Forelands have grown by almost 250%. And so with this, we are very confident that this growth will continue as we incorporate the additional 60 kilometers of drilling, which has not yet been captured by this mineral resource estimate.

And during the same period, as highlighted by Robert and Mama and Alex, we've seen significant growth in the copper price, which not only underpins the potential value of the Western Forelands, but also is a clear indication of the scarcity of such a high-quality undeveloped copper asset within the current global setting.

So turning to the next slide. To put the significance of the Western Forelands deposit into context. Here, we tried to benchmark the updated 2026 mineral resource against other major copper discoveries of the past decade. This clearly shows the standout of both scale and grade of the Western Forelands deposits. For us, we feel it's clear that the Western Forelands fits within a district-scale copper system with both the size and quality to compare favorably to some of the most important discoveries and geological belt elsewhere in the world.

The ranking of the Western Forelands should be viewed in context of the global setting. And it's -- as I will talk to you shortly about its nearby access to existing infrastructure. The important point here is since the '23 maiden resource, not only has the copper price significantly increased, but so has our mineral resources. And again, now as we move to the next phases of development in the project, we expect not only to continue to grow the resource but to step into a new phase of project scoping and development.

So now turning to the next slide. Here, we illustrate the various phases of infill drilling, which we're currently planning to execute over approximately the next 28 months, where we intend to convert prospectivity into minable confidence. So commencing later this year, we're planning 2 complementary drilling programs. Firstly, a shallow drilling to test the large-scale open pit opportunities alongside some deeper drilling to define high-grade mineralization potentially suitable for underground -- shallow underground mining. This will then be followed with a substantial preproduction infill program that will position the open pit targets to be potentially shovel ready by the end of 2028.

So turning to the next slide. The shallow gently dipping subcropping mineralization in the Western Forelands will potentially support a series of open pits, which could be mined at a low cost with a relatively low strip ratio whilst alongside higher-grade underground accesses can be developed concurrently. This concept is key for potentially lower capital start-up to the Western Forelands with initial underground production, focusing on shallow high-grade resources for a rapid and simple development time line with quick payback of the initial project capital. And concurrent production from both open pit and underground operations not only generate significantly -- significant operational flexibility but also supports substantial potential multi-decade production profiles.

In the top right-hand corner of this slide, we show a conceptual cross section of an open pit to demonstrate how these shallow dipping high-grade and subcropping mineral resources potentially lend themselves very well to shallow open pit mining methods.

So now turning to the next slide. This gives us a snapshot of our expected time line for the initial infill drill programs alongside the progression of other project activities, including perimeter fencing, construction of the initial project and operations camp alongside environmental and social studies completed in line with international ICMM and IFC standards.

We expect that the drilling in 2027 will provide the key framework to be able to define the development pathway as part of the project scoping work. Alongside this, concurrent infill drilling will provide the higher confidence conversion for the commencement of pre-feasibility studies later on in the year. So then turning over the slide. Looking to Kamoa-Kakula, we feel this provides a highly relevant operating template where we can draw synergies from in both the successful development and operation of new potential mines within the district.

As highlighted on this slide, this includes geological knowledge, reliable power, transport, processing and regional smelting capacity as well as strong relationships with host communities and governments. Not to mention the Western Forelands with the potential benefit to the immediate proximity to the Lobito Corridor, allowing significant synergies for offtake.

Just as importantly, Ivanhoe has almost 3 decades of experience working in the DRC. So then turning to the final slide. Here we see how Kamoa-Kakula provides a proxy of what can be achieved in a geological setting, where our initial production started in just under 6 years from the initial discovery. Not to mention the exceptional capital intensity of these ore bodies, which clearly stands out relative to other industry benchmarks. We feel this is a clear analogy of how these high-grade sedimentary-hosted copper projects in Western Forelands can be developed to produce globally significant mines through a phased development within an area with significant existing region infrastructure.

This blueprint is clear context for what we feel can be achieved at the Western Forelands in a world where we are hitting all-time record demand levels for copper as a critical metal, as already mentioned by Robert, Mama and Alex at the beginning of this presentation. So with that, I'll hand you back over to Tommy for questions.

Thanks, Simon. [Operator Instructions]. So operator, let's start by querying the phone line. Do we have anyone waiting?

[Operator Instructions]

Question on the line from Andrew Mikitchook with BMO Capital Markets.

Congratulations to the technical team on this really, really quick success in the scale of how long it usually takes people to advance these things. Maybe if we have Tim, could I ask Tim to come back on the line and just give us some sense of the concept of the eastern extension, sorry, from Makoko or from the resource that was published this morning towards Kakula West and how the prospectivity in that direction looks? From the simplicity of us sitting in our offices, there's clear linear trends connecting those 2, but is there any geological insight that we should be considering when we aren't geologist, that is from where we are?

Thanks, Andrew. Tommy, if you can just skip to Slide 13. I think that's probably a good one to talk to. So in terms of the connection with -- or between Makoko and Kakula West, there's probably a good 8 kilometers between the two. And the direction of travel, if you look at the high grades there is more northeast, southwest than it is directly east. But the drilling that we've carried out there does indicate that the basin is actually getting deeper as we go to the southeast. And that's probably the direction towards Kakula West itself.

The area that we're more excited about is really where you see those orange circles that those are denoting holes that have been completed, and you can see the grade there is 2% to 3%, and it really shows the strike of the high-grade zone. So we will be -- the intention is to actually chase that out further to the east.

And it's a deepening resource. So we're probably looking in a range of about 600 meters below surface in that direction.

What is also an area that we haven't tested and we're only just starting to complete the holes now. You can see the this gap area where we have 2023 outline written in black text there. That area is now currently being drilled out, and that's a lot shallower than that Makoko East area. And we are looking to close that area out in the coming 6 months or so. So if we look at that area of what I described earlier as exploration results, the intention is to convert that into the inferred category in this coming year. And we're probably looking at a similar uplift in metal from last year to this year to what we would see in the coming period once we closed that out. So easier another 30% on the resource just as we see it there. I don't know if that answers all your question.

No, no, that's perfect. Thank you very much for guiding our thoughts on that. Again, congratulations to the team. This is very quick progress, and I'll put the microphone down and let others ask questions.

[Operator Instructions] There being no further questions on the phone. I'll turn the call back over to Tommy Horton.

Thanks, operator. So we have a couple of questions through on the webcast. So first one here is, what are our plans with respect to the next resource estimate? There is clearly further copper to be included in the resource estimate. Do we have an idea on timing? And will this be before or after or during a PEA or scoping study?

Tommy, I think I can take that question as well. So in terms of the planned drilling that Simon alluded to, our first phase of infill will be completed by February of next year. That takes us down to 200-meter depth. The second phase takes us through to the end of May. And at that point, we will rerun the resource estimate. But from an expansion drilling point of view, the main expansion drilling really takes place from the end of May through to August next year.

So if we're looking at adding additional resources rather than conversion of inferred to indicated, I would say that August of next year or beyond August of next year would probably be the appropriate timing. But I think it's actually quite important to indicate the conversion of resources from the inferred category to a much higher confidence level. And that's going to be a very broad echelon. And I anticipate that the way that we've planned it out at this stage would be likely to see anywhere from a 30% to 40% uplift from the inferred category into the indicated category.

Okay. Thank you, Tim. Next question that's come in is related to partnership. This is probably a question for Alex or Mama, whether there is any interest that we have in partnering like we did at Kamoa-Kakula? And would this be an avenue for financing additional exploration? Or would we plan to do that ourselves?

Yes. Thanks. I'm happy to take that one. I think Robert alluded to it at the top of the call, there's no shortage of interest in terms of people looking to partner with us on the Western Forelands. And I think that's going back to the context in terms of the scarcity of new deposits of copper out there and especially at this quality and this sort of development time line. So there's plenty of people who are interested in partnership opportunities. We evaluate all proposals carefully.

And I think there is a story here that we could bail out a huge amount of value to the Western Forelands that isn't realized today in our share price, arguably, and you could probably fund not just the exploration expenditures, I think you could probably fund a material share of our sort of project equity to actually take the Western Forelands to first production by bringing in a partner at the right level. So that is something that we will consider, but it's by no means a necessity.

I think the company has the balance sheet and the strength certainly to take this project forward. And even though we have a great commitment to increasing our exploration expenditure, as Tim said, we'll probably spend significantly more than the $40 million next year.

It's still a relatively small scale expenditure in the grand scheme of things at this point in time until we start major development. So you always have that kind of balance of when is the right time to think about doing that deal once you've reached the kind of scale and the realization of the scale and the quality of the asset that you are sitting on. So we take all those things into consideration.

Thanks, Alex. And maybe this might be one for Simon. The next question is talking about the path to first production and what are -- we did touch on the sort of the major milestones, but what would be the critical path? What would be things that may impact uncertainty over time line? And just a sort of overview on permitting and how would that fit into being either on the critical path or not?

I think the key thing will be, as we showed on the line will be progressing from the initial expansion drilling through to the more detailed infill conversion drilling that Tim has alluded to. Project permitting, we've already commenced the environmental baselines. We're already progressing a number of the studies required for the permitting. So we don't see permitting is not on the critical time frame.

It's more us progressing the definition of the ore body and the mine design concurrently to a point at which we're able to commence full reserve level pre-feasibility and feasibility engineering. So as we alluded to on the time line earlier, I'd expect -- we're targeting for the end of 2028 to be essentially shovel-ready to -- with the open pit portions and probably not long thereafter with the underground portions with the shallow portion of the underground mineralization.

Okay. Thank you, Simon. So another question here on the ownership. Could we clarify the 80% ownership across the Makoko District and Kiala -- or is this Makoko -- just Makoko on its own? Maybe that's a question for Alex.

Yes. So I'll try to answer. So the vast majority of Makoko is already at the 80% ownership level because that's already been converted to a mining right. There are licenses in the Western Forelands where we own up to 100%, but those are generally earlier stage exploration rights where you haven't gone through the conversion process to a mining right, whereby the government and DRC nationals will hold a 20% ownership position.

And then there are some licenses in -- some licenses, sorry, in the Western Forelands where we are earning in through a joint venture structure where we started at an opening interest of 64%. And over time, the intention is that we will increase that ownership up to the 80% level through expenditures, but that does not apply to Makoko. Makoko is already at 80%.

Next question is on infrastructure within the DRC related to electricity as well as domestic smelting capability. Are these on the critical path in terms of project development? Is there anything that we would need to do in terms of investing in these 2 areas as part of the project development plan?

I'm happy to take that, Tommy, and perhaps Simon might have some things to add. Look, I think they're not on the critical path in terms of what we need to get done right now. There is smelting capacity in the DRC. There's obviously some smelting capacity at Kamoa-Kakula, but the intention is that by certainly on the development time line of the Western Forelands, Kamoa-Kakula will be filling its smelter capacity of 500,000 tonnes.

But the Kamoa-Kakula smelter has opened up regional smelting capacity, including the Lualaba Copper Smelter in Kolwezi.

So 20-odd kilometers down the road from Kamoa-Kakula and probably a little bit further from the Western Forelands, but by no means a long way.

So the regional smelting capacity in a nutshell is not really a concern and the export routes and the logistics, as Simon touched on, are only improving. In terms of the power, we have the power -- sufficient power in terms of what we need to get done today. It's relatively small-scale sort of project development operations.

As we think about moving into full-scale construction, then we will be obviously well ahead of the curve in terms of where we need to be planning for our expected power demand. But I think there are some real breakthroughs that we're making right now at Kamoa-Kakula in terms of the modular solar battery solutions. Those projects can be delivered in an 18- to 24-month time line. So that's why I say they're not on the critical path today, but at some point, they will be.

Thanks, Alex. A question for Tim and maybe Simon as well. Just some confusion over the open pit and underground with respect to the ore that will be processed. Is -- what is the makeup of the ore? Is it oxide transitional sulfide? Is it a single plant that we would look to build to process -- to process the material coming from open pit and underground?

Yes, sure. I mean it's all fresh sulfide mineralization and the subcropping mineralization whilst the top immediate 10 to 20 meters does contain some oxidized copper predominantly and we've seen from drilling that immediately within 30 to 40 meters from surface, you have full fresh sulfide. So it would only require a sulfide processing facility. There will be no need for additional oxide processing.

Thank you, Simon. We've got a few more minutes for questions. I've got a few left here. One, Tim, for you. In terms of the exploration experience and knowledge that you've gained within the Western Forelands, how is that playing into the global exploration portfolio in Zambia and in Angola with respect to seeing a structural geology that is similar and are the countries seeing equal prospectivity that could generate something that we have already delineated at the Western Forelands.

Well, quite a bit in that question. I think the easier answer to that is really it all stems from an understanding of the mineral system. And we make use of an approach referred to as the mineral system approach where one looks at the mineralization, not just from the actual rock host, but rather understanding in terms of the geodynamic setting within which the mineralization has been emplaced, the nature of the fluids that have moved that mineralization from its source to its ultimate preservation site and then the various elements around the structural conduits and the host rocks themselves.

So looking at that from a Central African Copperbelt basin point of view, we've certainly got a good understanding of the nature of this mineral system and that is actually being applied on a much broader level into the work that we are doing now in Zambia and DRC. And maybe also just to take a bit of a bold step into the work that we have embarked on now in Kazakhstan, all of these learnings are being applied and are actively being followed up and chased down in the different environments, whether it's in Zambia, Angola or Kazakhstan.

And it also adds to the growing portfolio of licenses outside of those existing areas that we're looking at, and it will continue to grow and morph as we -- as this understanding improves and I think as we test out various hypotheses. So what is really quite unique about the Ivanhoe experience is the latitude that we've been given to test out multiple mineralization hypotheses with our judgment and I think with a freedom that is somewhat unsurpassed in the industry.

Thanks, Tim. We've got one last question, and this is related to -- this is to Simon, and it's related to the MSO method that we have used with the resource estimate. What does this mean? And how does this relate to open pit and the underground resources or the open pit and underground resources that we plan to mine?

So the MSO is a mineable shape optimizer. And so what it is, it represents whatever the NI 43-101 principles reasonable prospects for eventual economic extraction. So what it does is it essentially takes the geological block model. We then constrain it to a set of minimum mining width and minimum mining heights and then define -- use the optimizer to define overall mineable envelope with continuous mining fronts. So what that does is it removes isolated scattered blocks that would actually be noneconomic to develop from the reported resource and makes the resource a much more conservative resource that has a much higher conversion rate from -- generally from resource through to future potential reserve or mine design conversions as a result of that.

Then the MSO [indiscernible] for now, we've got the whole resource within a 1% cutoff MSO. So effectively, we've constrained the entire mineral resource by an underground mineable envelope. But as I spoke to earlier and showed with the imminent drilling within some of the shallow subcropping mineralization, we expect to convert some of those to the upper portions within the top 150 to 200 meters to a number of open pits.

Now the open pits will come at a lower cutoff grade. So you expect that cutoff grade to reduce down to below 0.5% copper. And so with that, you'll get further growth in the mineral resources within those open pit potential areas relative to what's been reported in the existing MSO.

And then the interface between the open pits and the underground again, is going back to that conceptual section shown because of the shallow dipping nature of the ore bodies, any crown pillars between the open pit areas and the underground actually only cover a very, very small portion of the mineralization.

You can still have a significant size crown pillar. So the opportunity is there that you actually sterilize very, very little of your overall mineral resource within your crown pillar between the open pit and underground. So really, I mean, in summary, it's a much more conservative method of reporting a mineral resource and representing current industry best practice, but also presents a significant opportunity for further mineral resource growth as we continue to work through the scoping study and define split the ore body up into open pit and underground sections.

Okay. Thank you, Simon. Unless operator, there is anyone on the phone lines, I believe we will conclude our call. So thank you, everyone, for attending Ivanhoe Mines Western Forelands 2026 Mineral Resource Update Call. We look forward to speaking to you soon on further exciting milestones ahead.

Good morning, ladies and gentlemen. Welcome to the Ivanhoe Mines Limited Second Quarter Earnings Call. [Operator Instructions] This call is being recorded on Thursday, July 30, 2026. I would now like to turn the call over to Tommy Horton, Vice President, Investor Relations and Corporate Development. Please go ahead.

Thank you, operator. Hello, everyone. As introduced my name is Tommy Horton, and I am Vice President of Investor Relations and Corporate Development for Ivanhoe Mines. It is my pleasure to welcome you to our second quarter 2026 conference call. This call will be recorded on today, Thursday, July 30, 2026. On the line today from Ivanhoe Mines, we have Ivanhoe Mines Founder and Co-Chairman, Robert Friedland; President and Chief Executive Officer, Marna Cloete; Chief Operating Officer, Tom Van den Berg; Executive Vice President of Technical Services, Simon Bottoms; and Executive Vice President of Projects, Steve Amos. We close today's event with a question-and-answer session.

You can submit questions using the Q&A box on our web page as well as through the conference operator via the phone line. Given our time constraints, we will be unlikely to finish every question, but we will endeavor to follow up after the call via our Investor Relations team.

Before we begin, I'd like to remind everyone that today's event will contain forward-looking statements that will involve risks and uncertainties that could differ from actual results materially. Details for our forward-looking statements are contained on our news release on July 29 as well as on SEDAR+ as well as on our website, www.ivanhoemines.com. It's now my pleasure to hand over to Ivanhoe Mines' Founder and Co-Chairman, Robert Friedland, for his opening remarks. Robert, please go ahead.

Thank you to all of our shareholders and stakeholders. I'm speaking to you from a cloudy and relatively cool day in New York City. And I'd like to draw your attention to the slide on Page 3, as you see our Phase 1 solar power plant generating 60 megawatts of power when it's fully running at the end of this quarter in a few weeks. And you see those little light dots in the middle was the battery storage program. So this is not 60 megawatts only when the sun is shining. This is 60 megawatts, 24 hours a day. And in time, it will be twice as big as this vast field of solar arrays, and then it will be triple this size.

So this is a very good paradigm for our sort of vision for Ivanhoe Mines for the future, a company at the bottom of the world cost curve, sustainably producing copper metal in a green and sustainable way in the heart of Africa and in the heart of the richest copper mining region in the world. So I've been in this game for about 45 years. And I rarely give investment advice. I'm seeing shares overvalued and undervalued. But if you pay close attention to this conference call, you'll see why it's obvious that it's intelligent to approach our shares from the long side. They're now oversold.

There's nothing but upside going forward. There's an incredible series of opportunities as we develop the largest precious metals mine in the world, the richest zinc mine in the world. And yes, in the near future about the Western Forelands.

So with that, I'm going to turn this over to a woman I love a lot. She's our Chief Executive Officer. She just celebrated her 20th anniversary with Ivanhoe Mines. I watched her grow enormously as a manager, as a human being, as a visionary, as a politician. She's great. And if you want blunt advice of what to do with your wallet, I'm happy to talk about it later at the end of this call. But now over to Marna, our President and CEO. Marna?

Thank you, Robert, and thank you for the kind words. And just because he loves you, doesn't mean he goes easy on you, right? 20 years working for you and learning from you. The picture in the background on this slide is quite close to my heart. Our crews, our mining crews at Kamoa actually constructed this box cut themselves. So we didn't get a construction company to do this box cut development.

We did it ourselves, and they did it under budget and ahead of schedule, so definitely well performed and well-executed box cut. I also would just like to introduce David van Heerden, who's also on the call with us today. Tommy accidentally omitted him. I was a bit nervous because I thought maybe I was going to have to take you through our financials, but David is also with us on the call today, and I'll introduce him shortly.

We can go into the highlights, Tommy. In the second quarter, Kamoa produced in excess of 64,000 tonnes of copper. Our C1 cash costs in the first half of 2026 averaged $2.70 per pound. That was towards the lower end of guidance. Our margins were significantly supported by a $0.42 per pound smelter benefit. Kamoa-Kakula sold 120,000 tonnes of sulfuric acid at an average price of $465 per tonne. And in July, our contracts up to $840 per tonne were concluded. So if you look at the sulfuric acid prices, it more than doubled from the beginning of the year to the contracts we are now concluding in July. The production rates at Kamoa-Kakula are set to progressively increase towards the second half of the year. So we're really looking at an outstanding back half of the year after we've started implementing the turnaround strategy at Kamoa-Kakula.

We have also tightened our guidance for 2026 to between 290,000 and 310,000 tonnes of copper produced. And during the quarter, the first power of our 60-megawatt solar facility with battery backup, as Robert alluded to, was delivered and currently, the ramp-up is underway. Kipushi, the star of the show nowadays, had another great quarter, producing in excess of 70,000 tonnes at a cash cost of $0.90 per pound.

And at Western Forelands, where the Makoko discovery continues to grow, we plan to announce an upgraded mineral resource towards September of this year. Our adjusted EBITDA for Ivanhoe amounted to $179 million for the quarter. We can move to the next slide. It is with great sadness that I have to report the loss of life of Mr. [ Mohammed Mumbai ] on the 6th of July at the Kakula underground mine. Mr. Mumbai was conducting scaling activities when the fall of ground occurred.

The root cause of the incident has been identified and a large-scale training program for scaling operations and hazard identification has been implemented for all our operators and supervisors. Our operating procedures have been updated based on learnings from this incident. Our thoughts are with his family in this terribly tragic time as well as with his colleagues. In the second quarter, a large part of our sustainability initiatives focused on training and in particular, also on underground safety.

On the next slide, it would be remiss of me not to focus on, and I quote a wise voice from earlier on this call, the richest copper mining district in the world. It would be a miss for us not to highlight some of the significant achievements of the DRC over the past couple of years. The DRC is now the second largest global copper exporter, 40% of the DRC's GDP is directly derived from mining. Copper production in the DRC has increased by more than 300% in the past 10 years, and that cemented its position as the second largest copper producer. There's been a 7% year-on-year increase in copper production to 3.2 million tonnes in 2025, producing 14% of the world's copper.

And then the DRC also made history by issuing its first inaugural sovereign eurobond in April of this year to the tune of $1.25 billion. And then Ivanhoe has been a long-standing citizen in the DRC, and we cemented very successful strategic partnerships with the DRC government as well as with Gecamines, and we continue to foster those relationships and expand these projects that we are delivering in the DRC. With that as an introduction, I would now like to hand over to David van Heerden, our CFO, to take you through our quarterly financial results. Over to you, David.

Thanks very much, Marna. We can move to the next slide. So Kamoa-Kakula sold just over 61,000 tonnes of payable copper in the form of anodes and blister in the second quarter. The copper in concentrate produced through the mills was pretty close to the tonnes sold, leading to copper and inventory on hand remaining flat at around 40,000 tonnes. Although there was no destocking in the second quarter, we do expect that payable copper inventory to reduce between the 20,000s by the end of the year.

And at the current copper price, it would be a significant boost to our cash flow, revenue and EBITDA in coming quarters. Revenue was again buoyed by the higher copper price with a copper price realized of $5.99 per pound. The total revenue of $880 million included $56 million relating to the sale of sulfuric acid and a $33 million positive impact from mark-to-market of provisionally priced sales. With high production on its way and the current copper price environment, we definitely expect to exceed the $1 billion of revenue mark on a quarterly basis pretty soon. Moving to the next slide.

Cash cost for the second quarter of 2026 was $2.84 per pound of payable copper in salable product produced. The copper grade of ore processed was fairly similar to the previous 2 quarters. So the quarter-on-quarter decrease was primarily higher costs, most notably the direct impact of higher diesel prices, which was responsible for $0.18 or 70% of the quarter-on-quarter increase. But I'll provide more details on that on a following slide. Power costs increased to 20% of total cash cost illustrated as a percentage of C1 cash cost.

And the jump from Q4 last year was due to the smelter power usage as well as the impact of higher fuel prices. The cash cost for the year-to-date of $2.70 is still at the lower end of our guidance range, which we maintain despite the higher pricing environment. Kamoa-Kakula's EBITDA for Q2 was $385 million and only 3% lower than Q1, notwithstanding the lower tonnes sold and the higher cost environment. Higher copper prices, of course, played a role, and we continue to realize the significant smelter benefits.

Just looking at those smelter benefits again a little bit closer on the next slide. Here, we again show a waterfall to better illustrate the movement in our cash cost and highlights the benefits we get from our smelter. On the left-hand side, we start with the average C1 cash cost of the second half of last year and then we set out our movements to end on our cash cost for the first 6 months of 2026 of $2.70 per pound. The smelter operating cost of $0.33 is easily offset by the reduction in logistics costs, the sulfuric acid credit and then the savings on treatment charges. In total, the smelter caused a roughly $0.50 saving on per pound basis if the saving of road and export taxes are included. But that would be even more on a normalized diesel environment.

Then mining and processing more to the right-hand side is a little higher in the last 6 months due to the slightly higher power cost, the lower absorption of fixed costs due to the relatively lower production this year and then, of course, the higher diesel price since the closure of the Strait of Hormuz. And that's exactly where I will focus on the next slide.

Here, we look at the C1 cash costs for Q1 and Q2 with the direct diesel cost shown separately. So at the bottom left of the screen, you can see that Kamoa-Kakula spent $0.34 per pound of payable copper in final product on diesel in Q1 compared to $0.52 in the second quarter. That is an $0.18 increase and represents 70% of our quarter-on-quarter cash cost increase. So just to be clear here, this is the direct diesel impact. So it doesn't include the secondary impact of higher diesel prices like increased logistics charges as an example. And it's noteworthy that the current diesel price is a little bit higher than the average diesel price we achieved in the second quarter, but also that once the 60 megawatt of solar is operational later this quarter, our diesel consumption would go down with 25% to 30%.

And an even bigger mover in Q3 will, therefore, be the expected increase in the sulfuric acid byproduct credit. So far this quarter, we have been selling sulfuric acid at around $840 per tonne, which is much higher than the average price of $465 per tonne recognized in Q2. So if the current price holds for the remainder of the quarter, then the sulfuric byproduct credit will be close to $0.60 per pound of payable copper produced in the third quarter. And that's much higher than the already nice credit of $0.38 recognized in Q2.

Then on the right-hand side of the screen is just a reminder of where we forecast our C1 cash cost to be in the future as development rates and stoping tonnes and grades improve. On the next slide, here we show the quarter-on-quarter EBITDA waterfall for Kamoa-Kakula. Here, you can see that $76 million of the quarter-on-quarter EBITDA increase was due to higher copper price for the second quarter when compared to Q1. $43 million of that $76 million was the impact of the remeasurement of contract receivables, which represents the mark-to-market of provisionally priced sales at the higher price in the second quarter.

Revenue from acid sales was $7 million higher in Q2 than it was in Q1 and is expected to increase further, of course, as I mentioned on the previous slide. Logistics and treatment charges did not move much, but this was also because we are now transporting significantly lower volumes due to the smelter and cost was up quarter-on-quarter, mainly due to the higher diesel prices, as I've already explained. Lastly, you can see the impact of selling 5,000 tonnes and less of payable copper tonnes in the second quarter compared to Q1. And we definitely expect that block to be green and sizable in the coming quarters as we increase production and as we destock on the current stock on hand.

And then you end up with the quarterly EBITDA for Kamoa-Kakula, which is very close to what it was in the previous quarter. Moving to Kipushi on the next slide. It was another great quarter for Kipushi with another record of tonnes produced. The realized zinc price was also higher at $1.58 per pound of payable zinc. And Kipushi did, however, not sell all the zinc produced with roughly 14,000 tonnes increase in finished goods due to the inability to secure sufficient trucks to transport the concentrate to port.

The closure of the Strait of Hormuz significantly decreased the number of trucks entering into the DRC with sulfur from Dar es Salaam and with less trucks entering the DRC, less was available for backhaul with Kipushi concentrate. To add to that, the quotas assigned to the DRC cobalt producers also impacted negatively on truck availability. But the team has since been able to make very good progress in securing the required volume of trucks and inventory on site has halved since the end of June, even with production running extremely well. So we will take advantage of these great current zinc prices.

Still, Kipushi recognized revenue of $148 million in the second quarter and an EBITDA of $51 million at a margin of 35%. Cash cost was well controlled at $0.90 per pound payable zinc even with the inflationary pressures and was $0.88 for the year-to-date, still below the midpoint of our 2026 guidance, which we maintain. Also noteworthy is that Kipushi generated cash from operations of $94 million in the first half of this year, even with the buildup of inventory.

So moving to Ivanhoe Mines' consolidated results on the next slide. So Ivanhoe Mines recorded a profit of $46 million in Q2 and an adjusted EBITDA of $179 million. Both our EBITDA and our profit is expected to continue to grow with the increase of expected production at Kamoa-Kakula and Kipushi and with Platreef contribution coming very soon. Something that I would just like to point out is people often forget that our profit and EBITDA is reduced by our continued investment in exploration, particularly on the Western Forelands. Expensing exploration expenditure is an accounting policy decision.

So it's not necessarily treated the same way by our peers, but important to take into account when looking at our results. It might not be reflected in our profit or our EBITDA, but we do continue to see great results on exploration, and Simon will touch on that and the latest news a little bit later on in the presentation. We continue to maintain strong liquidity levels, and that can be seen on the next slide. Ivanhoe had $635 million of cash and cash equivalents on hand at the end of June, still a very strong liquidity position. Our pro rata net debt increased slightly, but more due to the reduction in cash over the quarter as opposed to an increase in debt.

The pro rata net debt ratio for the trailing 12 months remained stable, but still includes the impact of the lower EBITDA in Q3 last year. And it is back to the low 2 if you recalculate it using an annualized EBITDA for the last 6 months as an example. S&P downgraded Ivanhoe's corporate rating to B- during the quarter.

Our view is, of course, that it is not a fair reflection of the credit, even though S&P notes in the report that there is no material liquidity risk and that our credit metrics look very positive on 2028. Their metrics unfortunately focuses on just 2026 and 2027 and ignore the very good 2028. But having said that, we were very encouraged with how our bonds continue to trade even after the event.

So if we turn to the next slide, just to show where we are planning to spend our cash that we've got on hand. The capital expenditure on each of our projects remain in line with expectation and the guidance for each of them are reconfirmed. During the quarter, Ivanhoe Mines contributed $76 million to Kamoa-Kakula for its ongoing capital and operational requirements. With production and sales set to increase over the next few quarters, it is expected that no further contributions will be required and that Kamoa-Kakula will generate sufficient cash from operations and joint venture level facilities to support its own operational and capital cash requirements.

At Platreef, the Japanese consortium contributed $65 million towards Phase 2 development expenditure during the quarter, highlighting its ongoing confidence in the project's long-term potential and our team's execution capabilities. The Platreef project Phase 2 finance was also closed during the quarter and $87 million was drawn and received by Platreef in July. So our cash balance at the moment is actually higher than it was at the end of the quarter.

That financing is structured such that 2/3 of the remaining Phase 2 capital expenditure will be funded by this facility, and we will do quarterly drawdowns going forward. And with that, I will hand over to Tom van den Berg, our Chief Operating Officer, to start the operations and project update portion of today's presentation.

Thank you, David, and thank you for the introduction. Project 95, as you can see in the slide in front of you, just go back there, you can see those are the thickeners and the high ground, the reground back in the background there.

So that was commissioned in June 2026. So that's up and running at this stage of Phase 1 and Phase 2. Thanks. Let's go to the next slide. If you look at the numbers here, you can obviously see the combined copper ore grade processed has been climbing from the quarter -- the last quarter to this current quarter as we access higher grade in the areas in Kakula also producing good grade at the moment. And the tonnes milled also was an increase. Phase 3 did well in the tonnage.

Phase 1 and Phase 2, we were batching ore as the stockpiles came to an end. So that's picking up at this stage and that will go up further in the next 2 quarters. Combined copper recovery, as you can see, David spoke to already, we're also looking at good recovery rates there. So that's also improving. The Phase 3 concentrator continued to mill at around about greater than 25% above its design capacity, really doing well and achieving what we expected to achieve and overachieving at this stage.

So equivalent to milling at a rate of 6.3 megatonnes per annum. Phase 1 and 2, as I said, they were doing batching in the last portion. So they're running at about 60% of the capacity at 10.5 megatonnes per annum. Due to the ongoing turnaround at Kakula mine, we expect that to increase, and we are moving tonnes at this stage across from the Kansoko mine to the Phase 1 and Phase 2 as the Kamoa mine builds up and pulls the Phase 3, we are able to move tonnage across to Phase 1 and Phase 2 from Kansoko mine. Project 95 is boosting recoveries, as you can see, and that is up and running and has been commissioned at this stage.

Phase 1 and Phase 2 concentrated the feed grade and recoveries improved in quarter 2, and that's following the depletion of the surface stockpiles. So obviously, as we got to the bottom of the stockpiles, we had reduced grade, but that will be picked up by fresh ore from underground, and that is what you see with the change in the grade. So the mining -- mining rates are set to improve further in the second half of 2026. And we are seeing that through a combination of productivity initiatives, opening up more ends and getting into more areas on Kakula currently. If we go to the next slide, thank you.

So the 500,000 tonnes per annum smelter is running about a 60% capacity. We started up at the end of 2025. It's really doing well. It's been performing very well at 60% of its capacity, and it is stable, and we haven't had any issues with respect to the smelter and no major concerns. So you can see lots of copper anodes that have been generated in the picture. It generated 64,000 tonnes of anodes, blisters and anodes in quarter 2, 2026. There's a further ramp-up of the smelting line with Kamoa-Kakula, the mining rates increasing, and we will do that as we go ahead. 10,000 tonnes of unsold copper to be destocked as David spoke about in H2 2026 and then targeting the year-end to be 25,000 to 30,000 tonnes of copper. Thank you.

If you look at the ramp-up for the copper production to the 500,000. So you're seeing there of quarter 1 to quarter 2, it is the 9 was effectively the destocking that we're expecting to do. The 2 bars on quarter 3 and quarter 4 are the new destocking that we need to do in the H2 portion. We did do the 64, as you have seen, and then we're targeting to do further increases in quarter 3 and quarter 4. So our production guidance has been tightened, but it sits at 290,000 to 310,000. And in 2027, our production guidance goes from 380,000 to 420. And the increases are basically the new Kahala box cut.

The picture that you see behind this picture is the Kansoko that also then allows us to access the area of Kansoko midway in the ore body, reduces our training rates and then effectively give us better mining rates inside the process. And then the mining rates at Kakula will start increasing as the stoping commences and that will be at the back end of 2027. What we are doing at Kamoa and Kakula this stage is we will be up and running with the stoping. So we're starting getting our stoping back to what it should be. And we have effectively got the mines established to the new layouts and they are performing well.

So it's Kakula at this stage, we've just got to get the development, which we've done well on the front of the Northeast and Southeast, and then we will be around the front of the mine on the eastern side in 2027. Thanks. We go to the next slide. Sulfuric acid, David has spoken to most of it already. So I just want to highlight a few issues there. The sulfuric acid realized price was $465 per tonne. We did very well in terms of our sales and our cash costs in terms of the guidance from the acid.

The sulfuric acid in the market remains tight in the DRC, and this is due to reduced supply of sulfur passing through the Strait of Hormuz, coupled with import constraints inside and through the DRC. So quarter 3, the 2026 contracts price was 80% higher than quarter 2 at approximately $840 per tonne. So a really good story. The ore body is generating good acid from the smelter, and we're able to sell into the market and make money from it. Thank you. Next slide. Over to you, Simon. Sorry. Yes.

Our feasibility study updates are well underway. We're currently finalizing updated mineral resource models with drill data from the last 3 years across all deposits in the Kamoa-Kakula complex. Alongside, we're also updating newly calibrated geohydrological models, particularly focused on Kakula. These models will provide us with the foundation for the commencement of multiple mine design trade-offs and then further optimization throughout this quarter. Alongside these studies, we've commenced a detailed feasibility 250-kilometer drill program focused on 2027 to 2031 mining areas with the first drill hole at Kakula pictured in the background of this slide.

This detailed drill program will be further complemented with high-definition active seismic surveys, which together will provide the high-resolution geological and geotechnical models, updating our structural models to both optimize our geotechnical and hydrological dewatering designs across the complex. We anticipate that this drill campaign will extend into 2027, and we will utilize the initial results of this high-resolution data set to inform our trade-off decisions and subsequent life of mine plan optimization that we are commencing this quarter. So with that, I'll hand back to Tom to continue through the operations.

Yes. Thanks. I'll give an update on the solar project. So we've spoken about this nice picture there. You can see the batteries in the foreground and the panels in the background. So just to remind everyone, this is baseload power, 95% availability, more reliable than grid power, and it certainly reduces our diesel consumption quite significantly. So the way we're running Phase 1, there's 2 IPPs, independent power producers, each producing 30 megawatts. The first one has completed construction.

We're receiving 15 of the 30. The second 15 is under commissioning, and we expect that, I would say, in about 2 weeks' time. And then the final 30 megawatts from the second IPP by the end of September of this year, so by the end of Q3. We've also initiated Phase 2 of this project, which is basically a copy paste. So another 2 IPPs each producing 30 megawatts. We've signed the first power purchase agreement, PPA with the first independent power producer and the second signing of the contract is imminent.

I'm expecting that in a couple of weeks' time. And then there will be a Phase II. There's no question that this is a good initiative, and we're looking at self-build for Phase 3. I think we've got enough experience now from this work to take this on ourselves. Next slide, please, Tommy. [indiscernible] over to you, yes.

Yes, much appreciated. So yes, well done Kipushi. They really did a great job, and they continue to overperform. So thanks to Kipushi for the record 70,000 tonnes of zinc in quarter 2 '26. Kipushi milled a record of 200,000 tonnes of ore in quarter 2 at an average grade of 38.7%. That's a notable high-grade amount of zinc. Multiple concentrator records were achieved in quarter 2, '26, including recoveries averaging nearly 92% and then 25,634 tonnes of zinc produced in May. You can see the graphs on the right-hand side, talk to what I'm talking to on the left here. Production guidance unchanged at 240, set to be the world's third largest zinc mine in 2026. And then we're also doing the same thing with what Steve was saying. The DRC has got a very high Sunbelt.

We've got 12 hours of sunlight today, more sunlight in winter than we have in summer. And with that, we're going to dial in 10 megawatts of constant power at Kipushi, and that will also assist them in managing their constant power supply and making sure that they can mine and produce with those megawatts. Next slide.

I'll take over, talk about Platreef. So this is a focus for the project team at the moment, Platreef Phase 2, and this is the next big thing for Ivanhoe. What you can see there is Shaft #3. It's a rock wasting shaft. We wasted our first rock from that shaft at the end of March. And then we spent this quarter constructing the underground ore moving facilities, which consists of a crusher, 2 belts feeding the shaft and 2 truck tips. It's a 1,000-meter deep shaft. It's a rock wasting shaft only. We'll use shaft 1 for man material. This shaft initially will feed the Phase 1 plant. As the mining ramps up underground, we'll start building the stockpile for the Phase 2 plant.

And when the Phase 2 plant comes online towards the end of next year, this shaft will feed ore to the Phase 2 plant. Next one, please. We're just talking about Platreef and in particular, Phase 2. So we're developing the project in 3 phases, Phase 1 complete. Phase 2 will be complete by the end of next year, and that's about 450,000 to 500,000 ounces of 3 PGE plus gold. So a decent size, 10,000 tonnes of nickel and then Phase 3 will be a doubling of that. We're currently busy with the plant construction.

Earth works well advanced. Civil work started. We've in fact the mill base, which is on the critical path. We've awarded all the mechanical contracts, SMPP, structural mechanical piping and plate work, ordered all the long lead items and the bulk of the equipment. So it's going very well on the plant construction, definitely on target for the end of next year to start milling ore 3.3 million tonnes per annum is the milling rate of the Phase 2 plant. Another big bit of work that we're doing is Shaft 2.

So Shaft 2 is the future of Platreef. It's a rock and man material shaft, 8 million tonnes per annum. So a big shaft -- we're busy with what we call siping and lining, which is basically the widening of the shaft from 3.5 meters diameter to 10 meters diameter. We will be ready to hoist man and material late in 2028 and then rock about 6 months later. It's as I said, 8 million tonnes per annum huge shaft and derisks Phase 2 and gets us ready for Phase 3. Thanks. That's all. Simon?

So looking now to the exciting Western Forelands project. We're currently updating our mineral resource models with the data that we've gathered up until the end of the first quarter this year. And with this, we are anticipating to grow our total mineral resources by more than 30% as well as increasing the overall grade in our updated mineral resource statement, which we will publish in September this year. In parallel, we are ramping up drilling on site to undertake the largest drill program that has ever been undertaken on the project so far. This drilling is testing the continuity of mineralization between Makoko West and Central as well as stepping out to test both the shallow eastern extensions of Makoko Central and the southern extensions around the high-grade Kitoko target.

We will, of course, be updating you in the upcoming months with both the updated mineral resource and with the results of ongoing step-out drilling, which we believe will further grow shallow copper resources. Alongside the exploration works, we've commenced early project establishment and operational camp construction.

We'll be aiming to commence a series of technical studies later in the year in which we anticipate will include multiple shallow open pits that will enable a lower capital, fast execution construction to the project. So next slide, please. So now looking across our exploration portfolio and firstly, the Moxico province in Angola.

This is a frontier greenfield exploration program where we're testing our interpretation that the Katangan Basin sediments extends into Angola below cover, potentially targeting Western Forelands-style mineralization. We have completed a range of Airborne geophysics and soil geochemistry over the prospective areas.

And from the results of this, we have targeted stratigraphic drilling to test these interpretations. The preliminary results of the first few holes through this year have been very encouraging and have been confirming our regional interpretation. Whilst it is early days in this exploration program, we plan to continue drilling into 2027 as we vector in on potential mineral system targets. So then turning to the substantial exploration package in the Northwest province of Zambia. This is situated adjacent to the Angola border with similar stratigraphy to well-known neighboring mines.

Here, our drilling is targeting both covered Katangan's stratigraphy and younger IOCG-style mineralization targets, which were identified as part of an airborne geophysical survey. Our drilling commenced in mid-June on a number of the IOCG targets, the results of which so far have identified prospective alteration and sulfide vein.

In parallel to this, we're running a regional soil geochemistry and ground geophysics program on the southern licenses within the package throughout the second half of this year. The next phase of drilling in early 2027 will be planned to test the sedimentary hosted copper targets in the Northern and Western permits of the province.

So then turning to our strategic exploration joint venture in Kazakhstan, where we are funding a further $20 million of investment to expand the drill program, targeting sedimentary-hosted copper targets in a large sedimentary basin, which host giant Soviet era discoveries, analogous to that of the [ Chu-Sarysu ] Basin in Northern Europe.

In 2025, we completed a program of field mapping, soil geochemistry and geophysics, which define the key basin architecture, and we've been subsequently drill tested. Throughout this year, we're planning to drill approximately 35,000 meters on a number of conceptual targets. We anticipate that the results of this program will refine our basin interpretation and enable us to progressively vector in on potential mineral systems within them.

Thank you, Simon. So we'll now start the question-and-answer session. Covering analysts, you may submit your questions to the operator or the phone line questions can also be submitted through the webcast. Any questions submitted via the webcast that we are unable to address during the Q&A session, our Investor Relations team will endeavor to follow up with you.

So operator, let's start by clearing the phone lines. I see there's 4 in the queue. Over to you.

[Operator Instructions]

First question on the phone, Daniel Major with UBS.

First question, just around the sort of production versus sales outlook into the second half of the year. You noted in your material, Kamoa-Kakula, you expect to destock 10,000 tonnes of copper inventory. Is that all the destocking of concentrate and will flow through as production of blister anode -- or will that also be partially an unwind of sales of copper versus production of copper through the balance of the year? Because year-to-date, your sales has lagged production. So just where that 10,000 is going to sit?

Yes.

Happy to take that, Daniel. So yes, currently, we've got roughly 40,000 tonnes of copper in inventory. And that is a combination of copper and finished goods and copper in concentrate waiting to be smelted and then copper in the smelting circuit.

And we've said previously that we expect the smelter circuit to contain roughly 17,000 tonnes when it's run about at steady state. So that leaves us with rounding down to about 20,000 tonnes of other copper we can realize. And the expectation of that is that we will -- irrespective of which form it is, so if it's finished goods, we will sell 10,000 more either turn concentrate into finished goods and sell it or finished goods.

We don't have quite have 10,000 tonnes of finished goods in stock at the moment. And so it will be -- some of it will be a conversion of concentrate into finished goods and then sell. But of that 40,000, you'll see that reduced to at least 30,000 by the end of the year, meaning that we -- whatever finished product we produce by the end of the year or over the next 2 quarters, we will see an additional 10 being sold as well.

Okay. So a total of 10 split between finished goods and concentrate destocking. Is that right?

Yes, that's correct.

Okay. And then just second part of that, would you expect that to reduce working capital in the second half of the year at the Kamoa-Kakula JV level? Or is there any offsets?

Yes. Now we would expect that to reduce working capital and turn that into cash.

Okay. And then the second question, I believe there's a deadline or something around increasing local ownership in DRC operations at the end of July. Can you just give us an update on where you stand with respect to any such local participation thresholds and whether there's any potential changes in ownership at any of the DRC assets?

So I'm happy to take that one. So maybe just for a little bit of background for everybody. There's been communication received from the Minister of Mines asking mining companies to confirm a local participation in its shareholding. That is based on the 2018 mining code, which requires companies who convert an exploration permit to a mining permit to give 10% free carry non-dilutable participation to the state and then also to give a 10% stake, but that's not on a free carried basis and also not nondilutable to Congolese nationals.

Originally the legislation envisioned it was accompanied by regulations that stated that as an example, the 10% Congolese nationals could be 5% to employees. So that was the foundation of the communication by the Minister of Mines. Subsequently, there's been a number of engagement with the Minister of Mines as well as with the Prime Minister. The Minister of Mines for drafting a decree trying to implement this change retroactively. This agree cannot amend legislation as it will need to be adopted by parliament.

We've -- as much as this deadline is looming, we've had numerous engagements, and we were hopeful to have further engagement today. So it's really happening real time. But I don't think it will necessarily conclude before the end of this month, but the industry is positive that we should be able to find common ground and try and argue that this should only apply to conversions post 2018 and not to pre-2018 conversions as is the case with Kamoa-Kakula as well as with Kipushi and our partnership with Gecamines.

Okay. And would Western Forelands apply -- fall under that? So I would assume you would have to dilute that?

West Forelands would have -- as soon as you convert your exploration license to a mining license, you would, in any event, have to do the 10% to the DRC government and 10% to Congolese nationals. So in Western Forelands and Western Forelands is made of numerous permits. We have been applying that principle at Western Forelands. So at Western Forelands, it's not controversial at all because most of those conversions are both really acting.

Next question on the line, Lawson Winder of Bank of America.

And thank you, Robert, Marna and team for the presentation today. And also, Marna, congratulations on your significant 20-year anniversary. That is quite an accomplishment.

Yes, I could -- thank you so much.

Yes. It's remarkable. 2027 production. So you've expressed some confidence in the 2026 copper production outlook from Kamoa-Kakula. That's very helpful to hear. It comes through very clearly. When looking at 2027, what are you now seeing as the key gating items that will ensure production hits that 380,000 to 420,000 tonne guidance? And then how do the lower target underground development rates that you cited in the release factor in here?

Simon?

So I mean the key for 2027 is a combination of both development rates and the dewatering progress. I mean the development rates, as you see in the quarter have been slightly lower, but at the moment, they're still on track to establish that new eastern access of the mine. You'll see in the slide that Tom showed in the presentation earlier that really that big bump in production in 2027 comes in the fourth quarter, and that's really as we open up that access in the eastern side.

So at the moment, whilst the development rates have been slower than -- slightly slower than forecast, we're still on track to be able to -- we have enough conservatism in those plans and rates to be able to access that area in Q4 2027. The other key factor is the dewatering, and that's where we were talking to obviously, the hydrological model updates, and we're currently undergoing a big upgrade of a lot of our horizontal pumping capacity in Kakula underground.

We actually have more vertical -- we have vertical pumping capacity in excess of 8,500 liters a second, but we're only able to utilize about 5,500 liters a second of that vertical pumping capacity currently. So we're installing additional horizontal pump stations. Those horizontal pump stations will enable us to make substantial progress in particularly in the East. And again, as we progress that dewatering, that will allow us to speed up some of those development rates and also increase production in -- particularly in the Northwestern corner, which is supporting the production through the first 3 quarters of 2027.

Okay. Simon, that's helpful color. On the cost pressure, the language around that risk seems to have been slightly toned down in Q1 '26. Of course, correct me if I'm misreading that. But to what extent is that because of cost pressures having moderated in severity versus the benefit from the sulfuric acid sales and of course, quickly rising pricing for sulfuric acid?

Yes. It's -- I think in the -- it has been moderated a little bit just because we're now more aware of what we're dealing with. I mean at the current cash cost included, as I mentioned on the one slide, $0.52 of costs related to diesel. At the height of pricing in this quarter, that would have been close to $0.70, so around about an additional $0.18 increase at the -- sort of at the height of that pricing level. So I mean, yes, that is substantial and will have an impact. But then as I've also mentioned, we've got -- we will reduce our diesel requirement by 25% to 30%, which is around about that same amount.

And basically a reduction in diesel requirement. So our diesel increase will be offset by, one, the reduced diesel usage because of the solar. And granted that will only really be in effect from later in the specific quarter. So you'll see that more in the fourth quarter, but then also the big benefit of the sulfuric acid credit. I mentioned that at the current pricing, the credit will be around about $0.60, give or take a few cents.

And that would be -- I mean, that's more than $0.20 higher than the current credit. So more than offsets the increase in the diesel directly and whether you take the solar into account or not. So that's why we're a little bit more comfortable around the current pricing environment. And yes, the sulfuric acid and the current price for that plays a significant role.

Dalton Baretto with Canaccord.

My first question is also around the development rate at Kakula there, and I appreciate all the color that was provided. Just a very simple question.

Sorry, Dalton, I'm just going to interrupt. It's Tommy. We're just struggling to hear you. If you could.

My apologies. Is this better?

That's better.

Okay. Yes. My apologies. Sorry, I just want to follow up on the line of questioning around the development rates there. So on the -- my first question is that bump in production that you alluded to in Q4 of next year, presumably that's related to stoping and high-grade ore. Does that assume -- does that time line assume an improvement in the rates that you're seeing now? And then I guess part 2 of that is if you don't start stoping ore by Q4 of next year, what does 2027 look like?

Yes. So yes, that does assume a continued step-up from where we are at the moment in development rates. But I mean, it only assumes another, I think, step up by about 12%. And that step-up is only actually planned for the middle of 2027 as the development progresses around the back of that barrier pillar on the eastern side.

So that bump in production is entirely driven by that stoping in the high grade on the other side of the barrier pillar. What that brings overall, I mean, I think it's about another -- that portion of the mine is due to bring about 40,000 tonnes of copper to the plant. So without that -- if you calculate that into our guidance, that would be the impact if we were to not get that through.

That's helpful. And then just switching gears to the drill program that's on right now, the infill drill program. If you -- if we're successful, what do you think you can take that 60% extraction rate up to in the new mine plan?

It will be varied across different areas within the mine. No question in Kamoa, we're currently very actively late nights having discussions on changing those extraction ratios where we're able to take it to. We don't have a definitive number yet, but it is -- I mean, that pressure doesn't exist. There's a good chance we will be able to increase them not necessarily as high as they were before, but we will certainly be able to close at least half of the gap from where they were before.

But we will -- those changes in extraction ratios are going to come in incrementally. They're going to come in by domain and by portions of the mine. So it won't just be one large big change. It will be as we demonstrate the stability and particularly as we demonstrate the change in hydrological conditions as well as geotechnical conditions because the 2 are very -- quite intrinsically linked, then we will be incrementally bringing more and more back into the reserve statement.

There will be -- there will be a number of other changes, which I anticipate will come through in the mine design trade-offs that I think will have quite significant positive impacts on our year-end reserve statement where we're looking at potential shallow resources and how -- what the best mining method is to be able to extract those.

Operator, we've got 3 or 4 minutes for one last question. I see there's on the line with respect to other messages that have come through, I believe most of these have been answered by the analysts so far. So we'll finish up with this last question and wrap up.

Craig Hutchison at TD Cowen. Please go ahead.

I just wanted to ask about the grades in the second half of this year. If I look at the April release, you guys were, I think, targeting 500,000 tonnes from Kakula at about 3.5% grade. And now the guidance is for 400,000 tonnes a month at 2.7% grade. Can you just talk to the reduction in the grade? And is that a potential risk as we go into kind of early 2027? I'm just wondering if it has something to do with the dewatering rates.

Happy to say that, no. I mean it's actually -- it is linked to the dewatering rates, and it is intrinsically linked to that, but it actually should be considered as an opportunity because the primary mining front in -- that we're mining from at the moment in Kakula is actually in the Northwest. That eastern development that we're talking around developing around the barrier pillar is developing in very, very low-grade copper, bringing like 1% to 1.5% copper. It's not a substantial contributor to production.

That northwestern corner where we have had higher hydrological inflows than we initially modeled, and we haven't been able to utilize all of our vertical pumping capacity without these horizontal pump stations that those headings just haven't advanced as quickly as we had hoped. And with those headings not having advanced that, we haven't got quite to the higher grade yet. So I mean, the high grade is still there. It's still in the model. It's still -- it's been drilled. It's there for us to extract. So I don't think it's got a negative in the long term, but it does reflect the challenges we've been facing as we've been progressing the dewatering program.

Okay. And just one quick one again. Just Western Forelands, I think you mentioned there is technical studies underway and look at some high-grade open pit opportunities. But just when can we expect kind of an update, maybe a scoping study or PEA level update on Western Forelands?

So we're updating the mineral resource currently. The results of that mineral resource, I think, as Marna mentioned earlier, will be released in September. From that release, we'll then be putting out some concepts in terms of where we're going with the scoping study and where we expect to go. But the key thing really initially has been how big is and what is the extent of some of this high-grade shallow mineralization. And so far, the drilling just keeps extending it. So it's quite a nice problem to have. But it's difficult to wrap a full study around it whilst we're still growing the resource at quite such a rate.

Thank you. We have no further questions.

Thank you, operator. And that concludes Ivanhoe Mines Second Quarter 2026 Financial Results Call. Thank you all for attending today, and thank you to our senior management, including David, sorry, for forgetting you earlier. And we look forward to speaking to you all soon about the many exciting milestones we have ahead. Have a good summer. Thank you.

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

Good morning, ladies and gentlemen, and welcome to the Ivanhoe Mines Q1 Financial Results Conference Call.

[Operator Instructions]

This call is being recorded on Thursday, May 7, 2026. I would now like to turn the conference over to Tommy Horton. Please go ahead.

Thank you, operator. Hello, everyone. My name is Tommy Horton, and I am the Vice President of Investor Relations and Corporate Development for Ivanhoe Mines, and it is my pleasure to welcome you on our first quarter 2026 conference call.

On the line today from Ivanhoe Mines, we have Founder and Co-Chairman, Robert Friedland; President and Chief Executive Officer, Marna Cloete; Chief Operating Officer, Tom Van den Berg; Chief Financial Officer, David Van Heerden; Executive Vice President, Corporate Development and Investor Relations, Alex Pickard; and Executive Vice President, Technical Services, Simon Bottoms.

We will finish today's call with a question-and-answer session. You can submit your questions using the Q&A box on the web page as well as through the conference telephone line. If we run low on time, our Investor Relations team will endeavor to collect all questions and follow up accordingly.

Before we begin, I'd like to remind everyone that today's event will contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Details of the forward-looking statements are contained in our May 6 press release, which can be found on SEDAR+ and on our website, www.ivanhomines.com.

It is now my pleasure to hand over to Ivanhoe Mines' Founder and Co-Chairman, Robert Friedland, for his opening remarks.

Robert, please go ahead.

Thank you very much, and good morning to all of you on this call. I find myself in a beautiful morning in Southern California. We're about 30 years into our efforts in the Congo, and it's really great to talk to everybody today with so many tailwinds behind our back and our morale so high as our team executes on a number of important initiatives to really turn Ivanhoe Mines into one of the best Tier 1 mining companies in the world. We have a lot of problems in the world in the Middle East. And today, we're hoping for a peaceful settlement.

It may take time, but it's becoming increasingly obvious to everyone in a world where energy is everyone's critical concern. And by that, I mean the hydrocarbon coming out of the Strait of Hormuz and all the other chemicals like helium and sulfuric acid that come with the natural gas. That the world will continue to press for an energy transition to diversify away from exclusive reliance on hydrocarbons coming through the Strait of Hormuz, which is roughly 20% of the world's energy.

This means that observers like Mercuria, one of the major metals traders, has pointed out that the second half of this year could see an unprecedented demand for copper, literally a stock out where we could have crazy prices. We are extremely bullish for the supply-demand situation in copper metal over the next 5 years, let alone the second half of this year. As one of the copper producers that is the least exposed to hydrocarbon in the production of copper, Ivanhoe Mines is in a favored position.

Our energy is provided by stable hydroelectric power. And you'll recall that we have made great strides in that regard, both in upgrading the electrical grid in the Congo and expanding our hydroelectric assets. And in addition to that, we now have the largest solar field with battery backup that has ever been built in the mining industry, the largest solar field on the African continent will start up next month, producing about 60 megawatts of uninterruptible green power.

We expect to double that and in time, even triple that. So with an abundance of power coming into the Congo that does not rely on hydrocarbon. The quantum of hydrocarbon that we use to produce copper as a unit of copper production is the lowest in the world. We have a tremendous tailwind in pricing, and we have an unbelievable tailwind in what we're finding with the drill bit in the Western Forelands.

So we are confidently executing a turnaround plan to put Kamoa-Kakula right at the top of the world's copper mines. It's the highest grade mine in the world. It will produce over 500,000 metric tonnes of copper for a long, long time every year even without the Western Forelands.

And with that, I think we'll go into the specifics of the quarter. And I'd be happy now to turn this over to Marna, our Chief Executive Officer and President, who has worked so hard and made so much progress in the last quarter and along with the rest of the team. Thank you, Marna. Please go ahead.

Thank you, Robert, and good afternoon, good morning, everybody. I think this is quite a great photo. It showcases the Lobito corridor in action, and that was the first shipment of anode sitting at the Lobito port in Angola. So a lot of infrastructure development happening in Africa. And as Robert mentioned in his opening remarks, not only are we a producer of copper, but we're also a user of copper with all the renewable work we are doing with our hydropower outfits where we've -- the turbines that produce the -- the energy that we use are very copper intensive.

Also, we are in the process of commissioning the 60-megawatts solar field at Kamoa. It will be up and running progressively from June onwards up until August. And then also at Kipushi, we are planning to do a 10-megawatts solar farm. So really exciting what's happening on site to move away from the use of diesel. So if we move over to the next slide, it's been a very busy quarter with all our annual filings behind us, which included our updated technical report that outlines our pathway to be a producer in excess of 500,000 tonnes at Kamoa-Kakula from 2028 onwards.

At Kamoa for the quarter, we produced in excess of 71,417 tonnes of blister and anodes. And we did this at a very low C1 cash cost below our guidance of $2.58. Our margin was boosted by a $0.44 smelter benefit. The smelter at Kamoa-Kakula produced over 117,000 tonnes of sulphuric acid, and that received an average realized price of $467 per tonne. But acid prices are rising rapidly. And by June, it will increase to about $725 per tonne. And our forecast is that this will also increase in excess of $1,000 per tonne in the near future due to the scarcity of sulphuric acid and import restrictions from Zambia.

In April, we attended our triple milestone celebration with our Japanese and black economic empowerment partners at Platreef. And this celebration earmarked the completion of Shaft 3 that increased our hoisting capacity fivefold. And it will really change our destiny because we will be able to fast track our underground development. We also celebrated the breaking of ground for the earthworks of our Phase 2 concentrator, and this will increase our production to over 450,000 ounces of platinum, palladium, rhodium and gold from the fourth quarter of next year. Yes, the fourth quarter of next year is around the corner.

And then the third milestone was the commencement of the widening of Shaft 2. Kipushi also had record production in excess of 65,000 tonnes and a joint record cash cost of $0.86 per pound of zinc produced. Our management team also worked on a comprehensive contingency plan due to the macroeconomic uncertainty. And part of this plan is to ensure the availability of diesel, putting in place strategic orders to ensure we have business continuity over the next 12 months.

If we move over to the next slide, we were also busy as we published our ninth sustainability report in April, showcasing all the great work our teams do on site. This report is available on our website, and measures our performance against our 4 pillars: our governance, our people, our prosperity and our planet. And I invite all our listeners to please go and download this report and read it thoroughly so that you can understand the great work we do.

With that as an introduction, I will now hand over to David van Heerden, our CFO, to take you through our quarterly financials.

Thank you, David.

Thank you, Marna, and good morning, and good day to everyone joining the call today. The anodes we see on the screen is pretty at as this is the first quarter you will see the benefit to Kamoa of producing and selling anodes from our own smelter as opposed to the sale of concentrate like in the past. The smelter benefit will be a bit of a recurring theme today, but that's for good reasons.

We can move to the next slide. Kamoa-Kakula sold almost 67,000 tonnes of payable copper in the form of anodes and blister in the first quarter. The copper and concentrate produced through the mills was a little less than the tonnes sold, leading to a decrease in copper and inventory on hand. Copper and inventory on hand was still more than 40,000 tonnes. However, the smelter really performed well during the quarter. So a little more of the inventory on hand is in the form of anodes and therefore, ready to be sold.

We expect a further destocking to take place in the second quarter. Revenue was buoyed by the higher copper price with a copper price realized of $5.79 per pound and total revenue of $862 million includes $50 million relating to the sale of sulphuric acid and a $10 million negative impact on the mark-to-market of provisionally priced sales.

Moving on to the next slide. Cost of sales in the first quarter of 2026 was $2.58 per pound of payable copper and saleable product produced. With grades similar to Q4, the drive lower was really the smelter benefit, but more on that and the details of that on the following slide.

Power costs increased to about 18%, if illustrated on a percentage of C1 cash cost, but the jump is more to do with the smelter power usage rather than it is with the impact on -- of higher fuel prices. Q1 cash cost was slightly below the bottom end of our guidance range. And in our Q1 guidance, which we revised full year guidance, which we revised at the end of March, we did build in some provision for diesel prices being temporarily elevated and the current prices are quite a bit higher than what we've experienced in Q1.

Having said that, sulphuric acid has really proven to be a great hedge against the rising diesel price as we have seen the selling price of acid rise significantly as the conflict around Hormuz continues. Recently, Kamoa was able to conclude a sales contract at $725 per tonne, which is much better than the $460 per tonne realized in Q1. So because of that, Kamoa is a lot less sensitive than some other producers to the current pricing environment. We do caution, though, that if the current prices for the high-strength sulphuric acid and diesel remain at the current levels, Ivanhoe estimates that our C1 cash costs will be probably 5% higher than initially estimated.

But if all other assumptions hold, then 5% higher at the bottom of our -- at the bottom of our range or even 5% higher at the midpoint of our guidance range would still be well within our guidance. But as Marna mentioned, we do think that the sulphuric acid price still has some legs even at the current levels. Kamoa-Kakula recorded EBITDA of $397 million for Q1, and that's a nice continued build on the recent growth trajectory at a margin of 46%. This was achieved irrespective of the lower tonnes sold due to the higher copper price and the smelter benefits. We look at the smelter benefits a little bit closer on the next slide.

Here, we illustrate a waterfall to better illustrate the movement in our cash costs. On the left-hand side, we start with the average C1 cash cost of the second half of last year. We do this because Q4's cash cost was a little bit elevated. So we think this is a better reflection. But it's pretty clear to see what drove the improvement into Q1. The smelter operating cost of $0.26 is easily offset by the reduction in logistics cost, and the sulphuric acid credits and the savings in TCs.

In total, the smelter caused between $0.60 and $0.70 saving on a per pound basis if a saving of road and export taxes are included. Other than the smelter, G&A is also lower, mainly due to the non-recurrence of one-off items explained in Q4. And then mining and processing was also a little higher this quarter due to the slightly higher power cost, but the lower absorption of fixed costs due to the relatively lower production in Q1 also contributed.

Next, we show the quarter-on-quarter EBITDA waterfall for Kamoa-Kakula. Here, you can see that the $112 million of the quarter-on-quarter EBITDA increase was due to the higher average copper price for Q1 compared to Q4 last year. Then you see the benefit of the smelter once again, mainly smelter-driven savings on logistics and TCs and the assets credits moved EBITDA higher by $94 million and $50 million, respectively, while operating and other costs also improved when compared to Q4.

The $92 million impact of remeasurement of contract receivables, which represents the mark-to-market of provisionally priced sales relates more to Q4 than it does to do with Q1 this year. In Q4, we recognized a gain of $82 million, while in Q1 included a loss of $10 million, which together accounts for the negative $92 million you see on the screen. But when looking at that a little bit more closely, you will see that copper took a bit of a dip at the end of the quarter. So we had provisionally priced sales measured at a copper price of $5.52 per pound at the end of the quarter. And since we've consistently seen higher copper prices ever since, we do expect a positive remeasurement in Q2.

Lastly, you can see the impact of selling almost 12,000 less payable copper tonnes in Q1 compared to Q4 last year.

We move to Kipushi on the next slide. Yes, another record of tonnes produced and sold at a realized zinc price of $1.47 per pound of payable zinc led to a record revenue for Kipushi of $162 million for the quarter. Cash costs were well maintained at the bottom end of our cash cost guidance range and at the same levels as the previous quarter. So that translated into quarterly EBITDA of $58 million for Kipushi.

The zinc price have remained fairly consistent and above the Q1 levels in Q2 to date. So we do expect another good quarter for Kipushi in Q2.

Moving to Ivanhoe Mines' consolidated net results on the next slide. EBITDA for the quarter was higher than the three quarters before, driven by the increased share of EBITDA from Kamoa-Kakula and the continued growth in EBITDA from Kipushi. This was a little bit offset by our continued investment in exploration, particularly on the Western Forelands, but we continue to see great results, as you will see when Alex takes you through the updates there a little bit later.

Our results for the quarter was impacted by a tax settlement incurred at Kamoa-Kakula. Because of the settlement and the inclusion thereof in the share of loss from Kamoa-Kakula of $42 million, Ivanhoe recorded a loss after taxes of $2 million for the quarter. And this would have been a profit of $71 million if the settlement had not occurred. Other than that, we do continue to maintain strong liquidity levels, and that's illustrated on the next slide.

So Ivanhoe had $754 million of cash and cash equivalents and short-term deposits on hand at the end of March, which is a really good and strong position to be in. Our pro rata net debt increased slightly, but actually because of the reduction in cash over the previous quarter rather than an increase in debt. The pro rata net debt ratio for the trailing 12 months, even though it's still very comfortable at 2.4x, it includes the impact of the lower EBITDA in Q2 and Q3 last year and would have been much lower and comfortably below 2 if it is recalculated using an annualized Q1 2026 EBITDA.

Our bond has continued to trade well, underlining that it is very much a pool of funds available for us again in the future if needed. And it is great to see that Fitch has updated their credit outlook for Ivanhoe Mines to positive. If we turn to where we are planning to spend some of our cash on the next slide.

The capital expenditure on each of our projects remained in line with expectation and the guidance for each of them are reconfirmed. For Platreef, the Phase 2 project finance closed on 30 April with first draw successfully completed. And this is just one of many big steps taken recently towards making sure that Phase 2 development is completed in Q4 next year, which is only about 18 months away. and I'm sure the team will touch on the other big milestones achieved recently there.

Also noteworthy at Platreef and the Japanese consortium contributed $65 million towards Phase 2 development last month. And that just underscores their support for the management team and the project as a whole, which is great. And it even further reduces the remaining CapEx that needs to be funded by Ivanhoe Mines to bring Phase 2 to completion.

And with that, I hand over to Tom van den Berg, our Chief Operating Officer, to start the operations and projects update portion of today's presentation.

Thank you, David, Marna and Robert. I trust you can hear me. I got a picture in front of us here, which is while we were standing and using our time at the concentrators, we've been doing Project 95. So what you see in the picture is Project 95, which we've been commissioning and building and are just about to get up and running on Phase 1 and Phase 2 concentrators. So we expect them to be fully up and running and commissioned in the month of June. Thank you.

If you look at our concentrating and we look at our grades, what you can see there is we've been milling combined copper ore grade process has been at 2.32%. That's obviously got to do with -- as we go around and we've achieved the accesses to the front of the Kakula East portion. The Phase 3 concentrator has been supported by Kamoa and Kansoko very well, and we've actually done well above our design capacity. Again, we're sitting at 25% above the design milling rate of 6.3 million tonnes per annum, and we're currently moving some of the ore that we're overproducing from there across to Kakula.

So that is playing out well. Those mines are performing well. They are reconfigured and generating what they're required to generate.

Phase 1 and Phase 2 concentrators are operating at approximately 60% capacity. Our stockpiles, we've completed milling them that were there, and we're now starting to treat the fresh -- the fresh ore apologies, coming across from Kamoa and Kansoko to Kakula. So the turnaround at Kakula is on its way. We can see the tonnage on a daily basis is coming up and it's looking positive at this stage.

The holdings have taken place at the eastern side, and we're busy at the moment building the pump stations. The combined copper recovery, as you can see, is sitting at 85.6% and then we said at quarter 1 with 61,906 tonnes.

Project 95 should be well commissioned by June, and then that will add further to the above as we get into the high-grade areas on the west side of Kakula and on the Kakula East side. Thank you.

What you see in the picture in the background here is some of our new accesses. So this is Kansoko Sud. What this does is it allows us to access the ore body right in the middle. It improves our efficiencies, reduces our costs and enables us to get material to be moved in a much shorter route across to Kakula as well. So it is quite functional from a point of view of putting it exactly where we put it in the ore body. This boxcut, as you can see in the picture, is around about complete. We took a blast this morning, and we're nearing completion. And the Kahala boxcut, which is on the Kamoa side, also accessing a new ore body has also been completed, and we're busy with accessing the portals at the moment as we speak. So what you're seeing there, the spare capacity, we will start filling up that spare capacity with the additional tonnes that will come out of the Kamoa area, the Kahala area and then as we get more into Kansoko, and we'll build back Kakula and we'll fill up our concentrators. So as you see there, 2027, 2028, we'll have a processing plant that will be fully ramped up and back to where we were before.

So you can see the mining rate, 700,000 tonnes per month from H2 2026. And then the peripheral development around Kakula, as I mentioned earlier, the Northeast portion has done well. We managed to effect the holding busy doing the planning around the pump station and getting that into place. The Southeast pump station has already been built, and we're intending to commission that in the next month, and that will take us further ahead. The actual mining, there are ends that are heading to the front of the Northeast. They're progressing well, and we've accessed the west, and we're busy mining the west at this stage.

Thank you. Next slide. The 500,000 tonne per annum smelter is at 60% capacity. Just to remind the audience, we commissioned this in December, and it's been performing very well. The actual run rate is good. And we're seeing there that the capacity at 60%, we are able to achieve that. We've been able to manage that capacity. At the same time, as you heard from Marna and from Robert and from David, the amount of acid we've also been generating through the smelter has been great, and you'll see that on the next slide. But at this stage, we're 15% more production than the concentrate produced. So you'll see that Kamoa-Kakula produced 71,417 tonnes of blister anode in quarter 1, 2026. And then we're doing some toll treatment work at the moment where we're investigating with third parties and ensuring that we can effectively put other material through and make sure that we ramp up the smelter and we improve our margins in the smelter area.

So the smelter is performing well. It's been stable for the last quarter as we did the commissioning and as we brought it up to full capacity up to the full capacity of 60% -- thank you.

Here, you'll see the acid trucks. So this is acid going into the areas in the DRC. As you would know, and as you've heard, the sulphuric acid has been a win for us. We're seeing a massive benefit. As you can see at the bottom, $725 per tonne. So we've got new contracts that are priced in. That is double what we actually put into our cash costs. So we're seeing a significant benefit. We did a guidance of around $400 million to $500. And currently, we're pricing up, and you've heard Marna being positive about potentially we could even see more as the sulphuric acid constraints [at Hormuz] are still in place.

So this is obviously used in a lot of other Copperbelt smelters in Zambia export controls, and it's used for other copper producers, and we are the fortunate ones to be able to produce sulphuric acid itself. The sulphuric acid sold at the mine-gate was sold to 6 offtakers and the price was fixed on the short-term rolling contracts, but all these contracts are going to be repriced at quarter end.

And then the Central African Copperbelt consumes about 8 million tonnes, and we have the ability to feed into that and supply into that. So there's a supply constraint. And obviously, we were able to meet some of that from our side. Thank you.

What you see in the background here is the 60 megawatts of constant solar power, which will be available. There's a first portion coming available in the next month, and then it ramps up up into July. If you look at the picture, you'll see there's a little white markers on the right-hand side of the slide here. Those are the lithium-ion batteries that we actually feed from the solar farm. So this constant supply is not a peak supply. This is 60 megawatts of 24-hour supply.

The Congo is significantly blessed to be in a high solar belt. So we generate between 5 to 7 kilowatts per square meter. In Europe, it will only be half of that. And in winter, we actually produce more solar power. So we have 12 hours of sunlight across all days in the area. But in winter with the less cloud cover, we actually generate even more solar power. What this enables us to do is to reduce our reliance upon diesel. It enables us to have a cheaper form of energy. It's also a constant form of energy. So we have 2 contents, and that's the hydropower and then now we have the solar power as well. So what you'll see here is we are basically heading to closing out the solar facility with 60 megawatts of constant supply. That will then effectively assist us to reduce our reliance upon diesel generated power, which will effectively land up in us lowering our costs.

We also have hydropower that comes in from the grid, and that also enables us to have a good green energy and at a lower price, and we're not dependent on diesel, excepting for our generators, which we have to pick in every now and again to make sure we can get the right power. So what you'll see here as well is the solar power capacity. We have the potential to go up to 120 megawatts.

We just signed off another purchase agreement for 30 megawatts, and that's for quarter 3 2027, and we're busy with a tender for the fourth portion, which is another 30 megawatts, and that takes us up to a total of 120 megawatts. There is also further space, obviously, on the complex to do further. But where we are right now, we've got 60 megawatts coming up in July that will be fully commissioned by then, and that will reduce our costs quite significantly. Thank you.

Next slide. I'm going to hand over to Simon Bottoms. He's going to take us through Kipushi, and he'll take us through Platreef as well. Simon, over to you. Thanks.

Thank you, Tom. Turning now to Kipushi, where we set another consecutive quarterly production record of 65,044 tonnes of zinc produced within the quarter. Also further extending the run of high process recovery rates of more than 90% with associated head grades of 37% for the quarter. This production and cost run rate comfortably positions Kipushi to deliver within its annual guidance range of 240,000 to 290,000 tonnes for 2026. Added to this, we have started the tender process for the construction of a solar battery energy storage facility, which will further drop these already standout costs.

We continue to work on options with our joint venture partner, Gécamines, to realize the value of other byproduct critical metals from the Kipushi concentrate.

So next slide, please. Looking now to the awakening of the Giant Platreef deposit, where the 4 million tonne Shaft 3 on the right-hand side of this slide has successfully been commissioned for hoisting of the first stope ore from the Platreef ore body earlier in the quarter. The commissioning of Shaft 3 with associated underground materials handling infrastructure, including underground crushers and conveyors represents a major project milestone that will ultimately enable the commencement of Phase 1 production alongside building up a stockpile ahead of the construction of the Phase 2 concentrator.

Next slide, please. So turning to the Phase 2 development. Here you see Shaft 2 on the right-hand side of the slide, which is one of the largest shafts on the African continent designed to hoist approximately 8 million tonnes per annum. The shaft is currently being widened, targeting to reach a full bore diameter down to approximately 100 meters depth later on in the quarter. This shaft is scheduled to be commissioned at the end of 2028 and with all hoisting in the third quarter of 2029 will ultimately support the future production ramp-up to 11 million tonnes with the Phase 3 expansion.

So now turning to the next slide. Looking to the time line of key project milestones to deliver the first feed to the Phase 2 concentrator by the end of 2027. The earthworks for the Phase 2 concentrator have successfully commenced at the beginning of April, with completion on track for the end of 2027. And this will ultimately produce over 450,000 ounces of platinum, palladium, rhodium and gold, as mentioned by Marna earlier. And as you will see from this time line, we're currently well positioned with key contract awards underway and first concrete pours due to commence in Q3 later this year. This will also be accompanied by the commencement of the earthworks for the Phase 2 TSF alongside the concentrator construction.

So next slide, please. As you'll see that despite the recent call-off in PGM pricing associated with global geopolitical instabilities, we're still currently 61% above the feasibility basket prices for platinum, palladium, rhodium and gold, which were assumed at the time of the study. The critical nature of these metals has recently been recognized with the USGS categorizing rhodium as one of the highest risk metals to support the continuity of the automotive sector into the future.

Added to this, platinum, palladium and copper have all been categorized as critical and indispensable to the construction of data centers, green technologies as well as catalytic converters. Given the recent rise in copper and nickel prices, -- this potentially represents approximately $70 an ounce credit to further reduce the already standout $599 per ounce basket price for the Phase 2 cash costs shown on this slide.

So now I will hand over to Alex, who will take you through the exciting developments at our Western Forelands exploration project.

Thank you very much, Simon. It's Alex Pickard speaking. And last but certainly not least, I'll be taking you through an update on our exploration activities. Across the group, we have a massive year planned for exploration. We've recently increased our budget to over $120 million for the year, of which $86 million is earmarked for the Western Forelands. And for that $86 million, we budgeted 96 kilometers of drilling for the year, which is by far the largest ever year of drilling in the Western Forelands. The diagram or the map on the right-hand side is giving a few breadcrumbs just in terms of what you might expect to see when we put out our updated resource, which is coming out within a couple of months.

But really, there are 3 main focus areas for the drilling that we've been doing at least in the Makoko district to the Western Forelands. So area #1 that we've highlighted is the extensions of Kitoko to the south, where we're seeing very high-grade intercepts at depth. And then added to that, we are also connecting the drilling in the area between Kitoko and Makoko West. And basically, if you look on the diagram, all of the holes that are shown there are holes that have been drilled since the previous resource. So they give you an idea of the additional continuity of the ore body that we've been demonstrating.

The second area highlighted as # 2 in the red box is infill drilling between the Makoko West and the Makoko Central areas. These are some of the sort of shallower potentially open pitable resources that we have on the license area. And then thirdly, we have the Eastern extension of Makoko Central, which is really working back towards Kakula West, which is not shown on the diagram, but basically, Kakula West is only about 7 or 8 kilometers from the extension holes to Makoko on the eastern side. So all of these activities are very promising. We have an updated Western Forelands mineral resource to look forward to planned for mid-2026, so somewhere around the end of July -- sorry, end of June, early July is when we will be putting that out with a lot more information.

And another thing to add, part of the increased budget that we have in the Western Forelands is a much greater focus on initial project development activities. So that's really looking at the critical path to fast track the Western Forelands into production, and we'll be putting out a lot more information on that in the upcoming press release around the mineral resource.

And then finally, looking at all of the new horizons that Ivanhoe Mines is currently drilling in. So as I mentioned, that $120 million global budget, about $20 million of that is earmarked between the 2 projects on the left-hand side in the center of the page. So that's in Angola and Zambia. This is searching for Western Foreland style sedimentary copper on very, very large license packages, multiple sizes, multiple times the size of the Western Forelands license package.

In Angola, we have started a drill program of 6,400 meters with 2 diamond drill diamond core drill rigs. That is really to test and understand better the stratigraphy of the underlying mineralization in that area. And then in the Northwest province in Zambia, we've been working to basically set up for a productive year of exploration, a 7,000-meter drill campaign with 14 holes of diamond will be commencing over this dry season starting in May.

And then $20 million will also be spent, roughly speaking, in the Chu-Sarysu Basin in Kazakhstan, which is an Ivanhoe Mines joint venture where we're basically earning into a majority position. So we have a license area there of about 17,000 square kilometers. The $20 million budget for this year is basically expanding the diamond drill program to 40,000 meters across this very big land package. So lots going on across the board in exploration, lots of things that we hope to tell you about as the year progresses. And with that, I will hand back to Tommy Horton to chair the Q&A.

Thank you, Alex. We now begin the question and answer session. Covering analysts, you may submit your questions to the operator via the phone line, if you haven't done so already. Questions can also be submitted through the webcast. And any questions submitted, that we are unable to address our Investor Relations team will endeavor to follow up.

So operator, over to you to answer the phone lines.

[Operator Instructions]

First question comes from Lawson Winder from Bank of America Securities.

If I might, could I ask about the cash costs at Kamoa-Kakula. So they were below guidance, which is impressive. And you provided some color on the call about the outlook, but I'm still a little bit hard-pressed to see how if sulphur prices stay at current levels and sulphur sales remain near Q1 levels, how C1 cash costs won't be towards the lower end of the range even with higher diesel prices. And I mean, you've guided to the risk of potentially 5% higher C1 cash cost. Could you just help us appreciate some of the nuances in that risk? Perhaps our sulfur volumes expected to fall? Or is diesel maybe just that much more impactful than maybe we had thought? I appreciate it.

Yes. Happy to take that, Lawson. I think key things to consider what we consider on diesel is not just the absolute cost of the diesel we use in our generators, but also through the full supply chain and include basically logistics costs. I mean we -- what we did mention or what we did try and sort of illustrate is that when setting our guidance, we did expect and we did cater for elevated diesel prices specifically and then the spot price of sulphuric acid.

So the fact that we are below our guidance range in Q1 is largely because in Q1, we -- the prices were not yet elevated. So we've baked in some sense of elevation already in the current pricing. So that 5% is really an estimation that if over the next 9 months, there is no additional upside on the sulphuric acid over the current pricing, but the diesel prices remain at maximum level, then you could calculate a roughly 5% impact on cash cost in total for those periods.

Very helpful. And if you could just provide a little bit of color on the sulphuric acid production outlook. So I mean there was a lot of sulphuric acid produced in Q1. Do you anticipate that to continue trending upward from here?

Yes. We do expect that to continue to trend at nice upwards. I think the production is expected to increase. And that is -- that's partly because of the fact that we are feeding more Kamoa ore than Kakula ore we would have probably estimated, I think, a year or so ago. But the expectation is definitely for the sulphuric acid production to continue to increase quarter-on-quarter and probably around 400,000 tonnes of sulphuric acid still to be produced for the remainder of the year.

Next question comes from Daniel Major from UBS.

So yes, first, just one on Kamoa-Kakula specifically. And just maybe to follow up on Lawson's question to help us a little bit. Can you just give us what your diesel consumption per quarter is and what the assumption for pricing was embedded in the guidance relative to the spot price?

Yes. I think it's important to remember that when you set out guidance, guidance is based on a range. So it does assume a range of possible prices. And I mean, specifically, when you look at something like diesel, where you look at a specific pricing environment that you think could be temporary only that brings a bit more variability. So -- but having said that, we use around 30 million liters of diesel a month. It will -- or that's sort of what we used in the first quarter, 30 million liters of diesel.

Sorry, David, not per month, just per quarter.

Thank you, Marna, good point. In the first quarter, we used roughly 30 million liters of diesel. We expect that usage to come down as the solar plant comes online, as Tom explained. So that will be a little bit less. Average diesel price in the first quarter was roughly $1.80, including the levies that's charged in the DRC. And at the moment, it's probably double that.

Maybe.

Just to add, it's also important to note that we can, to some degree, change our diesel mix. So there are certain things that we can do in terms of only running concentrators when there's grid power available, for example, not switching them over to generators. So we can tweak down that 10 million liters that David was alluding to per month to a lower consumption level. And then the plan would be to switch in the solar and then to reduce our diesel usage even further. So that will offset the increase in pricing that we are seeing. So there are certain levers that we can pull with our current production scenarios that helps us as well to manage our cost.

Okay. That's useful. The second question on Kamoa-Kakula. You destocked some inventory during the first quarter. Can you give us a guidance on how much you would expect to continue to destock inventory during the remaining quarters? And then it seems you're still toll treating some concentrate at Lualaba. Is that on the contract and likely to continue? Or will that stop in the subsequent quarters?

Yes. Thanks, Daniel. That is currently on contract and will continue, but for lesser quantities going forward, we're riding out that current contract. And I mean, depending on how quickly we return to the production levels above what our smelter can produce. I mean it's good to have that local smelter as an additional option just in to provide additional surety. Then in terms of the destocking, I think the -- I can tell you what I would like. But no, we do expect that destocking still to be a little bit gradual over the next 2 quarters. So probably, I think 7,500 would be a good expectation for Q2 with another 7,500 in Q3 as an expectation, and then we'll see from there.

Okay.

Sorry, Daniel, the other thing just to add on the Lualaba smelter is that smelter is closing down for maintenance for 2 months, which I think is basically most of May and June.

Okay. The lower volumes in Q2 and I guess, hold?

Yes.

Yes. And then another question, if I could. You referenced in your slides the liquidity at the group level. The cash balance at the JV level is relatively low. Was it like $160 million or something? Is there capacity to raise further debt in DRC? Or would you expect to put more equity into the joint venture to improve the liquidity position?

Yes. We're looking at a number of options, Daniel. There's definitely capacity, not necessarily in country specifically, but from offshore lenders to provide in-country facilities through some of the mechanisms we've put in place for previous funding. There's definitely capacity, and there's definitely a willingness from the current lender group to add to their current borrowings to Kamoa-Kakula. So that is something we are looking at and considering adding to as needed.

And then, I mean, there might be some additional equity injections from ourselves and in as well. It's a bit of a trade-off discussion. But yes, it's another consideration. I mean at this stage, as you would have seen, our cash balance is more than sufficient to be able to provide Kamoa-Kakula with a bit of a cash flow cushion. But yes, there's options on the table.

Next question comes from Andrew Mikitchook from BMO Capital Markets.

Just a quick follow-up question for Tom. The -- if I could just get you to give us, again, the color you discussed on how Q2 is looking versus Q1. Are you already in a position where some of the Kamoa tonnes are coming down to the Phase 1, Phase 2 concentrator? Or is that more of a H2 type situation?

No, no. The answer is positive, yes. So we are currently moving tonnes from Kamoa and Kansoko to Phase 1 and Phase 2. So the mines at Kansoko and Kamoa are running at full capacity. Phase 3 is at full capacity, and we're moving some tonnes across. And those are fresh ore tonnes.

And generally, that would be a little bit better than what's been portrayed even in today's press release as to the guidance for the balance of the year. The way I interpret it in the portion of the press release, the interpretation is that those extra tonnes are not really arriving until the second half. So you're seeing some acceleration on that. Is that fair to interpret?

Yes, I would say that's fair to interpret it like that. Yes.

And second question also for you, Tom. The wording around this toll treatment what kind of trajectory or time line could be imagined like if additional sources were found, is it a fairly quick situation of just tracking it over and treating it in your spare capacity at the smelter? Or is there an extended period of qualification and testing and blending or something that we should be aware of?

I can just talk about we do need governmental approval to treat through our smelters. So that's our first hurdle that will take a couple of weeks, months to 2 months to obtain. And then we are already in discussions. So it's very possible to get that additional concentrate and then Tom can just answer you from a technical perspective.

Yes. the government permissions and then it's obviously testing and understanding how and where best to process it. So that the determination of where the actual material comes from will determine where we stick it in. But it will probably be in the Phase 1 and the Phase 2 concentrators because that's where the capacity sits.

Sorry, Tom, I'm just referring to the additional concentrate into the smelter. So I don't know if Steve wants to maybe.

Yes, I can comment on...

It's just the blend. Yes.

No test work required, just calculations based on the mineralogy and the analysis of the third-party feed. So literally a day's work. We'll know how to fit it in. It's all about the energy balance. So very quick.

And just conceptually, there are clearly mines creating concentrate in countries. It's a question of coming to the commercial agreement. Is that the reality of it?

Yes. So the government is actually also encouraging this because they would like beneficiated product transported. So they actual approached us too to see if it's possible, but we just need to get the permitting in place. And then there are multiple tollers that we have been in discussion with already. So we should be able to get the smelter as full as possible.

The next question is a follow-up from Daniel Major with UBS.

I'm back on so quickly. Yes, a couple of other follow-ups. Firstly, on Platreef, when are you going to start expensing and reporting the results from the division moving it from it being capitalized?

So Daniel, we expect to achieve commercial production sort of by midyear. So in terms of accounting standards, you will see some revenue from Platreef already in the second quarter, but it will really be a closer reflection of close -- what we expect of steady state Phase 1 production from Q3 onwards.

Okay. And then just another follow-up on the cash flow through the business. I mean you noted around the liquidity at the Kamoa joint venture and the near-term outlook. Given this kind of $2.1 billion on a 100% basis of debt within the joint venture, given the challenges you've seen at Kamoa, would it be fair to assume you're going to prioritize paying down that debt as the mine ramps up over the next 12 to 18 months, and we probably don't see a huge amount of cash paid out to the shareholders?

Yes. I think, Daniel, it's a modeling question with a number of different variables. I think it is safe to say that any debt extensions will probably be done over a medium to longer term because Kamoa can carry it, and it makes sense to have a fair level of debt at the joint venture level as well. So I don't think the assumption should be that we will draw that we would settle that joint venture level debt before sending funds up to the shareholders. I think we're agreed, at least that's our understanding that it makes sense to have a healthy level of debt at the Kamoa joint venture level, and it just makes sense to utilize their balance sheet as well.

And in terms of the timing that when cash will flow upwards, that's very much copper price and production dependent.

There are no further questions on the phone. I will turn the call back over to Tommy Horton.

Thank you very much, operator. Just reviewing the webcast questions that have come in. I've got one here, which is directed towards Tom. If you could provide a sort of quick update on dewatering on the east side of Kakula, please?

Yes, sure. Thank you, Tommy. So we're 74% dewatered in total it remains there. Currently, we're holding the water with the large pumps. And the reason for that is so that we can do the construction of the pump station in the Southeast. So that Southeast pump station has been constructed. We should be commissioning it in the next 2 weeks. That will then start allowing us to do the Stage 3 dewatering.

On the top -- on the Northeast, we affected our first holding in the last 2 weeks, and we are currently doing assessments and planning as to where the pump station on the Northeast will go. In the interim, what we've also done is we've looked at means and ways of assisting the pumps and reducing the reliance on any potential sort of blackouts or trip outs, and we've got a process we're busy working on that at the moment. That's still work in progress, but that will enable us then to further do dewatering. So we're pumping around about 4,700 liters a day currently and maintaining that. I hope that's good enough update. Thanks, Tommy.

Thanks, Tom. Just one last question on Western Forelands and what our sort of medium to long-term plans are with respect to that project. So maybe Alex or Marna, you'd like to answer that?

Yes. I'm happy to take that, Tommy. I mean, look, I think, first of all, a lot will be revealed when we put out the updated resource, and we'll talk a lot more about the sort of project development activities and the time lines that we are thinking about. But I mean, basically, what we already have at the Western Forelands is certainly enough of a critical mass to support a stand-alone milling operation. And while we haven't necessarily seen kind of, Kakula grades of 5% to 6%, 2% to 4% grades are very profitable and some of them can be mined in quite a shallow and efficient fashion.

So the plan is once we've got this resource update out, we are going to basically move into kind of more intensive scoping activities, which are going to then sort of put the Western Forelands on a kind of project development time line as well as a continuing exploration time line because there's still a hell of a lot of exploration to be done and a lot of the drilling that we're doing this year is still step out and also more broadly regional in the Western Forelands outside of the Makoko district.

So we'll be sort of running a two-pronged strategy of continuing that exploration at the same time as doing more infill drilling, increasing the level of confidence in the existing resource areas and moving into a kind of scoping and more of an engineering and feasibility study stage. So yes, that's a sort of high-level overview.

Thank you, Alex. And we are at time. So at the 1-hour mark, this concludes the Ivanhoe Mines First Quarter 2026 Financial Results Call. Thank you all again for attending today, and we look forward to speaking with you all again soon about our many exciting milestones ahead. Thank you very much.

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

Good afternoon, ladies and gentlemen. Welcome to the Ivanhoe Mines Kamoa-Kakula Technical Report Webinar.

[Operator Instructions]

This call is being recorded on Tuesday, March 31, 2026. And I would now like to turn the call over to Tommy Horton, Vice President, Investor Relations and Corporate Development.

Thank you very much, operator, and good evening, everyone. First and foremost, thank you for joining us today, and welcome to the Ivanhoe Mines Kamoa-Kakula 2026 Mineral Reserve and Mineral Resource Update. As operator mentioned, this is Tommy Holten, I'm Vice President of Investor Relations and Corporate Development at Ivanhoe Mines. And on the line with me today, we have Founder and Co-Executive Chairman, Robert Friedland. President and Chief Executive Officer, Marna Cloete; Chief Operating Officer, Tom Vanderberg, Executive Vice President, Corporate Development and Investor Relations, Alex Pickard, and Executive Vice President, Technical Services; Simon Bottoms.

Before we begin, I'd like to remind everyone that today's event will contain forward-looking statements and will involve risks and uncertainties that could cause actual events to differ materially from those in the forward-looking statements. Details of these forward-looking statements are contained in our March 31 news release as well as on SEDAR+ and on our website, www.ivanhoemines.com. So now it is my pleasure to introduce Ivanhoe Mines Founder and Co-Executive Chairman, Robert Friedland. Robert, over to you for some opening remarks.

Well, welcome to everybody who is joining this call from all over the world. I happen to be in California, and it is -- it's my privilege to talk to you about a very narrow subject today, which is putting a floor underneath all expectations for the Kamoa-Kakula copper mine. We have lots of other things that we can talk about in our company in the next month or 2. But as you all know, the stock market has seen a lot of red as a consequence of the war around and with Iran. [indiscernible] shareholders, it's like trying to pick up pennies in front of a steamroller given what's been happening in the financial markets. But all of the selling across the board and mining shares has been done by computers and we're fortunate that today, we have an opportunity to clarify our total situation and have a solid conservative appraisal of our redevelopment plans to restore Kamoa-Kakula to its justified Tier 1 and very important high-grade status, the highest grade major copper mine in the world, a mine that will be with us for decades and decades to come. And on top of that, we have our Western Foreland development with another 10 million or 12 million tonnes of copper right next door and contained copper. So it's fitting that we start this first slide which has my picture in the lower left with our solar field.

This is our first solar field that will generate 60 megawatts of uninterruptible power backed by batteries 24 hours a day. We plan to build a second one and then a third one, and this is part of what we're hardening Kamoa-Kakula against disruption from the Middle East. We're going to see in my opinion, much higher diesel prices. There's going to be diesel availability issues in Australia and other Asian parts of the world. And we've looked at this total situation now and we're going to give the markets and our stakeholders and our shareholders a very clear picture of what is the bottom line and all the upside in the next 2 years as we bring Kamoa-Kakula to all-time new record production. This is the mining business. It's not for intelligent people. We're some 4 years into this business in the Congo. We've seen lots of ups and downs. I rarely comment on the share price, but we're basically back to the same price we sold shares to a major North American financial institution and to a major sovereign wealth [indiscernible] in the Middle East around $12 a share.

Here, I think we see extraordinary value both in what's happening at Kamoa-Kakula in the next 2 years, what's going to happen in the Western Forlands, a very, very healthy copper price north of $5 a pound, an extraordinary turnaround at our Kipushi mine and the great news coming at the largest precious metals mine under development at Platreef. So with those opening remarks and with great optimism and thanks, for the hard work done for our thousands of key people working on this project. I'll turn this over to Marna, our CEO. Marna, please go ahead. Thank you.

Thank you, Robert, and good afternoon and good evening, everyone. I would like to open today with welcoming both Simon Bottoms and Mark Sumner to the executive management of Ivanhoe Mines. Simon joined early March as our EVP, Executive Vice President, Technical Services; and he underwent a baptism by fire, with having to take the lead on pulling together the study results that we are presenting to you today. Simon was previously with Barrick, and he's a geologist and a mining engineer by trade. So I think we are in capable hands. And Mark Sumner has been a trusted member of our team, and his promotion is a testament to the exceptional work that he has been doing on all our corporate financing initiatives.

So if we can move over to the next slide. When you do these updates, I think it's always imperative to take stock of the journey one has been on. And I want to kick off this webinar by reminding the audience of the salient features that makes Kamoa-Kakula such a remarkable generational mine. To date, we have invested in excess of $7 billion in capital, which was largely funded by project cash flows. We have generated a similar EBITDA over the first 5 years since 2021 by producing 1.7 million tonnes of copper in the first 5 years of operation at this mine at the lowest capital cost intensity in the copper industry. Our employees are Congolese, and most of them are trained on site at our training facilities and our center of excellence. And in addition to this, we operate a fully integrated mine and we have commissioned Africa's largest and greenest copper mountain. So I think that should frame the discussion of today.

If we move over into the second slide, in May of 2025, we experienced an event, which required us to completely rethink our approach to mining this generational mine. And over the next 12 months since May of last year, we had to embark on a turnaround initiative that was marked by key milestones and I will mention a few year today. The seismic event happened on the 18th of May, and we managed to extract all our people safely during this event. We also then started on the seventh of June to reenter [indiscernible] into the western side of Kakula and to restart our underground operations. In July of 2025, we appointed our consultants to start the technical report that we are presenting to you today, AMC from Australia and South Africa. We started with the Stage 2 dewatering by commissioning four 650 liters per second pumps that we installed at Kakula in September of 2025. In October and November, we received preliminary refining from big engineering and mining 3 on the geotechnical incident that occurred at Kamoa-Kakula and the subsequent technical findings, but then in November and December, we commissioned the smelter successfully and managed to also ramp it up successfully.

Towards the end of the same way in the beginning of January, we completed the Stage 2 dewatering and two, the first 2 of the 650 liters per second pump run dry in January and December. At the beginning of January, we also started with the development of the new access drives to the Northeast and the Southeast of Kakula and in March, our own crews started with the development of the box cuts at Kakula and [indiscernible]. We are currently also in the process of establishing a geotechnical review board that will oversee our operations going forward. So a lot has transpired over the first 12 months, and there's still a lot more work to be done that we will discuss with you during this webinar. Today marks the culmination of our initial findings, as I mentioned. And I would like to reiterate from the onset, as Robert also alluded to, that we see multiple areas for refinement and further optimization. Kamoa-Kakula remains a world-class mineral resource. And even though our mineral reserves has decreased with the new mine design and an exclusion zone that Simon will take you through a bit later during this call. It still supports a multigenerational mine life.

We had to rethink 2026 and 2027 production, and we will restate -- we've restated our guidance as well as our cash cost as a result as we develop the Kakula mine in order to make way for long-term infrastructure to establish future high productivity stoping and Alex will take you through our guidance a bit later as well as our cash cost impact. Our capital guidance will remain unchanged. I think it's important to note that all of this work that we are doing, we are doing to create a launch pad for us to restart our production in excess of 500,000 tonnes from 2028 onwards. With that as an introduction, I would now like to hand over to Simon to take you through the results of the study. Thank you, Simon.

Thanks, Marna. Good afternoon and good evening, everyone. So I'd like to start today by stepping you through a summary of reconciliation of the changes to our updated mineral reserves. So as you can see on the slide here, we've broken out the key changes against the depletion of our previously reported mineral reserve into 5 key components. So each of these, I will talk you through in more detail in upcoming slides in this presentation. Initially, as you will see, as Marna mentioned a moment ago, we've removed the old Kakula mine from our mineral reserve statement. This in the waterfall, you'll see we've broken down into 2 core components. The first of which we've turned the mature extraction zone which is excluded and removed from both mineral reserves and mineral resources, and I'll show you in more detail in the upcoming slide.

The second is shown by 1B on the waterfall. It has been reclassified from measured and indicated, to inferred mineral resources as we still see the potential for reasonable prospects for eventual economic extraction. And as a lot of my focus on the presentation today will be on with upcoming focused and detailed feasibility studies on the different ore bodies and mining areas within the Kamoa-Kakula complex. We fully anticipate that portions of 1B will be coming back into our mine plan and potentially back into our reserve statement with further detailed study work.

So then, as shown by number two, the most significant change to our reported mineral reserve is the change in our overall geotechnical regime and pillar with applied to our mine design. These have been extrapolated from the findings of the Kakula seismic zone investigations and these have resulted in an overall extraction ratio of approximately 60% of the mineral resource. So again, I will go into more detail on that in upcoming slides. Then in 3 and 4, we see these 2 should be very much viewed together. The first of which number three, as part of our mine redesigns, we've incorporated a significant increase in the proportion of high production stoping fronts within the mine, which inevitably has had the impact of increasing dilution and therefore, has had a significant impact on our reported reserve grade as you see in the grade reconciliation on the bottom graph on this slide.

However, that whilst this will be shown as a negative on the waterfall change on the waterfall here, we see this as a positive because overall, it increases the productivity and ultimately, our tonnage production out of the operating markets. The incorporation of these design changes ultimately lowered the grade of various areas of stoping across the mines, which resulted in them falling out of the mineral -- reported mineral reserves, which is why this is reflected as a negative metal change on the upward fall. However, when we've relooked at our mineral reserve commodity price assumptions, revising to $4.50 a pound and incorporated the changes in our underlying cost models, particularly around the confidence in our smelter operations, we've been able to reduce our overall operating cutoff and reserve cutoff to 1.5%.

This has effectively balanced out the metal changes that you see in change number three. Again, this comes with another reduction in the overall reported reserve grade as you see in the lower grade reconciliation graph. Now again, what I will go into this in a lot more detail coming up. And whilst this might be seen as a negative with these 2 changes substantially reducing the reported reserve grade. What it does do is it extends on already long life mine into a multi-decade mine continuing the Tier 1 levels of production well out beyond 20 years.

The fifth change here on the waterfall being the conversion of our Kamoa 3, 4, 5 and 6 mineral resources into mineral reserves. These conversions have been done through the application of the same mine design principles that we've extrapolated right across the Kamoa-Kakula complex after the geotechnical investigations within Kakula.

So now turning to focus on Kakula. The exclusion zones as I referred to in Change 1, we can go to the next slide, please. As shown in the image on the right-hand side of the slide, the mature extraction zone of 1A highlighted by the red outline. This is the zone where the seismic event occurred. And inside this zone, previous extraction ratios have exceeded 70%. This is the zone that we've conservatively removed from both our mineral resource and mineral reserve statement based upon guidance from the group of geotechnical experts that have been engaged throughout the process. Then in IB, we have reclassified the previously measured and indicated mineral resources into inferred mineral resources to highlight the fact that we still see reasonable prospects for eventual economic extraction within the zone, particularly once we've reestablished critical mine services and completed the Stage 3 dewatering, such that we are unable to have physical access across this inferred extraction zone.

So over the course of time, I have no doubt that 1 areas of mineral resource within that reported 1B zone will form part of our mine plan and potentially come back into our mineral reserve statement.

So now turning to the second change and the most significant change on our mineral reserve statement. This is the application of the new geotechnical parameters that I referred to earlier, initially designed as a reaction to the Kakula seismic event and extrapolated across all of the ore bodies within the Kamoa-Kakula complex. To illustrate this on the right-hand side of the slide here, I've shown the updated Kamoa 1 mine design. We're applying these principles. And as you will see, the core features of this mine sequences are such that we established the blue peripheral access drives and the red long-term trunk road accesses well ahead of our mining front. The sequence is such that these accesses are designed to be established at least one panel, which is highlighted in orange, which is made up of 3 active mining blocks by -- a grid of 3x3 active mining blocks ahead of the current mining front. These long-term accesses provide critical critical long-term trunk roads or mine services and materials handling routes. So by resequencing all of our minds into this manner, of course, it has had a substantial change on our mine sequencing. We feel that the application of these geotechnical guidelines is a cautious one. And by doing so -- doing this across all of the ore bodies in the Kamoa-Kakula complex. This has set us on a solid foundation from which we are confident we will be able to build back up upon from -- with future detailed geological, geotechnical and hydrological studies. These critical studies will ultimately enable us to develop more bespoke mining sequences and designs to each and every domain within each and every ore body, which we believe will ultimately improve upon the assumptions that we've applied to the reserve today.

So now moving on to the third key change whereby as part of the redesign process, as mentioned by Mano earlier, we've maximized the proportion of the minable reserve that is extracted through low-cost, high-productivity stoping drifts as illustrated in the upper graphic on this slide. These design changes inevitably do incur more dilution. As you can see by highlighted in the gray areas outside of the representative ore body on the graphic. But our trade-off studies have shown that even incurring this additional dilution the impacts of that are more than offset by the increase in productivity of our mining rates. And as illustrated on the earlier waterfall, this design change is further complemented by the revision of our operating cutoff grades, which reflect the confidence in our underlying cost profile as well as the changes in our commodity price assumptions for the mineral reserve. And ultimately, as you'll see on the lower graphic, what this has done has enabled us to optimize the extraction of our ore bodies, ensuring that we're not leaving behind high-value mineral results.

And so the lower -- lower cutoff grade stopes you see on the right-hand side of the graphic demonstrate exactly how decreasing the cutoff grade does drop our reserve grade. But ultimately, the incremental costs incurred mining this additional material are more than paid for by the 1.5 to 2% copper that is added to the production profile as a result of this design change.

So now turning -- moving on to the fifth change in the waterfall. This has been the inclusion of the additional mineral reserves at Kamoa's 3, 4, 5 and 6, which have been converted from mineral resources by again, applying these very cautious geotechnical design criteria across all of these ore bodies. This has resulted in a substantial increase in the overall mine life, albeit again at a lower grade with these ore bodies. However, when looking at where these ore bodies feature in our mine profile, the majority of them only commenced mining some 10 years or more from today.

So importantly now, turning to our mineral resource base. You will see that even with these updates, Kamoa-Kakula is still a standout mineral resource within -- that stands amongst the giants of the world-class copper deposits today. Our measured and indicated mineral resources are still very much intact. We've been -- we have updated them with the depletion and with the removal of the mature extraction zone from Kakula as I showed you on the graphic earlier.

Then there is an increase -- associated increase in our inferred mineral resources, which is a direct result of the reclassification of the measured and indicated material from Kakula into the inferred zone.

Importantly, a lot of additional drilling has taken place since our last underlying mineral resource model update, and we have already started the process of incorporating these into an updated mineral resource model. This resource model will not only reflect an updated geological model and grade estimate, but it will incorporate the multidisciplinary aspects that are required to really optimize our mine designs with obvious focuses on geotechnical modeling and hydrological modeling and incorporating those into our mine designs and sequences such that we can progress from what has currently been a standardized approach across all of the ore bodies to a bespoke design and sequence designed to each and every ore body across the complex.

So now turning to focus on Kakula. Throughout the course of this year and next year, we are very much focused on resetting the Kakula mine to establish Kakula 2.0, very similar to how I described to you with Kamoa earlier. This initially starts with the development of safe, long-term peripheral accesses around the perimeter of the ore body, as you see highlighted by the green-dashed outlines on the ore body -- mine design map.

As part of this, we're also establishing stability pillar to separate the historic mining area of the original Kakula mine from the new mine, as shown by the blue line, which separates the new eastern section of Kakula. Critically, these peripheral accesses will be used to locate critical infrastructure and mine services, including ventilation, dewatering and electrical reticulation and provide important egress access for all of our personnel. This will ensure that going forward, as Kakula ramps back up to be the Tier 1 ore body that it truly is, we will always be able to rely on consistency of operation of those services and facilities within the mine by establishing them in the safe foundational pillars around the periphery of the ore body.

Then as Kakula progresses and as the development progresses towards 2028, as we progress to the next slide, you will see, particularly in the eastern section of the mine. This becomes a high productivity long-haul stoping front for the new Kakula complex.

This restores the high-grade product production that everyone well knows from the Kakula ore body. Ultimately, the eastern section of the mine is developing at a faster rate than that of the Western section of the roof line because the depth of the ore body is a much shallower dip in the eastern section. The Western section, whilst it may look flat on this diagram is actually more representative of a bowl shape. And so a large amount of the development, as you will see in the design runs in perimeter rings circling around the rim of that bowl, enabling us to then establish established stoping drift fronts in between each of those levels.

These design improvements not only provide significant improvements in productivity, but also guarantee operational safety and predictability for our operations. And ultimately, we are confident that this will be the key pin that returns the Kamoa-Kakula complex back to a plus 500,000 tonne per annum steady-state producer. So in the interim, whilst we reset Kakula over the next 2 years, Kamoa is very much going to become the core backbone of the complex. And this, as the development in Kamoa accelerates from the 2 newly established box cuts and positions the mine for long-term steady-state production. To illustrate this, the image on the right shows the position of the Kamoa 1 mine only 10 years from today. And whilst you can see that the key trunk roads and peripheral access development drifts that I mentioned earlier, are very well established, far ahead of the stoping front.

These stoping and mining drifts only cover what is 1/4 of the footprint of the overall ore body. This reflects the truly world-class multi-decade mine life of the Kamoa ore body. And as we stand today, Kamoa is currently achieving some of the highest mining production rates of the complex, which solidifies its importance within the complex as one of the longest life and most consistent production profile. So as I mentioned earlier, the key within the next 12 months will be undertaking a set of detailed optimization studies for which we're commencing drilling in the immediate coming months, not just on our geological resources, but also to obtain information well ahead of our development to get our detailed rock mass and geotechnical classifications and hydrological mine [indiscernible].

We plan to incorporate all of these detailed drill programs into updated models and through an iterative process over the course of the next 12 months, utilize that upgraded resolution of data to improve our overall ore body knowledge, which ultimately will underpin the success of our ramp-up of the mining profile. This will then lead to another round of updates of our mine designs and infrastructure with a more bespoke application to different domains and areas of the ore bodies within the complex as we get that high resolution information. And overall, we are targeting putting together a detailed feasibility update for the immediate 5-year production profile, together with an updated pre-feasibility on the life of mine schedule with additional long-term trade-offs particularly as we have now brought in additional mineral resources, as highlighted earlier, through Kamoa 3 to 6 into the mineral reserve plan. So I'd like to hand over now to Tom, who will take you through the operational outlook.

Thank you, Simon, and welcome to all the audience. I think it's important just to say thank you to the technical teams. There's been a lot of work, a lot of hours putting over the last months to get to where we are today. It certainly isn't where we are going to stop. There's further iterations that will take place and further improvements that will take place as we get -- so we haven't applied some of the new technologies into these orebodies here. And as we progress, there will be further optimism and we'll take on an improvement as we go forward. So it is an iterative process, and we do believe that it will be improved as we go along. And thanks again to the technical teams and the subject matter experts, back engineering, AMC and all of them for the work that are [indiscernible] getting to the next slide, maximizing our concentrator assets. So Project 95 is where we've been building on Phase 1 and Phase 2, and we've been taking that construction up to 87% currently. What that does is it increases the recoveries at the 2 Phase I and Phase II contract of up to 87% and then up to 92% depending on the feed grade of the ore that will obviously give us further efficiency improvements at the concentrators. And then alternate operations are Phase 1 and Phase 2 of the concentrators in half 1, 2026, and that will be processing and processing it through with various processing efficiencies as we don't have a bottleneck at those particular concentrators at this stage.

So maximizing our recoveries in that particular area. As you see here on the slide on the right, the capacity is 17 million tonnes. We have spare capacity available in 2026. We will be looking for opportunities, and we are looking for those opportunities as you heard, with respect to filling it with further areas that we're opening up, like the [indiscernible] that we reset and actively busy working on that and opening up more mining phase in that area to fill that spare capacity where as far as possible. And you'll see the run of mine Kakula and the running of mine Kamoa with the various grades as well. And then it goes into 2027. Basically, it goes up and we've still got a bit of spare capacity. And then in 2028, we should be having the [indiscernible] becoming nameplate and milling at an upland capacity.

Thank you. Next slide. Our smelter, which has started in the -- and you'll see the first poll that took place here in December 2025. Yes, 99% pure copper anodes coming out of the Kakula smelter and very green ones at that, from our point of view, generated to a large extent for Hydro Power. So the ramp-up continues to exceed expectations. We are 60% above capacity at the moment. At the smelter, it's progressed well. There's always learnings, and we're applying those learnings as we go into the operational smelter.

Our first shipments has also taken place in the Lobito rail corridor, and that gives you those ultra-low carbon anodes that are completed and then heading to the international markets. Realized price for asset sales is currently at $500 a tonne, but that's obviously due to supply constraints in the various areas across the mine. We're not in the story across the supply chain disruptions that we've seen and continued closure of the Strait of Hormuz, which also may drive prices higher. And then the evaluation of toll [indiscernible] treatment purchase of third-party copper concentrates to further improve the margins in our smelter.

Last slide you're seeing here that I'll be talking to is the contingency planning for the current global events. We've gone through a scenario planning. We've done quite a bit of extensive scenario planning to understand the current global macro events, how it affects our diesel price and the availability issues of diesel. So we have been deprioritizing diesel [indiscernible] set consumptions to cover the DRC bidding stability for concentrators. And we've also then got significant on-site stocks of diesel and orders in place. So we've got strategic orders that are being held at this stage.

Commission of a 60-megawatt solar plant, as Robert referred to earlier, these give us the photo will take facilities that are expected mid-2026, and then we'll further reduce our diesel consumption as well and give us further greener copper as we will be able to take it further forward. and then finalizing the negotiations on the further 60-megawatt expansion targeting mid-2027 completion. Thank you. I'm going to hand over to Alex.

Thank you, Tom. It's Alex Pickard here. I'm going to close out the presentation today by taking you through our updated production and cash cost guidance, give a little bit more context on the plan going forward, and then we will have time for Q&A. What you can see here in the photo is one of the very large thickeners for Project 95, which is very close to construction completion.

Thanks, Tommy. So firstly, looking at the production forecast. What we are showing here is the historical performance of Kamoa-Kakula in the gray. So that's around 1.7 million tonnes of copper in concentrate produced in the last 5 years, 4 years and change really. Going forward, we've changed the methodology slightly. We are going to be reporting copper production in anodes, which is basically going to be the main form of production that we expect at least until our smelter is exceeding its capacity of 500,000 tonnes per annum from 2028. But even in the eventuality that the smelter exceeds capacity, we see toll treatment capacity to basically continue to produce and sell blister above 500,000 tonnes per annum going forward. So zooming in on the guidance. I mean I think in short, we think of the guidance more as a 1-year deferral on our previous ramp-up forecast. So this year is moving to 290,000 to 330,000 tonnes of copper anodes. And then next year, looking at increasing that up to 380,000 to 420,000 tonnes before ramping back up to 500,000 tonnes and above over a long mine life from 2028 onwards.

So if you look at this overall, it's around a 20% decrease across those 2 years, '26 and '27. Approximately 70% of that decrease is coming from the reestablishment and the work that we will be doing to redevelop the Kakula mine that Simon took you through and then the remaining decrease is coming from increased development at the Kamoa mines. As Simon mentioned, we are moving immediately into a phase of optimization. So I think there is some opportunity within these numbers particularly as we are completing the dewatering and reaccessing the full extent of the old Kakula mine. And in terms of what 2028 looks like moving into the long term, next year, we will come back with a much more detailed plan on that life of mine that will have a much higher degree of definition.

Moving to the cash cost guidance for 2026 and 2027. So this is really taking into consideration all factors that we've described. But right here is the lower production forecast and the lower grade through this redevelopment period. So the cash cost in round numbers has increased from the previous range by 10% to 20%. So the updated guidance is around $2.60 to $3 per pound for 2026. And then we expect a material decline to $2.10 to $2.50 for 2027.

Taking a more long-term view for 2028 and beyond. I think we're targeting a cash cost of $2 per pound. That's once we've reached the steady state production rate again. And I think, hopefully, we are targeting below that target, and there are a number of cost optimization initiatives that we are also looking into as part of the study process. The other thing that we've taken into consideration here is an updated view of the diesel pricing for 2026 and to an extent, 2027, given the disruptive global environment that we are currently facing. But the good news is that I think the diesel price is well offset by the higher sulfuric acid prices. that we will be receiving from the smelter.

And then looking at the pie chart on the right-hand side, what we want to highlight is the breakdown of C1 cash costs over the next 2 years. So really, where you see the impact of the lower tonnes and the lower grade is on the mine site cash cost. So that's the categories of mining processing and G&A because we're effectively spreading our fixed costs over only 60% to 80% of our true capacity. And so this is where we are really targeting the 25% reduction in cost on a per pound basis once we get past 2027. And then what is also interesting to see here is, if you look at the little sliver in the pie, which is the the C1 cash cost of the smelter where we are deducting from that C1 cash cost, the byproducts from the asset credit. So what you can see effectively is that the the asset credits basically pay for the operating cost of the smelter. And the other benefit of the smelter is those logistics and TCRCs are a much, much smaller part of the pie chart than they were previously where they were up to sort of 30% to 40% of the overall pie.

Thanks, Tommy. So finally, this slide is really just to take you through some of the upcoming delivery milestones so that investors can expect what to see as we continue this journey over the next 2 years? So we're sitting here today with the updated reserve and resource on the tape. I think as Simon and Marna alluded to, we really see this as more an interim update and a new baseline to build from. I think as evidence of that, and we're not sitting back after this new study, we actually have a kickoff meeting in 2 weeks' time, which is basically going to kick off the much more detailed feasibility study and PFS process.

So the beginning of that process will trigger a lot of additional drilling work and information gathering to improve the definition of the geology, geotechnical and hydrological databases. Looking more from an operations side, I think we've got a lot of great detail from Simon in terms of the ramp-up plan, but some of the key things that we will see is the imminent completion and ramp-up of Project 95 to boost the recoveries, as Tom mentioned, that's coming from next month. This quarter, we will also complete the new box cuts, which we call Kahala. Kahala is actually already in the ore body and Kansoko [indiscernible]. So those are the new accesses into the Kamoa mining areas and then the completion of the Phase I and II solar project by midyear, as Tom mentioned, for 60 megawatts of uninterruptible clean power, which is a great derisking event in an environment with a global fuel shortage.

Then finally, towards the end of this year or early next year, we will be completing the 5-year detailed feasibility study in the life of mine PFS. I think it's safe to say we see a very big opportunity to crystallize significant upside from the results that we presented today. And then we will move into 2027, which will really be a breakout year where we will start to commence the higher productivity low-cost stoping at Kakula the sort of Kakula 2.0, as we call it. And then that will support increasing the mining rate to reach our full milling capacity at 17 million tonnes per annum by year-end and ultimately move into 500,000 tonnes or more production over a very long life.

And finally, maybe just to conclude and closing on how Robert opened the call, we do have a very exciting upcoming news to report on the other projects. So the Western Foreland, next door is Kamoa-Kakula, we will be announcing a significantly enlarged updated mineral resource estimate during what is now the coming quarter or this quarter starting tomorrow and then at Platreef, we will very soon be commissioning a major shaft expansion, which quadruples the hoisting capacity and prepares the road for the Phase II expansion and the Phase II expansion will actually be completed on basically the same time line as what we see here for Kakula by the end of 2027, that will be in the commissioning phase. So a lot of exciting milestones to come. And I think with that, I'll pass back to Tommy to chair the Q&A.

[Operator Instructions]

Do we have anyone on the phone lines?

[Operator Instructions] Your first question comes from Andrew Mikitchook with BMO.

I know you touched on it already, but maybe Tom or someone else would be giving us a little bit more sense of how this dewatering and rehabilitation is going specifically, I guess, a lot of large portions of this area that you're working and have been removed from the near-term mine plan. But when your teams are in there, what are they seeing? Are you seeing areas of material disruption or non rehabilitatable. Any color would be helpful, I think, so people could understand what your guys are dealing with, please?

Sure, Tommy, should I go ahead and talk about it? So what we're seeing at the moment to be 72% dewatered. The pumps are currently running in a maintenance mode where we've maintained the levels. We're seeing the inflow is the same as it's always been. So that's been maintained currently. In the bottom southeast portion, we've entered that area we're busy building new pump stations for the Stage 3 pumping at this stage. There appears to be scaling that's taken place, but we haven't got massive collapses. So when a scaling, you're talking about union scale coming off the pillars on the side. That's been loaded out, and we're using remote operated LHDs, so load [indiscernible] dumps, to go and load it out. So people aren't putting at risk, and we are able to access certain areas. So there is access that's taken into place. We are being able to rehabilitate the areas and we'll be able to access them.

What we haven't been able to do at this stage because it's still battling with water on the northeast side and battling with water in the Southeast when I say battling with water is there's groundwater as you develop, and it is holding us up as we were trying to get through that groundwater. But it's not to say that we can't get through. We should be -- in the next month, we should be through in the Northeast, the same as we are in the Southeast. We haven't been able to get into the top of the northeast portion of the mine, and that would then give us a view as to what the top of the Northeast looks like. So the Southeast I've told you what it looks like, that we currently are achieving. We are busily rehabilitating and we have rehabilitated all the areas that we've gone into busy reestablishing the pump stations and then starting the development around the front.

And that is -- the rehabilitation is taking place that is successful at this stage, and we are making progress in terms of getting to the stage 3 dewatering. We've got a stage 4, what is looking at and planning at the moment as well, and we'll talk to that in the next call or if whenever we get to update again. Tom, back to you.

Thanks, operator. Tom. Operator, any further people on the line?

No, there are no further questions at this time. Okay. [indiscernible].

Okay. Thank you, operator. So if there are no other questions on the line, we will conclude the call. As mentioned, if you do have questions and you wish to follow up with with the company, then please contact the IR team at Ivanhoe Mines. So with that, I will now end the meeting. So thank you, everyone, for attending our webinar. Thank you, everyone at the company, and we wish you a lovely evening. Thank you very much.

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

Good morning, ladies and gentlemen, and welcome to the Ivanhoe Mines 2025 Fourth Quarter and Year-End Conference Call.

[Operator Instructions]

This call is being recorded on Thursday, February 19, 2026.

And I would now like to turn the conference over to Tommy Horton, Vice President of Investor Relations. Please go ahead.

Thank you very much, operator, and hello, everyone. I'd like to first and foremost, thank you for joining our call today and happy Chinese New Year. It's my pleasure to welcome you to Ivanhoe Mines' Fourth Quarter and Full Year 2025 Financial Results Conference Call. As the operator mentioned, my name is Tommy Horton, and I'm the Vice President of Investor Relations.

On the call today from Ivanhoe Mines, we have Founder and Executive Co-Chairman, Robert Friedland; President and Chief Executive Officer, Martie Cloete; Chief Financial Officer, David van Heerden; Chief Operating Officer, Tom van den Berg; Executive Vice President, Corporate Development; Mr. Alex Pickard; and Executive Vice President for projects, Mr. Steve Amos.

We'll finish today's event with a question-and-answer session, so you can submit your questions via the Q&A box on the webcast as well as through the conference operator via your phone line. Please also contact the Investor Relations team directly for follow-up questions that are not answered during the call today.

Before we begin, I'd like to remind everyone that today's event will contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Details of the forward-looking statements are contained in our February 18 news release as well as on SEDAR+ and on our website, www.ivanhoemines.com.

It is now my pleasure to introduce Ivanhoe Mines' Founder and Executive Co-Chair, Robert Friedland, for some opening remarks. Robert, over to you.

Thank you, ladies and gentlemen, and everybody listening in.I happen to be in the Middle East at this time. It's the month of Ramadan. The fast has just broken. It's also Chinese New Year. I've been living on an airplane in at least a dozen countries in the last three weeks, and we are on our way to the BMO conference, which is the largest of the mining conferences at this time of year. As we look at that, opening photograph of our opening remarks, I'm struck that on the 19th of February 2026, we can announce that we've jointly announced with Trafigura and Aurubis in Germany, the last shipping, and then down the Lobito Corridor to the Atlantic Ocean.

That's a downhill rail run for about 3,200 feet elevation down to sea level, so the train is actually going downhill from the mine to the sea. This is the largest smelter on the African continent. It's a direct-to-blister furnace, the largest ever built in the world. With Outotec's engineering and Nerin from China, we can say it's the most modern and greenest of copper smelters going down the railroad. And, you know, when I look back to the years when the idea of copper coming out of the Central Congo was just a dream, but today it's reality and will last for generations.

The Western Forelands is traversed by that new railroad. We have incredible exploration potential there. We continue to run about a $100 million a year budget in exploration for copper, and we find more copper per dollar or per penny than anyone in the industry. Our finding cost to find copper is under a penny a pound at a 1% cutoff grade, and very few districts even have 1% copper. So that's remarkable that it's just today that we jointly announced with Trafigura and Aurubis that this 99.7% copper is going its way to the ocean. In addition, the Zambian government to our south, who have a couple of smaller copper smelters, have announced that they will not export their sulfuric acid any longer to the DRC because they want to keep it for their own Zambian copper mining industry. That means that the sulfuric acid price has really risen very dramatically in the Congo, where it's used to leach oxide copper mines, and we've seen prices up to $700 a metric ton for sulfuric acid. So our smelter's producing an extremely valuable by-product.

We also have our zinc mine operating, shipping concentrate to the United States. Concentrate for zinc that also contains gallium and germanium, extremely valuable critical metals that will be recovered in future. And the Congo is one of the greatest places to find these sorts of metals. So this is a big day for the Democratic Republic of the Congo as our smelter starts.

And lastly, before I turn this over to Marna, our President and CEO, is an image of Platreef, which, after 34 years, has initiated production. Within two years, it will be a giant mine, and a few years thereafter, we think it'll be the largest and lowest cost producer in the world of a group of metals, platinum, palladium, gold, rhodium, which is on the critical materials list, and nickel and copper as well, which are on the critical materials list. So it's a, it's a tremendous turning point for our company. Things are really looking bright. The world needs these metals.

And with that, I'm honored to turn this over to Marna. Thank you very much.

Thank you, Robert, and good morning and good afternoon, everybody. Thank you for joining us. As Robert mentioned, this is a photo of Platreef that was inaugurated by President Ramaphosa in November. This mine is currently undergoing its Phase 2 expansion, and we will quadruple annualized production to approximately 450,000 ounces of precious metals by the end of 2027. So really, this is the one to watch over the next two years.

If we move over to my introductory slide, with 2025 in the rear-view mirror, it's time for us to take stock of what we have achieved. And despite lower production and sales since May, Kamoa-Kakula generated close to 400,000 tonnes of copper, generating $4.2 billion in revenue at a 40% margin and an EBITDA of approximately $1.5 billion. A standout achievement at Kamoa-Kakula was the commissioning of the smelter, as Robert mentioned, the largest and greenest in Africa. The ramp-up of the smelter is ahead of schedule at over 60% capacity. This is a phenomenal achievement by our project and operation teams.

Kipushi was the rising star, and after the completion of our deep bottlenecking project, it finished very strong, producing over 200,000 tonnes of zinc, and our guidance for 2026 is set at between 240,000 and 290,000 tonnes. Our 2025 production resulted in an EBITDA of $91 million. Our group EBITDA amounted to $578 million, with a net profit of $228 million. Our CFO, David van Heerden, will present our financial results in more detail shortly.

We can move over to the next slide. For those listeners that participated at the Mining Indaba recently hosted in South Africa, it would be amiss if we do not highlight the role that the DRC is taking in the rush for critical metals on the global stage. Progress on regional peace via Washington Accords for Peace and Prosperity has boosted the outlook for the DRC, and we can witness this through significant foreign investment in the mining industry. There was a 7% increase in copper production year-on-year to 3.2 million tonnes in 2025, making up 14% of the world's production. In the last 10 years alone, copper production increased by 300%, cementing the DRC's position as the second-largest producer of copper worldwide. The S&P has revised its outlook for the DRC to positive due to external and fiscal progress, resulting in real GDP growth of 5% per annum.

We can move over to the next slide. Our total recordable injury frequency rate of our operations continues to track in the bottom quartile compared with our industry peers. This is an incredible achievement, given that our workforce has rapidly expanded by over 150% in the past five years to more than 31,000 employees and contractors. For every new employee and contractor onboarded, safety training is a fundamental and mandatory part of the process.

However, statistics offer little comfort in the face of loss of life, and it's regrettable that I have to report that we had an unfortunate incident that occurred at Kamoa-Kakula last week, while two employees were conducting maintenance work at the Phase 2 concentrator. During the task, a flammable liquid ignited, causing severe burns to both individuals. They were immediately transported to our on-site medical facility, where they received urgent care. Despite tireless efforts from our medical teams, one of the workers tragically succumbed to his injuries. We are deeply saddened by this loss of life and extend our heartfelt condolences to his families, our friends, and colleagues during this difficult time. The second contractor remains in a stable condition and continues to receive medical care. We are also in close contact with his family and are supporting them through this recovery.

Safety remains our highest priority. A full investigation into this incident is underway to determine the cause and to ensure that appropriate corrective actions are taken to prevent such a tragedy from occurring again. We do, however, recognize that one life lost is one too many, and our focus is now on supporting those impacted and strengthening our commitment to ensuring that every person returns home safely at the end of each day.

Lastly from me on our sustainability efforts, the following initiatives deserve a very special mention. At Platreef, we inaugurated the Masodi Wastewater Treatment Plant, which was constructed in partnership with the Mogalakwena Municipality. Greywater from this plant will be used in our operations in a closed circuit, providing an innovative, conservation-driven solution to our water use requirements for the mine.

And at Kipushi, our total workforce now comprise of 97% Congolese nationals, with our processing plant department made up of 100% national workforce. Kipushi is really setting the standard for both Kamoa and Platreef, and we will work hard to achieving the same goals at our other mines.

With that as an introduction, I will now hand over to David van Heerden, our CFO, to take you through our financial overview.

Thank you, Marna, and good morning and good day to everyone joining the call today. Yes. Kamoa-Kakula achieved its highest ever revenue for a calendar year of $3.3 billion in 2025, and that was at a realized copper price of $4.40 per pound. Revenue was up from the $3.1 billion achieved in 2024. Annual EBITDA was $1.4 billion at a margin of 44%, and Kamoa-Kakula recorded EBITDA of $331 million for the fourth quarter, and that was up 69% from Q3, but was still impacted by the lower grade and ore processing. Although cash costs increased, the margin was up to 38%, and assisted by the higher copper price.

Kamoa-Kakula sold almost 79,000 tonnes of payable copper in the fourth quarter, recognizing revenue of $866 million at a realized copper price of $4.98 per pound of payable copper. Sales for the quarter was in excess of tonnes produced, leading to a slight decrease in contained copper and concentrate inventory on hand to 50,000 tonnes at the end of the year. That was down from the 59,000 tonnes of copper on hand at the end of Q3. The majority of the inventory is sitting ready to be smelted, and by the Kamoa-Kakula smelter.

Inventory at the Lualaba Copper Smelter in Kolwezi has decreased to about 3,000 tonnes. We expect, as we've sort of said before, that copper held in the stockpile and the smelting circuit will be reduced to approximately 17,000 tonnes during 2026 as the smelter ramps up. We therefore expect that the 2026 copper sales will be at least 30,000 tonnes higher than the copper production in 2026, with most of that, the stocking, expected to occur in the first half of this year.

Moving to the next slide, where we show the usual Kamoa-Kakula EBITDA waterfall graph. The EBITDA waterfall highlights the drivers of the quarter-on-quarter EBITDA change. As we start on the left-hand side of the screen, the higher tonnes sold in Q4 compared to Q3 was responsible for a $47 million increase in EBITDA. The higher copper price, both provisional and realized, was responsible for a combined $168 million of the increase. Logistics and operating costs were a little bit higher than where they were in Q3, but I'll explain that more when we get to the cash cost slide. And then realization cost was slightly higher, mostly due to the higher copper price. Of the sales in the quarter, we had 50,000 tonnes provisionally priced at the end of December, and with the higher copper price in January and February to date, we do expect a very nice upward remeasurement of receivables again in the first quarter of 2026.

Moving to cash costs, and for the fourth quarter, firstly, of 2025, that was $2.99 per pound of payable copper. As you can see from the breakdown of our cash costs that we present in our MD&A, logistics charges and G&A was abnormally high. During the quarter, the concentrate transported had lower contained copper and concentrate when compared to previous quarters, and there was also less concentrate sold at the Lualaba Copper Smelter. So in simple terms, more tonnes were moved to move the same amount of copper, leading to higher costs on a per pound of copper basis. The fact that tonnes sold for the quarter was also higher than tonnes produced, also had a also contributed to the increase.

G&A for Q4 included a few one-off items relating to staff costs, consumable write-downs, and software expenditures. So we don't see the Q4 level really being completely representative of where we expect G&A costs to be in the future. And I think if you look at cash costs for the full year, it, it's pretty positive that the $2.16 per pound was still within our revised guidance range for the year. Throughout 2025, cash costs increased proportionally, basically, to the decrease in the grade processed from Phase one, two, and three, and then, of course, the stockpiles. And as we mine more higher-grade areas on the western side of the Kakula mine and the overall grade improves, cash costs per pound will trend back down again.

But let's look ahead on the next slide. So our cash cost guidance for 2026 is $2.20 to $2.50 per pound of payable copper, and we expect that to improve to between $1.90 and $2.30 per pound of payable copper in 2027. The pie chart on the left-hand side shows the breakdown of our cash costs in the second half of the year in percentage terms, and then as represented by the yellow and green arrows, and we show where our cash costs are expected to improve over the coming year. So we expect that logistics and TC/RCs will improve by approximately 30% due to the impact of the smelter. And then we expect that mining, processing, and G&A will improve by approximately 20% on a per pound basis as the grade increases and improves.

We obviously expect the smelter benefit to improve further over time, and as production of the smelter improves and as efficiency there also improves. Then there's obviously also a number of other areas where the team is placing focus on, and where they have strong belief that they can have further impacts on costs.

As we turn to Kipushi on the next slide, Kipushi set a new record of quarterly production in Q4, and sold almost 48,000 tonnes of payable zinc for a record quarterly revenue of $138 million. Zinc sold was slightly in excess of zinc produced. So, fourth quarter -- sorry, actually, the other way around -- zinc produced was slightly in excess of zinc sold for the quarter. So, the fourth quarter could even have been better.

But zinc prices have continued to trend upwards, so we will reap the benefits of that in the first quarter of this year.

Kipushi's EBITDA for 2025 was $91 million, and $44 million of that was generated in the fourth quarter. Cash costs for Kipushi came down nicely as expected with the increased production, and was $0.86 per pound of payable zinc for the quarter, and $0.92 per pound for the full year, which was pretty close to the bottom of our guidance. Our 2026 guidance is $0.85 to $0.95 per pound of payable zinc, and it does include room for a increase in the benchmark treatment charges.

So moving to the next slide, Ivanhoe recognized profit of $228 million for 2025, and this was $35 million higher than the profit for 2024, with 2024 being impacted by the fair valuation of our then convertible notes, which was redeemed in 2024. Our group-level adjusted EBITDA was $578 million for 2025, and only 7.5% lower than our annual record in 2024. The principal driver of our adjusted EBITDA was again our share of EBITDA from Kamoa-Kakula, but Kipushi has started to contribute meaningfully in Q4 of this year, and Platreef will do the same towards the latter parts of 2026.

If we move to the next slide. Here we show a liquidity snapshot, and Ivanhoe had $885 million of cash and cash equivalents and short-term deposits on hand at the end of December, while Kamoa-Kakula had cash on hand of $311 million. The private placement with QIA in September and our senior notes issued in January leaves us in a very comfortable position at the end of 2025. Kamoa-Kakula concluded a two-year term facility of $500 million in the third quarter, and drew down $370 million of that in early October in 2025. But both Ivanhoe Mines and Zijin also funded cash calls of $150 million each to Kamoa-Kakula in December, assisting Kamoa-Kakula's liquidity. Our consolidated pro rata financial ratios continue to be comfortable with our net debt to EBITDA ratio of 2.1x. The net debt ratio will, of course, improve as our EBITDA grows in the coming periods.

Moving to our capital expenditure on the next slide. At Kamoa-Kakula, we underspend in terms of our initial guidance in 2025, showing very good capital discipline. That underspend has been shifted to 2026, and we've also put revised guidance or guidance out for 2027 as a good indication of what we believe will be spent in that year. The work for Kamoa-Kakula's updated development plan is progressing well, and as we have noted, that will be filed before the end of March this year.

At Platreef, Platreef came in towards very close to the bottom end of their 2025 capital expenditure guidance. Platreef completed Phase 1 development within and under budget, and that was the key driver to the low-ish or very good managed spend for Platreef in 2025. And then the 2026 and 2027 guidance is in line with the feasibility study completed in early 2025. And a large portion, $600 million of Platreef's remaining Phase 2 capital will be funded by the additional project finance facility, which has recently been signed.

At Kipushi, the expenditure at Kipushi was also pretty close to the 2025 guidance, and Kipushi now moves to steady state, but then also with a few improvement projects planned for 2026.

Yes. Thank you very much, and I'll now hand over to Tom van den Berg, Steve Amos and Alex Pickard, to take you further as part of the operations and projects update.

Thank you, David. As you can see in picture there before, Project 95 on its way. Kamoa-Kakula concentrate production. So despite the usually challenging year for everyone at Kamoa-Kakula, we would like to remind the audience that the mine still produced 389,000 tonnes of copper. It is still comfortably within the Tier 1 operations, among the top 10. The year for this year, that's 2025, Phase 3 will remain the star performer and locked in at plus 30% mill throughput and produced a record 145,000 tonnes. We expect the head grades to gradually improve through the year as the recovery plan advances, at Kamoa-Kakula, more so at Kakula. And then reaffirming the guidance numbers, though we expect that the first quarter will be the weakest, with lots of catching up to do in the second half of the year as we establish new accesses and new mining areas.

Project 95 is also nearing its completion, which we aim to take recoveries at Kakula to well above 90%. So in brief, you can see there Phase 3, a record 144 tonnes of copper production in 2025. The Kakula mine, we've completed the Stage 2 dewatering activities, enabling the mine to reopen the higher-grade mining areas in the front of Kakula East as well as Kakula West. And then we're remaining our guidance at 380,000 tonnes to 420,000 tonnes and in 2027, potentially 500,000 tonnes to 540,000 tonnes.

We can go to the next slide, please. Just looking at the dewatering. So the slide on the right-hand side depicts what was Kakula mine. We had a big fish right across with lots of water. We've only got the head of the fish left at this stage. So that blue that you see in the bottom right corner is effectively the pond that's left on the eastern side of the mine. The red dots demarcate new pump stations that we've refurbished and have got up and running. The black dots demarcate new pump stations that we're busy commissioning and recommissioning in different areas at the top of the northeast side of Kakula and the bottom at the southeast side of Kakula. We're busy establishing those currently as we speak, and then we've got one more pump station.

In terms of water, we're seeing about 4,500 liters of water coming to Kakula, and we are able to pump that, and we have more capacity than that 4,500 at this stage. So we've completed the dewatering up to stage two, and currently what we're doing is we've got some selective mining happening on the eastern side in old stoping areas, plus inside the east side of the mine and down on the southeast side of the mine. The western side of the mine is totally dewatered, and our crews are busy accessing the high-grade areas there at the moment as we speak, and we will see better grades coming out the west side of the mine in a short time.

We can go to the next slide. So the photo you see in the picture is the access at what we call Kakula mine, which is near Kamoa 1. So Kamoa 1, we started the access. We've actually progressed this quite well, and this box cut is taking shape as we speak. We also have started one at Kansoko Sud, and that is also in line, so it is also progressing very well. So those are new accesses. Kansoko Sud is to affect easier access into the Kansoko ore body and to improve productivity. This one that you see here in front of you in picture is at the Kakula box cut. We're gonna be adding additional crews and then rebuilding our stockpiles as we go forward and filling the mills.

So we're in the process of finalizing an updated study to ramp up the underground operations back to 17 million tonnes per annum and maintain an excess steady state of excess 500,000 tonnes of copper. The work under the new mine design parameters informed by world-leading experts, and we will do more disclosure on that in time to come when the study is complete. So that should be in late March.

Okay. Thank you. We can go to the next slide. What you're seeing here is the picture of the first casting that took place, the first anode, at the smelter. Apart from the recovery plans on the underground mining side, we are still hitting huge milestones overall at the Kamoa-Kakula project, so this was the commissioning. It's the largest copper smelter in Africa. It was completed last year at a capital cost of $1.1 billion and we announced this first anode production in December. This is a huge step change, as Robert spoke about, for Kamoa-Kakula to become an integrated metal producer, which reduces shipping costs dramatically and benefits from much lower credits, and acid credits will also be got, as David referred to, and I'll talk to that as well.

The ramp-up of the smelter is ahead of expectations, and we are already over 60% of the steady-state feed capacity at the smelter. The first shipment, as Robert also referred to, has taken place along the Lobito Corridor, and this is exceptionally low-carbon copper that is reaching the market and off on its way to Germany right now as we speak.

Thank you. We can go to the next slide. Just in terms of the direct, direct-to-blister smelter acid sales, we also had an equivalent of greater than 60% on the acid and acid production. We are producing around about 1,200 tonnes per day of sulfuric acid, and that's again at over 60% capacity. This acid has been sold to consumers in the DRC Copperbelt and taking advantage of the very high demand in the domestic market. Realized prices have been north of $450 a tonne, so very pleased with that.

Thank you. I'm gonna hand over to Steve for the next slide.

Thanks, Tom, and hi, everyone. So, October 2025 was a big year for the project team. We commissioned our turbine G25 at the Inga Power Station. For those of you who don't know, the Inga Power Station is on the Congo River, one of the widest rivers in the world, in the western DRC. Initially, Kamoa is only receiving 50 megawatts of 178 megawatts, and that is due to constraints on the transmission. We're busy working at two of the converter stations, one at Inga, which is pictured on the right-hand side there, and one at Kolwezi, which is very close to our mine. We're busy installing a static compensator at Kolwezi, and by late March, that will boost the megawatts to Kamoa to 85.

We're also busy with two filter banks at SCI, which is the Inga Converting Station, and that will increase the power to Kamoa to 125 megawatts. The deal we have with SNEL, the DRC power utility, is that we receive 70% of the available power from Inga, so 70% of the 178 megawatts, which is 125 megawatts.

Next slide, please, Tommy. I think something quite exciting in terms of power that's going on, on the mine site, so on the Kamoa license, we have two IPPs, independent power producers, that are constructing two 30-megawatt solar farms on the site. These 30-megawatt solar farms are 30 megawatts, 24 hours a day, 365 days a year, so it is reliable power. The way they do that, they install, and I speak under correction, approximately 120 megawatts of solar power at these farms with battery storage. So it doesn't matter if it's nighttime or it's raining, we still receive our 30 megawatts.

Timing on that, for the first IPP, between April and June this year, so 10 megawatts in April; 20, May; 30, June; and the second one, May to July, 10, 20, and 30 megawatts there as well. So we'll have 60 megawatts of clean, renewable power by July.

What we're also doing is Phase 2. Phase 2 will be another 60 megawatts. Very similar kind of concept. Again, two IPPs identified, one of them from Phase 1. Contracts have been signed, and mid-2027, we're expecting the additional 60 megawatts, which will take us up to 120 megawatts of, of renewable power on site.

That's all from me for now, Tommy.

Thanks, Steve. So Kipushi, this has been a very significant ramp-up year for the Kipushi mine. It started producing at the end of 2024. So as you can see, in 2025, a good ramp-up in terms of ore tonnes milled, zinc ore grade processed, and zinc concentrate produced, as well as zinc recovery. Production was a little low in the first half of the year, but since the debottlenecking, the project was completed in quarter 3, Kipushi has really hit its stride. 2,003 tonnes of zinc for the year was in line with guidance, above the midpoint of the range. In particular, we saw records in quarter four of 61,000 tonnes, and looking at December alone, 22,600 tonnes, which is equivalent to 270,000 tonnes annualized. We also highlight the recoveries we have been achieving at 93% in December, so looking to keep that up in the performance in 2026. Thank you.

Thank you, Tom. It's Alex Pickard speaking. I'm just going to talk briefly about the sleeping giant that we have now awoken, I think, at Kipushi. I think you know you are in a bull market for commodities when the zinc price is finally trading at multi-year highs, so we're currently above $3,300 per tonne or around $1.50 per pound. But that's especially exciting given the fantastic progress the team have made at Kipushi with the debottlenecking. And so with that, we are announcing our guidance range for Kipushi of 240,000 tonnes to 290,000 tonnes of zinc in concentrates. As Tom just mentioned, our month of December was sort of bang in the middle of that range at about 270,000 tonnes annualized.

So I think, for those who've had the pleasure of visiting Kipushi, it is an incredibly small footprint for a mine, and it's a very clean and tidy operation. But it's quite incredible to think that, from that small footprint, Kipushi will now be the fourth largest zinc mine in the world, as you can see on the right-hand side. As David touched on, with the operating costs trending firmly downwards at Kipushi and very low capital costs going forwards, we should start to see much more of a significant financial contribution from Kipushi, both in terms of EBITDA and cash flow.

And then an announcement that we made a couple of weeks ago while our Executive Chairman was in Washington. We are working on options to recognize the value for Kipushi's by-product metals, which includes highly strategic, critical minerals, including germanium and gallium. So we are working very closely with our joint venture partner, Gecamines, which is the DRC state-owned mining company, and one of the current off-takers, which is Mercuria Trading. And what we're looking to do is move Kipushi concentrates or a portion of the concentrate to the U.S. markets, where currently there is a major investment taking place in zinc smelting and refining capacity, including critical minerals.

Talking about the right time for Kipushi, it's also very much the right time for Platreef, and I think we're very close now to fully awakening the potential that we have at this incredible Platreef mine and the Platreef deposit. So the image that you can see here is the formal inauguration of Platreef, which took place on November 18, 2025. It was an excellent ceremony attended by the President of South Africa, who you can see in the foreground next to our chairman, Robert Friedland, and also included key members of the national and regional government, as well as the Ivanhoe Mines management team.

The Phase 1 mill is not really the big story here. We've been campaigning ore from developments at lower grades. Really, that Phase 1 mill will start properly once we begin stoping in around one month's time. It is just the beginning of a much larger project, which ultimately will be one of the largest producers of platinum group metals in the world.

So I'll pass back to Steve Amos to talk about the Phase 2 expansion, which is gathering steam.

Yes, thanks, Alex. So interesting times for Platreef. A major milestone happening towards the end of next month, and that is the commissioning of shaft 3. People might remember, a number of years ago, we made a decision to repurpose that shaft. It was initially going to be a ventilation shaft, so we've repurposed it into a 4 million tonne rock wasting shaft. It's not only the shaft, underground, there are 2 conveyors with stripe tips feeding that shaft, and very importantly, the first crusher underground will be commissioned before that shaft starts wasting. The crusher underground allows us to stope and crush material and waste it to surface.

Why this is such a big deal for Platreef is that Platreef is significantly constrained by shaft 1. That's the shaft on the left-hand side. It's a 1 million tonne per annum wasting shaft, but it is handling all the men, all the material, all machinery and equipment that has to go underground, all development ore, and all stoping ore. So it's severely constrained, and this really opens up Phase 1. It supplies significantly more ore than Phase 1 can handle. And the advantage of the shaft really is that it allows us to build up a stockpile for the start of Phase 2, which is at the end of 2027. So once the shaft is commissioned, a total of 5 million tonnes of wasting capacity.

Next, please, Tommy. So on the right-hand side is the big shaft. We call it shaft two, headgear is complete. We have a pilot hole from surface down 1,000 meters, 3.1-meter diameter. The idea with this shaft is, it de-risks Phase 2, but it really is the future for Phase 3. Phase 3 is about an 11 million tonne per annum operation. We've just appointed a contractor to do what we call Slype and line. So that is extend the diameter of the shaft from 3.1 meters to 10 meters and to line the shaft. And then, as I said, the shaft is capable of hoisting 8 million tonnes per annum. So in terms of schedule, men and materials, Q4 2028, and then hoisting, Q3 2029, and that's is the one of the largest shafts on the African continent. Just in terms of where we are with Phase 2, Phase 2 concentrator coming online at the end of 2027.

EPC and contract award awarded, earthworks contract awarded, most of the long lead items for the plant awarded. So we are good to go for the end of 2027 for Phase 2, approximately 500,000 ounces 4E, platinum, palladium, rhodium, and gold, 10,000 tonnes of nickel and 5,000 tonnes of copper. Thanks.

Thanks, Steve. And then looking at this slide, which is showing the PGM price deck over the past 12 months, what you can see here is a dramatic increase in PGM pricing, even with a small recent pullback in the month of February. All in all, you can see, we've had a 74% increase in the basket price for platinum, palladium, rhodium, and gold produced by Platreef, compared with the feasibility study prices. And so you can see on the chart, the yellow line, the dotted line, is our C1 cash cost of around $600 per ounce once we reach Phase 2 capacity, which is really underlining why we are building this Tier 1 operation in South Africa, which will be the highest margin PGM mine in the world, for many decades to come. And it's also worth noting that we, we have further support from the byproducts that are included in that cash cost, nickel and copper, which are also both trading at multi-year highs.

A bit of fun with numbers, but if you look at the spot prices and the models that we previously published for our feasibility study and scoping study, you can get some pretty exciting numbers for Platreef that I think are very much not captured in today's share price. So if you look at the feasibility study case alone, which is, less than 2 years away and under $800 million in CapEx to get to production, the NPV today is looking at, in excess of $3 billion. And then when you look at the larger 1 million ounce expansion case, including Phase 3, the NPV is closer to $8 billion. So quite remarkable numbers coming from Platreef that we will hopefully start to realize or gain more recognition for as we continue with the Phase 2 expansion.

Robert gave a good intro on the excitement that we have around our Western Forelands Exploration and our broader exploration efforts. As we say on the title here, the Makoko District is continuing to expand at a pace. We will be talking a lot more this year about our exploration efforts in general. We completed 53,000 meters of diamond drilling at the Western Forelands. It was a slightly slower year than we'd originally planned, just given what happened at Kamoa-Kakula, but still 53,000 meters enabled us to do a lot of step-out delineation work in the Makoko District. So you can see some of those drill holes represented on the map.

Across the strike length, which is about 18 kilometers, we declared a mineral resource estimate last year, which contained around 9 million tonnes of copper. That was at average grades at about 2% copper. Some of it's very shallow, and in terms of grade, that is very comparable to the overall global Kamoa-Kakula resource.

Where we've been focusing in terms of our drilling is on connecting the footprint between Makoko and Kitoko, so you can see the dots that are sort of adjoining those two ore bodies, and then stepping out to the south of Kitoko, which continues to expand, albeit at depth, and as well as that to the east of Makoko, where we are really now starting to connect the dots to a broader system back towards the Kakula West ore body. So our target with the Western Forelands is to put out an updated mineral resource estimate by mid-year, and safe to say, it will not be any smaller than the one we previously put out, last year.

Finally, and quite an exciting announcement, we've also commenced our preliminary engineering work, and that's really looking at the camp, the facilities, the footprint that we need for the beginning of a new mining complex in the Western Forelands. So the idea being that once that mineral resource estimate is completed, we can really hit the ground running with a scoping study on the Makoko District.

Then finally, just to close out, looking at our global exploration portfolio. So across the portfolio, which includes the Western Forelands, but it's also looking in Zambia and Angola for similar mineralization and trends as what we have in Western Forelands, and now also in Kazakhstan. We have a budget this year of $90 million. That's about 88% up on the previous year's spend. In fact, we plan to spend more in the Western Forelands at $50 million than we spent across the entire portfolio last year.

In the coming weeks, we will be putting out some more information, specifically on the exploration program, so we can do a bit more of a deep dive with maps and so on, across the different licenses. But if we look across the entire portfolio, we're targeting 140 kilometers of drilling, so it's a huge amount of drilling, which is very much sticking to Ivanhoe Mines' DNA of growth and creating value through the drill bit.

The right-hand side is just showing an indication of the exploration spend by project, so you can really think of that in terms of the amounts of drilling meters by project. So you can see, we also have a big emphasis this year on our joint venture projects in Kazakhstan.

So with that, I will wrap up and hand back to Tommy Horton to chair the Q&A.

Thank you very much, Alex and thanks everyone. We'll now proceed with Q&A.

[Operator Instructions]

So Operator, please proceed with the phone Q&A.

[Operator Instructions] Your first question comes from the line of Daniel Major from UBS.

Yes, I just wanted to first question, just thinking about the updated life of mine plan for Kamoa, and particularly thinking about the reserve and resource element to that. Looking at the breakdown of the reserves, Kakula's got about 6.6 million tonnes of reserves at 4.8% copper, in the eastern, predominantly eastern section, is my understanding. Do you envisage you have to remove part of that from the reserves in this update, given the flooding and the seismic issue?

You want me to take that one, Tommy?

Yes. Got for it, Alex.

Yes. So, Dan, I don't want to sort of preempt and go into too many details about, you know, what we will be disclosing in a lot of detail next month. But obviously, when you look at the Kakula mine, and specifically parts of the sort of old Kakula mine, so the central area that was flooded and is now largely dewatered, but at least partially dewatered, there will be some zones within that area which will be removed from the reserve. But, you know, largely speaking, those zones were already at quite a mature Phase of extraction anyway, so it's not a huge impact on those areas alone in terms of tonnage. But yes, you know, we could go on this subject for another half an hour. I think it's better once we've got the results out next month, then we can do more of a deep dive.

Okay, thanks. That's useful. And then, second question, in terms of the cost profile, and again, maybe trying to squeeze out more from what we'll get from the, life of mine update, but, essentially, yes, would it be a sensible assumption to assume something comparable to the 2027 guidance, from a cost standpoint, maybe slightly lower in 2028, 2029, assuming you achieve around the 550,000 tonne run rate at Kamoa-Kakula?

Yes, I'd say pretty much the same as Alex. I don't think we should go in too much detail that far in the future, given we'll have that information to the broader public pretty soon. But I think it is fair to say that as production increases, we do expect costs to trend down, but yes, I'll leave it at that for now.

Your next question comes from the line of Lawson Winder from Bank of America Securities.

Can I ask about the U.S. Critical Minerals partnership? And you know, with the context, and my understanding is that currently, Ivanhoe receives no payment for the germanium and gallium contained in the Kakula ore. What would be the technical adjustments needed to extract that value? And then ultimately, like, how do you envision the U.S. partnership factoring in? Could there be some direct funding? And then what would be a timeline to expect some value to be realized from that? And then just a third sort of point on that same subject, is there any scope for the partnership to expand into copper?

Thank you, Bank of America. I don't know if you can hear me well. I think it's a little bit premature to talk about these subjects. Ivanhoe is planning to open a New York and Washington D.C. office, and we spent a lot of time understanding the viewpoint of the United States of America and its government.

I think it's fair to say that the United States places the Democratic Republic of the Congo at the highest order of priority internationally. I think the penny has finally dropped that the Democratic Republic of the Congo is probably the world's greatest source of critical raw materials to the United States and other Western economies. I don't think it would be possible to have more attention on the Congo from the United States government than you could possibly imagine.

Copper is now on the critical raw materials list, and it's now well understood that the middle part of the piece, smelting and refining, is absolutely critical to America's national security. There are a lot of metals in the lead business and the zinc business, which are produced as a byproduct of leaded zinc. Similarly, with copper, a copper smelter recovers many other critical materials. We're the first new mining company to build a world-class smelter, and we see ever-escalating interest in support for development of the DRC, and we expect this only to grow in the future. That's really all I want to say at this time. There's gonna be a -- I think we'll have more discussion about this publicly in the next few months. But thank you for your, for your interest on it.

Thank you very much for your response. If I could ask one more strategic question, Robert, and perhaps Marna, you could weigh in on this, too. How do you view Ivanhoe's current appetite for M&A potential acquisitions, corporate level acquisitions or perhaps large asset acquisitions, particularly in light of the outlook for strengthening free cash flow from here, and then, you know, also in light of your recent partnership with QIA?

Well, I happen to be in Qatar at the moment, and as we said in our press release, we're in a continuous dialogue with all the world's major mining companies and sovereign investors, and we see a lot of opportunity to grow our company. I think interest in the Western Forelands is nearly infinite. We can find copper there a lot faster than we can mill it, that's for sure. So in the future, any excess milling capacity could be filled from initial mining in the Western Forelands, and then it can stand up its own standalone mining, concentrating and even smelting capacity.

I think I can say that after some 40 years in the business, I have never in my lifetime seen the intensity and the focus of interest in the expansion of mineral development, not only in the Congo, and in Zambia, and in Angola, and in South Africa, but around the world. I think there's a more sober understanding now that all critical materials depend largely on Africa for their development. I mean, where else could you go and build a Tier 1 mine for $1.3 billion, as we did in Phase 1, and recover the investment in 10 months? Where could you build a $1.3 million mine and generate $6 billion of free cash flow from it in the first few years?

My God, in the United States, you've got mines like Resolution that have been trying to get a permit for 35 years, and Pebble took another step backwards in Alaska just today. So, if you want to resolve our national security concerns, it's blatantly obvious that Africa is the continent that is the most important, and that places a tremendous premium on our operating team.

The women and men that run our company that actually understand Africa, actually have highly trained African people. Because if there's one limiting factor to this whole mess, it's the shortage of trained people. I would say flat out, the biggest asset our company has is the quality of the operating staff. On the exploration side, probably the best in the world, and on the operations side, probably the best in Africa by a big margin.

So the demand for these kinds of products, copper included, in the next 10 years is like trying to get the contents of the Hoover Dam through a garden hose, and there's really no chance to make a meaningful impact without the Congo. Look at how flat this land is. There's no ice, there's no snow. You got the highest grades in the world. If you got high-grade bauxite and high-grade electricity, hydropower, you win the game in aluminum. It's exactly the same in copper. If you got high-grade copper and hydroelectric power, it's obvious with no ice and snow, this is the best place in the world to mine copper.

Congo has gone from about number 9 in the world in production to number 2 in the last few years that we've been having this dialogue. Louis Watum was the excellent Minister of Mines for the Congo. He worked for Ivanhoe for close to 10 years. He announced recently at Indaba that Chile better look over their left shoulder because here comes the Congo, working to pass Chile as the largest copper producer in the world in the next 5 or 10 years.

And then solar power, I mean, you know, what's a better place to put up solar power than this flat land and this close to the equator? So the summary of these factors, I just want everybody to understand, if you can go to the Congo, you can mine copper. If you can go to the Congo, and you can mine zinc, and with that comes gallium and germanium, you can go to the Congo and mine anything. Congo holds some of the world's best resources of tin, tungsten, tantalum, all manner of rare earths, lithium. You name the critical metal, you're likely to find it at higher grades than anywhere in the world.

And so we're very happy to be focused where we are. Lots of opportunities for us to combine forces with other mining companies. I think it's fair to say we've had discussions with virtually everybody you can imagine in the mining industry, and we expect this sort of thing to continue on a going-forward basis. That's all I'd like to say about it at this time, but it's a very intelligent question. Thank you.

[Operator Instructions] There are no further questions at this time. I will now hand the call back to Tommy Horton for any closing remarks.

Thank you, operator. As we've come up on the hour, we are at time. Unfortunately, there are a few questions that are still in the webcast queue. So I invite those people to reach out to the Investor Relations team directly, and we will answer those questions for you.

So without further ado, we'll wrap up here for the day. Thanks again, everybody, and very much thank you for joining us. We look forward to talking to you again soon, and have a good rest of the day. I'll leave it over to you, the operator, to wrap up.

And this concludes today's call. Thank you for participating. You may all disconnect.

Good morning, ladies and gentlemen, and welcome to Ivanhoe Mines Third Quarter Earnings Conference Call. [Operator Instructions] Also note that this call is being recorded on Thursday, October 30, 2025. I would now like to turn the conference over to Matthew Keevil, Director, Investor Relations and Corporate Communications. Please go ahead.

Thanks very much, operator, and hello, everyone. I'd just like to, first and foremost, thank you all for joining us today. It's my pleasure to welcome you to Ivanhoe Mines' Third Quarter 2025 Financial Results Conference Call. As the operator mentioned, this is Matthew Keevil. I'm the Director of Investor Relations and Corporate Communications.

On the line today from Ivanhoe Mines, we have Founder and Executive Co-Chairman, Robert Friedland; President and Chief Executive Officer, Martie Cloete; Chief Financial Officer, David van Heerden; Chief Operating Officer, Mark Farren; Executive Vice President, Corporate Development and Investor Relations and Mr. Alex Pickard; and Executive Vice President, Projects, Steve Amos.

We will finish today's event with a question-and-answer session. You can submit a question using the Q&A box on the webcast as well as through the conference operator via your phone line. Please contact our Investor Relations team directly for follow-up questions that are not answered during the call. Before we begin, I'd like to remind everyone that today's event will contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.

Details of the forward-looking statements are contained in our October 29 news release as well as on SEDAR+ and at www.ivanhoemines.com. It is now my pleasure to introduce Ivanhoe Mines' Founder and Executive Co-Chair, Robert Friedland, for some opening remarks. Robert, please go ahead.

Well, thank you to everyone, all of our stakeholders all over the world. I'm addressing you from Riyadh, Saudi Arabia, where we've just concluded the future investment initiative that occurs here annually in Saudi Arabia, and it has become the premier investment destination in the world for people that are interested in the materials that comprise our supply chain and country's national security as it pertains to critical raw materials.

And so it's particularly appropriate that we welcome the Qatar Investment Authority with their $500 million equity investment in Ivanhoe Mines. As a leading institutional shareholder in this country with superb relations throughout the Islamic world, which I believe is the least explored part of this planet's mineral endowment. We welcome our Qatar Investment Authority as a long-term shareholder, and we'll be talking more about our excellent relations and future together in the near future.

It's also a very good day today to tell you that yesterday, we fed the first ore to the concentrator at what will become the largest precious metals development in our industry. It was in the 1980s that we began working in Limpopo province in the northern part of South Africa to find a giant deposit on the northern limb of the Bushveld, which is quite different than the rest of the Bushveld.

We have discovered a super monster, very long-lived, ultra-important Tier 1 polymetallic mine. And the ore was fed to the Phase 1 concentrator yesterday, opening up at least a 100-year era of a very important developer of gold, platinum, palladium, rhodium, nickel and copper. And rhodium is one of the most strategic of all metals, but platinum and palladium are also used in data centers and are critical to every server in almost every data center in the world.

So with that, I welcome all of you. It's -- I want to thank all of our people that have been working on our recovery program from the seismic event we experienced in May. We're delighted with our progress and the efforts of our people. And with that, I'll turn this over to Marna to start telling you the story. Thank you very much.

Thank you, Robert, for your introductory comments, and good morning, good evening, everyone, and thanks for joining us on our quarterly call. It's indeed quite exciting times here in South Africa. We're preparing for the G20 Summit later this month. And I think we couldn't have timed the start-up of Platreef better to coincide with this important event in South Africa. You are seeing a picture of our management team there in front of a discharge and settling pond. That's part of our Stage 2 dewatering.

And I'll quickly talk you through our quarter 3 turnaround strategy and some highlights at Kipushi. We're really on the brink of a new horizon. We had new horizons as a tagline associated with us before. And I'm bringing it back again today because we're quite excited about our plans coming together at Kamoa-Kakula. So if we can turn over to the next slide.

The third quarter was always expected to be a slightly softer quarter, but we were reflecting on what we've achieved physically on site. And if we take the team and the massive effort that went into our dewatering. It's going exceptionally well. The pumps that we flew in from China made a difference. We're seeing a record speed of building projects, and Mark will take you through that in the presentation a bit later today.

The team has really pulled off a significant effort to get the mine dewater as quick as possible. And we've got a team of technical experts. We brought them together. We're busy with our new life of mine plan that we plan to release sort of in the first quarter of next year. And we currently anticipate to bring Kamoa-Kakula back to copper production of over 550,000 tonnes in the future.

We were anticipating to be in a position to publish our guidance for 2026 and 2027 a bit sooner, but we did find that there's a lot of moving parts. We are dewatering real time. We have these technical experts that all need to reach consensus. We are quite excited about what's coming through these numbers.

And we would rather take the time and get everything accurate and then publish it out to the market. So by the latest, we will put these numbers out probably early January, but maybe before then. So that's what we anticipate to do over the next couple of months.

Just quickly speaking about Kamoa-Kakula and focusing a bit away from our turnaround strategy, but it's been a very exciting time on the smelter. We're going to start with the heat up soon. We're going to feed first concentrate into the smelter early December. And the technical people on the call will talk you through what that looks like and how we will go about feeding the smelter in early December.

We've also completed turbine 5 at Inga [indiscernible] , another major project that the team completed very successfully, and we're starting to transmit power through the grid, and we expect to receive another 50 megawatts through the grid in November.

And then as Robert mentioned, exciting times at Platreef. And then Kipushi is sort of a rising star that we shouldn't lose track of. We've completed the debottlenecking program, and we are on track to meet our production and cash cost guidance at Kipushi. And then the same for Kamoa-Kakula. We're also on track to meet our revised production guidance and cash cost guidance at Kamoa-Kakula.

Just one number I want to sort of address head on is the cash cost that you see at the bottom of your screen. That is the quarterly cash cost at Kamoa-Kakula. It does read higher than the numbers that you usually see. That's just because of the base used to calculate this cash cost for the quarter. We had lower production. We carried some G&A in that number.

And then obviously, we were feeding a bit lower grade feed into our plant. So that's the reason why you see a differential there. So if we move over to the next slide, talking about health and safety, it remains our #1 priority. And I think these statistics speak for themselves, especially for a company that's currently executing projects and running large turnaround strategies. We haven't had any LTIs recently at -- on site at Kamoa-Kakula.

And the construction of the smelter, which is a significant achievement, was completed without a single lost time injury recorded. I think that is really a great testimony to our project team and our construction teams. And then similarly, the construction of the Kipushi concentrator plant that started in September of 2022 as well as the recently completed debottlenecking program. They were all achieved without a single lost time injury. So I think a big shout out to our operational teams on the ground. They are doing an exceptional job. So with that as an introduction, we will now delve into the details, and I will ask David to take you through our financials for the quarter.

Thank you, Marna, and good morning and good day to everybody joining the call today. We can move straight into the next slide. Kamoa-Kakula sold almost 62,000 tonnes of payable copper in the third quarter. Production for the quarter was in excess of tonnes sold, and that led to an increase of contained copper and concentrate inventory on hand that increased to 59,000 tonnes at the end of the quarter. That was up from almost 54,000 tonnes on hand at the end of Q2.

The inventory at the nearby Lualaba copper smelter in Kolwezi was approximately 7,000 tonnes at the end of Q3, and that's down from the almost 19,000 tonnes that was there at the end of Q2. So the majority of the inventory is really sitting ready to be smelted by the Kamoa-Kakula copper smelter. It is really a supersized piggy bank at the current copper price, which is just waiting to be broken. We expect unsold inventory to gradually decrease, and we've said this previously, but we sort of maintain that, that should decrease to around 17,000 tonnes as the smelter is ramped up. Kamoa recorded revenue of $566 million in the third quarter, and that was at a realized copper price of $4.42 per pound of payable copper.

Moving to the next slide. Kamoa-Kakula recorded EBITDA of $196 million for Q3, and this was impacted by the lower tonnes sold and the lower grade of ore processed as the recovery plan progresses. Considering that this is what at least we believe to be Kamoa-Kakula's loWest point of the turnaround, the margin of 35% looks pretty good.

And cash cost for the third quarter of 2025 was $2.62 per pound of payable copper. Cash cost for the year-to-date sits at $1.97 per pound, and it's still well within our guidance for the year of $1.90 to $2.20 per pound of payable copper. Grade mined at Kakula was roughly 5% in Q1, 4% in Q2 and decreased to 2.5% in the third quarter, which was sort of in line with the overall grade processed from Phase 1, 2 and 3 as well as from the surface stockpiles in the third quarter.

We do expect that mining of the higher-grade areas on the Western side of the Kakula mine will ever commence in November. As Marna mentioned, Q3 was really an anomalous quarter when it comes to cash costs, not only because of the impact of lower grade, but also because of other factors that will be addressed as the turnaround progresses.

At the moment, the mining teams are doing mainly mining development tonnes as part of the reestablishment, which does come at a higher cost than stoping. The crews are also getting used to the smaller heading sizes and efficiencies are expected to improve in the future. And as we have explained previously, we will get noteworthy cash cost reduction benefits and from the smelter from early next year as the smelter ramps up. If we move to the next slide, and this illustrates the usual Kamoa-Kakula EBITDA waterfall.

The EBITDA waterfall highlights the drivers of the quarter-on-quarter EBITDA change for Kamoa-Kakula. So while we recognized $90 million of abnormal cost in Q2 relating to the seismic event in May 2025, this was down to $9 million in the third quarter, resulting in a delta of $81 million illustrated as the green bar to the left. In Q3, only cost relating directly to the dewatering effort was classified as abnormal.

So for Q3, this was mainly the cost of diesel to run the generators powering the dewatering pumps as the mining crews were no longer idle. The other big driver of our lower EBITDA was then the impact of the lower tonnes sold, which was almost $300 million. The higher quarter-on-quarter copper price resulted in a $25 million benefit. Logistics cost was a little bit lower quarter-on-quarter and other costs also came down from the elevated levels in Q2.

We turn to Kipushi on the next slide. Following Kipushi's record production in Q3, Kipushi sold almost 50,000 tonnes of payable zinc, recognizing a record quarterly revenue of $129 million. Kipushi's contribution to Ivanhoe's EBITDA was $27 million for the quarter. I think a pretty good result. Considering that Kipushi had a number of days downtime while the times for the second phase of the debottlenecking was completed in August.

Mark will talk you through the success of the debottlenecking later on in the presentation, and we expect Q4 results to be further improved as the production benefits are realized. Cash cost remains nice and stable and right in the midpoint of our guidance. We expect to see the benefits from the increased production from the fourth quarter onwards.

Turning to Ivanhoe Mines' consolidated profit and EBITDA on the next slide. Ivanhoe recorded a quarterly adjusted EBITDA of $87 million in Q3. The key driver of the lower adjusted EBITDA was really the lower sales at Kamoa-Kakula, as I've already explained, and its impact on Ivanhoe's share of the Kamoa-Kakula's EBITDA. This was partly offset by the increase in Kipushi's EBITDA as exploration expenditure and overheads remained largely consistent. Ivanhoe's profit for the third quarter was $31 million compared to $35 million in Q2 2025.

Turning to a liquidity snapshot on the next slide. Ivanhoe had $1 billion of cash and cash equivalents on hand at the end of September, while Kamoa had cash on hand of $125 million. We completed a private placement with Qatar Investment Authority, as Robert already mentioned in September for gross proceeds of $500 million and received a further $70 million from Jun as they exercise their anti-dilution rights.

And Kamoa Copper concluded a 2-year term facility of $500 million during the quarter and drew down $370 million in early October. Both Ivanhoe Mines and [indiscernible] also funded our proportionate share of a $135 million cash flow from Kamoa-Kakula in September.

Turning to the CapEx spending plans on the next slide. We lowered both the top and the bottom end of Kamoa-Kakula's 2025 capital expenditure by $100 million and just shifted that into 2026. The work on Kamoa-Kakula’s updated life of mine integrated development plan is well underway. And then the 2026 CapEx will be narrowed and better defined as that is completed and worked into the guidance.

Expenditure at Platreef is tracking at the lower end of the 2025 guidance and the capital expenditure guidance range for 2025 and 2026 is kept unchanged. The first feed of the ore into the Phase 1 concentrator took place, as Robert mentioned, recently. And the Phase 2 expansion is proceeding as it's laid out in the feasibility study completed earlier this year, which plans then for the Phase 2 concentrator module to come online in the fourth quarter of 2027.

We are also working on a senior project finance facility for Platreef Phase 2 for a total of $700 million, and that's progressing pretty well and expected to close in the first quarter of next year. Kipushi's debottlenecking program was completed in August, ahead of schedule, under budget, and I've already mentioned, Mark will take you through that. And we have slightly raised CapEx for Kipushi just to cater for accelerated construction of the second tailings facility Paddock as we prepare for increased production following that debottlenecking.

On the next slide, this slide shows our consolidated pro rata financial ratios, which have improved compared to where we were at the end of last quarter. That's mainly due to the cash received from the September private placement from QIA. And we are in a very healthy pro rata cash position with over $1 billion of cash on hand. And we are taking on a little bit of more debt at the Kamoa-Kakula level, but EBITDA and therefore, the net debt ratio will improve as we continue to execute on the turnaround plans at Kamoa-Kakula and as EBITDA from Kipushi increases and Platreef's EBITDA is added in the future.

Our target net leverage ratio remains 1x through the cycle, and we still believe that, that will come down in the near term as these -- as we progress our plans. I now hand over to Mark Farren, our Chief Operating Officer, to start the operations update portion of today's presentation.

Thank you, David. If you go to the next slide, please. Thanks. Okay. So we have spoken about this, and we do think this was the bottom. It wasn't really the milling so much. I mean we milled 3.4 million tonnes, but it's the grade. It's really the grade. And it's -- if I can explain to the listeners, it's really about 2 things. So mainly, it's getting into the higher-grade areas of the Kakula mine, which is all in the lower section of the mine, obviously, where the water issue is.

And then as we move and develop the footprint at Kamoa 1 and Kamoa 2, the grade improves. So you're going to look at a number of things that will influence the grade over the next immediate short term and then over the longer term. So that's why we're sort of pretty sure that we've hit the bottom of everything, hopefully, and we'll see a big turn from now going forward.

What is encouraging is Phase 3 concentrator is running sustainably at about 30% above its design capacity. And when we talk long term, you will see the references always to 17 million tonnes. So setting up this infrastructure that we have to get to the 17-odd million tonnes and then to put -- to increase the grade in all the different areas to get that target -- short-term target, I think, of getting over the 550,000 tonnes of copper. That will be in all the project plans and all the long-term plans that you see coming forward. And my belief is that -- and there will be some further increases above that in the longer term.

Next slide, please, David. Just to talk about the water. The blue looks like a fish. We call it a whale. It actually looks like a whale. But you'll see the West and the East have been joined. Between the 2, it was sort of flooded between the 2 and in the lower sections of both. The mining was actually taking place in the top sections of the West and the top sections of the East a little bit. And those areas are actually the lower grade areas, so the 2% grade areas. The light blue on the Western side is going to be the first target area that we dewater. And we've done this in stages.

So Stage 1 was to install temporary pumping capacity and stabilize the water levels at levels way above where they are now. And then Stage 2 was to put these high-capacity centrifugal pumps down these vertical shafts and then pump out at 2,600 liters per second. Those pumps were imported. They were installed within 6 weeks, and I think the team on site has done an absolutely fantastic job to get all that pumping infrastructure working.

Stage 3 is really going down the declines and opening up within the existing infrastructure, pumping infrastructure and rehabilitating the underground infrastructure and then dewatering first the West and then the East. And we believe in the month of November, the West will be completely dewatered and then we will target the East. And I believe that early next year, the total East will be dewatered.

And as you can imagine, all the crews are waiting to go back into the higher-grade Western section. It's all been scheduled, and I'll talk about the life of mine planning in the next couple of slides as well. But there's a proper solid pumping plan to get the infrastructure back on track and to get the crews back into the higher-grade mining.

Thank you. Next slide. So this is just a picture of what we've had to do. We had to go down through ventilation shafts, about 300 meters deep put in very high capacity pumping systems in. I thought the idea was very clever and it's worked extremely well. It's probably going to be used in the longer term as well because these pumps are working really well as long as the water is clean. So I guess, going forward, we'll use these high-capacity pumps in different areas of the mine.

Thank you. Next slide. This is just a picture to show you what we're dealing with when we talk about rehabilitation. So you'll see the spalling on the side walls, and that was really what that whole incident was about. The seismic activity we referred to is mainly side wall spalling. It's a pillar spalling, which has to be then rehabilitated as you go down and then recapacitate the pumping infrastructure as you go down. The next slide will just show you what it looks like when it's rehabilitated.

Next slide, please. So if you have a look at this, the side walls and the hanging walls are re-supported and it looks like a new mine, and it goes quite fast. We've made very good progress, I believe, with the rehabilitation. And I think, like I said, the month of November, we should open up the whole Western front, which is about 50 new faces that the teams can mine.

Next slide. Yes, and a different approach to planning. This is just one of the pictures, but it's done the same principles are applied to the new mines, the Kamoa 1 and 2 mines, they have the same principles applied. You've got a very good and Marna referred to it, a very good competent team that's working on the mine design of the future. We do believe it will be finished by quarter 1, 2026. And we'll move as fast as we can to give short-term production guidance, aiming for the next 3 years and then the longer term as well. We do believe the engineering is being done with the best experts in the industry to make sure that we get back and that we don't have a repeat of any of this again.

The plan short term, in my opinion, is to get back to 70 million tonnes with the best possible grades. And then you can see that little block in green, which means that we will exceed the 550,000 tonnes per annum in the medium term. Medium term to me is the next 2, 3 years. So -- and then take it on from there to grow the business.

Next slide, please. The smelter, we did speak about the smelter. It's sort of coming in at the right time for us because of a couple of things. Number one is obviously, the thing we've always spoken about is our logistics costs. So we're now half the logistics cost. We dropped it to less than half, I guess, because we're going to report -- we're going to export now 99.7% blister copper, anode copper actually. And the other thing that's just coming sort of -- it's going to help us quite a bit is the asset credits.

And you can see that we're expecting to receive prices of in and around $500 per tonne, which is very high in the industry. But there have been Zambia -- there have been export bans in Zambia, which means that the logistics cost to bring asset in from other countries is going to cost a lot more. So we're sitting right in the DRC where we need the asset for all the other mines. And so I think it's going to be very useful for us.

And then obviously, David, a little piggy bank needs to be broken that 59,000 tonnes of unsold copper needs to be fed into our smelter. And what we've had to do because of the [indiscernible] interruptions. [indiscernible] is still not perfect. We're doing a lot of work to stabilize the infrastructure as well, and we did speak about Inga being commissioned, which was done very, very well.

There are other things that we're doing on that network to stabilize the network completely, and they will take a little bit more time. But we've put in uninterrupted power supply of 60 megawatts. It's a huge project on its own, and it's being commissioned as we speak, which means that we can start feeding our direct to blister smelter. It's over $1 billion project that was done extremely well in my opinion. I think one of the best installations in that country or the best installation that the country has ever seen. I'm very proud of the work that's been done. And that thing will be heated up in the month of November and first heat in December. So we are very excited for those reasons. We're going to make money on the asset, and we're going to drop the transport cost a lot.

Thank you. Next slide. The turbine at Inga is complete. It's online at the moment. It's a huge project on its own. It's been done very, very well. And we will be receiving the first 50 megawatts of power in November, and then that ramps up. If you cast your minds to what it was, it's 180-odd megawatts of power that comes out of that turbine, of which we will be able to receive 150 megawatts. As we fix, like I said earlier, we strengthened the transmission. There are upgrades that we're busy with, such as these resistor banks that we're going to complete in quarter 2 2025, 2026 to increase and improve the stability of the whole infrastructure. There are capacitors that we're also installing as additional projects. But generally, we're strengthening the network for the country. So that whole DC line and its changes over to AC are being strengthened as we speak.

Thank you. Next slide. The green power, we're busy executing 2 of 30 megawatt on-site solar facilities with battery storage. I think these are 2 fantastic projects that also bring our operating cost, our power cost down compared to diesel hugely. It's less than half of the diesel cost. So we're having -- our first 2 will be running in quarter 2, 2026. They're big installations, they have fantastic installations, and we are working on work to expand that on-site solar facility to 120 megawatts.

So the first 2 will give us about 25% -- 20% to 25% of our energy requirements, and you can work out what the rest will do. And I think it's expandable. It's something that we want to take forward and expand incrementally as we grow our business and as we expand into the Western Forelands. It has a very good benefit of being clean and cheap and it complements hydropower very nicely. So I think -- as we move into the future, we'll be working on clean hydropower and clean solar power to expand our business.

Thank you. Next slide. Kipushi, we did speak about Kipushi, I think, a couple of times. We were dealing with the debottlenecking projects. Both of them are now complete. It was split into 2 basically, a shutdown in June and a shutdown in August. Both are complete. There's a little bit of work that we're still doing to add energy back up basically, diesel back up just as contingency back up, and that will be complete in November. We are taking Kipushi to about just north of 250,000 tonnes -- 250,000 to 300,000-odd tonnes of zinc. That will happen from next year and there will be a strong quarter.

This last quarter, quarter 4 will be stronger than quarter 3, which was quite a significant improvement over quarter 2. But we are moving to set up Kipushi to do about 250,000 to 300,000 tonnes of zinc next year, which puts it on the next slide, I think, next slide. Yes, puts it #3 in the world. So it's a small mine, but it's very high grade. And you can just have a look at that grade. It's north of 30%, that little red dot, and it takes us to pretty much the third biggest in the world.

Also, I might add that the zinc price has gone up quite nicely. Our C1 cash cost has been contained very well by the operational people. And the project has been done, I think, competitively on time, on budget. It's gone really well. And we're looking forward to see what Kipushi does over the next couple of years. Thank you. I think, Alex, are you going to do Platreef?

I'm going to take this Mark. Thanks. I'll take it. Yes. So yesterday was a big day for Platreef. We fed the mill with first ore in a long time, ran the mill for 4 hours at 30% bore load, which is in line with mill hot commissioning strike ramp-up. We've since stopped the mills. We're going to add the rest of the ball, so up to 100% charge. That will probably take us a day, 1.5 days, and then we'll restart the plant and start the ramp-up. I would expect approximately a week or so from when we restart the mill, hopefully tomorrow until when we get the first concentrate. So that will be an exciting thing for Platreef.

Next slide, please. I'll talk a bit about Shaft 3. Shaft 3, 4 million tonne per annum rock hoisting shaft. It's the picture in the middle. You can see the sinking head gear, the brown construction there. Really necessary for Phase 1, to sustain Phase 1, but also very important for Phase 2 to ramp up the production to 4 million tonnes plus and to create a nice big stockpile before we start the Phase 2 plant.

With this shaft and with Shaft 1, Shaft 1 is the shaft on the left-hand side in the background, we'll have a total of 5 million tonnes of hoisting capacity. Shaft 1 will, for the most part, be used for mine and material and Shaft 3 will be used for rock hoisting. In the foreground, you can see a whole lot of steel work that is the permanent head gear structure for Phase 3, which we will load into place. The schedule, and we're on schedule is end of March 2026 to start hoisting rock from that shaft. That includes underground rock handling, which is a crusher to conveyors and a tip and then obviously hoisting the -- hoisting through the shaft.

Next slide, please. I'll talk a bit about Phase 2 and Shaft 2. So Phase 2, for those of you who don't know, is a 4 million tonne mine and concentrator, produces about 450,000 ounces, platinum, palladium, rhodium and gold, about 10,000 tonnes of nickel, about 5,000 tonnes of copper. We've awarded the EPCM contract to DRA based in South Africa. They're the same contractors that did the Phase 1 work. We've started the early procurement. We plan to break ground with the earthworks in Q1 next year.

And then Q3 or Q4 2027, we start the big plant. So that's a total of 4 million tonnes with the hoisting capacity. For Shaft 2, which we require for Phase 2, but it also opens up Phase 3. We've just awarded what we call the Slype and line contract. What we've got on site at the moment, you can see the head gear complete. We've got a 3.1 meter diameter raise bore all the way down to 950 meters. What the Slype and line contract does is that it slype the 3.1-meter diameter shaft to a 10-meter diameter shaft. We then line the barrel and equip the barrel.

And by Q4 2028, we plan to use that shaft for mining material. At a later stage, we equip that shaft to hoist rock -- and eventually, that shaft will be an 8 million tonne per annum rock hoisting shaft, which will support Phase 3 of the project. Yes. So very exciting. We will mobilize the crew for the slype and line in Q1 next year. And that's about an 18 -- 24 to 30-month project. Next slide, please. Do you want to take that, Alex?

Yes. Thank you, Steve, and good day to everybody on the call. It's Alex Pickard here. We added this slide really just to congratulate ourselves, I think, on the impeccable timing of first production at Platreef after certainly more than 25 years of effort. We're just past LME Week here in London, and there's obviously been a lot of emphasis in the market on the gold price and also the copper price. But in fact, the PGMs, the Platinum Group Metals are the best-performing metals year-to-date. So platinum is up approximately 78% and palladium is up 56% since January.

So this means that Platreef will produce even stronger margins, remembering, of course, that as we ramp up to Phase 2, we expect to be one of the lowest cash cost producers in the whole industry because of the large-scale mechanized underground mining and also the byproduct credits that we received from nickel and copper.

So on the chart on the right-hand side, you can see the spot basket price for Platreef today, which includes platinum, palladium, rhodium and gold is $1,900 per ounce. And then the target cash cost once Phase 2 is up and running is $600 per ounce. Phase 1 is certainly sub-$1,000 once we are fully ramped up.

If you look also at the sensitivity analysis that we put in our most recent feasibility study, which was published earlier this year, at spot prices, the NPV is 40% to 45% higher than the base case we presented. And I think we're very firmly of the view that the NPVs that you see here on the bottom left are not really reflected in Ivanhoe Mines share price today. But hopefully, that will start to change as we will be reporting revenues and earnings from Platreef from the next quarter, which is quite exciting.

So moving to the next slide and to exploration, starting as usual with the Western Forelands. So across the Western Forelands this year, we've drilled over 40,000 meters of diamond drilling, and that includes a lot of work that we've been doing around the Makoko district, which is pictured here. I'll ask the audience just to look quite carefully at this graphic, which is showing the 18-kilometer long strike length.

And what you can see is the outline of the Makoko West and Kitoko ore bodies where we announced the upgraded resource in May of this year and over 9 million tonnes of contained copper between those 3 ore bodies. You can also see, if you look to the east, the proximity of Kakula West, which is only 8 kilometers away.

And then on this chart, what you're looking at, the larger colored circles that you can see are the holes that we've drilled this year subsequent to the new resource, and you can reference the grade of those holes against the scale that's shown in the key. So what you can see is that we've been very productively infilling the area between Makoko West and Kitoko with some good grade intersections. And as well as that, we've been stepping out to the south of Kitoko and also to the east of Makoko with some success. And I think what we have in the Western Forelands really is some of the best banquet book copper drilling that you will find anywhere in the world.

Our discovery cost is demonstrated at less than $10 per tonne of copper across the Western Forelands. We're now moving into the wet season. It's sort of starting in November and certainly in December. But we've made preparations, again, I think it's the third year running that we'll be drilling through the wet season. So watch this space at the Makoko District, but also elsewhere in the Western Forelands license package.

On the next slide, -- so really the continuation of the strategy that we have at the Western Foreland is the work that we are doing in neighboring Zambia and Angola. So starting first with Angola, we have a huge license package, over 22,000 square kilometers. So that's multiple the size of the Western Forelands. We've been conducting baseline geochem and geophysics, which is now complete. And we are about to start our first drilling on this land package in the fourth quarter. So that's quite exciting.

We have 2 drill rigs mobilized for over 6,000 meters of drilling. Zambia is not quite advanced. We only recently acquired that large land package. And really, we're doing the sort of foundational work to set up to commence drilling in Zambia in Q2 of 2026. So watch this space on both of those fronts.

And then the final slide, moving even further afield, I think Marna mentioned new horizons and Kazakhstan is certainly a new horizon where we've formed an exploration joint venture to earn up to 80% over time, and that is over 16,800 square kilometers. So again, it's, I think, about 7x the size of what we're looking at in the Western Forelands. I think given that we only signed this joint venture in the first quarter and we really state the licenses in Q2, the team -- the joint venture team have done a fantastic job of mobilizing very quickly, and we are already drilling. So we've already started a 17,500 meter diamond drilling campaign.

And then some very good initial news is that we have seen visible copper mineralization in the first drill hole on that license package. So we are very excited about the future in Kazakhstan and looking to leverage from that. So that concludes the presentation, and I will pass back to Matt Keevil to chair the Q&A.

Thanks very much, Alex, and thanks, everybody. We'll now proceed with the Q&A period. First and foremost, we're going to clear the phone lines of any questions coming in through the phones from our analysts. So operator, please do move forward with the phone Q&A period. Thank you.

[Operator Instructions] Your first phone question will be from Ralph Profiti at Stifel Nicolaus.

Very pleasing to see the recovery plan at Kamoa-Kakula going accordingly. And congratulations on the landmark investment by QIA. Marna, as the mine has been dewatering and continues so, have you seen or do you expect to see inflow rates increase basically due to the pressure differential between sort of external and in situ pressures on dewatered workings. It sounds like judging from the progress that inflow rates have at least been relatively stable. And at last, I remember, sort of 3,800 liters a second was kind of that rate. And is this still the case?

Thank you, Ralph. I'm going to let Mark answer the question. It's quite a complicated setup because you've got horizontal pumping as well as vertical pumping. And obviously, as you go ahead and dewater, you need to move infrastructure down. There's temporary installations and permanent installations.

So it's not -- you don't sort of measure it per meter day by day. But we haven't seen increased inflow rates. I think that's safe to say. But Mark maybe just explain to you how the meters that we dewater differentiate from day-to-day as a result of sort of these different pumping installations that we are busy with.

Thanks, Marna. No, that's right. You're actually not wrong, you're pretty good. So we pump around about 4,000 liters a second. It hasn't changed yet. And then we're trying to lower the whole system, let's call it the system, which relies on the vertical pumping system, but also the horizontal -- let's call it the horizontal or the [indiscernible]. So your rehabilitation and your [indiscernible] system also needs to go down at the same rate.

So vertically, it's about a meter per day that we lower. We have not really significantly increased anything. So we're running at about 4,000 liters a second for now. We have updated our hydrological model, which tells us over in the future. So in the future, when you carry on mining, particularly towards the West, we will increase our pumping rates.

So in other words, we will encounter more water. We know about it as we move further West when we're mining. But that's going to be all in hand. If you add the pumping capacity that we have currently, we're sitting with about north of 10,000, about 11,000 liters -- let's say, 10,000 liters a second of pumping capacity with an inflow of 4,000.

As we increase hydrologically, as the water increases as we move West, we increase that vertical and horizontal pumping capacity where it's needed. So it's nothing out of the ordinary and nothing that we don't expect. Thank you.

Understood. I appreciate that. If I can sort of switch gears, a completely different topic and encouraging to see the progress on Platreef. Can you help me bring you up to date on the offtake agreements negotiations with multi-parties and counterparties. I'd just like to know what the milestones we should be looking for as those are secured in the future.

I'm happy to take that. But Alex, maybe you can also just augment. So the Phase 1 concentrate we've placed with Northam, and that's pretty much finalized and in place. And then a portion of our second phase concentrate we've placed with Sibanye. We actually had a meeting this morning with SFA, and they're currently doing a tour of South Africa and capacity.

And we understand that there's likely to be capacity for the remainder of our concentrate, but those portions we still need to tie in as we bring Phase 2 online. But we are quite confident that we will find a home for the remainder. There's also expansion capacities at some of the existing fully integrated producers where one can join forces to do capital expansions if need to be, but we don't even think that would necessarily be needed.

[Operator Instructions] Next, we will hear from Andrew Mikitchook at BMO Capital Markets.

Yes. So some great questions already been asked and answered. But maybe if I could just get a few more comments from Mark on -- maybe on the basis of Slides 20 and 21, where you showed the before and after of the rehabilitation in Kakula. Is that representative of what you're seeing? Or what's the range of impact you're seeing as you're dewatering and your crews are going in there to rehabilitate. And generally, I don't personally consider myself an expert in rehabilitation. Is what we're seeing in those pictures extensive or expensive or time-consuming to rehabilitate?

That's a good -- yes, so it's a good question. It is representative of what we're finding. There are some areas that are much better than that. And there are some -- there's 1 or 2 areas on the eastern side that are worse than that, that we're busy with. But we haven't found anything that we can't deal with. So we're finding the pillars falling as we lower the pumps, we rehabilitate them with crews that are trying to do it. I think there's 7 different crews that are doing different areas, and they've done 10-plus kilometers of this. So they're pretty familiar with what to do.

They're making the progress. They're keeping us on track. And like I said to you, we should get the West open and dewatered in this month, in the month of November, which is a major breakthrough for us. And then we can put the resources in and make sure we get the eastern side reestablished with their pumping systems, et cetera, et cetera. So I do believe they've made the progress we needed them to make.

The risk to me was putting in those big pumps that we didn't know about. We didn't know or I didn’t used them before. We didn't know if it was going to work, and it worked exceptionally well. So we have made the progress that we wanted to make, and we continue to make good progress. We will talk to you if something goes wrong, we will talk to the market and say, look, we hit this problem or that problem. But so far, I think it's going very well. Thank you.

And just to come back to the other project of the moment, the Platreef. We just come back to the Shaft 1 and 3 and how those are performing so far in terms of ramping up the Phase 1 because they're the key that are holding together both the ramp-up and the expansion to Phase 2. Just how has the performance been so far?

I'll do that one as well, if you don't mind. So Phase 1, we sort of pushed out the commissioning of that plant to focus in on the critical infrastructure to get Phase 2 running. So Phase 2 really had to be done through shaft #3. Shaft #3, as Steve pointed out, it is a 4 million tonne hoisting shaft. That shaft will be commissioned and running in quarter 1, basically by March next year.

Remember, Phase 1 is something like 700,000 or 800,000 tonnes a year. It's a tiny little mine. It's a small little mine. But we have gone very quickly. We were executing Phase 2 in parallel. That shaft, that shaft #3 is what we needed. And that I'm telling you now will be running at the end of quarter 1 next year, which completely derisks Phase 1 hoisting. So in other words, the longer open stoping that you need to do in Phase 1 is completely derisked.

You can put mining material down, you can blast, you can hoist, you can do everything else you need. and it accelerates the development towards the footprint of Phase 2. So we can increase the development as much as we need to. We can open up the long-haul stoping phases for ourselves while Steve Amos is busy building the concentrator.

So I think the decision to do that shaft #3 was a good decision. And he also spoke about shaft #2, which we also do Phase 2, although it's for Phase 3. So it's sort of derisking Phase 1 by doing shaft #3, getting Phase 2 ready early and then longer term, setting up Phase 3 by doing shaft #2. So the sequencing is working, in my opinion. The risk is much lower than it would have been. And I think we've done a good job there. It's going to work. Thank you.

[Operator Instructions] And next question will be from [indiscernible] at Bloomberg Intelligence.

I just had 3, if you don't mind. Firstly, on recoveries, you've mentioned that you're aiming to target recoveries of 90%. Obviously, recoveries have been lower than that given the grades you've been processing. And of course, then you'll move up to that 95% later on when things are fully recovered. But just on that 90%, we're roughly at, I think, around 82% in the quarter. When should we apply that 90%? Is that potentially going to come in as early as kind of Q1 next year? Or is that a little bit later?

Maybe I can answer that one. So the reason for the lower recovery, the 82-odd percent is twofold. Low grade, which means a couple of percent -- low feed grade, which means a couple of percent reduction in recovery. And there's also some oxidized copper that had been sitting on the stockpiles. The stockpiles have been there for a number of years, which is not recoverable.

The sulfide is oxidized, it's not recoverable by [indiscernible]. So I think once the stockpiles will be depleted by the end of the year, and once we start mining fresh rock, we will get back to the close to 90% recovery, which we were sort of achieving before we had the issues.

I'm not sure if we mentioned that we are busy with a project called Project 95 at Kamoa Phase 1 and Phase 2. It's basically installing a whole lot of regrind capacity. And the reason we call it Project 95 is we're going to take the 90-odd percent recovery up to 95% recovery, and that will be commissioned in Q2 next year. So Q2 next year, we'll be mining fresh rock, the grade will be better and the plant will be achieving 95% recovery on Phase 1 and Phase 2.

Okay. So it's 95% from Q2 next year on Phase 1 and Phase 2 and potentially is 90% by Q1. Is that correct?

Yes, correct.

Okay. Got it. And then just another question on the stockpiles, which you're working through, which have helped kind of feed the concentrators while you rehabilitate the mine. So the plan is those stockpiles are depleted by the end of Q1, although I think I may have misheard, but you may have just mentioned they may be depleted by the end of this year.

But I just want to kind of try and understand the transition from stockpiled ore feeding the concentrators to mined ore, so kind of having run-of-mine feed come through. Is there a risk? How are you kind of managing that transition? Kind of is there a risk that you deplete some of your inventories, your stockpiles, your surface stockpiles before you've got sufficient run of mine ore to feed the concentrators?

So yes, I think there will be a reduction in throughput through the concentrators, in particular, at Kakula. The additional tonnes we mined at Kamoa will tram across to Kakula to try and assist there as well. I think there's an upside in terms of the material being fresh in terms of recovery and processing. But the production rate at Kakula Phase 1 and Phase 2 will reduce slightly just because there's not enough fresh run of mine to fill those plants to fill the 10.5 million tonnes that we've -- capacity that we've got installed there.

Okay. Understood. And then final question, just on the stockpiles, the copper and concentrate stockpiles at 59,000 tonnes. How should we think about how that gets drawn down over the course of 2026? Kind of what's the optimal level that, that hits and by when?

I think the optimal level from what I can remember is about 19,000 tonnes. That's the inventory and the stocks ahead of the smelter. They've got a ramp-up plan, which completes in about Q3 2026. So certainly by Q3 2026, that 59,000 tonnes will be down to 19,000 tonnes.

And at this time, I would like to turn the conference back over to Matthew Keevil.

Thanks very much, operator. And we've come up on the hour here, and there are no questions sitting in our webcast queue. So with that, we'll wrap up for the day. Thanks again, everybody, very much for joining us, and we're looking very much forward to a lot of great news coming out of the recovery program and the ramp-up of Platreef over the next few months. So we look forward to talking to you again, and have a great day. With that, please wrap up, operator.

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.