Lundin Mining Stock

Ladies and gentlemen, thank you for standing by. Welcome to Lundin Mining's Second Quarter 2026 Financial Results Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would like now to turn the conference over to Jack Lundin, President and Chief Executive Officer. Please go ahead.

Good morning, and welcome to Lundin Mining's Second Quarter 2026 Conference Call. Thank you for joining us today. A press release and presentation summarizing the quarter's results are available on our website, where a replay of this call will also be made available.

Before we begin, I would like to remind everyone that today's presentation and certain comments during the call, including our Q&A, will include forward-looking information that is subject to risks and uncertainties. I draw your attention to the cautionary statements on Slide 2 and encourage you to review our MD&A and related filings available on SEDAR for a full description of the relevant risk factors. As a reminder, all amounts discussed on today's call are in U.S. dollars unless otherwise noted.

Joining me on the call today is Juan Andres Morel, our Chief Operating Officer, and Teitur Poulsen, our Chief Financial Officer.

Turning to Slide 4. The second quarter was another productive period for the company, operationally, financially and strategically.

In line with our corporate vision, we completed the acquisition of an additional 5% interest in Caserones from our partner, JX Advanced Metals, bringing our total ownership to 75%. We also acquired a 31% interest in the Los Helados project, all for total consideration of $215 million. Los Helados is a large copper gold deposit located approximately 17 kilometers south of Caserones.

This transaction strengthens our mineral resource base while providing compelling long-term growth optionality in a district we know well. On June 17, we hosted our second annual Capital Markets Day, where we built on our strategic vision from last year and updated our financial outlook for the next 5 and 10 years. We highlighted multiple low capital-intensive brownfield expansion opportunities at our 3 existing operations, Candelaria, Caserones and Chapada, alongside the transformational long-term growth potential of the Vicuña project.

These opportunities collectively underpin our path to becoming a top 10 global copper producer. At the CMD, we approved the construction of an additional ball mill at Chapada, which will result in improved recoveries at the operation in anticipation of the Saúva gold project, another tangible step in converting our brownfield pipeline into production. Construction is expected to commence by year-end with commissioning targeted for late 2027.

At Vicuña, a significant milestone was achieved during the quarter with the approval of the inclusion of the Josemaria and Filo del Sol deposits under Argentina's RIGI PEELP program. Vicuña is the first copper mining project in Argentina to receive this more favorable designation. The approval provides long-term fiscal stability and investment certainty and is a meaningful step forward as we advance towards the Stage 1 sanctioning decision.

Subsequent to the quarter, Vicuña announced a long-term royalty and infrastructure trust agreement with the San Juan province over the life of mine, which consolidates pre-existing provincial royalties on the Filo del Sol and Josemaria deposits into one framework. This includes a 3% mining royalty and a 1.5% gross revenue royalty to form a provincial infrastructure trust. The agreement provides long-term economic certainty and enhances the stability of the operating framework as we continue to progress toward a sanctioning decision.

Lastly, on this slide, we repurchased approximately 2.2 million shares during the quarter, bringing our total year-to-date up to 6.1 million, which is consistent with our confidence in the intrinsic value of the company and the strength of our balance sheet. Since 2017, we have returned over $1.8 billion to shareholders through dividends and buybacks.

Operationally, the quarter was very consistent, benefiting from disciplined execution across our operations and a supportive copper price environment. Copper production of approximately 76,900 tonnes at a consolidated cash cost of $2.11 per pound translated into $1.2 billion in revenue and $360 million of free cash flow from operations, further strengthening our balance sheet and providing the financial flexibility to continue investing in our growth pipeline while returning capital to shareholders.

Despite the storm event after the quarter, which Juan Andres will talk to in more detail in the operations section, at the halfway point of the year, we continue to remain on track to achieve our annual production guidance range. Our operations have performed well, giving us confidence in our ability to deliver on our full year objectives.

Operational costs during the quarter were impacted by higher diesel prices. Should current pricing persist throughout the remainder of the year, we do still expect to be within our guidance cost outlook -- our guided cost outlook, excuse me.

Looking ahead, our focus continues to be on safety performance, delivering operational excellence, advancing our portfolio of organic growth opportunities and progressing the Vicuña project toward a sanctioning decision. Supported by high-margin, long-life assets, a disciplined capital allocation strategy and one of the strongest copper growth profiles in the industry, we believe Lundin Mining is well positioned to deliver sustainable long-term value for our shareholders.

I will now hand it over to Juan Andres to walk through the operational results in more detail.

Thank you, Jack, and good morning, everyone. Our operations performed consistently in the second quarter, and we remain on track to meet our annual production guidance for both copper and gold.

Subsequent to the end of the quarter, the storm in Chile impacted operations at Caserones, and I will provide more detail on this later on in the presentation.

For the quarter, copper production from our 3 operations totaled 76,900 tonnes, as mentioned previously. And for the first half of the year, we produced approximately 157,000 tonnes of copper. Gold production for the quarter was 33,000 ounces, bringing our year-to-date gold production to approximately 65,000 ounces. When we compare our first half copper production to our full year guidance range of 310,000 tonnes to 335,000 tonnes, we are tracking to guidance despite the weather-related events mentioned earlier, which is consistent with our expectations that production will be second half weighted, particularly at Candelaria.

For gold, we're also well positioned to achieve our full year guidance of 134,000 ounces to 149,000 ounces. Overall, the portfolio is performing in line with our planning assumptions, and our operations are delivering the consistency we need to meet our targets.

Moving to each operation individually. At Caserones, copper production for the quarter was approximately 34,000 tonnes, with higher grades from Phase 6 and strong throughput continuing to benefit from our full potential program initiatives. Year-to-date production is 73,000 tonnes.

Copper production at Candelaria for the quarter was approximately 31,000 tonnes with mining rates somewhat lower than the first quarter, reflecting additional shovel maintenance and ramp work in Phase 11 of the open pit. We remain confident that Candelaria is on track to meet its full year guidance. Candelaria's production profile remains second half weighted with higher grades planned, expected in the third and fourth quarter as we continue advancing Phase 12. Gold production for the quarter was approximately 18,000 ounces, in line with expectations.

At Chapada, we had a good quarter with strong throughput and copper grades slightly better than recent periods as we access higher-grade portions in the South pit. Copper production for the quarter was approximately 12,000 tonnes and gold production was 16,000 ounces. We anticipate production levels to remain consistent with Q2 through the second half of the year.

Subsequent to the quarter, Chile, Atacama region suffered severe winter storms that caused regional floodings and significant snowfall. Candelaria saw over 35 millimeters of rain and Caserones had 3.4 meters of snow. The country reported 13 fatalities and over 2,200 injuries associated with the storm, a truly tragic event that impacted several regions in Chile.

I want to acknowledge the Caserones and Candelaria teams for all their hard work and proactively taking precautionary measures to protect employees and a special thank you to the crew at Caserones that were isolated at the site during the storm for their dedication. We are fortunate that everyone was safe and no injuries were reported at our operations.

Mining operations at Candelaria were briefly impacted by heavy rainfall. However, the mill was able to continue to operate using existing ore stockpiles. Mining operations have since returned to full capacity, and the company remains on track to meet its full year production guidance.

At Caserones, operations were disrupted due to the heavy snowfall and high winds, which limited access to site and loss of power for 12 days. Backup power generators supported critical activities during this time. Winds reached over 125 kilometers per hour and ice buildup damaged 2 power line towers that require repairs. Crews worked all last week to remove the damaged structure and replace it. The photo on the right highlights the damage to the upper tower and cross arm of one of the towers. Power has been restored at site and the restart of operations at Caserones is currently underway. Initial concentrate production is expected by the end of the week and full capacity early next week. Prior to the storm, Caserones was tracking to the upper end of the copper guidance, producing 73,000 tonnes in the first half of the year against the range of 130,000 tonnes to 140,000 tonnes. We account for some weather-related disruptions during our planning process, but not to this magnitude.

After reviewing the mine plan for the remainder of the year and making some adjustments, we now anticipate coming in on the lower half of the guidance range at Caserones. This assumes that the weather cooperates with us for the rest of the year and operations performed well in the third and fourth quarter.

Cash cost guidance at Caserones remains the same. Year-to-date, we're tracking below the guidance range at $1.85 per pound, and we now anticipate being within the cost guidance range of Caserones, which is $2.05 per pound to $2.25 per pound. Candelaria and Chapada continue to perform well, and we reiterate our full year consolidated production guidance range of 310,000 tonnes to 335,000 tonnes of copper and 134,000 ounces to 149,000 ounces of gold for the year.

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

Thank you, Juan Andres, and good morning, everybody. As mentioned earlier, this was another quarter of consistent operational performance, which has translated into excellent financial results. Revenue from operations for the quarter was over $1.2 billion, a near record, driven by strong copper and gold prices alongside consistent production volumes across our 3 operations.

Our revenue mix remained heavily skewed towards copper, which accounted for approximately 88% of total revenue in the quarter, providing one of the highest leverages to copper amongst our peers. Gold contributed approximately 8% and moly approximately 2%, with the remainder from silver and other metals.

By operation, Caserones was the largest revenue contributor at approximately $518 million, followed by Candelaria at approximately $476 million and Chapada at $219 million. On a year-to-date basis, revenue totaled $2.4 billion, reflecting the significant step-up in realized prices for both copper and gold compared to prior year comparable period.

Now turning to volumes sold and realized prices. During the quarter, we produced 77,000 tonnes copper and sold approximately 74,000 tonnes, one of the lower quarters in recent times in terms of sales volumes for copper. This relatively low sales volume was offset by a record high realized copper price of $6.51 per pound and a meaningful uplift from $4.40 per pound realized in the same quarter last year.

Gold was sold at a realized price of $4,385 per ounce. At the end of the quarter, approximately 47,600 tonnes of copper remained provisionally priced at $6.07 per pound, with final pricing to be settled in the coming quarters with the majority of these to be settled during the third quarter.

Moving to production costs. The underlying cost structure across our operations remained stable during the quarter with total production cost of approximately $513 million. The primary driver of modest cost pressure in the quarter was higher diesel prices, which impacted all 3 operations to varying degrees. As Jack noted, should diesel prices persist at current levels through the remainder of the year, we still expect to meet consolidated cash cost guidance of $1.90 to $2.10 per pound copper.

Excluding this fuel-driven impact, the underlying operational cost base continues to perform in line with our expectation. Higher diesel prices increased costs by approximately $15 million in the second quarter as compared to the first quarter, equating to approximately $0.08 to $0.10 per pound copper on a consolidated basis. Our consolidated cash cost was $2.11 per pound of copper for the quarter, demonstrating disciplined cost management despite higher diesel prices. Although this was slightly above our 2026 guidance range of $1.90 to $2.10 per pound, we remain on track to achieve full year guidance. Year-to-date cash costs are $1.88 per pound, below the low end of the full year guidance range.

At Caserones, cash costs remained broadly in line with expectation at $2.14 per pound. The cash costs are continuing to benefit from strong copper production and favorable TC/RC terms and somewhat offset by higher diesel costs during this quarter.

At Candelaria, cash costs were somewhat higher in the quarter at $2.65 (sic) [ $2.63 ] per pound, reflecting lower byproduct credits driven by a lower realized gold price compared to recent periods as well as slightly higher stripping costs and lower sold volumes relative to the prior quarter.

In addition, Candelaria also has a higher level of diesel consumption relative to our other assets, and therefore, the increase in diesel prices is more impactful at Candelaria compared to our other assets.

At Chapada, the absolute cost for the quarter amounted to $84 million, which is in line with prior quarter. The cash cost recorded was $0.62 per pound, which is below the bottom end of the full year guidance at Chapada at $0.75 to $0.95 per pound, with the outperformance mainly relating to higher byproduct credits from a higher realized gold price as well as higher gold volume sold. The company's consolidated cash cost guidance for the year remains at $1.90 to $2.10 per pound of copper.

Turning to capital expenditure. Sustaining capital expenditure for the quarter were $111 million, with spending across all 3 operations primarily directed toward open pit waste stripping, underground mine development, tailings storage facility upgrades and investment in new mining equipment. Expansionary capital expenditure were $83 million in the quarter, bringing year-to-date expansionary spend to $137 million.

The majority of the expansionary capital in the quarter was attributable to the Vicuña project, where spending totaled $74 million as activities continue to ramp up, including engineering, training and early earthworks.

As previously announced at Chapada, the sanctioning of the additional ball mill on the Saúva project gold project has increased our full year expansionary capital guidance from $50 million to $85 million with construction expected to commence before year-end and commissioning targeted for late 2027.

Full year sustaining capital guidance remains unchanged at $550 million, and we continue to reaffirm our total 2027 (sic) [ 2026] capital expenditure guidance of $1.030 billion for the full year, implying a higher spend rate in the second half of the year to meet that guidance.

Our key financial metrics for the second quarter are presented on Slides 16 and 17. We generated adjusted EBITDA of $658 million for the quarter and adjusted operating cash flow of $495 million. On a year-to-date basis, adjusted EBITDA now stands at approximately $1.3 billion and adjusted operating cash flow at $945 million, both of which are tracking ahead of our full year guidance as provided at our recent Capital Markets Day event in June.

Free cash flow from operations for the quarter was -- excuse me, was $360 million, which reflects a working capital build of $36 million, sustaining capital investment of $111 million as well as cash taxes paid of $139 million. Adjusted earnings attributable to Lundin Mining shareholders was $257 million and on a per share basis, $0.30 for the quarter.

Slide 18 presents in greater detail the sources and uses of cash in the second quarter. The company's balance sheet remains strong, and we continue to hold a net cash position on the balance sheet. As already mentioned, the company generated adjusted operating cash flow of $495 million during the quarter. And after working capital build and capital investments, the free cash flow from -- the free cash flow generated during the quarter amounted to $265 million. We completed the $250 million acquisition of an additional 5% interest in Caserones, along with a 31% interest in Los Helados during the quarter. This acquisition was funded entirely from our balance sheet.

During the quarter, we paid 2 regular quarterly dividends with one payment occurring in April and another in June in total $34 million. In addition, we completed approximately $56 million of share repurchases under our normal course issuer bid in the quarter.

After the distribution of $82 million to the minority shareholder in Caserones and certain other smaller cash outlays, the net result is our balance sheet, which remains at a net cash position of $79 million despite having returned $90 million to shareholders during the quarter, in addition to the significant investments in the Vicuña district through the acquisition of an additional equity stake in Caserones mine as well as a meaningful stake in the Los Helados project in parallel with the continued capital investments into the Vicuña project.

And in addition, having returned $90 million in shareholder distributions. In addition to the net cash on the balance sheet, the company continues to have liquidity of $2.5 billion available through its corporate revolving credit facility. This facility will increase to $4.5 billion once the Stage 1 of Vicuña has been sanctioned, thus leaving the company fully funded for Stage 1 constructions at the Vicuña project.

I will now turn the call back to Jack to provide an update on the Vicuña project and our concluding remarks.

Thank you, Teitur. Vicuña continues to make significant progress towards a potential sanction decision with project activities already underway and a strong foundation being established for future development. We are pleased to announce that yesterday, we secured a long-term royalty agreement with San Juan Province that locked in fiscal stability for the life of mine. The provincial royalty agreement marks another important milestone in advancing the project and further reinforces the strong collaborative relationship we have established with the province of San Juan.

The Vicuña project is subject to 2 existing provincial royalties, a 3% mining royalty and a 1.5% provincial infrastructure trust. Both of these royalties were reflected in the economics of the PEA.

The provincial agreement consolidates infrastructure obligations associated with both deposits into a single 1.5% gross revenue infrastructure trust and caps the provincial mining royalty at 3% of gross revenue, both fixed for the life of the mine.

As part of the agreement, the province will receive an upfront $250 million infrastructure trust contribution, $125 million net to Lundin Mining that will provide funds to the San Juan province for local infrastructure and community initiatives. The advance will help deliver near-term tangible benefits to stakeholders while contributing to the broader development of the project. Vicuña will receive a 5-year infrastructure trust payment holiday from first production. The agreement is subject to provincial approval and the advanced payment is expected to close in the fourth quarter of 2026.

Additionally, last week, we also received approval from the National Gas and Electric Regulatory entity to build the high-voltage power line and electrical infrastructure for the project. Once completed, it will tie into the Argentine interconnection system. Vicuña will build out the Rodeo-Chaparro corridor as part of the future electrical infrastructure of San Juan, which will contribute to the growth of the province in the decades to come. This approval now clears the way and through the funding of the infrastructure, it allows Vicuña to access the majority of the capacity with the remainder available for public use.

Together with the recent RIGI PEELP approval and the provincial agreements, it strengthens the foundation for Vicuña and supports our objective of responsibly unlocking the full potential of the project for the benefit of all stakeholders. Our near-term priorities are to advance project and operational readiness, deliver the Stage 1 estimate update, unlock further value across Stages 2 and 3 through trade-offs and engineering and position Vicuña for a successful sanction decision as early as before the end of this year.

With the support of Lundin Mining and our partners, BHP and the benefits provided through RIGI, we are building the foundation for what has the potential to become one of the world's most significant copper, gold, silver districts.

In closing, the quarter demonstrated the operational consistency of our business, high-margin production from 3 long-life assets at a time of strong copper and gold prices, which translated into $1.2 billion in revenue, $658 million of adjusted EBITDA and $360 million of free cash flow from operations. At the midway point of this year, we remain on track to achieve our full year consolidated production guidance range.

Although the storm affected operations at Caserones subsequent to the second quarter, we still expect to achieve guidance at Caserones given we're tracking towards the upper end of the guidance range prior to this shutdown. While we are facing modest cost pressures from higher diesel prices, we expect to remain within cost guidance for the year. Strategically, the quarter was significant with the RIGI approval, royalty agreement and power line approval at Vicuña, the sanctioning of the Chapada ball mill, the closing of the transaction to increase ownership in Caserones and the addition of the Los Helados interest, all reflect disciplined execution of a clear and well-funded growth strategy. Each of these steps moves us meaningfully closer to our goal of becoming a top 10 global copper producer.

Operator, I will now open the call for any questions. Thank you.

[Operator Instructions] Our first question will come from Orest Wowkodaw with Scotiabank.

A question about the increase, the $100 million or up to $100 million increase in the NCIB that was announced. Curious if you could speak or give us a little bit of color on that. It's very positive to see something like that as you're about to go into a big project build.

And I'm just curious if we could -- if there's any read-through on that with respect to where you're seeing your balance sheet, but also whether we could see similar increases to the NCIB moving forward, say, for next year?

Thank you for the question. As we mentioned in the press release and on the call here that we've increased it for a onetime up to $100 million additional, inclusive of the $150 million original buyback approval. So for us, we're looking at that based on the valuation that we have this year, based on the financial performance that we've had and the positive tailwinds that we're seeing in commodity prices. And so therefore, I think we're being opportunistic and the Board was able to approve that.

Going forward, it's too early to say if we're going to be looking to increase. As you mentioned, we're going to be coming into a pretty capital-intensive period with Vicuña and our other brownfield expansion opportunities. So we'll look at that later down the line. But for now, I think looking at maintaining our absolute shareholder distribution program of $220 million a year in dividends and buybacks, we'll look for that to be maintained in the long term, and this is more of a one-off opportunity.

Appreciate the color. If I could just shift gears for a second to Vicuña. You mentioned the -- you're working on the Stage 1 update. Can you just walk us through what milestones are left that would be in front of the sanctioning decision, I guess, later this fall?

Absolutely. I mean, mainly, it's the bottom-up estimate that we're doing for Stage 1 and kind of refining the execution plan and working with our contractors to really put ourselves in a position to have a successful execution plan for Stage 1.

As you've seen, we've now got the long-term stability agreement in place with the province of San Juan that came on the heels of achieving the RIGI PEELP approval back in June. And so from permitting approval perspective, we're basically there. There are some various sectoral permits that we're still going to be achieving, which would be a requirement for a sanction decision. But really, the focus for us now is getting this bottom-up estimate completed, reviewing that with the technical independent peer review teams, both at BHP and Lundin Mining and then seeking a favorable sanction approval before -- potentially before the end of this year.

And our next question is going to come from Matt Greene with Goldman Sachs.

Juan Andres, perhaps one for you. Look, I appreciate you're juggling some extreme external factors here with the weather. But just on Candelaria with the rain well beyond your normal operating assumptions. How do regulators approach this when you have to maybe temporarily discharge water? And perhaps you can just talk us through how you manage all that excess water. Do you have to direct it into the pit? I appreciate you're back in production now, but I'm just kind of thinking kind of how you're able to manage that and if there's anything around from an environmental standpoint that could come back?

Yes. Thank you, Matt, for the question. Interesting angle for the event. Most of the -- we're in the middle of the desert. So most of the water is absorbed by the pit and the waste dump. So we don't have any contact water that we need to discharge to any nearby river or body of water. So this is a normal operation. We did have an inspection from SERNAGEOMIN, which is the agency that oversees the mining industry in Chile, and they visited all our facilities in Candelaria and found that everything was being operated and managed as expected.

Okay. That's great to hear. And then just on Caserones, in your opening remarks, you said you're reviewing the mine plan and making some adjustments and you feel comfortable in the guidance range. Can you just expand on what adjustments you are making to the mine plan in the second half?

Yes. So we found some opportunities basically by adjusting the location of some loading equipment, we will be able to ensure the high grades that we had in the fourth quarter to make sure that they are going to be mined during the year. So basically keeping the high grades within the mine plan of 2026.

And we also found an opportunity to postpone one shutdown at the mill. Given that we will be basically not operating for several weeks. We think that the liners of the mill can be postponed until the first week of January.

Got it. That's great. And if I could just squeeze one more in, more for clarification. Teitur, congratulations on the San Juan province agreement. Just to be clear, that payment in the December quarter, is that already budgeted in your CapEx guidance? Sorry if I missed that.

No, it's not budgeted. And we don't really see it as a CapEx item. This is an advanced contribution in return for getting a 5-year royalty holiday when we start up production. So we've paid upfront $250 million, and that's roughly [ NPV ] neutral when you look at saving royalties for the first 5 years of production.

And the next question is going to come from Ioannis Masvoulas with Morgan Stanley.

First question on Vicuña. I guess we'll have to wait for the FID decision and outcome of the CapEx review for Stage 1 sometime by the end of the year. But I also wanted to ask about Stages 2 and 3, where you're planning to release a PFS by the second half of next year. Can you talk about your latest thoughts around possible changes to the flow sheet and mine planning and whether a similar bottom-up CapEx review is on the cards like we've seen with Stage 1.

Ioannis, thanks for the question. So definitely, before we would look to sanction the future stages of Vicuña, we would be doing a bottom-up estimate on both Stages 2 and 3. Right now, as we guided in our Capital Markets Day, kind of second half of next year to have an updated study on Stages 2 and 3, we are looking at kind of simplifying the flow sheet for Stage 2, a bit complex in what we presented in the PEA. So the team is working on kind of a simplified flow sheet, which will probably form the basis of the PFS.

And then on Stage 3, a lot of the information is coming through the updated drill program that we have. So we continue to drill out the deposit, looking at the lateral extensions east and west in the Aurora Zone. We're also finding some mineralization kind of to the north and south. I mean the deposit continues to grow in all directions. So that will inform our optimized mine plan. So there's going to be some changes and some improvements that will be presented in the second half of next year, but nothing substantive that we could be reporting on other than that flow sheet optimization that I mentioned for Stage 2.

And second question on Caserones on the moly production, which was fairly weak relative to expectations due to recoveries that have come down to 27%. Can you give us a sense on what we should expect for the second half of this year? And when do you actually expect recoveries to improve towards historical levels?

Thank you for the question. We have been experiencing some metallurgical problems in the moly plant. As we move from the secondary portion of the deposit into the primary portion of the deposit, we're seeing a new mineralogic species coming up with the moly, and that has been causing some recovery issues at the moly plant. So we're dealing with that. We're investigating different reagents and changes to the flow sheet.

But definitely for this year, we do not expect to meet the target that we had for the moly, and we expect to resume the level of recoveries and performance in the next year. And of course, as we move away from that zone in the pit, recoveries will improve. But as long as we're in that part of the deposit, we'll be seeing these challenges.

Very clear. And maybe one last question for Teitur on this upfront payment of $250 million on a 100% basis related to the infrastructure trust. If I were to put everything on spot, it would seem that it's actually potentially NPV positive for Lundin Mining. Is that fair to say? And was your comment on NPV neutral based on a more conservative price deck? Or would you have a different conclusion based on what you have on your production profile?

Yes. I mean it all, I guess, depends on what your view on copper price is at the time when we start off, it will also obviously depend on the ramp-up profile in that initial phase because the term is locked for 5 years. So depending on the cumulative production volume over that 5 years, then that will dictate whether this has been neutral or slightly positive or negative. But I think all stakeholders, Austin, BHP and the province have looked at this as being roughly a neutral deal to everybody.

And the next question will come from Matthew Murphy with BMO Capital Markets.

I had another weather question. How did Vicuña fare in this winter storm? You said Caserones is, I think, up 3.5 meters of snow. Did you see the same thing on the Argentina side of the border?

Matt, great question. And yes, definitely, the -- on the Argentinian side of the border and where the Batidero camp is located approximately 40 kilometers or 50 kilometers away from where Caserones is, it was an extreme weather event that they felt on -- at Batidero and in the upper region of the San Juan province.

So fortunately, no major safety incidents and the recovery program is less extensive because we're not in project development mode or in operations. There are some early work activities that had to be paused. And drilling in the winter for the Vicuña district has always tightened up to make sure that we're not having rigs kind of exposed in far-to-reach areas. So I think they were well prepared, but no doubt, it was a significant severe weather event that impacted both sides of that mountain range.

And do you know last time Caserones would have experienced something like this?

Yes. Matt, this is Juan Andres. In 2017, the previous operator also experienced a similar situation like this. At that time, they had like 320 centimeters of snow, and they also experienced a shutdown. So we could say likely, there was some experience in the team on dealing with a situation like this.

Got it. Okay. Yes. Just interested because everyone thinks about high altitude and how risky and then you have a major event and no guidance cut. So that's good to see. And then the language around sanctioning where it says as early as year-end, are we still okay to read that as likely before year-end for Vicuña?

Yes, Matt, it's Jack here. Of course, yes, that's what we've been setting our targets on since the earlier part of this year. And so that still remains intact. As you've seen, we've made a lot of progress on getting the various stability agreements in place, and now we're working on the estimate and the execution plan for Stage 1. So yes, we're still trending towards the end of this year.

Okay. And then one more just on the cadence of CapEx. You're tracking fairly low relative to guidance really across the board, but especially on expansionary CapEx items. Any thoughts around how we might see that ramp?

Yes. No, I think that's just a -- the nature of a big project like Vicuña, you're continuously ramping up. So activity levels towards the end of the year are always going to be higher than at the beginning of the year. So that's not really outside our forecast at the moment.

On the sustaining CapEx side, I think it's particularly Caserones, which is lagging a bit behind our guidance. And that's, again, related to cadence of certain equipment purchases and certain other projects that are scheduled in the second half, notably on IT improvements, telecommunication improvements, et cetera. So the Caserones team feels confident that they will be able to catch up in the second half on some of these projects. So therefore, we retain full year guidance on all fronts.

And to complement what Teitur was saying also, remember that we sanctioned the additional ball mill at Chapada at the midpoint of this year. So that expansionary CapEx wouldn't have come in until now.

Our next question will come from Lawson Winder with Bank of America.

This is Adam Smiarowski calling on behalf of Lawson. Just following up on the Chapada. How should we think about growth CapEx there in 2027? Should we expect to see a level similar to 2026? Any detail would be appreciated there.

Yes. For the ball mill, that project is going to be all in around about $65 million, of which we're spending $35 million this year. So it's roughly split 50-50 between this year and next year. And then if you couple in this Phase 1 of Saúva, we've guided to all-in CapEx of $110 million for that project, including the ball mill. So the ball mill is $65 million out of the $110 million, and the rest will be allocated on Saúva as and when that's finally sanctioned by our Board.

Fantastic. And I was hoping you could talk about the strategy on M&A following the activity this quarter with the increased stake in Caserones and acquiring interest at Los Helados. Is there an appetite for more or for larger acquisitions?

Thanks for the question. As always, Lundin Mining being a Lundin Group entity, we stay opportunistic when we're looking at opportunities to grow our portfolio through M&A activities. I mean we've got a very solid asset base today. We're looking to grow production at all of our sites. And then with the big development project of Vicuña, I think we've got a good plate of opportunities in the existing portfolio.

That being said, with the financial standing that we have and kind of where we're seeing the market today, there's always opportunities to look at. But at the moment, we're not actively pursuing anything of scale, and we really are focused on the assets that we have in our portfolio.

And our next question will come from Stefan Ioannou with ATB.

Just curious, you mentioned the Stage 2 sort of update study anticipated sometime later next year would look to sort of a simplified flow sheet or operation. Can you just say, is that centered largely on the gold and the copper sort of components coming out of Filo? Or should we read into that, that you may also be considering potentially other sort of strategic feed sources going into Stage 2?

Thanks for the question. No, really, it is just optimizing around the ore body of the Filo del Sol deposits and the oxide zone at Filo. So it's still very much intact on building off of what we designed for Stage 2, but just looking to optimize and potentially simplify that flow sheet.

And our next question will come from Matt Greene with Goldman Sachs.

Actually, just a follow-on from that Phase 2 streamlining. How are you -- I mean, to the extent you can, are you looking at sort of new technologies, novel technologies? Is this part of your thinking?

Yes, Matt. Good question as well. Like we're definitely looking at different types of leaching technologies and seeing how we can implement that into the design for Stage 2. Too early to say kind of what that is and how we're going to be building off of it. But absolutely, we're seeing some very promising technologies being produced today for leaching, and that's something that we would love to and we will look to incorporate in the updated study for Stage 2.

This does conclude today's Q&A session. And also, this will conclude today's conference call. Thank you for participating, and you may now disconnect.

Perfect. Well, good afternoon, everyone. It's great to be here. See a lot of familiar faces. Thanks for taking the time out of your day to join us here in person, and thanks to everyone online. And thanks to the team; the slides are very well done. A lot of hard work has gone into it. And there's a lot to cover today, and the company remains in good shape, but I'll leave it to management to tell the story and hand it off to Jack, the CEO of Lundin Mining.

Okay. Okay. Well, first off, Good afternoon, everybody. Thank you to the those that made the trip out here to Lundin for our second annual Capital Markets Day event. It's a pleasure to be here to represent Lundin Mining and to present the very exciting trajectory and history of the company. So over the next few hours, we're going to be walking through a comprehensive overview of the business. And I hope that you get -- all that you need out of the slides. But as Stephen was saying, we'll be open for Q&A in this session and also later at dinner after the event. And for those online, thank you so much for your continued interest in Lundin Mining, and we look forward to following up with you after this event.

I will be making cautionary forward-looking statements. So we always encourage the audience and those that will be looking through this presentation to read the statements, and these will be posted online and also all of the documents that we'll be presenting that have public information or 43-101 compliant are uploaded on SEDAR.

So today's speakers, first with myself doing the introduction, Jack Lundin, President and CEO. We've also got a great cast of characters here in the audience with us. Juan Andres Morel, our Chief Operating Officer, will walk us through operations. We've got Teitur Poulsen, our CFO. We've got Tim Walmsley, our VP of Exploration; Eduardo Cortes, VP of Mining and Resources as well. And Ron Hochstein from Vicuña Corp is here to walk through the great Vicuña District and all of the exciting updates that we have there. Also in the audience and in attendance today that will be here for the presentation and for later on we've got Vlada, Robert, Leo, Jennifer, Itamar, Marcelo, Nathan and Stephen. So a big group and will be here to enjoy a session and hopefully answer any questions that you may have.

So as I was mentioning a comprehensive overview here, we've got introductions followed by operations that will take us into the break, and then we'll get into our growth opportunities really centered in the Vicuña District and Ron will go through Vicuña Corp and all the exciting updates we have for the -- for those of you that have been following the story for a number of years. And Teitur will kind of, wrap it up with the financial overview. What's different between last year and this year is last year, we were providing 5-year projections for our financial forecast. But this year, we're going to have 10-year financial projections to really capture the long-term growth opportunities that we see with all of our mid- and longer-term growth through our existing operations, through Vicuña and through some new opportunities that are presenting themselves to the company.

We also, as Stephen was saying, we issued a press release that kind of accompanies this presentation that has all of the key details, and we encourage those that have not read that press release to kind of refer to that as well as the presentation that we'll be sharing. And at the end, there's going to be time for Q&A. So rest assured, if you have a question, write it down, and we'll be able to answer that at the end.

So it's been an exciting journey for Lundin Mining. I think we classify this company as an organization that has three decades of strategic growth. We've been building a company into what it is today. That's really focused on copper. But I think what we represent today is a series of deliberate decisions that have reshaped the business over multiple cycles. All of you would be aware, we're in a very cyclical business. The commodity prices tend to go up and down. And I think Lundin Mining has demonstrated that we have the ability to adapt and reimagine the business and take advantage of opportunities that we see before our competitors.

So on this slide, we're highlighting both relevant but not all of the historic transactions. But really, I think ultimately what we want to show here is that Lundin Mining has consistently created value by identifying strategic opportunities and transforming its portfolio ahead of the market. Our journey began in the early '90s with the entrepreneurial vision of my grandfather Adolf, and father, Lucas Lundin, and through discoveries such as [store] [Lundin] in Sweden. The foundation of the Lundin model was established, and that is creating value through exploration, disciplined risk-taking and execution. The next phase was built through this European operating platform through acquisitions such as Zinkgruvan and Neves-Corvo. These transactions transformed the company from an exploration and small-scale mining business into a growing producer with high-quality operating assets. From there, Lundin Mining expanded globally. We entered the Democratic Republic of the Congo to develop the world-class Tenke Fungurume mine with our then partners, [Freeport]. The acquisition as well of the Eagle mine in Michigan helped build a diversified base metals company with a broader geographic footprint and increasing scale. And this period demonstrated the company's ability to allocate capital effectively and grow through both acquisitions and organic development.

As the industry landscape evolved, Lundin Mining began an intentional pivot towards copper. The acquisitions of Candelaria, Chapada and later, Josemaria reflected a conviction that copper would become increasingly important in the decades ahead. These were strategic investments, and these were made before the current focus on future copper supply shortages became widely recognized. And now this most recent chapter between 2022 and 2026, it's the bridge of the discussions that we're going to be having today is the portfolio transformation that has taken place here and really what we're defining as the Vicuña era. So if we hone in on kind of the last 3 to 4 years of the company, and it's been a very busy and transformational 3 to 4 years that we've had, starting with the acquisition of Josemaria Resources in 2022. That really got us interested and into the Vicuña District as Lundin Mining and really showed that there was more potential than just a great development stage project. And that was through 2023 when we acquired the first 51% ownership in the Caserones mine. Since then, we've incrementally increased our ownership to now 75% and a mine that we've seen about 60% of return on capital invested since that acquisition in 2023. So -- this mine continues to generate strong cash flows, continues to demonstrate a lot of upside and gives us that ability to gain institutional knowledge in a district that we've grown our presence and are very excited to continue advancing on both the Chilean and Argentinian side. And we'll present -- a large portion of today will be focused in this area.

The partnership that we formed first announced in 2024 and the transaction was closed in January 2025 was the joint acquisition with our partners, BHP, to acquire Filo Corp for about USD 3 billion. And that vending in Josemaria formed a cornerstone growth project for us that sets us apart from our competitors and that we're very proud to be able to report that we've had some recent news. We continue to build momentum, and we've now got a RIGI application approved on that, which Ron will walk us through in his section. And then following these large transactions in the Vicuña District, we divested our non-South American assets. So we sold Zinkgruvan and Neves-Corvo in 2025. And most recently in Eagle, we divested out of that mine, still retaining a 20% ownership in Talon Metals, where Juan Andres is Chairman, and I'm on the Board. So we're continuing to follow that investment and see exciting opportunities there, but it's essentially out of the Lundin Mining portfolio. And also, as part of the incremental 5% increase in Caserones ownership, we were able to acquire 31% of Los Helados, another project in this emerging Vicuña district, which really solidifies our holding in this area and gives us further optionality and opportunity to grow.

So I think these actions that we took were not isolated. They are part of a deliberate strategy to concentrate capital and focus on long-life, high-quality copper assets. And this is really what we can see, the evolution of Lundin Mining and how our business model has changed and how we really believe these decisions that we have made have transformed the business and set us up for a remarkable run. What you're seeing here is a comparison between 2022 and 2025. So really when we started to embark on these transformative deals. You can see in the first pie chart, our copper production for 2022 was 250,000 tonnes of copper, generated $3 billion in revenue. And you can see the weighting of copper, around 63% was weighted to copper production for our revenues.

When you look at 2025, of course, with the tailwinds of commodity prices going higher, mainly copper and gold and the copper production that we had growing to 330,000 tonnes, revenue being generated of $4.1 billion and these longer life assets that also have scale and optionality to look at capitalizing on synergies, particularly between mines like Caserones and Candelaria, you can see that stronger EBITDA margins in the center of the slide here have meant that we're generating in absolute terms, higher EBITDA and also at a higher margin. So I think that these transformative steps really have set the landscape and the framework for what Lundin Mining is today. You can see on the right here that the market cap at the end of 2022 was USD 5.7 billion, and we've more than tripled that value as at the end of 2025.

I think what we see not only commodity price environment, but also the ability to deliver quarter after quarter, year after year in Lundin Mining. And you can see that, that has been reflected in the market capitalization of our business. You can see on the bottom right, copper price, the rise in copper price over that period. Our peers have had a tremendous run as well, but Lundin Mining has had a tremendous run from 2022 to 2025. And we're continuing that trend in 2026. We have, this year, nearly added USD 7 billion in market cap. We're up 40% year-to-date. And we continue to hit our operational targets and exceed our financial targets, thanks to the performance of our assets, but really anchored to the great team that we have in the audience and those team members that are currently at site and working in the field.

But it's not all about absolute numbers. It's about per share performance, showing that as a shareholder of Lundin Mining, what you're seeing is that the resource is growing, the reserves are growing and the copper production per share is growing as well. For Josemaria Resources and for Filo Corp, we issued about 140 million shares. And in 2022, we've been -- since 2022, we've bought back about 31 million shares. And so in absolute terms, we've seen our share count go up. However, because the business has grown and because we've added these resources, we've added this production to our portfolio on a per share basis, we're continuing to demonstrate that Lundin Mining is growing and growing the right way.

Copper and gold, these resources are done on an attributable basis. So that would include our 50% ownership in Vicuña Corp. And when you look at the most recent PEA or the most recent study that we published on Vicuña, you can see that this is an immense resource, 47 million tonnes of copper, 96 million ounces of gold and 1.8 billion ounces of silver. For a company of Lundin Mining's size to have 50% ownership in that, it's a tremendous opportunity for us to continue to grow and to continue to demonstrate to our shareholders that we're going to be growing this portfolio. And the team here will be walking us through just how we plan to achieve that.

I think it's also important to talk to the audience a little bit about what we're seeing and what we understand in this dynamic environment in the copper sector that we're in. In 2025, we participated in an industry study led by S&P Global, examining the global outlook for copper supply and demand through year 2040. And the study is projecting that approximately 14 million tonnes or 50% growth in copper demand will be growing by 2040, highlighting copper's critical role in 4 key areas, which you can see on the slide here. So economic development, electrification, artificial intelligence infrastructure, including data centers and defense applications.

The construction industry will continue. Construction and industrial machinery expected to remain the largest contributors to underlying economic demand for copper going from 18 million tonnes in 2025 to projected 23 million tonnes in 2040. But the adoption of electric vehicles structural shift in transportation-related copper consumption. And of course, the AI trend that we're seeing taking shape is really contributing to a massive growth in demand for copper. These findings, I think, reinforce copper's position as a strategic material underpinning both global economic growth and the energy transition.

And this is another slide showing that basically what this study has proven or has shown is that there's going to be about a 10 million tonne shortfall expected in copper. So copper basically today stands at a pivotal moment. Global demand is accelerating along the 4 key areas, as I mentioned in the last slide, yet the current supply is on course to actually decline as existing resources and existing mining operations are aging. So those of you in the audience, I'm sure, would be well aware that declining ore grades, rising costs, complex extraction conditions are contributing to this. The study projects that under current conditions, primary mine supply is actually set to peak by 2030. And there's going to be a potential, as I mentioned, 10 million tonne shortfall in copper by 2040.

Increasing secondary supply from recycling scrap copper will only partially close that gap. If you take a look at Vicuña, 800,000 tonnes of copper equivalent during its peak production years, you're essentially going to need 17.5 [Vicuñas] coming online by 2040 to meet this growing gap. But the reality is the reverse is happening. Growth in supply is looking to decline. If we look back in time, 2010 to 2025, global mined copper production increased by roughly 7 million tonnes since 2010, but output from existing operations is expected to decline by a similar amount by 2040 as major mines are depleted. So in order to meet this growing demand, the study concluded that the industry must both sustain production from current mines and develop new projects, a process that typically takes 15 to 20 years from discovery to when you're in production, there's going to be a significant requirement for capital to meet this crisis that we're potentially facing. And this is why we're focusing our attention on operational performance and the need to grow our production base.

So enter Lundin Mining in 2026. Pleasingly, Q1, we've had a very solid safety performance, first and foremost. I think what we'll see through Juan Andres' section is industry-leading over the last several quarters, and we continue to see strong safety performance at our operations, which really underpins the overall, I think, operations and how we're able to operate at the standard and at the level we are. So it's fundamental to us, and it's very proud to stand here and say that we've got industry-leading safety performance at our operations. Q1, as I mentioned, and as you can see the production numbers here on the screen, we generated nearly $630 million in EBITDA, just shy of $500 million in operating cash flow and $315 million in free cash flow. So we're forecasting, which you'll see on a later slide that we should generate around USD 700 million in free cash flow for the year, which includes our expansionary capital, which includes our 50% capital that we're putting towards the $800 million budget of Vicuña.

So significant spending year, but overall, still going to be generating a significant amount of free cash flow, which highlights the financial strength of our business. And in addition to the financial strength of our business being in a net cash position with a USD 4.5 billion revolving credit facility to fund our growth ambitions, we couldn't be better suited to capitalize on the opportunities that we have going forward.

Also, Los Helados is an exciting growth opportunity that we're exploring to develop with our partners in NGEx, and Tim and Eduardo will kind of talk about the opportunities later on in the slide. So our existing portfolio gives us the opportunity to grow at a substantial pace, far exceeding any of the competitors in our sector of our size. We've got -- what you can see on this slide here is line of sight to going from midpoint of our guidance, 323,000 tonnes of copper and 142,000 ounces of gold, up to over 500,000 tonnes of copper and 550,000 ounces of gold production through our near-term organic growth opportunities, so our brownfield expansions at Chapada, Candelaria and Caserones and then through the stage development of Vicuña. So we basically are demonstrating that we have a decade of growth ahead and really anchored to a very solid operating base.

And -- as Ron will get into, and as I mentioned, established in 2025, January 2025, significant progress continues to be made in derisking and advancing this once-in-a-generation project. The project is Vicuña, multistaged so that we can be cash generating to fund the future expansions. We've got good line of sight to continuing to unlock value. And just last night, as I mentioned, we were able to announce the receipt of our RIGI application under the long-term strategic export designation. I think this is a significant milestone. It continues to build on the momentum that we've been growing at Vicuña. And compared to the standard RIGI framework, this RIGI PEELP application, it offers extended benefits 40 years versus 30, along with accelerated access to things like revenue repatriation and export duty exemptions. And this further strengthens the project's investment profile. So overall, I think to summarize the introduction here on our business before going into more details, I think what we can classify Lundin Mining is that we've got stability and growth to create lasting value for our organization. We continue to have a relentless focus on cost discipline and a relentless focus on best-in-class safety standards.

We continue to have our sustainability focus, and I'm happy to confirm that we source all of our -- source 100% renewable power across all of our three operations. And to support the broader sustainability efforts, the Lundin Foundation remains one of our most important partners. We additionally this year, submitted and published our first CSRD compliant report, representing an important step forward in how we're reporting our business. And we continue to be performance focused and show that we're a company that has truly unrivaled growth. So with that, I would now invite Juan Andres up on stage so that he can walk us through operations. Thank you very much.

Good afternoon, everyone. As well, thank you, Jack, for that great introduction and for setting the stage for the rest of the presentation. I will be walking you through the main progress that we have made in our three operations in South America. And I'm also going to be -- I want to highlight that we're joined by our three general managers, Managing Directors: Marcelo from Caserones, Leonardo from Candelaria and Itamar from Chapada. So if you have any questions after the meeting, they're here also to answer some of the toughest questions. I will also be joined by Tim and Eduardo to walk you through some details of each of our operations.

So last year, we set the stage of the operational strategy among these three main pillars. The first one being the operational discipline. That is the center of our strategy, and we have been improving our managing systems and all our routines to make sure that the operational discipline keeps improving year after year. We have increased our focus on safety. We have increased our -- or improved our planning cycle system, and those are the main drivers for our operational consistency and the discipline that we have been able to reach. Full potential is something that we started -- initially that we started in 2023, and that has been front and center of our operational strategy to bring the sites to the level of competitiveness and efficiency that we see today, and I'm going to walk you through that process as well. And finally, the focus on low-intensity near-term low capital intensity near-term opportunities, and we're going to speak about Saúva and the Caserones Cathodes plant. Let's start with safety. We have seen some incredible results in our safety performance. What you can see on the screen on the right is the band of the performance of all the companies in the ICMM database.

So you can see at the bottom of that band, the performance that Lundin Mining has had over the years between 2015 and 2026. In the last 3, 4 years since we launched what we call the FRM, our Fatal Risk Management system, we have seen an incredible improvement in our performance in safety. We launched the FRM in late 2023. And since then, we have seen incredible results. We have a record industry record safety performance on our TRIF that you can see there at 0.15. And as of now, this system is fully embedded across all our operations. And the next steps is continue working on strengthening our critical controls and sustaining stronger safety performance as we move forward.

In terms of our operational performance, we have reached or achieved or beat guidance in the last 3 consecutive years. As you can see on the screen, 2023, '24, '25, we met guidance for both copper and gold. And this year, we also aim to meet the guidance for 2026. That is a great demonstration of the consistency and the increased operational discipline that we have achieved in these last few years. Full potential, as I said before, is front and center in our strategy. What we aim is to unlock the maximum value from our ore body. And this is a very rigorous system where we look at opportunities to improve our processes all across our sites, and we take them into a much more rigorous process to come up with a business case, and then we move into implementation.

We have separated the this approach in two. First, what you see on the left is what we call the asset operational excellence, which is basically aiming to use the installed capacity and increase our efficiencies based on the capabilities that we have at each site. On the right, you can see the asset strategy. Those are opportunities with marginal investment or low capital intensity opportunities that aim to increase our production levels. So on the left, on full potential, so far, we have been able to optimize existing processes based on cost optimization and increase in revenue.

Now we're -- since we almost finished that first phase, that first wave of projects, we're now moving into full potential 2.0. This is going to be a little bit harder. Maybe we picked the low-hanging fruits in that first wave. And now we need to look a little deeper and look at the data to help us identify those opportunities. That's why we're implementing some digitalization across our processes, adding more data analytics and, of course, looking for opportunities to apply artificial intelligence. On the right side, on the asset strategy, we are moving forward with our Saúva project and the CPU, which is the Chapada plant upgrade that Eduardo will be telling us more details on that, which aims to increase our recoveries through the addition of the second ball mill. So low intensity, again, low capital intensity initiatives to increase production. Also, the Caserones improvement in the utilization of our cathode plant is related to these low capital intensity initiatives.

On the next phase, we will be looking at new opportunities. There's an opportunity to continue with the Saúva project to keep adding more efficiencies or more -- some additional equipment to our mill to increase productivity as well. We're looking at the same opportunities in Caserones. So we will continue looking at some low capital intensity near-term growth opportunities. Some results that we have achieved so far, as you can see on the screen, starting with Chapada on the left. These are some -- a very good metric to show the progress that we have made with the full potential initiative. Total operating costs divided by tonnes milled is a good indication of how we have been able to improve the efficiency in all our assets.

These are nominal terms. So despite the effect of inflationary pressures and cost increase in some of our main cost drivers, we have been able to reduce our cost per tonne mill. You can see in Chapada from previous -- before the implementation of our full potential in 2022, the cost was $11.8 per tonne mill. And now post the full potential implementation, we have taken it down to $10.6 per tonne mill, 11% decrease. Once we saw the success of this initiative in Chapada, we quickly moved into Caserones and implemented full potential in Caserones as well. And if you look at the dollars per tonne mill before the implementation of full potential, we took this metric down from $20 per tonne mill down to $17.9 per tonne mill, 10% reduction in this very short period of time.

Similarly, we moved into Candelaria and implemented the same initiative. And we were able to take down -- in this case, we're only considering the open pit to make it an apples-to-apples comparison, but we took the total cost divided by tonnes milled from $19.9 to $19.03, a 4% reduction. So we know that we need to keep working in Candelaria to make further improvements. Moving into each of our -- we are going to go deeper into one of -- each of our assets. So starting with our Brazilian operation. Chapada in the state of Goiás. In the first quarter of 2016 (sic) [ 2026 ], it contributed to 17% of the total revenue. It's 100% owned by Lundin Mining. It's an open pit, very low grade, 16,000 tonnes per day mill capacity. You can see there the head grade, 0.22% copper, 0.12 grams per tonne gold. More than 25 years of mine life and an incredible history or incredible story of improving the efficiency. You can see there the drop in the C1 over the last 3 years.

We have been able to maintain almost the same copper production and same with the gold production at the order of 45,000 tonnes of copper per year. This year, we're aiming to meet our guidance, which is between 45,000 and 50,000 tonnes of copper for the year. Gold 57,000 to 62,000 ounces in the year. We have adjusted our C1 guidance. Previously, our guidance was between $1 and $1.2 per pound. We have reduced the guidance for the year to $0.75 to $0.95 per pound. So an incredible C1 for such a low-grade operation. So recognition to the team for all the efforts done around the full potential and helping us get to this level of efficiency in Chapada.

Some of the examples of full potential initiatives, you can see there on the screen. In the case of the mine, we were able to reduce our fuel consumption by 11%. We increased our cycle times by 6%. So -- and that is basically by making all the speeds of the -- our whole fleet much more consistent and much more standardized. We also increased the payload of our trucks by 2%. In the mill, we were able to increase our throughput, meaning our tonnes per hour by 9% and the total additional ore milled per year went up by 4%. We have also put a particular focus on our sustaining capital. In the case of Chapada, we were able to reduce our sustaining capital divided by tonnes milled by 40%. And also a key initiative in the case of the full potential in Chapada was look at the long-term mine plan and reduce the strip ratio by postponing some waste movement, and we were able to come up with a much more balanced long-term mine plan. That resulted in a 29% reduction of our strip ratio. I will now hand it over to Eduardo to walk us through the Saúva and CPU project.

Thanks, Juan Andres. Can you hear me? Perfect. Okay. So I'll walk you through the Saúva project. This is one of our best growth projects in the company. Saúva is split in two parts. The first part is the construction of a second ball mill, which will help us to reach higher recoveries for both copper and gold. This is -- on the right side, you can see the rendering of the second ball mill is in green, close to the actual ball mill. And on the left, you can see the CapEx that we're spending this year is $35 million. And the total CapEx for this project is $70 million, and this year, we're spending half of it. We're accelerating this project, and we're starting next month with earthworks expecting to finalize the commissioning by end of next year.

So this project is key, the CPU, the spare parts that I was talking about is key to unlock the Saúva deposit because we don't want to be sending those higher grades from Saúva to recover 5% less. So we want to finish this ball mill construction, then we can mine Saúva. And then Saúva, as you can see there, we're expecting to start production by Q1 2029. So as a quick refresher, Saúva is a project that is a deposit that is located 15 kilometers north of Chapada. And we're expecting to increase production by 15,000 tonnes of copper and 45,000 ounces of gold for -- during 4 years. In the table, you can see the key highlights of the project. So it's a 33 million tonnes total mine, that's including ore and waste, average strip ratio of 1.6:1. Ore to mill is around 28 million tonnes or it is under 30 million tonnes during this initial portion that we're mining from Saúva at a head grade of 0.4% copper and 0.3 grams per tonne gold. So this is for us for Chapada is high grade. Ron, maybe it's low grade for you, but for us, it's very, very high grade.

The initial capital is $110 million comparing to what we showed last year, $150 million. We have been able to decrease significantly that initial capital to give us a capital intensity under $7,500 per tonne of copper. So yes, this is a great project for Chapada, increasing 30% copper production and 75% gold production. And we are -- it's important to mention that we're only mining a small portion of Saúva. The deposit disclosed and published in our website is much larger than that is 250 million tonnes of ore at a 30% higher copper and gold grade than the Chapada deposit.

So we're still studying that second portion, and we're doing some engineering studies to try to keep start production there as well. So it's also important to mention that this is not growth anymore for Chapada. This is part of our base case integrated in the life of mine plan for 2027. Here, you can see the schedule. We are starting from the top, expecting to finalize the engineering, permitting and electrification approval by Q4 this year, following with the ball mill fabrication that started actually last month and construction and installation of this ball mill by Q4 2027 and the commissioning a couple of quarters there to start increasing the recoveries by Q1 2028. So -- after that, we are developing the Saúva deposit and feasibility study, environmental baseline data and permitting to be finalized by Q4 2028.

In parallel, we're developing the early works activities, infrastructure and water management to start in late 2027 and finalize in Q4 2028. And then we are expecting to start the pre-stripping by Q4 2028. It's a small volume of pre-stripping luckily is no more than 3 months. So we're expecting to start production, as I said before, Q1 2029 from Saúva to the expanded ball mill or to the expanded Chapada plant. Okay. So here, we have a layout of Chapada. On the right side, we don't -- we're not showing Saúva here. It's only Chapada. But as you can see, we have several pits that we're mining. The most important pits for us for the following years are the South pit and also Baru and the North pit. Those are the areas that we're mining currently.

On the left side, you can see our production plan outlook for the 10 years. So orange line, you see what we showed last year in the CMD. And then the blue solid is the base life of mine and the light blue is the growth potential that we have. So the production profile is very similar from what we showed last year. We're only able to accelerate or move forward this high peak production that it was Saúva. So we'll move it forward to 2029 as we accelerated our Saúva project. We're also expecting a mineral resource and mineral reserves update by Q4 2026 or hopefully no more than Q1 2027. Now I'll hand it over to Tim.

Thanks. Just very briefly here, just looking beyond the initial exploitation option at Saúva, there's much more continued growth to come at Saúva. You can see here the conceptual open pit resource pit in lighter gray above is much larger than the initial Phase 1 Saúva pit and mineralization of a high-grade nature continues beyond that pit for at least a kilometer. And this last hole that came in with results today show that, that zone maintains open and continues at depth to date. So most of our exploration work since the last time we met a year ago has been focused extending the Saúva at depth to see how far this higher-grade core will continue as well as rilling some additional holes along the Saúva trend looking for another Saúva in the district. And given the size of the exploration potential, we're quite optimistic. There's a huge footprint of underdrilled and underexplored opportunity within the Saúva trend. Hand it back to Andres or to [indiscernible].

Thank you, Tim. We're now going to fly to Chile to the Atacama region and start with Candelaria. We're going to start moving slowly up into the up into the Vicuña District and starting in the lower part of the Atacama region. Candelaria, in the first quarter of 2026 contributed with 39% of our revenue. It's 80% owned by Lundin Mining. It's a combination of an open pit and underground operation, 75,000 tonnes per day in the Candelaria mill and 3,800 tonnes per day in the PAC plant. The grades, you can see there, 0.44 for the open pit and 0.8 for the underground. More than 20 years of mine life, and we continue to make progress. The production profile, as you can see on the right chart, it varies depending on the mining sequence. We hit some high-grade zones and production, of course, goes up to like 1620 in 2024, then it comes down again and then it goes back again.

This year, we're aiming to meet, of course, our guidance, which is between 135,000 and 145,000 tonnes of copper and meet our C1 guidance as well, which is between 2.05 and 2.25. You have to remember that C1 includes the streaming costs. So this is -- probably if we remove the streaming costs will be, of course, lower than that. In Candelaria, we have also moved forward with the full potential, as I explained before. And here are a few examples of the initiatives that we have implemented so far. We have seen an incredible improvement in our tire life. We increased that by 27%, which the tires are the main cost components or one of the main cost components in the mining cost. We have improved our shovel utilization up by more than 10%, and we have also increased the payload of our haulage fleet by 6%. In the case of the mill, we have increased our grinding throughput by 11%, and we have reduced consumable while improving plant availability by more than 1%. We have also looked at reducing the sustaining CapEx divided by tonnes milled by 65%. And we continue to optimize our G&A cost and the nonproductive infrastructure, what we call the NPI by 17%.

One of the key initiatives in Candelaria, you have heard us from some time ago that we've been discussing the idea of expand the underground mine. We were ready to do that in 2025, but we looked at the way the process was being executed, and we realized that the entire mine was basically outsourced. And given the challenge to take the mine from 14,000 tonnes per day to 22,000 tonnes per day is a significant challenge. We decided that we want to have more control over the operation of the underground. So before expanding the mine, we decided to take a step back and in-source all the operation of the underground mine. So in 2025, we started that process. And as of now, we're 97% complete. We have in-sourced drilling and blasting, loading and hauling and all of the support functions in the underground mine.

We only left 2/3 of the underground development in a new contract that we just awarded to a new company. And we're keeping also as part of the in-sourcing initiative, 1/3 of the underground development in our hands. In May, we reached already our target of 400 meters month, and we have seen incredibly lower cost than what we expected initially. So we continue moving forward with that. And in the future, we'll probably be analyzing the possibility to fully in-source all the underground development. We should reach the full target of the underground development in the second half of this year. The target is 1,200 meters per month. So we should be in that level in the second half of this year. That will help us to stabilize the underground mine at 14,000 tonnes per day by the second half of 2027. And from that point forward, we should start slowly increasing the extraction of the underground to take it to 22,000 tonnes per day.

As you can see there on the graph on the right, we aim to increase our copper production at about 12,000 to 14,000 tonnes of copper per year from this expansion of the underground mine in Candelaria. Another interesting boost to our EBITDA or free cash flow in the case of Candelaria is the step down of our streaming agreement. As you know, we have a streaming agreement with Franco-Nevada. And this agreement will step down from 68% to 40% once we reach 720,000 tonnes -- sorry, 720,000 ounces produced since the agreement was signed. And this and that will happen sometime in the first half of 2027. So from that point forward, an amount in the order of 15,000 to 20,000 ounces will be attributable to Lundin Mining. And that will add between $56 million to $90 million per year of free cash flow at current gold prices. Back to Eduardo with the growth opportunities in Candelaria.

Thank you. So similar to the slide I showed before, we have on the right side, the Candelaria main pit. There is also another future pit that is to the south that is not shown here. It's called Española, but that is part of 2035 production. So this pit, we're focusing on Phase 11 and Phase 12 in red and orange, respectively. So that's the -- where is the production coming from for the following couple of years. Also, we're going through pre-stripping of Phase 13, which is one of the most important phases for the -- from year 2030 onwards. On the left side, you can see the solid area in blue is the LOM base case, life of mine base case and in light blue is the growth that we have considered for Candelaria. So we have two main growth opportunities here, as Juan Andres was mentioning, is the expansion of the underground mine from 14,000 to 22,000 tonnes per day. And also recently, this year, we added to the growth opportunities this Phase 14 to the north of the pit that we were not considering before, and now we're actually considering it, and it would be coming online at least in this growth scenario in year 2033 or so. Tim?

This is just -- this slide will be familiar to those who were here a year ago. It's more or less the same slide, but it shows the longevity of this project. Candelaria is now over 30 years producing and the deposit still remains open in many, many directions. It continues open to the north, as you can see on the right-hand side of the slide. It continues open to the south where we have very high-grade breccias that we continue to hit without end. There's still a little bit of potential underneath in deeper parts of Candelaria North where there's still higher-grade veins below original underground mining that we still have room to test for. And then further south at surface, we have potential to expand the Española deposit on strike to the south.

And a year ago, we acquired a neighboring property called Resguardo that had a small -- or small-ish, small compared to Candelaria, but not so small resource potential in -- at surface, very similar in nature to Española. During this year, we will be drilling and trying to expand that initial body and join it to Española. And it looks during very promising that we can join those two deposits and thereby continue to increase the size of Española. And last but not least, I think you'll recall last year, we mentioned that above Candelaria at the time of the Candelaria discovery, they were smaller deposits in this higher lithologic horizon, similar to Española.

So that leaves open the opportunity for testing for larger deposits beneath the Española deposit, and we will continue to do that in the second half of this year. At surface to the south, this is just a plan view showing you the Española resource in green in measured and indicated and then the growth potential around the margins of this deposit in orange, classified here as mineral inventory. So the resource shown there in measured and indicated only, there's an additional 44 million tonnes of inferred on top of that is now built into the Candelaria LOM, but we -- we are currently drilling the edges of Española trying to grow it larger. And beyond Española, you can see the outline of the Resguardo system that we are now trying to confirm historic drill holes and find the edges and see if we can connect these bodies and eventually connect them to Española. Once that's done, of course, there is also good exploration and geophysical evidence that this sort of mineralization will continue further south as well.

We're now going to move east up in the [Andes] and reach the entrance of the Vicuña District with our Caserones operation. Caserones in the first quarter of 2026 contributed with 44% of our revenue. It's now 75% owned by Lundin Mining. It's also an open pit operation, similarly to Candelaria. Our average throughput is in the order of 100,000 tonnes per day, 0.3% copper grade and more than 15 years of mine life. Caserones has shown a very consistent copper production in the last 4 years. Last year, 133,000. This year, we're aiming to meet guidance between 130,000 and 140,000 tonnes per year. Our C1 guidance for this year is between 205 and 2.25 similarly to the one we have in Candelaria. Some examples of the full potential initiatives that the team has implemented so far. You see a pattern. We basically take what we have learned in Chapada, transferred that to Candelaria, and we're doing similarly initiatives Caserones. We also aim to increase our payload of our haulage fleet, and we achieved a 5% increase -- we have also looked at reducing our cycle times, and we achieved a 20% improvement.

We also increased the use of our haulage fleet by 21% and the maintenance contract was optimized and renegotiated, and we have also in-sourced a part of our maintenance contract. In the mill, we have seen improvements by 1.2% improvement in our tonnes per hour. It may not look that much, but at the end of the year, it translates into a significant improvement. We have also improved our availability by 5%. And in 2025, we achieved a record in terms of we material process reaching 33 million tonnes of ore per year, which is a 5% increase compared to our baseline that we use for our full potential initiatives.

One of the most iconic initiatives has been the improvement in the utilization of the installed capacity of our SX-EW or our Cathode plant in Caserones. And we continue testing new technologies to potentially leach our primary sulfides that we have in Caserones. So this is a sample of the initiatives that are behind the full potential in Caserones. As I mentioned before, the increased utilization in our copper in the cathode plant is one of the most significant initiatives in our full potential program. We have been able to increase the utilization from 55% from the previous time before the acquisition to 80% currently. In the Phase 1,-- what is behind that increase in the utilization is that we added 5 million tonnes more per year of material that was placed in the dump leach.

Together with that, we increased our irrigation area by more than 100,000 square meters. And we also increased the dosage of sulfuric acid in the irrigation. With that, we were able to take the cathode production from 15 in ' 22, 19 in '23, roughly 24 in '24 to almost 26 last year. And this year, we're aiming to produce 30,000 tonnes of cathodes. We are moving now into a second phase, also within the scope of the full potential. And we have identified the opportunity to debottle the electrowinning plant. And in order to do that, we will be repowering the cooling system of our existing rectifiers by 10% to 15%, which will allow us to increase the nameplate capacity from 35% to almost 40% -- sorry, from 35,000 tonnes of copper to 40,000 tonnes of cathodes per year.

This is with a very low capital investment, less than $1 million in the year. So this will be a very, again, low capital intensity near-term growth opportunity that we have in Caserones. In Caserones, we have been historically producing gold. Although we have not reported or guided the market on the gold production, there has been some gold production and gold revenues being obtained in Caserones. In 2025, we produced 15,000 ounces of gold, which translated in $46 million of revenue in that year. Our current block model doesn't have yet the precision to guide on gold, but we are working on improving the grade modeling so we can start guiding gold in Caserones in 2027. But this is a significant boost on our free cash flow, and we continue monitoring the gold production in Caserones, of course, together with the [moly] as the other byproduct. Back to you, Eduardo.

Thank you, Juan Andres. So on the right side, you see the main Caserones, we have 2 phases in production, Phase 7 and Phase 6B. There is another phase that is being developed in pre-stripping, right? But it's not shown here or highlighted here at least. To the bottom of the picture, we see the plant in green, the processing plant and to the right of the picture, we see the SX-EW plant and the dump leach. As Juan Andres was mentioning, we have improved significantly our cathode production. Also, we have worked on ore reclassification that has allowed us to increase the feed to the cathode plant. And in our base LOM life of mine now, we're considering up to 35,000 tonnes of copper coming from cathodes, which is much higher than what we considered last year. And also, we're keeping up to 40,000, so 5 extra 1,000 tonnes of copper as a growth opportunity following what Juan Andres was mentioning on his slide. As you can see, the dark blue and the dark and the light blue are very similar to the profile we show on the previous CMD. So we are keeping a steady production for 10 years between 130,000 and 140,000 tonnes of copper.

Thanks. This is just an update to show you what we've been doing in exploration for the last year. When we met last year, we were exploring aggressively looking for higher-grade breccias underneath the existing -- within the lower parts and underneath the existing resource at Caserones. Historically, the sulfide or hypogene part of the Caserones deposit was quite underdrilled. Most of the drilling was focused on the shallow enrichment blanket, and we saw an opportunity to find more of these unrecognized higher-grade breccias within the system itself.

That went extremely well towards the end of the year. To date, we've found at least 4 or 5 new higher-grade breccia bodies that were unrecognized within the existing resource. and we continue to drill, although we have handed it off this year from exploration to the mine team, the mine resource team, they continue to drill looking for more of these, and they continue to find more, which should have a positive impact on the average resource grade in the system. In addition, last year, the Angelica prospect last year, we were starting to drill underneath the known oxide body. There was a small oxide body known previously prior to purchase. No drilling had been done prior to Lundin to look for the sulfide source of that oxide body. And a year ago, we were drilling the first 1 or 2 holes underneath the oxide body looking for the sulfide body. Since that time, we've completed now 20 kilometers of drilling in 2025, most of which was focused on Angelica. And we're about 1/3 of the way through an additional 27 kilometers of drilling planned drilling planned for this year. And we continue to try and define the limits of the sulfide body. There's still a couple of areas where it's growing. We're focusing on looking at, again, similar high-grade breccias within Angelica, similar to Caserones, and we're trying to find just how large those could be.

If all goes well and we find and can limit the system, we are hoping to move towards an initial resource early next year. At the same time, within the broader district, you'll recall we have a huge number of targets on the property. This property was never really explored since the early '90s. So there's a lot of work for us to do here. We started by drilling -- by exploring aggressively the most obvious targets, the ones closest to the plant that could have the most immediate economic impact at Angelica. In parallel to that, we started testing a nearby target called Centauro, where we saw oxide potential.

We've drilled most of that now, and there is a small oxide opportunity there. And also, we started in the later part of Q2, testing the western edge of Caserones where there's evidence of additional breccias that could extend the footprint of that body and enlarge the future open pit. And during all of that period, we've been pushing the road access from the plant area through Centauro and down into the Cordillera target. And we won't be able to drill that before the winter season, which just commenced, but we have 2 drill pads already and waiting. So as soon as the winter stops, we'll be in there as soon as possible to get the first drill holes into Cordillera, which you can see is quite a large target.

In parallel, we'll be hoping in H2 to drill the first couple of holes on the northern extension of Los Helados, which spills into the Caserones property. And in parallel, while we're doing this drilling, we're sending out recce teams to start taking first samples and reconnaissance mapping on all these other targets in the district on a priority basis. There's probably at least 2 or 3 years of aggressive exploration before we can say how many of these targets represent additional deposit opportunities.

Thank you, Tim and Eduardo. So just to close our section in operations, I want to emphasize that we keep executing our strategy based on these 3 main focuses: safety, putting safety as one priority. Safety performance and operational performance go hand in hand, and they are the good reflection of the discipline of an operation. So we're very proud to see the results that we have been able to achieve. And of course, this is a result of strong leadership, and I want to recognize the job that our managing directors do on an everyday basis in our operations. We're changing the culture. We're moving the culture forward with our new values in the company. And we're turning our FRM, our fatal risk management system and our full potential as part of our Lundin way, so the core of our culture. So we will continue delivering results and optimizing our operations, and we will continue looking at opportunities with low capital intensity to improve our copper production in the near term. So thank you for your attention.

We're now moving to a break.

Los Helados? Okay. So we will continue with the agenda and what we have next is a presentation from Eduardo and team on Los Helados.

Now after going through operations and the near-term growth that we see there, we move to, I know Adam's favorite part of every presentation, the future growth opportunities in the district. But before going through the district, I just wanted to give credit to the exceptional discovery team at NGEx Minerals, a sister company within the Lundin Group. These next two slides have been borrowed from them, and they summarize really well just how significant Vicuña as a major porphyry copper district. To produce a major or giant porphyry copper district, a lot of things have to go right. You have to start with the right rocks, magmas capable of bringing lots of metal to the surface, major structures with deep plumbing, able to channel and focus those metals into concentrated areas, multiple events, multiple mineralizing events. Every large district has these by pumping the system, pumping district many times, you end up with clusters of deposits.

But even if -- those first 3 elements go very well. The fourth of these different elements can make or break a deposit. The preservation, it's really, really key. If the deposit is placed too deep, it can't -- it's too deep to exploit from surface. If it's placed too shallow over millions of years, it gets eroded and what might have been a nice deposit gets washed to the sea. Within the Vicuña district, there's different examples of how important this preservation aspect is. The Los Helados deposit in the center of the district represents a wholly preserved porphyry copper system.

The 2 older deposits, Caserones and Josemaria, because they're older, they've seen a little bit more erosion and the top margin or portion of that deposit of those deposits has been oxidized through thousands of years of interaction with the water table. And some of that copper from the top part of the system gets leached and then reconcentrated in enriched layer at the top of the system. But there's a very, very special example in the district here, and that's Filo. In the Filo example, everything has gone right to produce this super giant of a deposit. The mountain forming uplift is perfectly balanced with the erosion of the Andes in such manner that the early-stage large tonnage copper and gold porphyry system in place in the early formation of the deposit was then overprinted and upgraded by later-stage alteration events through high sulfidation and epithermal processes, superimposing higher grade gold and silver mineralization on the deposit, resulting in the exceptional 1 or plus 1% copper equivalent high-grade core that we see at Los Helados (sic) [ Filo ] , which is extremely unique within the district and within the world.

Once you have a giant metal district, there are usually four key characteristics that all of them seem to demonstrate. The first being scale. Usually, giant metal districts exhibit deposits that are exceptional in their deposit class. And here, we have a case where all the deposits are either giant, super giant or in the case of Filo beyond super giant size. Again, the second aspect is always key is clusters because the system has been pulsed and pumped multiple times, it tends to produce these clusters of deposits. And of course, all large metal districts have important long-lived deep-rooted structures to channel.

And lastly grade. As the deposits and the metal district that hosts them get bigger, the grades also get bigger. And we see that in most of the deposits here and especially in Filo. But one of the most significant aspects of being part of a giant metal district is that most companies in history that have been able and had the foresight to get aggressively involved in a giant metal district early on have benefited from being catapulted to be one of the largest mining companies in the world.

And here at Vicuña, Lundin Mining is hoping and planning to benefit and follow in the footsteps of these large mining companies and hopefully join the ranks of the world's largest copper producing companies in the world. And rather than me continuing to talk about words here, and I think it's best shown through a video with some pictures. So there's a video coming up that's going to give you a bird's eye view of the district and the multiple deposits that this district holds.

[Presentation]

As they say, a picture is worth a thousand words, and I think that was a good overview of the system. Just coming back to two dimensions here. Just wanted to highlight one of the latest additions to the Lundin portfolio. In Q2, we acquired, as Jack said, 31% of the Los Helados project on the Chilean side of the border. This project is located 17 kilometers due south of the Caserones infrastructure and plant and offers an opportunity for exceptional synergies with our operation at Caserones as we continue to evaluate these sort of options with our partner, NGEx. Los Helados is a large porphyry system. And again, it has higher grade cores. You can see here the areas in red, 3 areas in red, the main Condor zone, which represents the majority of the highest grade in the system, over 0.8% copper equivalent is exceptional grade for porphyries these days.

But it also in the last few years or half decade, the NGEx team located a couple of additional breccias, higher-grade breccia bodies within the system. And the Northern one Alicanto goes right up to the border with Caserones and their last high-grade drill hole was only meters from the property boundary of Caserones. So as I mentioned, in the second half of this year, we hope to be drilling on Caserones land, looking for the extension of the system into our mineral rights as well. And by acquiring 31% of Los Helados project, we effectively increased the mineral concession footprint of the Caserones property by 30%. So between our share of the Los Helados project and the Caserones land holdings, we now have over 80,000 hectares in the Chilean side of the district. And I'll pass it on now to Eduardo, who's going to speak more on the resource and development options.

Thanks, Tim. So on the left -- sorry, on the right side, as Tim was mentioning, we have the 3 main domains, Alicanto, Condor and Phoenix. Those are the high-grade zones of Los Helados. Its extension is 1.3 kilometers long and 1.3 kilometers vertical and it's open at depth still. We don't know the limit of the deposit by now. On the left, you can see the resource, but they indicated only, we're not showing inferred, 8.4 million tonnes of copper and 10.2 million ounces of gold. In the video was mentioned actually 12 million tonnes of copper, but that is including inferred resources. But it has a high-grade core of 2.9 million tonnes of copper and 3.5 million ounces of gold at 0.72 copper equivalent, which is pretty high grade.

And this adds 12% to total attributable M&A copper resource of Lundin Mining. One thing to mention here is that this resource is estimated with a significantly lower metal prices that we're using today to estimate our resources. So this is from 2023 and also is using mining costs associated to a block caving because this project has historically been looked as a block caving. And now we are exploring other options or mining methods, including an open pit, which comes with lower mining costs. So you put that into perspective, like higher metal prices and lower mining costs, we see room for growth for this project as well.

So we are studying three main options. You can see here starting from the top, extension and then expansion and stand-alone. So on the extension opportunity here, we want to leverage the existing Caserones infrastructure. So you see that we're planning to -- this option, we're planning to mine the ore from Los Helados and transfer it to the Caserones plant, leveraging the infrastructure that we have there. And this will mostly extend the life of mine for Caserones. However, not only that because as you saw in the previous slide, Los Helados has significantly higher grades than Caserones. So depending on when we start production, it will likely displace ore from Caserones and therefore, increase production. And this option, although is a low CapEx opportunity and then obviously associated to a lower exploring growth opportunity. However, it's still worth. The second option we're looking into is expansion. So we're thinking to increase the production or the capacity of the current Caserones plant. There is not a lot of room in Caserones to do that. But after carefully looking into this, we actually think we can do it.

So we are including this added capacity at Caserones as an option. And then similar to the previous scenario, we're going to consider mining ore from Los Helados, transfer it to the expanded Caserones plant and therefore, getting higher throughput. This is obviously requiring more CapEx, but it's giving us more growth and sharing the infrastructure that we currently have.

And the last option that we are evaluating is the highest requirement for capital. But it's a stand-alone plant at Los Helados. So it wouldn't require any material handling from Los Helados to Caserones. So in that regard, CapEx will be lower and OpEx as well. but this definitely will -- we would be able to evaluate bigger plants. This is a 3 billion tonnes resource. So any plant like similar to Caserones now, we will have like an 80 years life of mine. So we likely explore bigger plants than that. So therefore, the capital is higher and the growth is higher as well the upside.

All of these scenarios have common enablers, being power, tailings and water. And we are studying all of these scenarios plus these enablers as part of a scoping study that we're launching this month, and we're hoping to finalize by Q1 next year or at least internally, we're going to have those results to see and determine what are we moving forward with a pre-feasibility study.

With that, we're going to the break right now.

We'll take a 15-minute break. We'll come back here at 3:40, but I'll wrangle you guys out, if you want to go and grab...

[Break]

Okay. We had that great video of Tim that talked about what we've got here. And it's very exciting for me to be here. And really, for the first time, other than the analyst trip to be able to talk to a group of investors about Vicuña.

Many of you may know me from Lundin Gold. So if I say ounces a few times up here, please forgive me. I still have gold in my veins. But when Jack and Adam asked me about this opportunity, it didn't take long for me to say, yes, because as you've seen, this is a world-class -- not project, it's a world-class district. And to take the experiences that we, the Lundin Group had from Lundin Gold to Vicuña was an exciting opportunity.

In addition, some people may look at it as an issue having a 50-50 joint venture with BHP and Lundin. But I've really quickly noticed that it's a great opportunity. It's a great opportunity to be able to take the learnings and what we can do best from BHP and the Lundin Group and Lundin Mining. That's something that a lot of projects have that opportunity.

But at the same time, what we want to create is Vicuña Corp. Vicuña Corp with its own culture and its own pride in developing the Vicuña district.

As I say, it's the next major copper district to be developed. The best thing we can do, as you've seen that great video that Tim showed is this is a video that was put together after we published the PEA in March of earlier this year. And it gives you a good overview, really the first picture of what not just Josemaria, both Josemaria, Filo and the district will look like. Go ahead.

[Presentation]

Not quite as dramatic ending to that. But as was stated, this will be one of the top five producers in the world, not only in terms of copper, but gold and silver. This porphyry district is actually quite unique in terms of the amount of precious metals relative to the copper here. You put that together with current prices and the production levels that we'll be producing at, you'll see here that our projected cash cost -- average cash cost for the first 25 years is negative. And as a result, again, you combine that low cash cost with that production level, and we're going to be generating significant annual free cash flow in excess of $2.2 billion. And that's on prices, again, that were as of a few months ago, not current consensus.

The current CapEx is $7.1 billion. That was based on the PEA. Our team right now is very much focused on a new bottoms-up CapEx estimate. The one thing, though, that I want everyone to remember, we talked about it being a PEA, but there was a heck of a lot of work done on Josemaria. I've had the benefit of being on the board of Jose being on the Board of Filo. So being exposed to this, and I saw the amount of work that was put in. The amount of work that Dave Dicaire, when he joined Lundin Mining from Lundin Gold, spend a lot of time to put what is a very solid foundation for Josemaria. So when you think of PEA, don't think of Josemaria like a PEA. It's actually much further developed.

The other part is we talk about Filo. We talked about the Filo sulfides, which is really the crown jewel what we're really focused on. You can see from this graphic, and this now has been updated to more current metal prices, that this project can essentially finance all that growth and still be generating excess cash flows. This is what's really unique about Filo. We have to focus, and that's what our team is doing right now is on building Josemaria because that's the foundation for the crown jewel of the Filo sulfides.

As I think Jack mentioned, this is not an old venture. Yes, the area is old. It's been -- I remember when Lukas staked it back 20-plus years ago. But Vicuña was only formed just over 18 months ago, January 2025. We got the initial resource estimate out.

Then there was a big push to get the PEA out, because, again, it was that first time that there was going to be this vision for investors, for both BHP and Lundin Mining, what did this project look like? We got our amendment to our EIA, EIA approved. So we're ready to do work.

And -- oh, I see you changed that. We had RIGI expected approval. So Stephen has updated that. And if we were to say that was immaculate timing, yes. But we did it. I was in Buenos Aires, I hit the button to submit it December 14. So we got it in just a little over 6 months. This is a huge step forward.

What's next? Pathway to sanction. Our whole team right now is focusing on preparing the information that's going to be necessary for the Board of Lundin Mining and the Board of BHP to make a sanctioning decision before the end of this year. We're progressing engineering -- we projected engineering by the time sanction decision comes around will be about 50%. Don't get too concerned that, that seems low. The areas where the risk is such as civils, mechanical, other areas will be closer to 70%, 80% by the time they get done. We're not focusing on instrumentation and bathroom design at this point. We're focusing on the things that are key.

We got the RIGI. Point one, check. I was just in San Juan on Friday for meetings. We're moving forward aggressively on the provincial agreements, and I've just talked about the detailed engineering and design.

What does RIGI mean? It's significant. I can remember very early on in meetings we had, where we said -- actually was a meeting with Jack and Carlos from BHP and myself, my first meeting with Milei. And we told them that without RIGI, this project wouldn't be happening. That's how important this is. This gives us the stability, 40-plus years of stability. It's a very solid program and to the point where they're now looking at a super RIGI for further expansion. But the other point, don't forget PEELP. This is the first copper project to have been signed or applied for and received RIGI PEELP. This gives us even further stability.

Engineering and procurement. We have over 400 suppliers already engaged. Local procurement is underway with high-voltage equipment and heavy mining equipment, and I'll talk a little bit about that later. These photos here, all our SAG mill and ball mills are bought. The shells are sitting in San Juan, as are the motors all in climate-controlled warehouses, ready to be moved up. That's significant. As many of you know, are exposed to projects, those are your long lead items that you really make -- got to make sure you're getting line for. We've got that. We're focusing on the other one, high-voltage equipment where we're very close to putting those purchase orders in. And the bulk earthworks is not only being engineered, it's also well underway.

One of the big successes we had at Fruta del Norte was local hiring and local procurement. We know that's important. We also know San Juan is actually much more of a mining province than they like to give themselves credit for. But there still needs to be a lot of training. We have significant programs underway, a lot of hiring. We hired over 60 -- sorry, 70 people last month. We're already at 50 people, this month, we've hired. We're ramping up in San Juan.

The engineering at Fluor Daniel, they have 2.5x more people than they did 2 months ago, engineers working on this project. We are ramping up to be able to be ready to make that sanction decision by the end of this year.

But we're not only focused on project readiness, we're also focused on operational readiness. Earthworks is not only being engineered, it's being done. We have 25, 40-tonne Scania trucks on site right now with associated excavation equipment. We are already started preparing the earthworks for the process plant. We have 7 Komatsu, 150-tonne trucks coming in, we say October here, as I heard last night, that's going to be September, plus a large excavator. Again, working on earthworks for the process plant but also starting to start on tailings as well.

So don't just think that this is all -- we're all sitting at the starting line, waiting for the sanction decision, no. Things are already happening on site. Similarly, major vertical construction packages. So the wet and the dry packages for the process plant are being put together right now to be issued early next year and the high-voltage power line.

Let's talk a little bit. I've really focused on Stage 1, but let's talk a little bit about Stage 2 and 3. The key here, what we saw in the video, there's still lots of room for optimization. I talked about how Josemaria had a very solid foundation, the Filo oxides and the Filo sulfides less so, but that creates opportunities. Specifically in the oxides, the process that was there that we walked through that's in the PEA, we know we can improve on that. We have a lot of metallurgical test work underway, some new mine plans.

Similarly, with the Stage 3, we actually have drilling still ongoing. Filo is still expanding. We're also focusing on some of the high-grade core and looking some of the things that Eduardo talked about what they've done at Candelaria and Caserones with their mine plans and looking at them differently, we're applying that now on Filo sulfide.

Can we look at optimizing, getting more value sooner? As many of you saw, probably if you read the PEA, you saw that it was a short Josemaria and Filo oxide sulfides. We're looking at opportunities. Can we look at opportunities to maybe blend and bring -- share the opportunity to increase the grade and throughput. So there's a lot of work underway.

The infrastructure is key for Stage 3. That's when we make the move to desalinization water, start bringing water up from Chile. We're looking at about a 2,000 liter per second plant, looking at opportunities there for financing, location, opportunities to maybe work with Lundin Mining in terms of scaling up infrastructure. The concentrate pipeline that was mentioned, that is one area where we're actually stepping back, is on concentrate treatment for Filo. Does a roaster make sense? Does a smelter roaster make sense? Do some other technologies that we're doing the work maybe make more sense. That's one area we are very aggressively stepping back and maybe looking at some future opportunities.

The other part of this is by national treaty. Filo, oxides and sulfides sit in Chile. Part of it -- sorry, part of it sits in Chile. The oxide is actually not a small percentage. So there is a binational treaty in place between Chile and Argentina. We already have an exploration protocol. And our strategy is to put together an exploitation protocol Phase 1 for Josemaria, which will help us be able to move supplies materials, et cetera, back and forth between the two countries. It's not needed for a concentrate export. It's just would help in construction and operations.

But an exploitation protocol Phase 2 for the actual operation because then we will be mining ore in Chile, bringing it into Argentina to process and then export. So that one will take a little bit more work.

The advantage we've got right now, you've got two governments. We've almost got the perfect storm in a great way. You got Kast in Chile, Milei in Argentina. The first place -- first time -- first meeting Kast had was with Milei. And guess what, Vicuña was brought up. So this is a project that these governments are focused on. I've attended meetings with Jack and the team in Chile. We have attended meetings in Argentina. This project is a focus, and that's one of the things that we'll definitely be working on as part of the Stage 2 and 3.

What to expect next year? Expanding the earthworks. I mentioned the Komatsu fleet that's going to be arriving. Major vertical construction contracts awarded. We're talking a lot with major construction firms in Argentina about these opportunities. We announced an expansion of our camp to an additional 2,500 beds, which will start construction. And we'll expand it even further to 4,300 beds and keep moving that engineering and obviously initiates power line construction.

We're started. We're waiting for that sanction decision. The team is so focused on putting together all the documents that will help the BHP Board and the Lundin Mining Board to make that decision to move forward. It's a very exciting time right now with Vicuña, and seeing what the opportunities are. And our team have to stay focused on building that foundation but it's a lot of fun because we've got this group sitting and building this foundation, but also get to spend some time looking at the upside and potential that we can see in Stage 2 and 3.

It's a district, it takes a lot of time. It takes a lot of people, it takes a lot of focus on it. But with the backing of BHP and Lundin Mining, we're able to hire people. It's a challenge in this industry, but we're able to hire people because they want to come work with something that's pretty unique and will be world-class.

So that kind of summarizes what it is, focus on project operational readiness, build that first stage, look at opportunities and sanction.

With that, I'll turn it over to Teitur.

Okay. Good afternoon, everybody. Can you hear me? Good. So we're coming up here to the final stretch going through the financials before I hand it back to Jack for some concluding remarks.

And just before going into the outlook we're going to give here on the financials, I thought it was just good to recap on what we went through last year. As Jack said, last year was the first time we had a Capital Markets event for the company and also the first time we started to give more longer-term financial projections.

And what we focused on last year, the narrative last year was all around the Vicuña and how on earth this company could afford to fund such a big project as Vicuña. Obviously, back then, we didn't have any CapEx number for Vicuña and we didn't have our revolving credit facility in place to [indiscernible] -- to fund all that. But what we did outline was that we thought the funding -- the company had a funding capacity of up to $6 billion in funding. And we sort of tried to give the confidence to the market that, that should be more than sufficient to fully fund the Vicuña Stage 1 and then beyond. We also outlined our financial framework, whereby we committed to shareholder distribution of $220 million per year. And we also outlined that we felt we could distribute that amount of money every year even through the build phase of Vicuña.

And what we will show today, obviously, now with the PEA of Vicuña in place, we now have firm CapEx numbers. We have production profiles embedded in our financial framework. And we will now not only give you a 5-year outlook on the projections, but 10-year outlook to really capture that kick we get in production volume when Vicuña is in production. So I think that's what you should expect over the next few slides. There won't be any fancy videos but there will be some very impressive numbers.

And then just on the financial framework. This is something we outlined last year as well, and you will see the frame here is very similar to what Juan Andres has presented on the operational side. And there's no coincidence in that because everything is really fundamentally anchored in on our LOMs, what our assets, producing assets can generate in future cash flows. And the guiding principles there are that we are maximizing value on all our LOMs. That is the target of what we're doing here. It's not volume or growth for the sake of growing. It's maximizing value. So that is what we always center back to when we go through the cycle and we go through it once a year in 3 sort of iterations, doing the block models. And then midyear, we do all the profiles and the physicals. And then towards the end of the year, when we do the budget and the new 3-year guidance, we update for all the costs and the inflationary environments that we have to embed in our LOMs.

And that then generates the operating cash flow that you see here, and you will see through our projections that we have a very, very solid cash-generative portfolio within the company, both with low taxes and also with low operating costs. And it's that operating cash flow part of money that we then use to allocate through our financial framework.

Obviously, sustaining CapEx, you saw Juan Andres went through the rigorous process we have there in terms of trimming costs across the board where we can. And that's a continuous process that will never end. And then on the expansionary CapEx, obviously, Vicuña is one, but you've seen the more brownfield projects we are embarking on here now with Saúva and more cathodes coming through the underground expansion on Candelaria as well. So all of that goes into the expansionary CapEx part. And again, there, we remain very disciplined in terms of where we allocate capital towards growth. We need to hit certain IRRs.

And we are also not afraid to recircle our decisions. We were looking a few years back on what we call CUGEP, which was a more fancy way of increasing the throughput of Candelaria underground. But actually, when we had reassessed that, we decided to bin that particular project and doing a much more plain vanilla more gradual expansion in Candelaria underground just by adding more mining fleet to increase the throughput.

And what you will see in our projection, shareholder distribution is a core pillar to our strategy. And in any numbers you see here, we are assuming $220 million a year in shareholder distribution every year. Whether we look at it for a 5-year outlook or a 10-year outlook, it will remain unchanged over that period.

And then obviously, the balance sheet, we always want to keep a conservative leverage on the balance sheet. And today, we are actually in a net cash position. And depending on which scenario we look at here, you'll actually see that we are really on the fringes now of funding this entire growth we have ahead of us, self-funding it without relying on -- drawing on in debt. Obviously, depending on what commodity prices we assume, but there is a real avenue here now for us to actually be able to execute on this growth without drawing or too heavily on debt facilities.

And I think, obviously, for you guys to navigate through our financial projections, I think it's important that we remain crystal clear here on what is included and what is not included in our projections. Obviously, the three LOMs that you saw Juan Andres and Eduardo go through is the backbone of our projections. And then on the corporate side, we are including, as I said, the shareholder distribution. We are also including certain contingent payments that remain to be paid by Boliden in relation to our sale of our European assets. So far, we have banked $5 million on contingent payment from Boliden, but we are projecting more payments this year the deal is that as long as zinc is over $1.30 at Neves, then we get 60% of every increment revenue generated above that and also $4.50 on copper. So today, spot prices are significantly above that. So that's generating extra cash inflow for us. And that deal also remains into all of 2027, whereas on Zinkgruvan, it's a slightly higher zinc price of $1.40 per pound, but even at that threshold, zinc prices spot are higher than that.

So we are assuming some cash inflow from Boliden within our projections. We also have some deferred payments still on Caserones to JX. We acquired the asset from JX. So within our projections, there's still another $130 million worth of deferred payments to make to JX, which is all embedded in our projections.

And then the Candelaria stream, as Juan Andres has explained, we project that to step down first half next year from 68% down to 40%. So that should release more gold ounces net into our cash flow stream, which is also reflected here.

On the project side, you see on the right-hand side of the slide here. Obviously, the Vicuña numbers are as disclosed previously and as Ron just explained. So there have been no changes made there. Saúva Phase 1, you saw the production profile and the $110 million CapEx for Saúva, including the extra ball mill for higher recoveries. That is included in our profile. But Phase 2, which was outlined by Tim and Eduardo is not currently included, so that could be further upside.

On the Caserones side, we are assuming up to 35,000 tonnes of cathode production. You heard the guys presenting a scenario where we potentially can get up to 40,000 tonnes, but we have only included 35,000 tonnes per annum in these projections. And then you have the remaining sort of projects we are currently working on. None of those are currently included in our projections.

And what's also important to understand our projections is obviously which macro assumptions we are assuming and you see those here. Last year, we started at $4.40, and we were increasing the base case up to $4.50 long-term copper. Obviously, the world has moved on since then. So we are now assuming $5.50 long-term copper and actually keep that flat through all the projection period, whereas on the gold, we start off with $4,000 per ounce and stepping down to $3,700 in the long term.

You'll also see on the right-hand side, the FX assumptions. And what we are assuming here is that the Chilean pesos will be somewhat correlated to the strength of the copper price. So the higher the copper price is stronger the Chilean pesos and vice versa. So that's what we are assuming in our projections. And then the Brazilian real, which is less impactful on the overall consolidated numbers that we have. But nevertheless, you see which FX rates we are assuming on that front.

And if we start just on the near term here with our 2026 financial projections, we have already reported Q1 numbers. So those are in the back of this slide deck as well. But you can see the full year numbers here where we are reiterating this morning the copper and gold full year guidance is there's no changes there. So 323,000 tonnes copper is the midpoint of the guidance for the full year. And we did 80,000 tonnes in Q1. So that's smack in the middle of the projected guidance around about 25% of annual guidance we achieved in Q1.

And that's then generating at $5.50 copper price for the full year, $4.5 billion in revenue. And the correct EBITDA, that you see here is $4.3 billion, on like in the press release this morning where there was a clerical error in the guidance we initially gave in the press release. But $2.3 billion EBITDA is the correct number. And if you look at what we did in Q1, we did $625 million, so around about 27% achieved in Q1. So we are again tracking to full year guidance on that.

And then we guide to free cash flow from operations adjusted. So this ignores working capital movement of -- sorry, $1.2 billion for the full year and we did $335 million in Q1 alone.

And then on sustaining CapEx, we are guiding $550 million. There is no change on that. That was the original guidance we had in the beginning of the year. But we have increased the expansionary CapEx at today's CMD by $35 million to reflect the extra ball mill at Chapada that Eduardo took you through. So we are now guiding $480 million in expansionary CapEx this year. Obviously, the majority of that number is still made up of by the Vicuña spend, $395 million net to us. There are some Candelaria expansionary CapEx in here as well. And then, as I said, $35 million for the CPU plant at Chapada.

So that leaves us to project an adjusted free cash flow for the full year of $700 million. And you see the sensitivities on the right there, plus or minus $1 change in copper price would release between -- well, around about $400 million extra free cash flow for the group.

And in terms of net cash or debt impact, it's slightly lower, $1 movement in price would translate into $320 million to $330 million movement in net debt given that some of the free cash flow we generate is being paid out to our non-controlling interest at Candelaria and Caserones. So we are now projecting to finish the year within a net cash position of $60 million before changes in working capital.

And here, you see the production profile that we are basing our financial projections on. And whether you look near term, medium term or long term, you will have growth across the board. So it doesn't really matter which way you skin this cat, you will conclude that there is growth within the portfolio. Obviously, in the near term, the growth is a bit more moderate, but it's also very low CapEx intensity growth, mainly being the extra cathode at the Caserones in the near term. And then Saúva is now assumed to come on stream in 2029. So that's contributing quite significantly to the medium-term growth. And then obviously, with the blue portion of the bar here, you see Vicuña coming onstream and sort of makes that significant step change that we have in the profile.

And if you look at from 2026 out to 2025, going from 330,000 tonnes per year, up to 500,000 tonnes per year, that will translate to close to a 5% CAGR over this period. So that, I think, is a pretty impressive growth profile that we have in the portfolio.

And on the Vicuña piece, obviously, it's subject to sanctioning happening at the end of this year. But all the star signs are that this will be fully sanctioned. And actually, both companies are, I would say, behaving as if a sanction has happened, and we are allocating significant capital into the project already.

So if we then look at the first 5 years here in terms of how our C1 cost is tracking and therefore, the EBITDA margin and ultimately, on the right here, what the absolute cumulative EBITDA numbers will be. You can see here, if you start on the right that we're projecting now to generate over $13 billion cumulative EBITDA at our base price deck of $5.50, that translates to an average EBITDA over the next 5 years of $2.6 billion. So very, very significant EBITDA generation. And you can also see that it's mainly Candelaria and Caserones that are contributing to the EBITDA generation. Candelaria is projected to do $5.6 billion cumulative over the next 5 years and Caserones is slightly below at $4.5 billion, and then Chapada will be $2.3 billion. And given we project out to 2030, we will have a small sliver of Vicuña also entering the fray here with $1 billion of EBITDA generation, our net 50% share will come into the picture here.

And you can also see on the C1 cost on the left here, how Vicuña impacts the C1 cost, given the significant byproducts both in gold and silver. Actually in the very first year, we are projecting that Vicuña will have a negative $2.5 C1 cost given the significant gold and silver that we have. So that's pulling down the average for the group from around about -- we'll sit at around about $2 C1 cost over the next 4 years or 3 years. And then with Saúva coming in, we're dropping down to $1.5 roughly. And then when Vicuña comes in, in 2030, we're around about $0.75 C1 costs for the group on a consolidated basis. And that's obviously what's helping to elevate our EBITDA margins over this period.

And if we then hone in a little bit more on the input costs that the company is incurring to generate the production that we have. This is the input split -- input cost split for 2026. And you can see in the pie chart here on the top, this is making out around about, I think 67% or 66% of the total input cost that we have. And a big chunk of that is relating to the labor cost. We have around about 4,000 employees. So that's roughly 1/3 of the total labor force that we have. And the majority of that is obviously sitting with the contractors that we have with each of the three mine sites.

And it's important, therefore, that labor productivity is always looked at very closely because it is a big input factor. In Chile, we obviously have the unions cycle of negotiations. And we just went through that in Candelaria. So we have embedded a new 3-year union agreement there. So there shouldn't be any renegotiation on that over the next 3 years. And at Caserones, that labor negotiation process is commencing in early 2027. So we're going to go through that cycle as well.

And it's important to say when we look at all the projection numbers here that we are presenting everything in real 2026 terms. So we are not assuming any inflation either on copper prices, gold prices or on the input cost. But what we are assuming in our long-term projection is one extra cycle of labor negotiation for the Candelaria and Caserones. So given this every 3 year, we will have three cycles of those over the next 10 years, but we're only assuming one uplift in union bonuses over those negotiation processes simply because we present everything in real terms.

And what you see on the right-hand side here is obviously very topical these days is fuel and energy and in particular, the diesel costs. And you can see out of the total input cost here, it's not that significant for us. We're consuming around about 180 million liters of diesel per year across the three sites. And that's amounting to around about 7% of the input costs. Actually, electricity cost is the higher proportion of that. And on the electricity front, we have PPAs, as Jack said in the beginning, all the renewable power generation. And we have a PPA locked in around producing the electrons that we need. And particularly at Chapada, we have a very competitive price of less than $40 per megawatt hour, whereas in Chile, we have 55% at Candelaria and 73 -- sorry, $55 per megawatt hour at Candelaria and $73 per megawatt hour at Caserones. So relatively competitive PPA contracts, I would say that we have locked in.

But what is a bit of a headwind in Chile is that even though we have PPAs, the electrons are still transported through the public grid. And the grid fees in Chile are relatively high. They vary a bit, but between $30 and $40 per megawatt hour is the grid fee. So our all-in costs are around about $90 to $110 per megawatt hour in Chile, whereas in Brazil, they're below $40 a megawatt hour, so very competitive.

Our C1 guidance for the full year remains unchanged at $1.90 to $2.10. We have reduced, as you saw earlier, the Chapada C1 cost by $0.25. But on a consolidated basis, given the weighting that Chapada has in our consolidation, we have decided not to change the fully consolidated range, $1.90 to $2.10. And you also see at the bottom here, the sensitivities on both diesel price, inputs and also the FX rates that we have. And here it's important also to highlight that we have locked in for this year, both some Brazilian real and some Chilean pesos hedges. So any appreciation in the Chilean pesos below CLP 900 to the dollar, our hedges will be in the money and therefore, we will somewhat mitigate what otherwise will push up our U.S. dollar-based C1 cost as we report them.

So if we then move on and look at then the free cash flow generation still only for the next 5 years. We project adjusted operating cash flow of -- at our base case of $10.5 billion. And again, here, Candelaria is contributing $4.1 billion and Caserones -- even though Caserones has a lower EBITDA number, it has a higher free cash or operating cash flow number of $4.3 billion given that we have significant tax losses at Caserones, whereas we don't have any tax losses at Candelaria. So on our projection, we are assuming that Caserones tax losses will remain available until the end of 2031 when we have fully -- we currently have close to $4 billion of tax losses at Caserones. And as I said, over the next 5 years, we are depleting that tax loss base down to 0, which means that we'll only be paying the mining royalty tax in Chile and no corporation tax.

Chapada is doing $2 billion of operating cash flow and Vicuña here is $600 million for the 5 years, obviously all coming at the end of 2030 when we Vicuña starts off. In Vicuña, we are assuming 100% equity funding, which means that we are paying what 0.5% equity tax every year as we put more and more money into Vicuña to fund the CapEx I think we will optimize that funding structure when we sanction the project, but to be conservative, we have assumed 100% equity funding throughout the project period here of 10 years, which means, therefore, that there's a lower tax loss position at Vicuña when you start off because you haven't had any interest adoption, plus you're paying the 0.5% tax on the equity that you put into Vicuña.

And when we net out the sustaining CapEx, we are now projecting $8.1 billion of adjusted free cash flow from our operations compared to $4.9 billion that we had at last year's CMD, albeit at a lower commodity price deck than we currently show.

But as I said in the beginning, we wanted to stretch our projections more than just for the next 5 years. And now we are showing you a scenario here where we are projecting over the next 10 years, and we call this a decade of two halves. I mean we have the World Cup going on now, and we all know in various sports events, you can have games of two halves where the first half is terrible and then the team turns it around and has knock it out of the park in the second half. However, our portfolio is also two halves, but it has an exceptional performance even in the first half and an even better performance in the second half.

With the Vicuña coming on stream in 2030, you can see the uplift here in EBITDA, 70% for the following 5 years and even more so in free cash flow from operations close to 90%, given that we will have some tax losses again, at Vicuña, when you start up because you have obviously been through the development phase. So therefore, you build up a significant tax loss position at Vicuña as start-up. So out of the $15.5 billion in free cash flow from operations as we project from '31 to '35, Vicuña accounts for roughly half of that cash generation, 51%.

So extremely cash generative portfolio. And obviously, even though when you look at the average step-up in copper production, it's around about 30% in the second half of the decade versus the first half. What makes the free cash flow numbers go up this much is obviously with the gold and silver component that's coming through in the portfolio. And combined with that, you actually have a declining expansionary CapEx profile of $4.9 billion in the first 5 years, falling to $3.9 billion in the second 5 years.

And then that then gives you the full picture of what the company will look like over the next 10 years. And again, we've tried to split this up into the first 5 years versus the second 5 years. And if we take this from left to right, as I said earlier, the free cash flow from operation, which is after the sustaining CapEx that we incur we are modeling here for the next 5 years, $8.1 billion. And with a higher copper price of $6.50, we will be close to $10 billion in free cash flow at a lower copper price of $4.50, we will be at $6.5 billion.

The next bar you have here is distribution to shareholders. As I said, $220 million. So over 5 years, that's $1.1 billion of return capital to shareholders in addition to around about $1.4 billion returned to JX and Sumitomo as the minority shareholders in Caserones and Candelaria respectively.

Before Vicuna CapEx, we have some incremental expansionary CapEx. This mainly relates to Sa�va Phase 1 and also the EIA 2040 program at Candelaria in addition to some pre-stripping for future phases at Candelaria, around about $600 million for the next 5 years.

And then we also have some leases and deferred obligations, notably the $130 million payment to Caserones that we have to make over the next few years up to 2029. In addition to the $250 million fee we paid to JX earlier this year when we acquired an incremental 5% stake in Caserones plus 31% in Los Helados. So pre-Vicuna CapEx over the next 5 years, we are generating over $4 billion in free cash flow for the group.

We started 2026 with around about $60 million in net cash. So when you then deduct the Vicuna CapEx, which is Stage 1, obviously, $7.1 billion, we pay 50% of that. But there's also Stage 2 capital spend in these numbers. So all in, it's $4.9 billion net our share over the next 5 years. That then leaves the company with a net debt position of $700 million at the end of 2030. And then the fund begins with Vicuna ramping up. And you can see then in the subsequent 5 years, we are projecting $15.5 billion in free cash flow from operation.

And as I said earlier, Vicuna is obviously the main contributor to that, over 50%. And at the high and low end of the price deck we have here, we could get over $17 billion or down to $13.5 billion. And we will continue to pay the shareholder distribution, as I said, another $1.1 billion for the next 5 years from 2031 to 2035, plus we will pay around about $1.3 billion of dividends to our noncontrolling interest with Sumitomo and JX from Candelaria and Caserones.

And then we have obviously continued expansionary CapEx, mainly again on Vicu�a, Stage 2 and Stage 3 are in full flow during this period. So $3.9 billion of additional CapEx going to Vicu�a here, plus some very minor expansionary CapEx still being spent on Candelaria.

So all in, that then leaves the company in a net cash position of $8.2 billion at the end of 2035. Or if you take the high end of the price deck, $6.50 copper right back to 2026 through the next 5 years -- the next 10 years, we will have accumulated net cash of over $11.6 billion at the end of 2035 or $4.5 billion net cash in the lower price deck.

So whichever price scenario you're on here, you can see the company remains very cash generative. And what is amazing to think is when you look at 2035 and the 500,000 tonnes copper production we have at that point, we still have a resource to production ratio of 40 years. So we could stay at 500,000 tonnes per year for the next 40 years at 2035 as we look forward with the remaining resources we have into producing assets plus our 31% in Los Helados. So a very solid outlook for the company.

And I talked about funding capacity. As you saw in the previous slide, we will barely tap into our revolving credit facility to fund this growth. But nevertheless, we have entered into a new credit facility with 17 international banks. Today, we have locked in credit lines of $2.25 billion. And we are going through a gap analysis on the ESG front in Vicu�a. And once that report is executed and delivered, then we will automatically step up to $3.5 billion in commitments from the banks. And once Vicu�a Stage 1 is sanctioned, which is planned to happen as early as the end of this year, then the banks will release the last $1 billion of liquidity. So we will have full access to $4.5 billion upon sanctioning Vicu�a.

So plenty of firepower in here. We took out the RCF really to mitigate against any downturn in commodity prices. You will see here even at the low price deck of $4.50, our leverage will actually peak at 1.2x attributable net debt to attributable EBITDA. So we will -- even at the low price deck, we have plenty of headroom. And actually, when we took out the RCF, we always wanted to plan for a rainy day with copper prices being even lower than $4.50 in the long term.

So we're in a great position to execute on our business plan and actually to do more if the right opportunity comes along. And just a housekeeping slide here on the shareholder distribution policy. You'll be aware that we have a blend of dividends and share buybacks. So to date, this year, we have acquired $62 million worth of shares bought back. So in total, 2.25 million shares at an average USD price per share of $27 per share roughly. And then we are doing our quarterly dividends, which are amounting to CAD 0.11 per share per year.

And our commitment is still to distribute $220 million, and we will remain opportunistic around how we do our share buybacks. And in the event that we don't fully utilize what we currently allocate to share buyback of $150 million, any shortfall of the $150 million, we will pay out as a special dividend so that the shareholders have always been made whole in that they will receive $220 million with a blend of share buybacks and dividends. And our next dividend payout is happening on the 25th of June.

So with that, just to wrap up on the financial outlook side, as you hopefully have gathered from the slides I've shown here today is that the company is in a fantastic position to embark on this growth profile ahead of us. We're entering this growth profile with having met guidance 3 years in a row. The operations are running smooth, and we have a net cash position on our balance sheet. And depending on copper price outlook, we could potentially fund the impressive growth we have ahead of us without actually tapping into the RCF or even if we do, it will be only marginal draws on the RCF to execute on this program.

So there's potential to do more growth or more M&A or potentially increase shareholder returns over time. So with that, I'll hand back to Jack.

Thank you, Teitur. Thank you, team, for the great presentation. So I'll wrap up the Capital Markets Day in the following few slides here, and then we'll open up for some Q&A. But as Teitur kind of elegantly walked us through the profile of Lundin Mining and really the future projections of our organization, what you can see here is we've got growing production, continued significant revenue and really a strong underlying business that underpins the ability to grow at a significant pace and at a remarkable scale.

So you're seeing kind of a summary of what Teitur was saying in terms of revenue and average production. If you look at 2021 to 2025, our average annual copper production was 306,000 tonnes per year. So you're seeing over the next 5 years, going up to 340,000 tonnes and then really that step change going up to 445,000 tonnes. And beyond that, as Teitur was saying, once we get into the next 10 years, we'll be able to sustain slightly over 500,000 tonnes of annual copper production, which firmly puts us into a top 10 copper producer.

And also, it's very important to state that we're chasing that scale. We have that growth ambition, but we're doing so in a disciplined manner where our EBITDA margins as well are going to be growing. So we're doing this both on a per share basis and in a value-accretive way for the company, not just for the sake of growth itself. When you look at revenue, very impressive revenue growth. We did from 2021 to 2025, USD 18.3 billion in revenue generation. So we'll be scaling up now to $24 billion over the next 5 years and then close to $36 billion from 2031 to 2035.

Now if we look here at the illustrative EBITDA and cash flow after capital expenditure requirements. So Teitur walked us through these details, but I think, again, important to highlight 70% growth in cumulative EBITDA from the 5- to 10-year outlook and 90% growth in cumulative adjusted free cash flow from operations. This is going to drive excessive cash generation, gives us the flexibility to continue looking at opportunities to grow our business, to look at potentially scaling up with shareholder distributions and continue to be in a position of strength as we go into that next level of ranking in the copper sector.

Again, this is growing from the last 5 years of $8.3 billion in adjusted EBITDA and the last 5 years from 2021 to 2025 of $3.1 billion in adjusted free cash flow from operations. So continued sustainable growth going into the next decade and very exciting for position for Lundin Mining, very exciting for us to be the company that we are today with this trajectory.

So as a takeaway here, as we look to wrap up, I think it's very clear, we've been demonstrating that this is an organization poised for growth. We're underlining our business by strong operational performance, always focused on ensuring that our existing operations are performing to the best of their ability. They're now at a level of maturity where we've tasked our great managing directors that are here today with looking to grow the business in the near term, and we've identified some very exciting opportunities that we're going to be aggressively pursuing over the short term here.

We're going to continue to find near-term catalysts at our existing operations with Vicu�a and other opportunities in the Vicu�a district like Los Helados, which we opened up and revealed today to the audience with our partners at NGEx. Financial strength really underlines the business as well. So we've got the flexibility, and we've got the financial representation here to be able to grow our portfolio and really this Vicu�a era. I think Lundin Mining is a history of a series of successful strategic transformative transactions and the Vicu�a era is simply the latest and potentially the largest and greatest one yet.

So with that, thank you to all of you in the audience. Thank you to those online. We'll now open up for Q&A. Thank you.

So if I could ask the presenters to come stand up here, and we'll take turns answering some of these questions that may come.

[Operator Instructions]

And may be we will start over here then.

It's Dan Major from UBS. A couple of questions. Maybe first one on Vicu�a. You mentioned you're doing a bottom-up review of the CapEx estimate. Most CapEx numbers go up from a PEA to a definitive feasibility study, but you obviously highlighted the advanced nature of this. Exactly when should we get that CapEx update? Is it around the time of FID? And directionally, where do you see the risks around the $7.1 billion?

Yes. It's -- actually, it's not a bottom -- it's actually a brand-new estimate. We're taking it because that estimate was done as part of the original study. So this is actually a buildup from first principles estimate. And based -- we're well on our way through that. Yes, that will be coming out as part of the FID decision. But we're -- as with a lot of estimates, my experience over time, you start to see pluses and minuses as you keep working through. The key is our team is -- we're working very closely with Fluor to not just sort of sit back and wait until they give us the estimate and then sort of say, okay, no, it's very much an iterative process because we also -- we have a short period of time. Our shareholders, I got over there and his cohort at BHP have really given us a short time to get all that done. But yes, it will be part of the FID.

Okay. Sorry, just to push slightly, there's a balance of positives and negatives, where would you see the skew of the balance and positive negatives on the CapEx at this point?

I look at myself as our team is tightrope walkers right now. We're not leaning one way or the other. We're staying on the tight rope.

Okay. And then just a follow-up question. Yes, you talked a lot about the funding options. What's the position on streaming at the JV level or as the individual shareholders on the Lundin side, how is that discussion as a funding source?

Yes, maybe I can take that. I mean that will be a shareholder decision as opposed to a Vicu�a Corp decision whether we do that. We have looked at various funding options over the last year, 1.5 years together with the treasury team at BHP and as we are looking at it today, I think entering into any streaming arrangements is extremely unlikely. We see that as really being sort of on the border line of being equity cost of capital. So not something that neither Lundin Mining nor BHP really needs to enter into. I think the most likely scenario of funding here will be that respective shareholders will put a blend of equity and shareholder loans into Vicu�a Corp. And then potentially further down the line, there might be some element of project finance or ECA type of structure in place, but it needs to stack up commercially compared to what Lundin Mining and BHP can borrow at parent company level.

Ioannis Masvoulas from Morgan Stanley. A couple of questions from my side. Again, maybe one for Ron. When you look at all the feasibility work that you're doing right now, you said that CapEx is something you're focusing on. But a couple of questions. First, looking past Phase 1, thinking about the oxides because I recall from the site you did a few months ago, the flow sheet was a big focus, whether you're finding ways to potentially simplify the flow sheet there. Maybe an update there on how you're thinking about that?

And then b, when it comes to the infrastructure, you made a couple of comments, but just intrigued to hear your latest view around like roster. Is this less and less likely as you do more work? And then thinking about the broader infrastructure, Candelaria is sitting on a lot of infrastructure around port and desalinated water and pipelines. Is there a prospect where some of that asset base could potentially be folded into the infrastructure vehicle you're considering for the broader district?

I'll start with the last and work back. And yes, that's one of the things we're really looking at. We had a workshop about a week ago with Lundin Mining, BHP and ourselves looking at opportunities to share or expand that infrastructure. So that's definitely part of what's being taken into account. With regards to concentrate treatment, the initial feedback that we received from the regulators and that is a roaster and also on the commercial side, the roaster is it may be our only opportunity. We're still -- we keep it there, but we are looking at other ways to maybe do it. One option may be a combined smelter roaster with partners or something like that. It's definitely something that we realized quickly we needed to step back. But some form of treatment is going to be necessary.

And with regards to Phase 2, Stage 2 -- sorry, Stage 2, we're definitely looking at simplifying the process. And the other part is not only to simplify it because the original process was in the PEA with the on-off and the sequential leach. We all knew that was technically -- it could be technically challenging. I'm not saying it couldn't be done, but it could be technically challenging, but we see other opportunities.

And then the other aspect is looking at not just looking at Stage 2 and then looking at Stage 3, but looking at the combined because really, again, you got to remember, the whole thing about the oxides is to get to the sulfides. And we think there were some -- as part of the PEA as our work to get there, there may have been some opportunities overlooked that, again, simplify Stage 2 with a focus to get to the sulfide sooner.

Orest Wowkodaw with Scotiabank.

Just you did such a good job outlining how strong the balance sheet outlook is even in the context of a big project build. I'm curious, I mean, given that your internal cash needs are quite low with the brownfield expansions you got ahead in �Vicu�a, yes, it's big, but you've got cash flow. I'm wondering if there -- you see room to bolt on other assets to grow the portfolio before �Vicu�a is up and running. I mean the company has got a great history of making astute acquisitions of producing assets over time. I'm wondering if you see opportunities out there.

Thanks, Orest. I can take that. Great question, and that's absolutely right. I mean we've got the financial flexibility to do more than what our portfolio shows. But I think hopefully, what we also portrayed is mining is tough, projects are tough. We need to be able to focus our attention on where we believe we can extract the most value. And I think that's with what's already within our portfolio.

That being said, Lundin Mining, Lundin Group Company being opportunistic, seeing what's out there in the sector. If we see something that makes sense that could bolt on to our portfolio, that would be something nice in the interim to complement what we already have, then by all means, we would be interested in looking at that.

So I would say that we stay opportunistic, but by no means do we have to be executing on another transaction. I think the team is very much enjoying this period where we're -- we've got a smaller asset base, albeit each asset is much bigger, but we can focus our attention on where we think we can drive that value. So we'll stay opportunistic.

And just as a quick follow-up, this one again for Ron. Can you remind us what was the diesel assumption in the $7.1 billion CapEx like from a -- just from a stripping earthmoving perspective? And like when you update the study here, I mean, given how volatile diesel pricing is and other input pricing, like can you give us a sense of just what that impact could be as a stand-alone?

Yes. We've looked at it, and we actually just completed sort of the summary memo for where we're going to end up on diesel. I'd have to get back to you Orest. I think one of the things we get a quick sensitivity, I think it was like a $0.10, $0.15 a liter difference is in -- it's in the $10 million type range. So it's again, we're not -- it is an impact. with the greenfield construction like this, concrete, steel, all those other things have a bigger impact and plus the strip ratio is quite low at Jose. So those -- it's not as big as what you saw in Teitur's numbers for the operations as it is an impact on us, but I'll get back to you on that.

Yes. I think -- I mean, we got that question on our Q1 call as well. And I think we looked at it straight answer. I mean, diesel prices have fluctuated a lot. So it depends on what point in time you lock in the diesel price. But I seem to recall we were looking at maybe $100 million plus or minus increase on the total CapEx?

But that was like $0.50 or something [indiscernible] higher diesel price than what we're currently trading at.

Yes. It's Johannes Grunselius, SB1 Markets.

I have one sort of question on your operating track record because it's been really, really good for a couple of years. You also showed us the health and safety KPIs, which are also trending well. You mentioned you have a program there, some kind of FRM program or something like that. But the reason why you're doing great, is that sort of -- is the answer your culture, monitoring systems? Or is it also -- the answer is that you have very sort of easy assets to operate. If you can give some color on that, please?

Yes. Well, I can start and maybe if my colleagues would want to complement or if I'm missing anything, then please chime in. But I think really, it starts with the team being close to the assets, having a cohesive team is key, putting our focus where we believe the attention should be, which is the asset planning cycle, a very robust 12-month rolling period where we constantly are looking from the resource extension that makes its way into the mine plan that makes its way then into the budget and how we present to the Board and get approval on the 1- to 3-year budget.

I mean we're constantly following a very rigorous planning cycle, and we integrate the corporate team, the operations team, and we're always looking together on where we think we can drive value through bringing costs down and driving operational improvements. But fundamentally, I think for Lundin Mining, the success that we've had in the last 3 to 4 years really comes from having a best-in-class team and committed staying relentlessly focused on driving cost down and looking for operational improvements. I don't know, Jens, if I was missing anything there.

Lawson Winder from Bank of America. You did a really interesting job of discussing some of the projects that were excluded from the financial scenario. So Caserones Sulfides Deep, Angelica, Candelaria underground expansion, Los Helados, Sa�va Phase 2, though, Juan Andr�s, you sort of glossed over that. I was wondering if you could give us a little bit more color on what you see with Phase 2 of Sa�va and how big that opportunity might be?

Yes. I can probably support Juan Andres while he's getting the microphone and Eduardo as well. But I think really the focus, Lawson, on us is seeing how we can fast track the development of Phase 1 through really unlocking the ability to increase recoveries through the Chapada ball mill addition of that second ball mill and then also looking at the easier to get to material in Sa�va, which forms Sa�va stage or Phase 1.

So we are very much keen to continue pursuing Phase 2 once we get into Phase 1, but that's a later-stage kind of project opportunity. There's a different execution plan on that permitting time line as well. So still a lot of work to be done, but it very much is something that we are keen to continue pursuing. And with Itamar here and Eduardo's team, we're working on kind of developing a plan there.

Yes. And just to add to that. So we -- as mentioned in the slides, we first -- we're focusing on expanding the capacity of the concentrator plant to increase recoveries. And then we are focusing on capturing the highest grade core in the first 4, 5 years. But as I mentioned, it's only 30 million tonnes out of 250 million tonnes of resource. So there is a very good potential there that we want to capture, and we are actually studying that. It requires -- because it's a larger volume, it requires a more sophisticated material handling system, and we cannot rely on just tracking that material from Sa�va to Chapada. So that's the work where we're performing right now. We're going through a pre-feasibility study for a potential expansion of...

If I can ask a follow-up on the more immediate term, your 2026 guidance, really significant reduction in the CapEx -- sorry, the cash cost guidance for Chapada for '26, 23%. But nevertheless, consolidated guidance was left unchanged. Are you guys just being conservative here? Or are you seeing cost pressures elsewhere in the portfolio that are offsetting that?

No, I don't think we're being conservative. I think we're being pretty realistic. I mean, obviously, with the drop in -- at Chapada, there are 2 things there. One is the gold byproduct is actually pretty significant. And with the higher gold prices now versus what we based our guidance on, that is contributing to the reduction. And also at Chapada, there's been a diesel tax that we historically have paid. But now we have -- there's been a court ruling in Brazil, whereby mining is deemed to be a processing activity.

So any diesel we consume within the periphery of the mining activities, this diesel tax does no longer apply. It does still apply to getting the concentrate from mine site to the port. But within the compound of the mining activity, this diesel tax is not applying. So those 2 factors have contributed towards that. Whereas on the other side, the Candelaria has obviously, with diesel prices being slightly higher and certain other input factors also being slightly higher. When you blend everything together, we felt it was prudent to keep consolidated guidance unchanged.

Matt Murphy with BMO. First one, just on the Los Helados development pathways. How should we think about the -- you've got the sort of maturation of the Caserones pit and this Los Helados opportunity, pretty advanced, but also some very exciting district opportunities. What would you have to see in those district opportunities to prioritize, say, like Cordillera over Los Helados? Or is it just Los Helados is so much more advanced that it likely comes before whatever else you find?

Do you want to talk to the exploration potential, Tim?

Yes. I might just start by saying that, obviously, Cordillera, it's a large target, but has yet to receive one drill hole compared to Los Helados that has 96,000 meters of drilling, 110 drill holes. So they're very, very different stages. And Los Helados is also 2/3 indicated. And so it's quite advanced. We'll have to wait and see what occurs in Cordillera but it's very early to judge and speculate, I think.

Yes. And to complement that, I think, as well, like we're going to continue pursuing these exploration targets that we see. I mean, we're clearly in a very highly prospective region. So we want to continue to look at those exploration opportunities now with Los Helados being so far advanced, that kind of comes into an opportunity that we need to pursue. So we'll pursue all of those opportunities in parallel, and then we'll stack them up based on what we think we could drive the most value in the near term.

Okay. And then just one on the Vicu�a sanctioning decision. Ron, on your slide, the provincial agreements, can you go through what's required there?

One we're focusing on right now is it's called the DIA Trust, and this was a part of the environmental approvals. And what this agreement would be something very similar like what we did in Ecuador we've done before, which is a prepayment and then we would pay 1.5% of sales. We get a 5-year holiday on that. That's part of -- the DIA has this requirement for us to be putting some money in for infrastructure, et cetera, like that. That's a small part of it.

The key part of that agreement, royalty stability for life of mine at 3%. That's the key that's part of that agreement. That's step one. Then we're also focusing then on a second agreement, get the first one through Congress. The second will be on infrastructure that we need for the project, and we would get some royalty offsets because that infrastructure benefits not only Vicu�a, but the whole province. So there's kind of 2 agreements. The DIA is the one we're really focusing on right now, and we want to be -- have the other one essentially ready to be signed, but it probably won't be signed until sanction.

[indiscernible] from Berenberg.

A couple of questions. The first one, just on the operations broadly. Despite excluding the cost pressures, just generally over the last few months, is there any availability issues that you're seeing across Chile or Brazil? That's the first...

You mean availability of...

Sulfuric acid, consumables regions?

No. Actually, we have taken some provisions on fuel availability. We contracted 8,000 cubic meters of fuel storage that we're using to smooth out our supply. So we have that insurance, if you want to call it that way. And in the case of sulfuric acid, our annual consumption is 40,000 tonnes per year, so not that significant. And we have long-term contracts with our supplier, and we haven't seen any interruption of our supplies.

And the second one would be just on Vicu�a again, just on the long-term revenue profile. Just back on the envelope calculation, it looks like given the 85% copper revenue split in 2025, it looks like long term, that's probably coming down, just given the gold and silver credit at Vicu�a. Does that mean assuming streaming is extremely unlikely at this point that you're comfortable with that and precious metals gain high proportion in the portfolio long term?

Yes, absolutely. I mean we're looking at Vicu�a and all of the minerals that it has contained in the deposit, both at Josemaria and Filo. And I think it's a blessing that you've got such a strong copper asset that has precious metals like gold and silver that will help as byproduct material. So for us, we're a copper-focused company, but with byproducts like gold and silver coming into these assets, I think it again underlines the uniqueness of these types of deposits. So that doesn't kind of hurt our vision at all.

Cody Hayden from Deutsche Bank.

Just on Vicu�a, and you talked about it briefly on project readiness and headcount and resource. Looking at kind of the numbers you present on the slides, a significant uplift in the amount of people. You mentioned briefly you might you encountered some challenges or how should we think about that over the near term? What challenges might you face? How might you overcome that? And do you see there being more concerns just given some of the other greenfield copper projects in the region potentially coming online or being started up in the next few years?

Great question. Yes, it is one of our top risks, but the way to handle that risk is get in front of it. I think the advantage we have as with any Lundin Group project and BHP certainly are supporting this is we're going to be first. We're going to be the first ones out there. We're the first ones that are really hiring. We're -- and we're putting -- we've already bought simulators, and we're putting some of those in local communities to open up opportunities for training in the communities.

We just got to get in front of it. And we experienced that at Fruta del Norte. Nathan and I were together there, and we had to get -- we were way in front of the training program before we actually got into operations. And that's the key. Because the other thing, too, is you want to get start training on trades and things like that. We're working with local universities, technical schools because those are people, you get the training in place, they can help you through construction, but then also you identify the good ones to keep during operations. Look, we realize it's a challenge. It's not only greenfield in there. We're starting to see the whole industry. But one of the advantages we have is we'll be first, and that's going to be a big plus.

Just a couple of follow-ups. The first on the Los Helados opportunity. One of the options is increasing the throughput at the existing mill. So question here is what sort of increase you are considering? Are we looking at a small incremental throughput increase or something more substantial? And is it just on the concentrator side or also on the cathode side?

Yes. Thanks for the question. We are keeping that open by now, but we're -- we look into the real estate of Caserones, and we will need to do some modifications, but we're thinking like at least one more line production -- one more production line. So like 100,000 tonnes per day. But we don't want to limit our options only to that. Marcelo also has projects to debottleneck the current capacity of the plant. So maybe we explore that with lower capital intensity. So yes, we're going to keep the options open, but I think the maximum for the real estate is another line, 100,000 tonnes per day.

That's very clear. And just a second question on copper price expectations and forecast. We've seen the whole industry moving up along with the spot copper price. And if I look at the PEA in February, you used $4.60 as a sort of central case. And today, everything was around $5.50, so a 20% increase in 4 months. So question here is, when you look at all these growth options within the portfolio outside Vicu�a, is $5.50 the level you use to evaluate IRRs and whether projects could meet the right hurdles?

Do you want to start?

Yes. No, I mean, we are an agile, nimble company. So we're not going to lock ourselves in on a copper price and a IRR number that come hell or high water, that's what it needs to be, like we are much more flexible than that. We will build up a matrix of copper prices, gold prices, discount rates, technical profiles and you essentially build up a matrix of NPV and IRR and you take a decision on that basis as to whether you want to go ahead or not.

So but fundamentally, we I think we stay conservative. I mean, our budget this year was built on $4.50. And when we look at M&A and so on, we're obviously not disclosing which price decks we're running that on, but I think you can rest assured that we are not going to push the copper price to be able to sanction an M&A or some brownfield investment. So we will remain disciplined on that.

Just a follow-up as well, please. Orest Wowkodaw from Scotiabank. Teitur, the financial forecast out to 2035, when you went through what's included, what's excluded, I didn't see a box there for the infrastructure CapEx. It wasn't listed as included or excluded. Is that excluded?

Well, it is as presented in the PEA. And what we assumed in the PEA was that it's not part of the CapEx, but it is part of the OpEx. So we reverse engineered that and we had our internal CapEx number for the infrastructure. And the way we went about it to say, okay, if a third-party owned this infrastructure, they are seeking xIRR on that infrastructure. Therefore, our tariff needs to be a certain profile to meet that IRR profile that the infrastructure owner owns.

So again, commercially sensitive numbers, but we're not disclosing what they are, but I think we've been reasonable again in what the typical infrastructure rate of return will be, and we have applied that to the CapEx numbers that we have built up.

Okay. And then just a follow-up to the overall picture on infrastructure. Just is there any sort of time line we should think about when some decisions will be made with respect in terms of tying in some of the Lundin Mining infrastructure into Vicu�a? And is that still years away? Or is that something that could come sooner in terms of getting a better picture?

I wouldn't say that, that's years away, but definitely something into later part of 2027, I would say that we would probably have an update there. So we're using this opportunity now while we're really focused on sanctioning Stage 1 and getting everything ready from a project readiness and operations readiness standpoint there to really look at the Filo project and what that's going to require in terms of logistics and transport and then looking at Caserones and Candelaria and now with potential of Los Helados and adding all of that in. So there's a lot of work that is being done right now. It's definitely not sitting idle. But I would say towards the end of next year, we'll probably have a more fulsome update for the market on that, Orest.

Shane Nagle from National Bank. Just a couple of questions that we've seen like the Governor of La Rioja come out with some opposition. We've seen -- I think there's some discrepancy on the power draw within San Juan. You obviously have very strong federal support for this project. Can you just comment on the materiality of some of these risks to your development time line?

Yes. La Rioja first. Yes, there is one part of the road to site that goes through that province, and they've been sticking their hand up and raising a challenge now going back to Josemaria days. The interesting part, though, that ended this whole thing was community protests. We had nothing to do with it. The community themselves went out and protested the government for shutting this down because they want their jobs, they want to be able to work at Vicu�a. And that was a real eye-opening thing. And I think it shows the work that this team has done for the last several years in building up that community support.

So now we're working with the government. I think they realize and we're focusing on building that bypass and working with increasing our opportunities for training. We had several workshops that were all planned for towns in La Rioja. And when they put that out, we shut them all down. So it's just part of building a project.

And on the power side, yes, there was a hearing that was held last week now on -- by the national regulator. And we and the provincial and some of the stakeholders, the communities that have agreed that, look, let's see what the issue is. Let's have some discussions about how we can overcome this, but [indiscernible] is still very supportive of our application and what we -- what that was 3 years in the making. So there's a lot of work that's been done on that. But we're seeing what we can do and listening to the -- in particular, communities.

[indiscernible] we could have a scenario that NGEx might be in production before Filo starts production. How would that change? The scenario?

Well, I think as you've seen through the Vicu�a District video that we showed in the fly over, there's a number of deposits that are all being pursued in parallel. But for us, with Lundin Mining, with Vicu�a Corp and what we have in our portfolio requires a lot of attention and focus. And I think NGEx, they have their business strategy very clearly laid out. They're maturing an asset that is still very much in early stages in Lunahuasi. And so they're going to continue to drill that deposit out. And of course, they've applied, I believe, for a RIGI application, but the base RIGI and still a bit of work to be done.

So there may be an opportunity down the road to look at some more consolidation in the district in the future. But right now, we're very much fully focused on what we have in our portfolio.

Richard Garchitorena from Barclays.

One bigger picture question on free cash flow. You show 5-year, 10-year, very stronger free cash flow. I know you have obviously a couple more stages beyond Stage 1. But in terms of the $220 million capital allocation that you've sort of earmarked, I mean, is that a starting point? Can you look at increasing that over time? And how would you allocate versus share dividends, share repurchases versus dividend increases and special dividends such a thing.

I can start and then, Teitur, if you want to complement. But what we wanted to do was ensure that we came out with a shareholder distribution framework that could fit in our long-term projections. So as Teitur was talking about, when we look at projects and do we stick on a copper price, absolutely not. We look at flexing the model. We use price sensitivities, various inputs to see what are we comfortable with going forward.

And during this growth period, it was determined that, that absolute return of around $220 million through reducing our dividends and implementing a stronger buyback protocol, that was what we wanted to do.

Now of course, we're going to have a lot more flexibility given the commodity price environment that we're in, given the performance of our existing operations.So I think we've got a minimum shareholder distribution framework that has been established, and we do have the flexibility to look at that. But that fits into all of our scenario planning for capital allocation. But what I think is a key takeaway is that shareholders can rest assured that we can maintain that as our minimum distribution policy.

Follow-up from Dan at UBS. Just on the infrastructure discussion. I mean it sounds like you're confident on other parts of the construction sort of piece. But how advanced are you in discussions with third parties around the infrastructure? Would the infrastructure be constructed by the joint venture and then kind of farmed out? Or would it be built by somebody else? And then the third question, is there actually any examples in the industry of a roaster or a smelter being acquired by an infrastructure fund?

The answer to the last one, no, we're not an infrastructure fund, but you could look at a smelting company or something like that rather than looking at a traditional infrastructure fund. In terms of how it's built in that, that's still all early stages. We're still looking at different opportunities. I think we're very early stages.

Exactly. We're in early stages, as Ron was saying, we've had a workshop to kind of scenario plan all of the options that exist, and there are many. And so we're working towards what is the best viable option and embedded within that is the commercial strategy as well. So it's too early for us to come out and say what that is, but we're maturing that with the team with Vicu�a and with our partners at BHP.

Okay. And so just to follow up on you saying it could be a smelting company. I mean the cost of capital for a smelting company, I suspect is not as low as a water or electricity solution. Is that something you've also factored into your return assumptions that are embedded in the cost estimates?

Not at this point. We took an approach of just taking that sort of infrastructure for the PEA level.

Well, I think that -- sorry, maybe one last question.

I think it's probably for Juan Andres. I think it's really neat that you have your mine managers here, and they must be really proud of that safety record and running reliable operations. Can you give us a bit of color like 1 or 2 things that each of your mine managers does very well and that you're going to sell Ron, you need to take these best practices from them and make sure they get implemented at Vicu�a?

Great question. Thank you, Frank. Well, they're all exceptional, exceptional leaders. And I think they do a lot of things extremely well. The presence at the site. They spend most of the time at the site with their teams working on safety, cost control, full potential initiatives, meeting with the communities. They are our face in front of the communities, meeting with the regulators on a regular basis.

But the focus on discipline, on operational discipline is one. We have established several routine and processes to make sure that we are continually monitoring the progress on a daily basis, weekly basis, monthly basis, quarterly basis, producing reliable data that can be analyzed that we can look at the information and do protection from there and take action on the deviations that we're seeing.

So I think very strong technical leadership presence at the site being the face of the company out in the community and leading with the example on safety, cost control and discipline in general.

I think to add to that, Andres, is the experience at Caserones is working at Altitude as well. That we're learning a lot. They're learning a lot there. We'll certainly be able to take some of their learnings there too, Vicu�a.

And lastly, maybe a healthy competition on driving what are the best full potential initiatives and how can you share those experiences and then look to even get better from one site to the next. So I think sharing ideas and being a cohesive unit is definitely something that we have in our organization, which drives a lot of value.

Great. With all the good questions that came in here, we've covered everything that's online. So maybe I'll just hand it back to you, Jack, for one final closing remark, and we'll close out for the day.

Okay. Before I do that, I'm going to hand it back to you just so you can go through the plan for this evening. After the -- okay. apologies. Well, for those online, I just want to thank you again on behalf of Lundin Mining for sitting through another Capital Markets Day. We're very excited about the future of Lundin Mining. And hopefully, you've got all the necessary information from this presentation, but we look forward to following up with all of our current shareholders, the analysts that are here, our prospective shareholders, and the future couldn't be brighter for Lundin Mining, and we're going to continue to pursue all of these options and initiatives with a relentless focus on continuing to drive best-in-class safety, best-in-class full potential opportunities and pursue that growth.

And year-over-year, I think you'll see that the business will continue to transform for the better. So thank you, everybody, again for being here.

Good day, and thank you for standing by. Welcome to the Lundin Mining's First Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Jack Lundin, President and CEO. Please go ahead.

Good morning, and welcome to Lundin Mining's Q1 2026 Financial Results. Last night, we reported our financial and operating results for the first quarter. We appreciate your continued interest as we review our performance and key developments from the period.

The presentation is available on our website where a replay is also available. All figures presented are in U.S. dollars from continuing operations, unless otherwise noted. Before starting our call, I ask everyone to read the cautionary statements on this page. Be aware that some of today's remarks will contain forward-looking information and are subject to risks and uncertainties. For more details, please refer to the cautionary statements on Slide 2 and our most recent filings on SEDAR.

Thank you for your attention as we continue. Joining me today on the call will be Juan Andres Morel, our Chief Operating Officer; and Teitur Poulsen, our Chief Financial Officer. I am pleased to report that we had a solid start to the 2026 calendar year as reported in these first quarter results.

Operationally, we produced approximately 79,900 tonnes of copper and 31,500 ounces of gold at a consolidated C1 cash cost of $1.66 per pound, keeping us on track with our annual guidance.

Our operations generated over $1.1 billion in revenue, $627 million in adjusted EBITDA and $380 million in free cash flow from operations for the quarter, demonstrating consistency and stability from our asset base.

These results strengthened our net cash position. and at the end of the quarter, we had approximately $250 million in cash, net of debt and excluding lease liabilities. There were a number of corporate events from the quarter with the key highlights being presented on this slide. A significant milestone as most on the call would be familiar with, was the results and subsequent filing of the integrated technical study on the Vicuña project, highlighting a Tier 1 asset capable of producing over 500,000 tonnes of copper and 800,000 ounces of gold at a first quartile C1 cash cost.

In March, we hosted a visit with a group of analysts and investors touring both the Vicuña project and the Caserones operation. The visit highlighted the exceptional potential of the district anchored by the stable high-margin Caserones asset and complemented by the significant long-term growth opportunity across the broader Vicuña district with the Josemaria and Filo del Sol deposits.

During the visit, we announced the acquisition of an additional 5% interest in Caserones, along with a 31% interest in the adjacent Los Helados project from our partners at JX Advanced Metals. We now have 75% interest in the Caserones mine.

We see considerable synergies and future strategic optionality at Los Helados , and we'll continue to evaluate the project and provide updates to the market throughout the year. I will speak to the regional developments towards the end of this presentation. Year-over-year, on an attributable basis, we increased the company's copper mineral resources by approximately 115% to over 39 million tonnes.

This includes the 31% interest of the Los Helados project. As we rapidly progress our growth opportunities within our portfolio, we have high conviction in converting these resources into reserves in line with our strategy to feed a pipeline of growth opportunities.

A significant driver of this considerable increase was the initial resource estimate generated last year at Vicuña, which incorporated the Filo del Sol deposit and highlighted what is now recognized as the largest copper discovery in the last 30 years. The Vicuña project contains 46 million tonnes of copper, 97 million ounces of gold and 1.8 billion ounces of silver and is continuing to grow through the drill bit.

During the quarter, we finalized the upsizing of our revolving credit facility from $1.75 billion to $4.5 billion, ensuring that we are fully financed for the first stage of the Vicuña project. With our balance sheet in great shape and an expanded credit facility, we are positioned to fund our portion of the project. In line with our shareholder distribution policy, during the quarter, we purchased 1.4 million shares for USD 40 million as part of our share buyback program, along with the declaration of our Q1 dividend.

Since 2017, we have returned over $1.6 billion to shareholders through dividends and share buybacks. And finally, we filed our inaugural CSRD report under the EU Corporate Sustainability Reporting Directive, providing enhanced disclosure and greater rigor around our key environmental, health and safety governance and social commitments, which reinforces our dedication to responsible mining practices. I will now hand the call over to Juan Andres, Chief Operating Officer, to talk about our production results.

Thank you, Jack, and good morning, everyone. We are pleased to report that we had one of the strongest safety performances on record with a TRIF of 0.03 during the quarter, and this coincided with the good operational results from our assets. Copper production for the company was 79,900 tonnes for the quarter, which is in line with guidance. Gold production for the quarter totaled 31,500 ounces. We expect gold grade profiles at Candelaria and Chapada to contribute to a stronger second half of the year for gold production and remain on track to guidance.

At Candelaria, production was 30,800 tonnes of copper and 17,700 ounces of gold. Lower grades from mine sequencing in the first quarter, combined with approximately 3 days of unscheduled downtime to complete preventive maintenance on the mill, which impacted production.

During the downtime, we took advantage of the opportunity and moved up scheduled maintenance that will improve run time hours in the second half of the year. Candelaria will be second half of the year weighted with approximately 55% of the production expected in Q3 and Q4.

Production at Candelaria is tracking to plan and on target to meet guidance for the year. Caserones performed well this quarter and produced 38,600 tonnes of copper. Higher grades from ore sourced from Phase 6 contributed to higher production along with high cathode production. Cathode production continues to be strong from higher irrigation rates, improved irrigation patterns and more material being placed on the dump leach pad. We expect Caserones to be first half of the year weighted and grades to come down in the second half of the year. Caserones is also tracking to guidance for the year. Mill throughput at Chapada was high this quarter from higher mechanical availability and softer ore, which offset lower grades.

During the quarter, Chapada produced 10,600 tonnes of copper and 13,800 ounces of gold. Production will also be slightly weighted to the second half of the year, driven by the grade profile at the mine. I will now turn the call over to Teitur, to provide a summary on financial results.

Thank you, Andres, and good morning, everybody. Financially, we had yet another very strong quarter, driven by consistent operations and higher commodity prices. We generated almost $1.2 billion in revenues. Earlier in the quarter, we finalized the sale of our Eagle mine to Talon Metals, which solidifies our position as predominantly being a pure-play copper company with approximately 85% of our revenue generated from copper and approximately 10% from gold. For the second consecutive quarter, Caserones was our largest revenue contributor, accounting for 44% of total revenue of the company. Moving to the next slide and looking at the volumes sold and realized pricing. During the quarter, we sold 77,700 tonnes of copper at a realized price of $5.70 per pound and 29,900 ounces of gold at $5,120 per ounce.

The LME copper price during the quarter was fairly stable and relatively in line with the LME copper price as of end of 2025. which, therefore, has resulted in the realized price of $5.70 per pound during the first quarter, which includes provisional adjustments from prior period sales, and this being closer to the LME average copper price over the same period.

All shipments scheduled at the end of the first quarter were successfully completed, which has led to our concentrate inventory levels remaining relatively low at the end of the first quarter with around 29,000 tonnes of concentrate inventory. At the end of the first quarter, approximately 67,100 tonnes of copper were provisionally priced at $5.54 per pound and remained open for final pricing adjustments, as did 27,900 ounces of gold at a price of $4,540 per ounce.

A breakdown of our operating costs are summarized on Slide 12. Since the breakout of the war in the Middle East, there has been a heightened focus on input costs for the mining sector. This slide illustrates that the bulk of our costs are split between labor, consumables and energy. When combined, these input costs account for approximately 2/3 of our overall cost structure. Diesel costs accounted for approximately 7% of our total operating costs for the first quarter, with the rise in diesel prices only materializing towards the end of the first quarter and therefore, not being that impactful for the quarter as a whole.

Our current guidance assumes a diesel price based on the New York Harbor Index of around $0.60 per liter. The current New York harbor price is around $1 per liter and when combined with the partial abolishment of the specific diesel tax credit for diesel use in mines in Chile, this increase is forecast to result in an increase in C1 cash cost of approximately $0.08 per copper on a consolidated basis for the year, which means that the company remains on track to meet full year C1 cash cost guidance even if the current diesel prices persist for the rest of the year.

We have proactively increased our physical storage capacity for diesel in Chile for our 2 mines from approximately 1 week worth of consumption to 1 month's worth of consumption. This enhances this enhanced storage capacity allows us to mitigate supply risks and maintain short-term operational continuity should diesel supply restrictions arise in the future. Overall, consolidated production costs have come down from the previous quarter and remained consistent with prior periods, totaling just under $500 million with an adjusted EBITDA margin of 54%.

Last quarter, elevated costs were driven by higher sales volumes. At Candelaria, in the fourth quarter last year, the company finalized early labor agreement renewals, which led to a one-time increase in costs due to signing payments. The first quarter total costs were $202 million compared to previous quarter of $227 million.

At Caserones, costs have come down quarter-over-quarter, reflecting the lower volumes sold. Better cost control and higher byproduct credits and somewhat offset by a stronger Chilean peso have helped improve C1 cash cost to $1.58 per pound, the lowest Caserones has seen since we acquired the asset.

Both Candelaria and Caserones were impacted by unfavorable foreign exchange rates. The Chilean peso strengthened against the U.S. dollar by approximately 5% compared to the previous quarter. At Chapada, costs remained stable and with a higher gold price, the C1 cash cost was $0.45 per pound, remaining in line with last quarter's results. On a consolidated basis, the company's C1 cash cost for the quarter was $1.66 per pound, which is below our current guidance for the year of $1.90 to $2.10 per pound, primarily driven by higher byproduct credits.

Our first quarter key financial metrics are presented on Slide 14. Strong operational results translated into adjusted EBITDA of $627 million and adjusted operating cash flow of $450 million during the quarter. Once again, this was near-record adjusted quarterly EBITDA figure for the company, reflecting continued benefit from higher commodity prices and robust production across our assets.

Continuing with our financial results. Free cash flow from operations was $380 million and adjusted earnings were $265 million, which resulted in an adjusted earnings per share of $0.31 attributable to our shareholders. Sustaining capital expenditure during the period totaled $126 million, while expansionary capital expenditure during the period totaled $54 million, of which $52 million was spent at Vicuña.

The majority of the sustaining CapEx was focused on open pit waste stripping, underground mine development and tailings storage development. Sustaining capital expenditure was slightly lower than expected due to project delays at Caserones and Candelaria.

We anticipate capital spending cadence will increase over the remaining quarters and our full year sustaining CapEx guidance for all assets remains unchanged. We also saw an underspend at Vicuña for the first quarter relating to phasing of expenditure. and as such, our full year guidance for Vicuña spend of $395 million for our 50% interest remains intact.

Slide 17 presents in greater detail the sources and uses of cash in the first quarter. Our continuing operations generated just under $500 million in operating cash flow after having paid cash taxes of $95 million.

After sustaining capital spend of $126 million, the company generated free cash flow from continuing operations of $380 million. The company declared a dividend in Q1 that will be paid out in Q2 and also purchased $40 million in shares as part of its share buyback program.

Dividends to noncontrolling interest in Caserones amounted to $60 million, and the company ended the quarter with a cash position of $565 million on a consolidated basis. We ended the first quarter in a net cash position of roughly $250 million, excluding capital leases compared to a net cash position of $77 million at the end of the last year.

Subsequent to quarter end, we closed the acquisition of an additional 5% interest in Caserones and a 31% interest in Los Helados, which resulted in a cash outflow of $215 million at closing, leaving the company with a current net cash position of $51 million.

During the first quarter, the company finalized the upsizing of its revolving credit facility to $4.5 billion. The credit facility currently has $2.25 billion available for drawing, which will expand to $3.5 billion, subject to certain conditions being satisfied with a further increase to the full $4.5 billion upon approval of Stage 1 of the Vicuña project.

So in conclusion, the company continues to be in great shape from a financial perspective with highly cash-generative producing assets, net cash on the balance sheet and ample liquidity available to fund its exciting growth plans in parallel with maintaining an annual shareholder distribution of around $220 million. With that, I'll hand the call back to Jack.

Thank you, Teitur. So in February, we announced the results of the integrated technical study for the Vicuña project, confirming its Tier 1 status and outlining a comprehensive stage development plan.

The study highlights the project's potential to generate significant returns through high volumes of copper, gold and silver production at first quartile or lower operating cost profile. The technical report has been filed on SEDAR and is available for download.

As part of the project governance framework, the technical assurance and peer review process for the PEA phase identified opportunities to enhance value and advance sanction readiness through targeted derisking initiatives across all development stages.

The Vicuña team is actively progressing these initiatives and detailed design and engineering continued to progress on track as per the 2026 work plan. On site, activities are progressing well as project readiness ramps up. The project added over 100 hires in the first quarter, increasing the full-time Vicuña corp workforce by approximately 25%, excluding contractors. Early works preparation is underway, including ongoing equipment operator training and initial deliveries for the earthworks fleet have begun.

We expect site development to commence in the coming months, supported by the arrival of the 40-tonne trucking fleet and other auxiliary equipment. The existing 1,500-person construction camp continues to serve as the base of operations. Current efforts are focused on early earthworks to prepare for larger-scale bulk earth moving, which the project plans to self-perform as part of the initial construction strategy.

Also, our RIGI application, which was filed under the long-term strategic export project category back in December continues to progress through the review process with several rounds of questioning successfully completed, most recently at the end of April. We anticipate to receive approval in the near future, which will support our final investment decision on Stage 1, which is targeted as soon as before the end of this year. Another exciting development opportunity for the company was the recently announced transaction with our partners, JX Advanced Metals, as mentioned by Teitur. With our additional ownership in Caserones, we acquired a 31% ownership in the Los Helados project. Los Helados is located approximately 17 kilometers south of our Caserones mine, roughly midway between Caserones and the Vicuña project on the Chilean side of the district.

As shown in the center of this slide, the initial discovery hole was drilled in 2011 by the NGX exploration team and more than 100 kilometers of drilling has since defined a significant resource.

We see strong potential for synergies and long-term optionality between Los Helados and Caserones. We are actively evaluating opportunities to capture these synergies, including transporting mined ore to Caserones as well as a stand-alone development scenario at Los Helados.

This work will continue to advance throughout the year with our partners at NGX. Los Helados is an advanced copper-gold development asset with more than 100 drill holes of drilling completed to date. This work has resulted in a resource estimate of 12 million tonnes of copper and 14 million ounces of gold on a 100% basis, including a higher grade core of 2.9 million tonnes at 0.72% copper equivalent, providing us with a strong foundation to continue advancing and analyzing the project with our partners. We look forward to providing an update on our vision for Los Helados at our upcoming Capital Markets Day in June. We are very pleased with the strong start to 2026.

Our solid operating performance has translated into strong cash flow, allowing us to build on our net cash position. We remain firmly on track to deliver our full year guidance while maintaining disciplined cost and capital management. With a strengthened liquidity position, we are well positioned to advance Vicuña along with other growth opportunities while continuing to return capital to shareholders through our dividend and buyback program.

At Lundin Mining, disciplined execution across high-margin, stable operations underpin our performance. Supported by an unrivaled growth strategy and a strong balance sheet, we are positioned to drive significant value for our stakeholders over the years ahead. With that, I would now like to open up the call for questions.

[Operator Instructions] And our first question will come from the line of Orest Wowkodaw of Scotiabank.

Thanks for the sensitivity on the diesel price on the OpEx. I'm just wondering with the current environment, if you could also share perhaps an impact on the Phase 1 CapEx of Vicuña. And I'm curious what diesel price was assumed in Phase 1 relative to where we are today at spot as well. I'm just also wondering if you're starting to see some inflationary pressures as you're getting, I assume, firm contracts for parts of Phase 1.

Orest, it's Teitur here. So all the input factors for the CapEx estimates that we announced in the PEA were effectively based on spot prices at that point in time. So the diesel prices would have been closer to what we assumed in our C1 cost guidance for the company was around about $0.60 per liter. So we're still doing the bottom-up cost estimates for Phase 1, but we're not anticipating any major changes on that front. Obviously, this will be a development phase over 3 or 4 years. So let's see how that turns out. And we're also trying to map the volume of all the input costs and to then take a decision later on together with BHP, our partner on Vicuña as to whether we should lock in any hedging on any of the input costs or not.

But that remains under evaluation and no decision has been taken on that. In terms of our operating assets, I think we're in a good position. As I said on the call, even if current diesel prices persist for the remainder of the year, we will stay within guidance. And in fact, we run a sensitivity even if diesel prices double from current levels, we still project to be within the upper end of our C1 cost guidance of $2.10.

So I think we're in good shape in terms of input costs despite the fact that we had seen some pressure on increasing input costs just now.

And just as a follow-up, what about the sulfuric acid cost at Caserones? Can you give us some sensitivities there?

Orest, this is Juan Andres. In Caserones, the acid, the sulfuric acid consumption is fairly low, 45,000 tons per year. We have not seen any indication of shortage of supply from our suppliers. We have seen a small increase in costs. We're above the $300 per ton of sulfuric acid. But so far, we continue to have the supply with no interruptions.

Okay. And is that price fixed for a certain amount of time? Or are you purely market exposed on the acid?

No, we do have some adjustments to the spot price.

And our next question will be coming from the line of Matt Greene of Goldman Sachs.

Teitur, if I could just ask another way perhaps on the diesel question. I appreciate your costs that strong cost performance. But a lot of your CapEx is earthworks related, which is obviously a lot more diesel intensive than perhaps the broader cost base.

Can you give us a sense just of that $400 million for Vicuña, how much of that is earthworks related? And then I guess, for every dollar spent on earthworks, could you give us a sense for how much of that is fuel related?

I don't have that level of details. Obviously, diesel, steel, cement, all those input costs are material in the context of the CapEx for Vicuña. So it's as I said, it's something we are mapping out as we work off the more detailed engineering on the project and the CapEx estimates.

And I think it will be prudent of us to look at those volumes, how they are phased over the next 3, 4 years and then see whether we should lock anything in. I think where diesel prices are trading at just now, I'm not sure I will allocate locking anything in at these levels. But I think assuming things normalize in the Middle East later in the year, I think it would be prudent to perhaps look at locking in certain of those costs.

Yes. Got it. That's great. And look, sticking with Vicuña, the comment in there just around the power with ENRE, could you just elaborate just on what's going on there? Because I understand you're funding a transmission line. You get about 90% of the capacity that you're building out.

But some of your peers in the region are, I guess, pushing back on some of this and there's a hearing next month. Can you just elaborate on just what's going on there? And if there was, I guess, a negative outcome from this hearing, does that impact the sanctioning or development timeline at all?

Matt, we'll have to get back to you on the details of that. But I mean, for us, right now, the transmission line and the work that we're doing as part of our off-site infrastructure planning, it's still on track. And so we have a plan to connect to the national grid through Rodeo and San Juan to supply 260 to 290 megawatts of power to the project.

And that hearing that I think you're referring to is a routine part of connecting power to Argentina's national grid. So yes, I mean, we follow it closely. But for us right now, we haven't seen any material impacts that could adversely impact our planning.

[Operator Instructions] Next question is coming from the line of Craig Hutchison of TD.

Just in your opening remarks, you talked about some of the work you guys are doing around Los Helados. Just given you guys have a 31% stake, is the plan to work with NGX and put out some kind of scoping level study later this year or early next? Just kind of curious on what you guys are going to kind of surface value there?

Yes. Thanks for the question, Craig. So absolutely, I mean, now that we've got a 31% stake of Los Helados and working with our new partners at NGX to see what the development options are that exist. We're approximately 17 kilometers away from Caserones.

We're looking at synergies between what we could develop through Los Helados and bring material into Caserones. We're also looking at if we need to do more exploratory drilling, looking at kind of different development concepts such as potentially building a new concentrator close to Los Helados.

And so all of that is work that we would be doing with our partners at NGX. And ultimately, there's still a lot of work to be done given that we have just kind of earned into this deposit, but it's very attractive. The exploration in the prospective area is still exists. And so we plan to kind of give more of a fulsome update in the work that we've done and are continuing to do at our Capital Markets Day in just over a month. But very exciting for us as we see this as kind of right in the center of the Vicuña district where we are already heavily invested in and very familiar with the region. So we're excited to see this growth opportunity mature.

Okay. Great. And then just maybe sticking with Caserones. Just you guys had a really good cathode production numbers for the quarter. Do you see the opportunities to kind of stay at those levels and potentially come at the top end of your guidance there? I know you guys are doing a bunch of work on that front.

Craig?

Yeah.

Yes, thank you for the question. This is Juan Andres. Yes, we do see opportunities, of course, to stabilize the sustaining CapEx in all of our assets. We continue looking at that through our full potential initiatives. So probably we'll be updating the market on the next Capital Markets Day.

The next question is coming from the line of Stefan Ioannou of ATB Cormark Capital Markets.

Maybe just to follow up on Craig's on Los Helados and maybe it's something that comes out in the Capital Markets Day. But just I remember there's also a lot of sort of compelling exploration like not only at Los Helados, but between Caserones and Los Helados beyond Angelica. Like is the plan going forward to sort of do a fulsome sort of more deep dive on that exploration potential as well and how that might tie into the Los Helados strategy? Or is the thinking right now to focus on Los Helados and how that fits into the Cash flows itself?

Stefan, thanks for the question. You're exactly right. I mean when we acquired Caserones, what we acquired was a significant land package around 58,000 hectares of underexplored territory in the Vicuña District.

And so with our exploration team led by our VP of Exploration, Tim Walmsley, we've been, and the team, of course, at Caserones, we've been looking at how to stage that exploration. So we've been focusing in the Caserones deep sulfide zone. We've been focusing on Angelica. As you know, there's an oxide overburden.

And underneath, we've been exploring for some sulfide breccias and trying to see if that could potentially look at making its way into the mine plan if we can find a significant amount of volume at attractive enough grade. So we're continuing to explore that near-mine exploration.

We're also looking at 2 targets, which we're currently drilling out a little bit further away from Caserones. And we'll continue to kind of mature those opportunities in parallel to looking at this new development opportunity with Los Helados.

So everything kind of goes into our capital allocation framework, and we look at where the high-impact investments could be. But ultimately, exploration in this area will be prioritized on where we believe we can quickly turn discovery into resource into reserve and then add that into the Caserones mine plan. But knowing that we have such a well-defined resource at Los Helados or a partnership of this or equity in this Los Helados deposit, it now is making its way into the development kind of opportunity horizon.

At this time, there are no more questions in the queue. And I would like to turn the call back to Jack for closing remarks. Please go ahead.

Thank you, everybody, for joining the call. We continue to see great progress in all of our initiatives at Lundin Mining and another solid quarter, and we'll continue to progress with capital discipline, disciplined operational performance and pursuing our very exciting growth opportunities. And we look forward to updating the market in more detail at our upcoming Capital Markets Day on June 17. Thank you.

Thank you all for joining today's program. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Lundin Mining Fourth Quarter 2025 and Year-End Financial Results Presentation. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Jack Lundin, President and CEO. Please go ahead.

Welcome to Lundin Mining's Full Year and Q4 2025 Earnings Call. Our operating and financial results were released last night, and the news release, presentation and webcast replay are available on our website. All amounts are in U.S. dollars unless stated otherwise. You may have noticed a new look in our materials for this call. Today, we are pleased to introduce to you Lundin Mining's new brand, which is aligned with our copper-focused strategy and long-term growth ambitions.

Over the past 2 years, we have completed transformative transactions that have streamlined our portfolio and sharpened our focus on copper. Our new brand identity brings together our corporate and sites under one unified recognizable look and feel while strengthening our visibility in the regions where we operate. You'll see the updated brand across our investor materials, website and operations, starting with the financial results we are discussing today. About the logo and colors, the stylized L in our new logo symbolizes momentum and growth, while our new color palette is inspired by copper and the landscapes where we operate. Before we start, we will play a quick video capturing our new look. Please enjoy.

[Presentation]

As a reminder, yesterday's results and some remarks made on today's call will include forward-looking statements. Please refer to the cautionary statements on Slide 3 for reference. With me on the call today is Juan Andres Morel, our Chief Operating Officer; and Teitur Poulsen, our Chief Financial Officer, to present operating and financial results for the company. 2025 was another milestone year for Lundin Mining on nearly all fronts of the business, and we have positioned ourselves on a clear path to becoming a top-tier copper producer, completing 3 transformative transactions during the year, which rationalized our portfolio and sharpened our focus on our existing assets in South America.

In January, we finalized the merger of our Eagle mine with Talon Metals to create a new pure-play American nickel company. This transaction unlocks meaningful synergies, including the opportunity to leverage the Humboldt Mill as a shared centralized processing facility. At the same time, Lundin Mining has retained a 20% ownership in the combined company, and me and Juan Andres have joined the Board, along with former Managing Director of Eagle, Darby Stacey, as the new CEO of Talon. With this streamlined asset base, we continued to advance our growth initiatives.

This includes refining growth plans for our 3 operations and maturing the large-scale growth plans for the Vicu�a project. We recently announced our updated mineral reserve and resource statement and on an attributable basis, the company now has contained metal of over 35 million tonnes of copper, over 60 million ounces of gold and over 960 million ounces of silver, effectively doubling our copper resource base and adding a significant amount of gold and silver to our mineral resource inventory.

We delivered our best financial performance in the history of the company and generated record revenue of more than $4.1 billion and adjusted EBITDA of $1.9 billion for the year from continuing operations, not including the Eagle Mine. We declared our 39th regular quarterly dividend, paid out $106 million in dividends during the year and purchased 15.1 million shares for a total return of $256 million to shareholders, demonstrating our commitment to shareholder returns as part of our capital allocation strategy.

We are pleased to reinforce today several recent announcements that have been published by the company. The highlight from earlier this week was the announced -- was that we announced the results of the integrated technical report on the Vicu�a project, highlighting an incredible project capable of producing over 500,000 tonnes of copper, 800,000 ounces of gold and over 20 million ounces of silver during its peak production years, which would position it as a top 5 in terms of scale on all of these metal categories. We also announced commitments to upsizing our revolving credit facility to $4.5 billion to enable us to fund the next phase of growth for our company.

Operationally, our assets performed exceptionally during the year, and we were able to increase copper guidance in the third quarter while also reducing our consolidated cash cost guidance range. We met revised guidance on all consolidated metals in 2025. Safety remains our top priority. And during the quarter, we continued to strengthen our safety culture through visible leadership and targeted training programs across all operations. We continue to improve our total recordable injury frequency rate, which resulted in achieving the lowest rate in the company's history. Including Eagle, consolidated copper production was 331,000 tonnes of copper for the year, led by strong performance from Caserones and consistency from Candelaria and Chapada.

Gold production was 142,000 ounces for the year. Caserones annual production for copper was at the top end of the most recent production guidance range and the fourth quarter copper production was the highest since the mine was acquired by the company in 2023. From continuing operations, we generated adjusted EBITDA of $1.9 billion and adjusted operating cash flow from operations of $1.6 billion during the year, both annual records for the company. For the third year in a row, we met copper guidance, reflecting the accuracy of our planning cycle and our disciplined focus on operational consistency.

I will now hand it over to Juan Andres to go through the operational results in more detail.

Thank you, Jack, and good morning, everyone. We shared our production results earlier this year. I will now briefly highlight some of the key points from the year-end release. The company exceeded original guidance -- copper guidance and met revised guidance across all metals. The company produced 331,000 tonnes of copper this year and 87,000 tonnes in the fourth quarter, inclusive of the Eagle mine. Gold production for the fourth quarter totaled approximately 34,000 ounces and for the full year, 142,000 ounces, which was in line with guidance.

Throughout the year, Candelaria maintained steady operations with 95% mill availability and processed approximately 7.8 million to 8.1 million tonnes of ore each quarter and 32 million tonnes in the year. Candelaria produced a total of 145,000 tonnes of copper, in line with annual guidance. In the fourth quarter, the mine produced 34,000 tonnes of copper, which was slightly less than previous quarters due to planned lower head grades.

Caserones performed very well and annual production for copper beat original guidance and was at the top end of the most recent production guidance range. Fourth quarter copper production was the highest since the mine was acquired by the company, as Jack mentioned earlier. Caserones produced 133,000 tonnes of copper during the year and 40,000 tonnes in the quarter. Higher production was driven by higher head grades and strong cathode production.

Additional oxide material placed on the dump leach together with improved leaching practices increased copper cathode production to 25,800 tonnes in 2025. As mentioned at our Capital Markets Day, these optimization efforts have led our annual copper cathode production forecast to increase to approximately 26,000 to 28,000 tonnes in 2026 through 2028, an improvement of 6,000 to 8,000 tons from prior levels. Chapada was slightly second half weighted this year. During the fourth quarter, throughput was 6 million tons, which produced 11,200 tonnes of copper and 44,000 tonnes of copper in 2025, which was at the upper end of guidance for the year. And finally, Eagle produced 2,200 tonnes of nickel in the quarter and for the year was in the midpoint of guidance at 10,000 tonnes.

Our assets demonstrated positive progress in 2025. Moving forward, our focus will remain on operational enhancement to optimize margins and further improve the cost profile of our holdings.

I will now turn the call over to Teitur to provide financial summary.

Thank you, Andres, and good morning, everyone. So before going into the numbers, as a reminder that with the completion of the sale of our Eagle mine, this operation is presented as discontinued operations in our income statement and the assets and liabilities on the balance sheet have been classified as held for sale as of December 31, 2025.

As Jack mentioned earlier, robust copper and gold production, combined with unwinding concentrate inventory, along with high commodity prices led to an outstanding financial performance for the period. We reached record revenue and adjusted EBITDA for 2025. We generated close to $1.4 billion in revenue during the fourth quarter, including $52 million from discontinued operations. Revenue for the full year amounted to a record $4.5 billion, including $409 million from discontinued operations. Our sales mix remains predominantly leveraged to copper and has increased from last year where 75% was generated from copper compared to the fourth quarter this year, where the copper component accounts for 87% for the quarter.

Moving to the next slide. In the third quarter, we incurred a shipment delay of approximately 20,000 tonnes of copper concentrate at Caserones due to weather-related impacts. And this resulted in the company carrying higher-than-normal inventory levels at the end of Q3. This elevated level of inventory has been unwound during the fourth quarter, leading Caserones to sell 45,000 tonnes in the quarter. Pricing adjustments on prior period sales of concentrate had a positive impact on revenue by $83 million in the fourth quarter, helping drive financial performance. In the fourth quarter, we realized a copper price of $5.89 per pound, which was higher than the LME quarterly average of $5.03 per pound.

For the full year, our average realized price was $4.91 per pound for copper, which is materially higher than the annual LME average of $4.51 per pound copper. This higher realized price is driven by the fact that the disproportionate share of our annual sales occurred during the fourth quarter when the market prices were higher than the annual average price. At the end of the fourth quarter, approximately 80,000 tonnes of copper were provisionally priced at $5.64 per pound and remained open for final pricing adjustments.

Moving to Slide 13. Consolidated production costs for the fourth quarter amounted to $585 million, including discontinued operations, which is higher than previous quarters due to the elevated sales volumes and certain one-off costs expensed in the fourth quarter. At Candelaria, the company finalized ahead of schedule labor renewal agreements with Candelaria's 5 unions during the fourth quarter, which led to a onetime increase in costs due to signing payments. Cash costs for the fourth quarter were higher than previous quarters and were similarly impacted by the one-off union signing bonus payment. The higher sales volume at Caserones for the fourth quarter drove a high absolute production cost for the quarter.

Cash costs for the fourth quarter were in line with the previous quarter and Caserones full year cash cost of $2.17 per pound is towards the bottom end of guidance. Chapada's full year cash cost of $0.75 per pound outperformed the revised range -- guidance range of $0.90 to $1 per pound. Cash costs were positively impacted by the favorable gold pricing compared to forecast, resulting in improved byproduct credits for both the full year and the fourth quarter. Cost control across all sites remain very robust, and this has resulted in the company's cash cost for the full year of $1.87 per pound coming in below the bottom end of our original guidance and towards the bottom end of the revised guidance. This better-than-expected outcome was achieved despite the unbudgeted union agreement payment at Candelaria being accelerated from 2026 into 2025.

Slide 14 shows our total capital expenditure for the full year, which amounted to sustaining CapEx of $499 million, inclusive of Eagle compared to revised guidance of $510 million. The lower sustaining capital investment was primarily the result of reduced stripping and a delay in capital projects at Caserones. Capital expenditure at Vicu�a was $167 million compared to guidance of $215 million, with this underspend mostly relating to timing. Our full year and fourth quarter key financial metrics are presented on the next couple of slides. As previously stated, total revenue for the year, including discontinued operations, reached close to $4.5 billion with almost $1.5 billion generated in the fourth quarter. We generated adjusted EBITDA of $1.9 billion for the year from continuing operations, including $686 million in the fourth quarter. Adjusted operating cash flow from continuing operations exceeded $1.6 billion for the year, including over $665 million in the fourth quarter.

Moving to the next slide. Free cash flow from continuing operations was $774 million for the year and $388 million for the quarter. Operating cash flow benefited from higher commodity prices and was offset by a significant negative working capital build of $414 million for the full year and a working capital build of $132 million for the fourth quarter. Full year adjusted earnings from continuing operations amounted to $688 million and $364 million for the quarter. Earnings from continuing operations for the quarter amounted to over $900 million and were positively impacted by a noncash deferred tax recovery at Caserones of $517 million, with the company now having recognized a larger portion of the $3.9 billion tax loss at Caserones.

Slide 17 presents in greater detail the sources and uses of cash in 2025. In 2025, our continuing operations generated just over $1.6 billion in cash flow before working capital.

This cash generation includes close to $400 million paid in cash taxes during the year. After netting capital expenditure and noncash working capital movement, the free cash flow from continuing operations amounted to $539 million. As per the company's shareholder distribution policy, the company executed on its share buyback program totaling $150 million. And combined with the dividends for the fourth quarter 2024 and the first 3 quarters 2025 has paid an additional $106 million in dividends. Dividends to noncontrolling interest in Candelaria and Caserones amounted to $138 million for the year.

The company had a cash outflow of about $150 million on lease payments, interest and hedges and ending the year with net -- with a net cash position of $77 million, excluding capital leases. The company has significantly strengthened its balance sheet during 2025 with the sale of the European assets being pivotal to this strengthening. With last week's announcement to upsize our revolving credit facility from $1.75 billion to $4.5 billion, combined with the strong cash generation from our producing assets, the company is now financially primed to embark on the capital investment required to unlock the exciting Virunyia project in Argentina.

And with that, I'll now turn the call back to Jack.

Thank you, Teitur. In January, we announced updated 3-year guidance for production, operating cash costs and capital expenditures for 2026. Copper production is forecast to be 310,000 to 335,000 tonnes on a consolidated basis in 2026. Compared to last year's 3-year outlook, mine sequencing optimizations are expected to increase copper production by 20,000 tonnes in 2027, while the midpoint of 2026 has been adjusted by 5,000 tonnes, resulting in a net increase of approximately 15,000 tonnes over the 2-year period. Revisions to Candelaria's 2026 copper and gold production guidance incorporates lower underground mining rates in the first half of the year as the company in-sources the underground mine operations contractor.

The production profile is forecast to be modestly weighted towards the second half of the year due to higher expected grades from Phase 12. We expect the in-sourcing strategy to lead to cost savings and improved productivity for our underground operations, which represents a significant value driver for the future of our Candelaria operation. At Caserones, 2026 estimates remain unchanged, while copper guidance in 2027 increased by 10,000 tonnes to range between 115,000 to 125,000 tonnes, resulting from higher cathode production and increased mill throughput. Chapada copper production guidance has been revised upward by approximately 5,000 tonnes for 2026, resulting in an anticipated range of 45,000 to 50,000 tonnes.

Gold production guidance also increased by 10,000 ounces for 2027 compared to previous guidance. The updated mine plan reduces the dependence on lower-grade stockpile material from around 25% down to about 10%, enhancing copper and gold recovery rates over the 3-year period. Consolidated gold production is forecast to be 134,000 to 149,000 ounces in 2026 for the company. Consolidated cash cost for 2026 is projected to range from $1.90 to $2.10 a pound of copper after accounting for by-product credits. Total sustaining capital expenditures are forecast to be $550 million, consistent with prior year's guidance.

Candelaria and Caserones account for approximately 80% of the sustaining capital budget with the majority of expenditures directed to stripping, mine development for Candelaria's underground, tailings and mining equipment purchases and replacements. Expansionary capital expenditures are forecast to be $445 million, and this includes the 50% expenditure related to our 50-50 joint arrangement between the company and our partners, BHP for the Vicu�a project.

This ramp-up in expenditure gets us ready for a sanction decision on Vicu�a as early as the end of this year. Included in expansionary capital expenditures, we also have $35 million in expansionary CapEx at Candelaria, which includes preproduction stripping related to Phase 13 in the open pit. Exploration this year is estimated to be $53 million, and we will target drilling almost 70,000 meters between Caserones, Candelaria and Chapada. The drill program at Caserones will primarily focus on defining the size of the Angelica deposit, both in terms of leachable copper resources and the underlying copper molybdenum sulfide mineralization, where we are targeting a maiden resource next year in calendar year 2027.

Additional drilling at Caserones will be directed towards new discoveries and testing at least 2 new district exploration targets, Centauro and Cordillera. At Candelaria, drilling is designed to continue expanding the underground resources and also growing the shallow La Espanola deposit and neighboring La Portuguesa target. At Chapada, additional drilling at Sa�va will continue to further define higher-grade resources that will be incorporated into an updated resource estimate later this year, which will also be embedded within the updated technical report for Chapada.

I'll now hand it back over to Juan Andres to give an update on the Sa�va project.

Thank you, Jack. As mentioned at our CMD last year, we are advancing key growth initiatives at our Chapada mine, including the installation of an additional ball mill and the development of the nearby Sa�va satellite deposit. The ball mill installation will allow a finer grind size, which is expected to increase recoveries by approximately 5% for both copper and gold for the entire life of mine. At the same time, ore from Sa�va deposit will provide higher grade ore, helping to offset the lower grade material at Chapada and further enhance overall plant performance. The pre-feasibility study for Sa�va has been completed and a feasibility study has been initiated.

We are targeting to make a sanctioning decision in the second half of 2026, and we expect construction of the new ball mill to begin by the end of 2026 or early 2027, which will put the commissioning of the ball mill near the end of 2027. Permitting at Sa�va will continue to advance in parallel and potentially, we could see first ore from Sa�va in 2029, subject to permit time lines. The pre-feasibility study highlighted an average production increase of 17,000 tonnes per annum for copper and 32,000 ounces per year over a 5-year period for Phase 1. We anticipate this profile will improve as the mine plan is optimized to include Phase 2.

I will now turn it back to Jack.

On Monday, we announced the results of the Vicu�a Integrated Technical study, signifying an important milestone for this impressive district scale project. At full capacity, the district is expected to produce over 500,000 tonnes of copper, 800,000 ounces of gold and 20 million ounces of silver each year. The project benefits from a first quartile cash cost profile and will be built to generate sustained significant cash flow for many decades throughout the cyclical nature of the base and precious metal sectors. Furthermore, the stage development approach is designed to use cash flows to fund subsequent expansions, optimizing capital efficiency and value creation.

It is great to start off in 2026 with these recent company highlights and on the heels of a record-breaking year for the company. Divesting our European assets simplified our portfolio and strengthened our balance sheet, allowing us to focus on future growth across our South American sites. Our partnership in the Vicu�a District positions us for multiyear growth toward becoming a top 10 copper producer. Filo del Sol, one of the largest undeveloped copper, gold, silver deposits globally and our joint venture with BHP creates a pathway to form a new multigenerational mining district.

Anchored by consistent operational performance, we delivered record revenue of $4.5 billion, declared our 39th consecutive quarterly dividend and returned a total of $256 million to shareholders through dividends and share buybacks, highlighting our financial discipline and commitment to shareholder returns. Lundin Mining is uniquely positioned with a strong balance sheet, funding commitments for our ambitious pipeline of growth, a simplified portfolio and a strategic partnership with BHP in the Vicu�a District, offering unparalleled growth opportunities for our stakeholders.

With that, I would like to open the lines for questions. Thank you.

[Operator Instructions]

Our first question comes from Johannes Grunselius with [ SB1 Markets ].

Yes. It's Johannes. I have 2 questions. So the first one is on Caserones, where you had really good grades, as you highlighted. I can see that your annual sort of copper output is [ 158 ] or something and your full year '26 guidance is [ 130 ] to [ 140 ]. Are you seeing that more conservative now than you did when you launched the guidance in 1 in December? That's my first question.

Johannes, this is Juan Andres. We -- as I mentioned on the presentation, we have seen a significant improvement in the performance of the cathode plant. So we are forecasting more cathode production. And that is somehow offsetting some of the drops in the grades in the following year, but we are maintaining our guidance overall as previous years.

All right. Okay. So it was sort of in line with your expectations, the Q4 volumes. They didn't surprise you.

No, it was as expected in the mine plan.

Okay. Okay. Okay. Good. And the second question, and you partly answered it in your presentations. But when I look at the OpEx versus, for example, your ore volumes in Candelaria, Caserones, it's a pretty high increase in OpEx per tonne ore mined and ore milled. And you mentioned there was some negotiations with unions that could explain that. But could you -- how should we view it? How much did cost move up sort of on an underlying basis? And is this like in line with the mining industry right now in Argentina and Chile?

Johannes, it's Teitur here. I mean, first off, I mean, it's a great result that we managed to land these 5 agreements with the unions at Candelaria ahead of schedule because that eliminates any risk of any production disruption in 2026. But we are not disclosing the exact details of what those bonus payments are. The sequence here is that every 3 years, we enter into negotiations with the unions. And normally, what happens is you're paying certain one-off bonuses to the labor force in order to extend stability for the next 3 years.

And the way we account for that is that whenever we pay these bonuses every 3 years, we expense that payment in the quarter where the payment occurs. So that did elevate the, as you say, the Candelaria absolute costs in Q4, but the return from that is that we now have stability over the next 3 years. And at Caserones, the absolute costs are also up, and that's simply because we report the production cost as per the sold volume, not the produced volume, and we sold an elevated amount of volume for Caserones in Q4. So that's what's driving a higher absolute production cost. But if you look at it on a unit basis, it's as low as it was inQ3.

Our next question comes from Daniel Major with UBS.

Just on the Sa�va update, I'm just looking at the slide from the Capital Markets Day on the scoping study. And I mean, you're sort of guiding for a similar rate of production. I think it was 15,000 to 20,000 tonnes per annum of copper -- it's now [ 17 ], it's fractionally lower gold. But the parameters seem somewhat different. I mean the CapEx has gone down from [ $155 million ] to [ $110 million ]. The grades are lower. The throughput is lower, but the production is the same. Can you just run us through what the difference is between what you're presenting on now relative to the Capital Markets Day and kind of what's changed, particularly the reduction in CapEx? Was that just a conservative initial assessment? Or has the scope changed much?

Daniel, this is Juan Andres. Thank you for the question. So in -- during the CMD, we guided based on a conceptual study. And as we move into the pre-feasibility study, of course, we increased the level of understanding of this opportunity. In the original CapEx estimate, we have considered a secondary crusher for the addition of the ball mill. During the PFS, we learned that, that was not necessary. So that was basically removed from the CapEx estimate.

And the rest of the scope remains the same. So we have the ball mill, which is roughly $60 million, $65 million. And then for the Sa�va itself for the open pit is another $45 million for road construction, liners for the waste dumps and a water treatment plant. So that is basically the scope. So that is what triggered this CapEx reduction. Of course, there were some minor adjustments to the mine plan, given also changes in the metal prices that were used for mine design, and that explains the small changes in the tonnes and grades.

Okay. Second question, just around the treatment and refining charges. I think Antofagasta settled what looks like the benchmark essentially close to 0. Would it be fair to say that you're following similar terms? And then is there any difference in the realization when we look at what you're sort of putting in your accounts for treatment and refining charges, -- is that going to dramatically decline? Or are there any additional charges incremental to what a pretty close to 0 benchmark represents?

Yes. Those are also the numbers we are hearing. Certainly, for volume going into China, I think it will be segmented a little bit more than what normally was the case. So we will have to see what the Japanese rates land up and other rates. But generally speaking, it's trending very well. I mean within our cost guidance for 2026, we have assumed 25 and 2.5. So I think we're likely to land ahead of what we assumed in our guidance. So I think that's as much as we can say. And obviously, then depending on the blend of how much we sell on the fixed-term contracts versus spot markets, that might ultimately also impact the weighted average TC/RC charges we have for the full year.

Okay. But you've assumed 25 and 2.5. So there's obviously quite a bit of downside even though it's a relatively small number. Okay. Yes. And then final one, I'll let someone else go. Just wanted to follow up on some of the discussions in the call earlier in the week around streaming in Vicu�a. I mean it felt like the narrative from BHP on their call following the announced transaction at Antamina was the reason they were happy to stream that was that there wasn't a huge amount of long-term growth optionality beyond life extension, which made up with the same dynamic in Vicu�a. Can you just give us another summary of how you're viewing streaming in the district and confirm whether it would be at all possible that one party out of the JV would stream and the other would not.

Daniel, it's Jack here. So I think as we were mentioning and as we released on Friday last week, we've upsized our near finalization of upsizing our revolving credit facility up to USD 4.5 billion, which would put us firmly in position to be fully financed for our portion of the build. Now that also gives us the optionality to look at other forms of financing, streaming being one of them. We're seeing that there are some uniquely structured streaming deals being announced in the market, and we're obviously following what our partners, BHP are doing at Antamina. I think it opens up optionality and opportunities for us.

But I think also, as we've mentioned, the Filo deposit is still open in all directions, and we see significant upside potential for the resource to grow, and that includes silver qualities and quantities. But of course, you can structure a deal where you're having step-downs or arrangements where you don't have to run the stream in perpetuity. So we're looking at opportunities, but I would say it's still lower down on the probability list for us in terms of financing. And if there were to be one party working on a different form of financing than another, then as part of the JV, the partners would have to get together and align on what that is. But right now, I think we're in a really good position as it pertains to our funding strategy.

Our next question comes from Sathish Kasinathan with Bank of America.

My first question is on the long-term outlook, the 3-year outlook. So your 2028 guidance, which currently calls for a modest drop in copper production versus 2027. I guess there is upside from Sa�va, which could start in the second half of 2028. Can you talk about some of the other opportunities you highlighted at the Investor Day, mainly the underground expansion at Candelaria and then the Angelica target at Caserones?

Yes, I can talk about the growth projects, and I'll hand it over to Juan Andres to talk about the 2028 production guidance range. So for Candelaria underground, as we mentioned on the call, right now, the focus for us is to be in-sourcing the mine production operator in the underground.

And in order to accommodate that smooth transition, we've lowered the throughput assumption from the underground, and we'll be exiting 2026 getting back to kind of that 14,000 tonne per day baseline production rate. Once we've been able to do that, then we'll look at putting a plan in place to potentially grow in increments up to what could be around 22,000 tonnes per day in the underground, which translates to around 10,000 tonnes of copper per annum for Candelaria overall. Angelica is a very exciting exploration play right beside Caserones.

We've got a number of exploration targets that we're following up on through our drilling season this year at Caserones. And really, what we're looking at is high-impact holes that are near the existing infrastructure of Caserones that could quickly translate into mineable inventory to potentially feed higher-grade material to the sulfide concentrator or even more oxide material for our dump leach, which as we have been announcing and talking about the cathode plant is running exceptionally well due to upgrades that we've made to our overall kind of leaching plan. So yes, we're going to be chasing up those opportunities in addition to the Sa�va project, which we just spoke about, and I'll hand it over to Juan Andres to talk about 2028.

Yes. In our guidance in 2028, we have not yet included any of these opportunities yet. So as we move forward, we will be including those. So I don't think there's...

No. And Sa�va is not part of our -- we haven't fully sanctioned it yet. We look to do that before the end of this year. I mean the Chapada plant upgrade for the extra ball mill is something that we will be proceeding on. And right now, the PFS outlined us getting into first production actually in 2029, not in 2028.

Okay. Understood. Maybe one question on the Chapada stream. So Chapada currently has a stream on the primary metal production. With the change in ownership there with the acquisition of Sandstorm. So have you had any initial talks with the new owners and whether you can potentially take advantage of the current strong gold price and convert it into a gold stream instead of a primary metal stream?

No, we haven't had any discussions since the change of ownership on that stream, but something that we'd obviously entertain potentially in the future.

Our next question comes from Cody Hayden with Deutsche Bank.

You kind of touched on it already, but as we approach a potential sanctioning decision at Vicu�a later this year, I was wondering if you could comment on how we should be thinking about the balance sheet and capital allocation. Is there any consideration on updating any of your policies? Are you sort of in a holding period until financing agreement is confirmed at Vicu�a? And then second, I noticed the calculation of net debt has been updated to exclude lease liabilities. I was wondering if you could just explain a bit of the rationale behind this change.

Yes, I can address just on the capitalized leases. Most of those actually relate to the Caserones operations. But we just think it's a cleaner story. It's less confusing if you just segregate the actual external debt as debt when we talk about the net debt. The leases are -- financially, it has to be classified as debt, but they really relate to the operations of the Caserones mine. So that's why we prefer to separate the 2, and we are always very clear as to when we talk about net debt that it excludes capitalized leases. So there's nothing more to it than that. We just feel it's a simpler way to communicate the position of the balance sheet.

Yes. And with respect to kind of our capital allocation, I think we've been very consistent in our messaging. We will look to remain distributing capital to shareholders in absolute terms of around $220 million through dividends and our buyback policy. We've got growth opportunities that we're pursuing. And then we've got this upsizing of our revolving credit facility that we're on the cusp of finalizing. And so that puts us in a really good position, right, being in a net cash position.

We entered 2025 with a debt of around $1.3 billion, thankfully, to the conclusion of the sales of our European assets and other transactions, we've been able to pay down our debt in addition to the strong cash flows being generated. So I think we're in a very strong position, which gives us the ability to maintain returns to shareholders, pursue our brownfield opportunities at our existing operations and then go after the big growth opportunity with Vicu�a. So we're in good shape.

Our next question comes from Craig Hutchison with TD Cowen.

Most of my questions have been answered, but I just wanted to circle back on Sa�va. Just looking at the production profile, it seemed to me pretty accretive, particularly given the high gold grades in year 1. But is any possibility you could give us some kind of sense in terms of what the NPV uplift would be from this project? It's just difficult to kind of understand just based on only having initial capital and some of the grades. But is this a pretty material uplift in terms of how you view the NPV for Chapada overall?

Yes, absolutely. It definitely impacts the overall value of Chapada, adds a significant amount of NPV to the asset. We use base case kind of consensus pricing for the sanctioning decision and for our economic model. But if you were to use spot pricing, I mean, this would significantly enhance the overall value of Chapada. And so these are the exact type of projects that we're tasking our sites to go out and look to pursue given that Chapada has stabilized the operation and is generating strong cash flows year-over-year. I think Sa�va plays a key role to improving the overall value. And I will say as well, targeting before the end of this year, we're going to be updating the technical report, which will update the resource and reserve for Chapada. It will incorporate Sa�va as a reserve as well, and it will include kind of the development plan and overall strategy for making that part of the core of the operation.

Okay. Great. I guess you can't give us some kind of a sense of what it's -- what that NPV uplift is at this point? Or we have to wait until sort of year-end?

Yes. We're not disclosing that at this time. But yes, but you'll be able to see it in the near term.

Our next question comes from Matt Greene with Goldman Sachs.

Congrats on a great year. If I could just carry on that question on Sa�va, Andres. What do you -- I guess, firstly, just a clarification point because I think the language is changing a bit here. At your CMD, you talked about incremental production, and now we're talking about offsetting low-grade material. So I just want to confirm that is still incremental production on top of what the mine plan you presented at the CMD? And then just kind of how you -- since the scoping study in this PEA, has your approach to how you're thinking about this project changed at all? I mean metal pricing has gone up. I guess, are you solving for NPV? Are you solving for capital intensity, the ability to bring this to market quickly? I'm just kind of keen to know if your approach towards this project has changed at all since the CMD.

No. And in general, the approach has not changed, Matt. And we're still aiming for bringing production earlier in the life of mine of Chapada and taking advantage of the current commodity prices. So we're aiming for low intensity -- low capital intensity opportunities as we highlighted during the CMD. And to your initial question, it is incremental production. So we're basically deferring or delaying low-grade material from Chapada and replacing that with higher-grade material from Sa�va.

And those 17,000 tonnes of copper are actually incremental over the previous life of mine of Chapada. And just to add one more comment. This is the first phase of this project, which is this near-term opportunity. But as we continue with the study of the project, the feasibility study, we'll also be working on the pre-feasibility study of the remaining of the ore body, which is still very attractive, but we need to understand more the deposit and how we're going to bring that project forward.

Yes. Got it. That's clear. And I guess just taking a step back on the concentrate markets. You touched on TC/RCs earlier, but I don't think that really tells the whole story, just given the tightness, not getting to get penalized as much on purities, free metal. I think your bargaining power as a mining concentrate producer right now is quite favorable. So is this I guess, changing the way you're thinking about how you produce your concentrates across your mines. I mean, are you able to lower the grade of your concentrates, perhaps mine material if you do have it that has higher impurities and be quite opportunistic in this market? Is this something that is perhaps opening up a few opportunities?

Yes. We have been looking at opportunities from that regard. We are testing some different approaches in Chapada, for example, where we're making a trade-off between lowering the grade of the concentrate and increase our recovery significantly. So we are testing those opportunities. We have seen, on the other side, an incredible increase in the concentrate grade in Caserones as we mine through an area of the deposit where recoveries are higher and concentrate grades are highest, is basically driven by the metal, but those are the kind of trade-offs that we're testing now.

Okay. And is that looking quite promising? Is that all reflected in your guidance? Or could that be a little bit of upside, you think?

No, they're not yet totally reflected in our guidance.

That will conclude our question-and-answer session. This concludes today's conference call. Thank you for participating. You may now disconnect.

Ladies and gentlemen, thank you for standing by, and welcome to the Lundin Mining project update. [Operator Instructions] Please be advised that today's conference is being recorded. I would like now to turn the conference over to Jack O. Lundin, President and Chief Executive Officer. Please go ahead.

Thank you very much, and good morning, everyone. It's an honor to be here today to be able to present the results of the preliminary economic assessment for the Vicuna project. I will be making forward-looking statements as well as the team that will be with me today, and answering questions. And so therefore, we encourage you all to look at this press release, look at this slide and go on to our website for more details on the cautionary statements.

So the agenda today is as follows. We're going to walk through the highlights of the PEA. We're going to get into the details of the full-scale Vicuna project. We'll also talk about the recently updated mineral resource estimate that supports this preliminary economic assessment. We're going to get into the details of the stage development plan, so Stage 1, Stage 2 and Stage 3, which will get us to full scale, including and incorporating Josemaria and Filo del Sol deposits, and then at the end, we'll get into a summary followed by next steps before jumping into a Q&A session.

I'm pleased to be joined today on the call with members of both the Vicuna Corp. and Lundin Mining executive teams. So Ron Hochstein, who will be calling in from Argentina is on the call. And in the room with me today is Dave Dicaire, the GM of Vicuna Corp; Teitur Poulsen, our Chief Financial Officer; and Juan Andres Morel, our Chief Operating Officer. We have a couple of other members of the Vicuna Corp. project team to help with answering any questions if necessary.

So jumping into the highlights of the preliminary economic assessment. So what we can say with these results is that we are clearly delivering on our strategy, outlining a pathway to become a top 10 copper producer by pursuing a clear and disciplined growth strategy. We hope to really acknowledge that and demonstrate the viability of this plan through the update of this project. And what we're classifying and what we're identifying here is a giant metal district. The study that we released the results of yesterday outlined a Tier 1 status project. We call it multigenerational because of the mine life that stretches beyond 70 years. And the stage development plan offers significant upside and optionality, which will continue to refine as we get through later stages of the study. But also because of the stage development, there's huge upside in terms of optimization work that we can focus on, particularly in the later stages.

With these results, the project is marked as what has the potential to be the largest ever mining project in Argentina. I mentioned that Ron is currently in Argentina right now. He's in Buenos Aires, meeting with President Milei to discuss the highlights of this study. And this follows on a meeting where our partners BHP, along with myself at Lundin Mining and Ron were able to go to Buenos Aires and meet with Milei to discuss the updated status of where we're at with the project. And I think it's very important for us to state that we're committed to working with local and national authorities to put the best plan in place to maximize value for all stakeholders associated to the Vicuna project.

Before getting into the results of the PEA, a refresher on the stage development plan and the overall district concept, I think, is very important for everybody to be refamiliarized with. So we're breaking this project down into 3 stages. Stage 1, which outlines the Josemaria project, building a sulfide concentrator that will get to 175,000 tonnes per day of mineral processing capacity or about 64 million tonnes per annum. That will be the size of the sulfide concentrator for Stage 1, contemplating 3 initial lines, feeding material into the processing facility. And the first 5 full years of production from Stage 1 will outline about 200,000 tonnes of copper and 400,000 ounces of gold before introducing the Filo sulfide ore.

Stage 2 is the oxide circuit. So we're contemplating a 60,000 tonne per day heap leaching process to treat initially blended material to recover the copper, followed by a 30,000 tonne per day heap leach to recover the gold content. And so that is what we've identified as Stage 2. The oxide material is the overburden on top of the Filo sulfide deposit, and that is outlined in Stage 3. And Stage 3 is what brings us to full scale expanding the concentrator by adding 2 lines to get us to just under 300,000 tonnes per day or about 100 million tonnes per annum. This would also include, which we'll show in a video, building a conveying system to get the material from Filo to the centralized processing facility in Josemaria. And Stage 3 is what really enables us to get to a peak production of well over 500,000 tonnes per annum of copper and over 800,000 ounces of gold per annum.

To achieve this full scale, we've developed an infrastructure strategy, whereby we'll outsource the components of the off-site infrastructure to a third party. This is common for projects of this scale, and we'll talk to it a little bit later in the presentation. Our partners, BHP have experience in this at other large-scale operations in their portfolio, and we'll look to leverage that knowledge. This does not materially impact the NPV as capital savings are offset by operating costs.

Now touching on the highlights. So the first row of this slide is showing the 10-year average during peak production for copper, gold and silver. So as mentioned, over 500,000 tonnes of copper, over 800,000 ounces of gold and over 20 million ounces of silver. Putting this at a large scale, Tier 1 district development, which is very exciting for a company like Lundin Mining to have 50% of such a large-scale and exciting project.

In the second row, what we're outlining is the first 25-year average before the full scale. So still very impressive numbers over 25 years of over 400,000 tonnes of copper, 700,000 ounces of gold and 22 million ounces of silver. So you'll see that the silver production profile is actually heavier weighted to the initial years of production when compared to copper and gold.

In the third row, a couple of other important metrics. So Stage 1 CapEx right now is earmarked for USD 7.1 billion. So that gives us a very strong capital intensity of approximately $21,000 per copper equivalent tonne. Thanks in large part to the strong precious metal byproduct that we're generating, as you can see on this slide. But what's really impressive as well is the 25-year average annual free cash flow. So subtracting the growth CapEx or the Stage 2 and 3 CapEx from this average 25-year free cash flow assumption, USD 2.2 billion using our base case commodity price assumptions. And so very impressive cash flow generations. And that's really, again, in large part due to the commodity mix that's going to be produced from this asset. And that generates or translates into a negative C1 operating costs over the first 25 years.

On this slide showing kind of the continued highlights of the overall project. So there's other key metrics that are important to show here. As I mentioned, the generational nature of this project being over 70 years in mine life. When you're adding now Stages 2 and 3 to Stage 1, the overall initial capital is envisioned to be just over USD 18 billion of capital requirement. And that gets us to a capital intensity on full scale of about $26,000 per tonne copper equivalent. So still very, very attractive figures here even given the large-scale nature of this overall combined project.

All-in sustaining costs. So the sum of refining costs, third-party royalties, site operating costs, sustaining CapEx and closure costs subtracted by byproduct credits and divided by the pounds of copper sold is $0.47 a pound, so very attractive over the life of mine all-in sustaining cost.

And lastly here, what you can see the last -- the lower 2 figures, these are the benefits to Argentina in terms of taxes and royalties, will be approximately $1 billion per annum. What's not mentioned on this slide, but we'll talk to you a little bit later on is the direct and indirect jobs that will be created from this project for the country. So over 5,000 direct jobs to be created during the construction period, and that translates into nearly 20,000 indirect jobs. It's very impressive from an employment standpoint. And I'm pleased to share that the support will be provided for this by the Vicuna Foundation, a newly formed foundation, to support capacity building, construction and operation readiness and local supplier development programs.

So here on this slide, what you can see is the leverage to commodity prices. The lighter colored bar is our base case assumption. You can see strong internal rate of returns being generated from our base case commodity prices. But I think it's also very important to highlight at consensus -- or sorry, at spot prices today, the project of this size and scale generates very impressive returns. And I think that the payback period, the ability to fund the later stages through cash flows shows that not only is this project have strong leverage to commodity prices, but also at conservative price assumptions we have the ability to get to full scale without stretching the balance sheet too significantly for Lundin Mining and its 50% share.

Most of you that have been following the story would be familiar with this slide where we're showing how the Vicuna project stacks up against the mining giants today. These are compared to existing mining operations. And what you can see when we get to that 10-year peak production average the Vicuna project does get into a top 5 category for copper, for gold and for silver. And that really, I think, is what attracts us to really pursuing this project at a rapid pace. Phenomenal numbers that we're generating. And what's unique about Vicuna is that it gets to be top 5 status across all 3 of these commodities. And that's unique when you compare to the other large-scale operations that are producing in the world today.

This also demonstrates the Tier 1 nature of Vicuna. So the global cost curve shows first quartile, first quartile pricing as well as, in many years, first decile cementing this has the potential to be that true Tier 1 operation. And so I think we see significant upside today to even refining those costs and improving as we refine the studies, but already looking at the preliminary economic results for this project, we are comfortably within first quartile and, in many years, first decile of the cost curve.

And this slide is very important to demonstrate the disciplined approach to our staged construction strategy. What you can see here is the cash flows being generated already in the first full year of operations, so in 2031. Following expenditures for Stage 2 and 3 CapEx, we're going to be in a positive cash flow position. So these are showing unlevered cash flow figures, which essentially means that we're going to be in a position to not only fund our growth, but also to pay down any debt that would be taken on to advance this project. And this does not include any cash flows from Lundin Mining's other operations. So I think the disciplined approach aligns very well with our partners, BHP, on being able to support getting into first stage operations and then using those operation returns to fund Stages 2 and 3.

Now I want to spend a little bit of time touching on the resource, the mineral resource estimate that we're outlining and forming the basis of this study. We're going to show kind of the comparison here from the 2025 May mineral resource estimate, which was the maiden resource estimate for Filo sulfides and an update to the Filo oxides and Josemaria mineral resources. So when combining all categories, what you see here is now a combined mineral resource of 46 million tonnes of copper, nearly 100 million ounces of gold and nearly 1.8 billion ounces of silver. So we've added 9 million tonnes in all categories of copper, which is another 1.5x Josemaria's mineral resource in the M, I & I category.

Looking at gold, we've added 16.5 million ounces of gold. So basically another 1.7x Fruta del Norte in less than 1 year of drilling, which really shows the uniqueness of this deposit continuing to grow in all directions. And with the amount of drilling that we've done only in the last few months, we've substantially increased the size of this mineral resource.

Here's another slide showing the resource comparison from our May update to the now newly updated PEA resource model. So we're taking a cross section, so you can see the lateral expansion of the mineral resource estimate, showing that both to the east and to the west, mineralization continues to expand and that we've already seen that the deposit is continuing to grow in all directions. So to support this updated study, in the last 8 months, we've drilled 35 holes over approximately 45,000 meters. And really, it just demonstrates the remarkable resource growth from that amount of meters drilled.

As I've said, the resource is open in all directions. And in 2026, we will continue to follow up with another approximately 50,000 meters of drilling, focused on supporting really optimizing the mine plan to generate improved early cash flows to support mine plan optimizations. So now we're going to show a video that really shows kind of the overall scale of the project and puts kind of what we've been talking about into perspective.

Starting with the Caserones open pit mine, which is located approximately 40 kilometers away from the Vicuna project on the Chilean side of the Vicuna District. This is Lundin Mining's operating mine in the Atacama region in the Vicuna District on the Chile side. If you follow the project south, you'll get to the border between Chile and Argentina, and you'll enter into the Vicuna District and the Vicuna project on the Argentinian side. Here, we're showing the Josemaria deposit, which forms the basis for Stage 1. You can also see now the associated infrastructure and the location of what will be the centralized processing facility.

Now stepping out and looking at the proximity of Josemaria in relation to the Filo del Sol deposits. Stage 2 contemplating the oxides or the capped mineralization over the Filo sulfide deposit. You can see the location of the leaching pads and the associated Waste Rock facilities. As mentioned earlier, this will be a sequential leaching circuit so that we can capture both the copper and the gold.

Now what you'll see is the mineral resource for the Filo sulfides and the final pit outline. The high-grade core of Aurora is we anticipate to get into the Aurora zone within the first 8 years of operating the sulfides at Filo. This demonstrates the scale and high-grade nature of the deposits continue to expand in all directions. And for us, the importance of optimizing the mine plan to get into the high-grade material as soon as possible.

We will be sending the crushed material from Filo sulfides via a network of conveyors to the central processing facility, which is located near Stage 1 Josemaria. You can see the Josemaria pit. And now you'll see adding another 2 lines from the ore stockpile to the processing facility. And this is where we get to approximately just under 300,000 tonnes per day or over 100 million tonnes per annum of processing capacity.

Okay. So just couple more slides before opening it up to Q&A. So as mentioned before, the offsite infrastructure strategy here, there are a few components that are important to mention. So water supply for Stage 1 is expected to be sourced from well fields in the project area. But to accommodate the Stage 3 Filo del Sol mine expansion and mill expansion, a desalinated seawater system has been proposed along the Chilean coast. And this is engineered to deliver 2,000 liters per second to the Vicuna project. This initiative includes the development of a dedicated seawater intake, a desalination facility and a pipeline extending across to the freshwater pond at the project milling site in Vicuna.

To accommodate the increased throughput associated with Stage 3 as well, a new concentrate pipeline and associated pumping system will be installed to link the concentrator with a designated roaster to deal with the arsenic content from the Filo sulfide material. All works associated to the off-site infrastructure strategy will continue to be matured through the advanced project phases and advance in parallel to all of the on-site project work that we're doing. And as mentioned, the costs associated to the infrastructure are embedded as operating costs and the overall project economics are maintained through this strategy.

Now touching on next steps. So this PEA forms the basis for us to advance through project definition and eventually to what we would see as a sanctioned decision as soon as before the end of this year. But there are significant opportunities that exist to improve overall project economics. So engineering for Stages 2 and 3 will continue, trade-off studies, as I mentioned, drilling and mine plan optimization will all continue. Mineral process, flow sheet optimization and the stage sequencing is all looking to be advanced in these parallel work streams. And Stage 1, which is Josemaria, is advancing now through a Class II estimate, which will be ready prior to year-end and will form the basis for our sanction decision.

The RIGI application that we submitted in December is going through the formal review process. And so we anticipate to receive approval on that application, and that would be, of course, a requirement prior to coming up with a final investment decision. And as mentioned, all of this work will support the FID coming as soon as the early -- as soon as the end of this year.

So with that, I'd like to open up the floor to questions and allow some of the team to support with some of the responses. Thank you very much.

[Operator Instructions] And our first question will come from Orest Wowkodaw with Scotiabank.

Congratulations on the update. I was wondering, could we get some clarification on the infrastructure assumptions? Just how much CapEx is involved if you -- if the project did have to build the infrastructure? And then corresponding, I'm wondering how much is that impacting the cash cost either per pound or per tonne by assuming, I guess, user fees for the third-party outsourcing?

Thank you for your question. So the -- as I mentioned, the offsite infrastructure is embedded within the operating cost. And so we're actually not publishing the capital cost estimate. This plays into the strategy for us to be able to spin out that infrastructure into a new entity, and therefore, we would be a receiver of that infrastructure by utilizing it via a tariff. And so we're actually not providing the capital estimate for the offsite infrastructure at this time.

Okay. And how much is it impacting the user fee, how much -- or tariff? How much is that impacting the cost per tonne or the cost per pound?

Yes. No, it's Teitur here. So I mean there will be just some commercial sensitivities around this, given that we are looking to potentially spin this out into a separate vehicle. And obviously, the rationale here is that these infrastructure investors are requiring a lower rate of return than what mining companies normally are looking to achieve. So with that cost of capital offset, we believe there is economic benefit to the project to allow a lower risk and lower returning assets to be held by somebody else. So there are certain commercial sensitivities around this, which is why we are not disclosing these metrics.

Okay. No, fair enough. I mean, obviously, your balance sheet is well positioned here with negligible net debt and your credit facility. But I'm just curious whether you would consider streaming any of the precious metals to help finance this project from a Lundin perspective? Obviously, we just saw BHP do a very large silver stream overnight. Is that something that Lundin is considering?

Yes. I mean what needs to happen from now until we sanction the project potentially as early as late this year is that we do need to agree with BHP on the exact funding mechanism and strategy around Vicuna. I mean, as you saw last week, we raised $4.5 billion in our new upsized RCF. So if the decision is that we -- each shareholder is going to fund this project from their respective balance sheets, we are fully funded to do that already. But there is a scenario where the project itself, as you mentioned, raises some debt, whether it's project finance or whether it's streaming or whether it's something else. And there's also a third scenario where it's going to be a blend of shareholder funding versus asset-based funding. So all those details are still to be worked out and agreed with BHP prior to sanctioning, but whichever avenue we take, we, at this point, are fully covered to fund our share of it.

And our next question is going to come from Ralph Profiti with Stifel.

Jack, I got a question on the updated mineral resource estimate at Filo. And just wondering on some of your learnings on how well defined the transition zone is between those 2 domains there? And I'm just trying to quantify the risk of acid-consuming sulfides entering the leach pads. And it doesn't seem like the recovery has changed as much, but just wondering what the new MRE is telling us about that?

Yes. Thanks for that question. We've actually got the Director of Resources for Vicuna here -- -- Vicuna Corp here, [ Cole Mooney ], so I'll hand it over to him to answer that.

Yes, it's a good question. Thank you. The transition zone has been -- will be a major focus of the 2026 studies going forward. We're currently working on a lot of geo-metallurgical test work and studies. So currently it's -- the transition zone is defined, but it's not fully defined. We're going to continue to advance that understanding throughout the year.

Okay. Great. Helpful. And just coming back to the last question, can you talk a little bit about the landscape and the appetite for third-party infrastructure development plays? And because it sounds like that once this is spun out into a new entity that we may see the joint venture provide some or part of the funding? Or will these truly be stand-alone entities?

Yes. I think it's really too early to conclude on any of that. I mean it will be -- first of all, we need to agree on the details with our partner, BHP in terms of how we go about this. I mean it's fair to say we've already received inbounds from infrastructure investors inquiring about this. It's obviously fairly big pieces of infrastructure. So this, I think, registers on anyone's radar screens. But it's a process we need to go through and whether we launch an official tender process around this or how it's done, it's still to be -- details are still to be worked out. But as I said, the rationale for it, I think, is very sound, and we've had preliminary discussions with BHP. In fact, you've seen BHP doing something similar on other assets already. So I think we're fairly well aligned with BHP in terms of how to go about this, but details still to be worked out.

And our next question will come from Ioannis Masvoulas with Morgan Stanley.

And congratulations on the update. A couple of questions from my side. The first, we've seen several mining companies looking to develop projects across scope and other minerals in Argentina over the coming years. How do you anticipate to manage the potential scarcity around labor and other resources during the construction cycle? Do you expect to bring over contractors from Chile or further afield? Some color on that would be very useful.

Yes, this is Dave Dicaire from Vicuna. One of the benefits we have with Vicuna is we're kind of the first ones of the large-scale projects that we're going to build. So we're not seeing any issues with labor sourcing. And Argentina has relatively high unemployment right now. We already are in the midst of our training programs to ensure that we have adequate skilled labor and also prioritizing local labor. We've also gone down and got early contractor involvement to discuss with the contractors the planning of the project, the labor sourcing. And some of these contractors are continuing contractors are also looking to JV with other larger foreign companies to assist them in managing the workload. So we're not seeing it as a high risk or an issue at this time.

Okay. Very clear. Just second question, going back to the funding topic. If there were to be streaming as part of the funding solution for the JV partners, how could that work? Could it be the case that streaming only happens on the 50% share of the BHP while you use a different funding mix given that you don't really need the capital? And then related to that, how do you feel about hedging during the development phase to backstop the balance sheet or the cash flow on any downside scenarios?

Yes. I mean on the streaming part, obviously, there's a big contingent of both gold and silver here. But I do believe if we were to enter into streaming arrangements, it would be done at asset level. I mean the arrangement is that the offtake here is allocated 50-50 to BHP and Lundin. So we will market our 50% net attributable share of the copper. And if we get the gold and silver as well ahead of streaming, then we will market all of that on our account and BHP will market their 50% share on their account. But I think normally, you would expect a streaming arrangement like this to be implemented at asset level. And the second part of the question was...

Hedging.

No. I mean, as you've seen, we -- if the scenario is that even if we fund 100% of this project from our respective balance sheet, parent company balance sheets with our facility of $4.5 billion, even in a very, very low copper price environment, we are fully funded to do that. So we would not envisage entering into any commodity price hedging. We have traditionally done some FX hedging just to protect our operating costs in Chile and Brazil. So we might continue to look at that. But in terms of commodity price hedging, that's not going to happen.

And our next question will come from Lawson Winder with Bank of America Securities.

Congratulations on moving this project a long way towards an ultimate completion. If I could just get a sense of the CapEx and the contingency applied, can we think of that as accounting for inflation? Or is there other more design-related considerations that make up that contingency?

And then I guess, actually, where I'm coming from is, what's the risk that once we get to a feasibility level that ultimately, CapEx is higher than what we are today?

Yes. Thanks for the question. This is Dave Dicaire again. We've updated the estimate based on where we were at a couple of years ago. But we're right in the middle right now of doing a complete bottoms-up estimate. We have done some factors in where we had done provisions for inspection and things like that in those areas. So we're doing a complete bottoms-up estimate. We're very confident in the CapEx numbers. We've had pretty in-depth reviews of those. And we've also benchmarked them against other projects and other capacity factors and things like that.

So we're not concerned. We have current pricing. We're actually seeing very competitive pricing right now in the market also on things like bulks and commodities and equipment. So we have a lot of confidence in our CapEx number.

And maybe we should add also that all the costs you see here and all the economics are based on real 2026 money. So there's no escalation on either cost or on commodity pricing. So the IRR you're seeing here is in real term ahead of inflation -- before inflation.

Okay. Great. And then as a follow-up, with respect to the infrastructure company, to what extent could the existing desal, port and other infrastructure at Caldera that's now associated with Lundin Mining and Candelaria be part of that infrastructure company? Or is that just not something that's being contemplated?

Lawson, yes, that definitely is part of the strategy that is being contemplated. So we do have a significant amount of infrastructure already that is supporting our Chilean operations. And so this is something that we're looking at right now that could be added to this strategy, whereby we are ensuring that we have sufficient spare capacity at the Caldera port. We'll look at pipeline routing as well. We'll look at key locations for infrastructure such as pumping stations, and we'll see if we can tap into economies of scale through the assets that we already have in the Atacama region. So all of that is being contemplated and further refined through these advanced studies.

And the next question will come from Johannes Grunselius with SB1 Markets.

I have one question on the tax environment and when you present and provide us the different NPV values, you say it's after tax. How should we think about that? Have you sort of applied existing tax law, in other words, 35% or the most likely coming tax of 25% in your models? That's my question.

It's Teitur here. So the tax or after-tax cash flows have been modeled on the RIGI PEELP framework, which we have in the slide deck, you can see the key factors in terms of tax rate and the other aspects of that is a 25% corporation tax rate. And we have assumed the RIGI to be applicable for 40 years, which is the current rule. And obviously, the mine life here is 70 years. So after the 40 years, we revert back to the current framework, which is then getting back up to 35% and there's an export royalty applicable from that point onward. So that's how we have modeled it. And all the numbers you see here are on a stand-alone unlevered project basis. So this is before dividend is streamed out of the country, which would attract certain smaller withholding tax numbers as well.

Yes. Maybe you have discussed this in the earlier presentation, but is that like how should we be considering the lower 25% tax versus existing tax laws? Is that a dumb deal to you or are this discussed? Or have you sort of -- what's your discussion where -- what's the status on that?

Yes. So we submitted the application for fiscal stability under the RIGI scheme in December. And upon receipt of approval of that application, we would then be working from the updated kind of fiscal regime. So we feel comfortable and confident that you can be modeling under the benefits from the RIGI regime when you're looking at the economic parameters for the full-scale project.

And the next question will come from Craig Hutchison with TD Cowen.

Just with regards to the concentrate roaster plan for Stage 3 to deal with the elevated arsenic levels, how critical is this from an economic perspective? Like have you guys -- I'm sure you've looked at the alternative of just doing a blend and taking the penalties. But in the event that permitting a roaster is challenging, just kind of curious like from an economic perspective, how critical it is to have it in the project?

Yes, this is Dave Deciare. We're in early stages on a lot of the test work and the roaster is a proven technology, and we will continue to test and look at alternative scenarios. There are scenarios looking at different leaching technologies of the concentrate also, and we'll have a better idea on that as we get closer to sanctioned as that test work comes out of the labs.

Okay. Great. Maybe just a follow-up question. Just on the CapEx, the $7.1 billion, does any of the spend this year a credit against that $7.1 billion? Or should we just assume it's $7.1 billion from project sanction?

No, none of that $7.1 billion is -- has including costs for this year. This is kind of pre-CapEx period. And so we've classified CapEx following the sanction decision and starting in our model in Jan 1 of 2027.

And the next question will come from Anita Soni with CIBC.

A few questions. First question, I guess, is next steps. Will you file this PEA on SEDAR? And after that, will you do an updated feasibility study?

Yes. We will be filing this technical report on SEDAR once it's fully completed within the 45-day window of when the results were published as of yesterday. And then we will continue to refine and update studies for all stages as we continue to advance the project, and we'll likely have another published estimates prior to sanction.

Great. And did you give us a time line for construction on how long you think it will take once the project gets sanctioned?

Yes. I think we're outlining in what we've stated in the press release and what will be outlined in the PEA is around a 40-month construction period from when you start to when you get first material through the mill and start commissioning, so about a 40-month period. And we're obviously looking at opportunities to improve that time line as well as opportunities to improve and refine the time lines for Stages 2 and 3 as well. So all of that is part of the work program that continues to advance as we're moving towards the end of this year.

Okay. Secondly -- or sorry, I guess this is third. On the -- can you give us a breakdown of the CapEx spend by year? You've given us the $7.1 billion, but I don't see anywhere where you -- and then you've broken out Stage 2 and Stage 3, how much it is per annum in CapEx spend, but I don't think there's a breakout of the $7.1 billion for each year.

Yes. That information will be readily available when we publish the results, and I think as well as an updated presentation online that we're going to be sharing, which we'll get into more details on the cash flow for expenditures for all phases, but spending a lot of time in demonstrating the viability of Stage 1 as that is the most advanced kind of stage for us with the most definition. So that will become available to you, Anita, and we can have a follow-up call if you have more questions on specific details of staged CapEx or any components to the different phases.

Okay. A couple more. Just in terms of the mining rates, is it fair to assume that it's direct ore feed, there's no stockpiling going on or any of that?

Thanks for the question. Yes, the majority of it is direct ore feed. There always is some stockpiling in any operation, especially of the scale, but the majority of it is direct ore feed, you're correct.

And then lastly, on the tailings management, between all of the phases, there's $300 million in tailings. Is there something -- can you just explain what the tailings philosophy is there?

Yes. It's Dave Dicaire again. You'll see that when the report comes out, that there is 3 proposed tailings sites and they're all within the vicinity of the plant site. So they're all very close. So there is good sites close by for expansion. So there is a capacity for the tailings, and you'll see those when we produce the drawings in the report.

And the next question will come from Stefan Ioannou with ATB.

Congratulations on the study, looks great. I was just curious, when you talk about optimizing Stage 2 and 3 going forward and maybe more so Stage 3, is that really focused on the existing deposits? Or do you start to maybe think about things like Cumbre Verde potential and/or other opportunities in the immediate region?

Yes. Great question. I think those would be classified as later stages at this point in time. Like when we go across, when we look at the level of maturity of the various stages that we've outlined, there's a lot of work that goes into ensuring that we've got the optimal kind of mine plan and the supported drilling to get us to a reserve base that we could then look at refining that mine plan and that milling plan. So anything beyond kind of yet to be discovered material would be seen as later-phase opportunities. But it is good to mention that given the nature of the Vicuna District and continuous mineralization kind of in all directions, there does remain significant upside for us to see future expansions beyond Josemaria and Filo.

And our next question will come from Dalton Baretto with Canaccord.

Congrats on getting this out. My first question is on the roaster assumptions that's part of the study here. And I guess 2 parts to that question. The first one, is that roaster part of the Stage 3 CapEx? Or is that part of this infrastructure vehicle you're thinking about? And then Part B is, you're probably assuming that you're going to build your own, but would something off the shelf like Mount Isa is up to sale with that work as well?

Sure. I can take that. It's David Dicaire. The roaster is in the infrastructure CapEx at this time. And we haven't really looked at details about available facilities. There is available capacity in Chile also with Codelco that we'll talk to them about also. But right now, that's in the CapEx for the infrastructure -- or in the OpEx for the infrastructure.

Great. And then maybe just a follow-up with Teitur on a comment that was made earlier around infrastructure cost of capital. When you compare that versus the implied cost of capital on the stream that was announced yesterday in Antamina, is the infrastructure piece still lower or comparable? I mean because we're talking low single-digit IRRs on the stream here.

Yes. I mean I can't really answer that, I don't think. But I mean, I think conceptually, as we said, infrastructure investment, whether it's desal or whether it's port or slurry lines, in its very nature, it is infrastructure. So the risk profile on those assets is significantly lower. Obviously, still the offtake is reliant on Vicuna and potentially other assets in the area. We have a few other assets there, which could tap into some of that infrastructure. So there could be some risk sharing as such for the infrastructure investors. But it's early days on this, and it will be -- first of all, strategically, we need to decide whether that's the path we want to go down, which is likely. And then we need to go through the commercial negotiation with the infrastructure owners as to how we structure it and what the cost of funding is going to be.

And the next question will come from Matt Greene with Goldman Sachs.

Congratulations. I have a couple. Just you touched on your benchmarked CapEx against other projects, but the productivity, I guess, just looking at the time line and execution, BHP flagged this at Jansen productivity as being a big issue. So can you just touch on how you've benchmarked productivity just given the remote nature of this district and the elevation?

Sure. It's Dave Dicaire. I'll take that. The bulk of the estimates done by Fluor, and we benchmarked a lot of it off their database for labor and high altitude projects in South America. We've also checked the benchmarks against what was experienced in other high altitudes sites that we're aware of. We've also got some engagement with [indiscernible] to review some of the construction planning and some of the productivity. So we're fairly comfortable with the productivity that we've used that's had a lot of review and a lot of scrutiny.

And just my last question is around the glacier reform. With the RIGI PEELP submission, are you happy with the proposals or has the government actually reformed some of the, I guess, ambiguity around the previous glacier reform?

Yes, we're happy with what's been proposed in that glacier reform language or clarification. So yes, we're comfortable with that, and we're happy with it.

And the next question will come from Daniel Major with UBS.

A couple of questions. You mentioned you're targeting FID at the end of the year. Could you just give us a sense what is the key determinant around that? Is it the RIGI approval time frame? Is there a specific level of detailed engineering you would need to achieve for the first phase to feel confident in the FID? So is it more internal or external that determines being comfortable and ready to FID?

Yes. Thanks for the question. There's a number of stage gates that will get us ready to come out with an FID or sanction decision. So you've mentioned those. I mean, of course, this PEA is a significant step forward, but it also forms the basis for us now, as Dave was speaking about, to further refine the Stage 1 estimate, and that will give us more definition and more accuracy in that estimate, which would be something we would use to put forward to -- or Vicuna would put forward to the shareholders for an FID. We've got various secretarial and provincial approvals that we're looking at obtaining and the status of those are moving forward as per our baseline schedule.

And the RIGI application, which is working through its way through the review process, I would say, is on track as well. So permit approvals, updated estimates, line of sight to financing and ensuring that we're hitting all of our milestones that we've agreed on with our partners will be required before sanction. And what I will say is we've been moving on and hitting kind of our baseline targets from when we established Vicuna Corp. back in January 2025 up until this point in time. So momentum is definitely building, and we are making positive progress to that eventual decision to be made by both BHP and Lundin Mining jointly.

Okay. Second question, can you tell us what the level of contingency is included in the CapEx estimates you provided in this presentation?

This is Dave Dicaire. I think on the Stage 1 contingency is about 17%. And on the other stage, it's probably up around 20%, 20% to 22%.

Okay. That's clear. And then a final one, just thinking about the latter stages of the project, cross-border project development didn't work out so well further down south historically. Have you got a clear legal framework in place for the cross-border requirements for the latter stages of the project? It's the first part of the question. And then the second is permitting on the Chilean side of the border historically has been more challenging. Do you have a clear pathway to permitting the required infrastructure to complete the final stages?

Yes, the permitting strategy is, of course, part of the overall strategic plan for developing and getting into full-scale operations. There is a binational treaty that exists today between Chile and Argentina. In fact, we have a Vicuna protocol that exists for this exploration stage that the projects are in. And so we can move in and out between Chile and Argentina without having to clear customs each time. Now what we would look at doing is escalating that to an exploitation agreement between both countries, and that would enable us to move product and personnel through this operations phase more freely. So we're working both with Chilean and Argentinian authorities as part of that binational treaty commission to establish this. And we do have time to ensure that we tick all the boxes and get the necessary approvals to really bring that to that exploitation phase.

We're seeing as well and understanding the permitting time lines and using those assumptions for unlocking the full scale. So I think we've got a good strategy in place, a collaborative effort between people that are working for BHP, Lundin Mining, Vicuna Corp. and working with the Argentinian and Chilean authorities as well. So no doubt, it's a big undertaking, but I think we've got a good plan in place, and we do see it as a feasible and viable option to get to full scale.

And our next question will come from Orest Wowkodaw with Scotia Bank.

You've already got a plus 7-year mine life. Clearly Filo is probably going to get bigger. Is there any plans for a Phase 4 at this point in terms of expansion. And I'm just wondering if you feel like you're capped out at the Phase 3 design throughput with respect to your ability to mine at Jose and Filo? Or do you think the ore bodies could support a future expansion well beyond what you're currently thinking?

Great question, Orest. And I think that given the size, the scale, the life of this project, it gives us flexibility to look at a multitude of options. And really what we would be trying to do is enhance near-term cash flows and economic viability in the earlier year. So improving mine plan, seeing if we can get the grade profiles up so we can be feeding higher-grade material earlier on, establishing that kind of peak production profile earlier on and seeing how long we could plateau that out rather than trying to extend mine life beyond 70 years. But I think ultimately, this is a unique district that once you get into production, you're going to be operating for many, many decades.

So we've got the optionality because of the size of the mineral endowment. And I think exploration also lends to looking at future optimizations if we were able to find high-grade near-surface mineralization that could supplement maybe lower grade material that's currently contemplated in the existing resources. These are the types of things that we'd look to kind of pursue in parallel to all of the ongoing work streams.

And just one follow-up, if I could. It looks like BHP has put out a slightly different number or range, I guess, for Phase 1 CapEx of they're saying $7 billion to $8 billion. And it looks like they've applied some kind of plus 10% to the $7 billion number. Is that just a difference in philosophy? Or is that essentially putting a contingency on a contingency? How should we think about that?

Yes. So we're all aligned on the initial capital number of being $7.1 billion. And so think that's BHP's method of presenting the data. So at Lundin Mining, we've presented the absolute figure and not giving ranges to those numbers. So it's just a difference in reporting standards. But overall, both BHP and Lundin Mining through the Board of Directors of Vicuna Corp have signed off on the results of the PEA, and those are seen the same way between both companies.

And our last question will come from Ioannis Masvoulas with Morgan Stanley.

I think you partly answered it, but if I look at Slide 31, where you show the concentrator feed by source, we do see quite a lot of great variability after the first sort of 10 years of operation. Is that something that, as you indicated, you're planning to improve as you continue your visibility work and your exploration, and therefore, we might end up with a flatter grade profile at high levels? Or due to the nature of the mining district, we might have to accept some variability depending on the phase of our production?

Ioannis, I think it's very common to see during this kind of level of study grade variability in the manner that you're seeing on the presentation and the material that we're providing. So absolutely, the work of the mining engineering team, together in collaboration with the exploration and geology department will be to refine that reserve and mine plan to look at having less variability and bringing forward higher-grade material. So that all comes down to further refinements of the updated studies. And we believe there's significant kind of upside to ensure that we can do that.

This does conclude today's conference call. Thank you for participating, and you may now disconnect.

Good day, and thank you for standing by. Welcome to the Lundin Mining Third Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to turn the conference over to Jack Lundin, President and CEO of Lundin Mining. Please go ahead.

Welcome to our third quarter 2025 conference call. The financial results press release and presentation are on our website where you can also find a replay of this call. All figures today are in U.S. dollars unless stated otherwise. After the presentation, we will open the floor to questions.

Today's webinar will include forward-looking statements that involve risks and uncertainties. Please review the cautionary notes on Slide 2 and the disclaimer in our MD&A.

With me today is our Chief Operating Officer, Juan Andres Morel; and our Chief Financial Officer, Teitur Poulsen, to discuss our Q3 operating and financial results.

Touching on the highlights from the quarter. Consistent operational performance continues to drive solid financial results, which I'll briefly summarize on the next slide, and Juan Andres and Teitur will provide additional details shortly.

We've tightened our production guidance ranges, increased copper guidance and reduced cost guidance, reflecting the strength and stability of our operations. We continue to advance the Vicuña opportunity during the quarter given the positive momentum and many working fronts that are progressing well against the baseline plan, we felt it was the right moment to further strengthen the management team.

Effective tomorrow, Ron Hochstein will be leaving Lundin Gold to join Dave Dicaire in the rest of the Vicuña Corp. team, where he will support as Chief Executive Officer of the joint venture. Ron joined a group of familiar former colleagues, many of whom were involved on the successful project phase of the Fruta del Norte gold mine in Southern Ecuador, currently owned and operated by Lundin Gold.

Together, the team will look to build on a successful track record by bringing the Vicuña project towards the sanction decision and ultimately, development and operations.

Our operational success goes hand-in-hand with our safety performance. In the first 9 months of the year, we're pleased to report no major injuries across any of our operations and the total recordable injury frequency rate of 0.29, the lowest in the company's last 10 years. This achievement underscores our commitment to risk management and the effectiveness of our proactive improvements to critical controls.

Lastly, as we outlined at our Capital Markets Day in June, we're advancing several near and midterm growth opportunities across each of our three Latin American operations.

One key initiative relates to the Caserones cathode growth opportunity, and I'll provide an update on that towards the end of today's presentation.

On the next slide, we're pleased to announce that the third quarter was the best quarter year-to-date by most metrics. We're seeing the benefits of a simplified portfolio, full potential initiatives and disciplined planning and the execution of our plans are paying off now.

Copper production for the quarter totaled 87,400 tons, primarily driven by a strong performance at Caserones from higher copper grades and elevated cathode production. As a result, we have increased annual copper guidance by approximately 11,500 tons in the midpoint. The new guidance range is 319,000 to 337,000 tons of copper, improving by about 3.5% when you compare the midpoint.

Gold production was in line with the last quarter at 38,000 ounces, and year-to-date, we are tracking to achieve our full year guidance. During the quarter, we produced copper at a consolidated cash cost of $1.61 per pound, benefiting from stronger gold prices and cost reduction efforts at our assets through our full potential programs. We have since lowered cost guidance to $1.85 to $2 a pound and tightened our production ranges on several of our assets as we enter the final quarter of the year. We will provide details on guidance improvements later in this presentation.

And on the operational financial performance, we delivered over $1 billion in revenue in Q3, making it one of the strongest quarters in the company's 30-year history. And we generated approximately $490 million in adjusted EBITDA and $383 million in adjusted operating cash flow. We also declared our 38th regular quarterly dividend, highlighting our commitment to financial discipline and shareholder returns.

There were no share buybacks in the quarter. Year-to-date, we've purchased or repurchased 12.6 million shares for approximately USD 104 million at an average price of CAD 11.70 per share. With about $45 million remaining under our $150 million buyback program, subject to market conditions, we intend to complete the buybacks before the end of this year.

However, any shares that are not purchased will be turned into a special dividend, ensuring we deliver on our $220 million total annual return target.

I would now like to invite Juan Andres, our Chief Operating Officer, to discuss our production results for the quarter.

Thank you, Jack, and good morning, everyone. Our assets continue to perform well, and the focus on increasing our operational discipline is correlating to strong safety and production results. As mentioned earlier, we increased copper guidance, and I will discuss that later on.

Copper production for the company was 87,400 tons for the quarter and 244,200 tons year-to-date, which puts us in a comfortable position to meet our increased guidance range for the year of 319,000 to 337,000 tons of copper.

Gold production for the quarter totaled 37,800 ounces and 107,700 ounces year-to-date. The company is positioned well going into the end of the year and tracking to production guidance on a consolidated basis for copper, gold and nickel for 2025.

At Candelaria, copper production for the quarter totaled 37,000 tons, along with 19,900 ounces of gold. Candelaria continues to be extremely consistent this year, softer ore from Phase 11 led to higher throughput in the mill, which processed 8.1 million tons of ore during the period. This is the highest throughput in a quarter in the last 5 years and the second highest quarter for throughput since we have owned the asset.

Year-to-date, Candelaria has produced 111,000 tons of copper and 61,500 ounces of gold, which puts Candelaria well on track to meet guidance for the year. We anticipate production levels in the fourth quarter at Candelaria to be in line with Q3.

At Caserones, copper production reached 35,300 tons in Q3, one of the strongest quarters since we have owned the asset. Year-to-date, it has produced 93,300 tons. As mentioned last quarter, the asset is second half weighted. Head grades have improved in the second half of the year and should continue through Q4, putting Caserones on track to meet guidance.

Cathode production continued to outperform expectations, but in line with what we announced in June during our Capital Markets Day. A total of 6,300 tons of copper of cathodes was produced in the quarter driven by increased material placed on the leach pads and improved irrigation practices. We have updated the hydrometallurgical model for the dump leach and anticipate cathode production for the full year to be approximately 24,000 tons, which is higher than what we have planned at the beginning of the year.

This strong capital production has led us to increase overall guidance for Caserones and tighten the range. The new copper guidance is forecast to be 127,000 to 133,000 tons for the full year at Caserones.

In the quarter, Chapada produced 12,600 tons of copper and 17,900 ounces of gold. Production at Chapada continues to be weighted toward the second half of the year, and fourth quarter production should be in line with Q3.

At Eagle Mine, nickel production was 2,700 tons and copper production was 2,400 tons for the quarter. Mill throughput was strong at 183,000 tons, which was the highest quarterly throughput in the last 2 years.

Eagle is tracking to guidance and is expected to be within 9,000 and 11,000 tons of nickel and within 9,000 and 10,000 tons of copper for the year. Year-to-date, operations have been performing well. Strong capital production and throughput at Caserones has led to a guidance increase for approximately 10,000 tons. As mentioned, the new guidance range for Caserones is now 127,000 to 133,000 tons.

With increased confidence going into the end of the year, we have tightened the guidance ranges for Candelaria and Eagle. The new copper guidance range for Candelaria is 143,000 to 149,000 tons and for Eagle is 9,000 to 10,000 tons of copper.

Consolidated copper production guidance range is now 319,000 to 337,000 tons of copper an improvement of approximately 11,500 tons to the midpoint of the guidance.

Consolidated gold production guidance is now 135,000 to 146,000, representing a tightening of the range for improved confidence at Candelaria and Chapada. Overall, we're in a good position entering the fourth quarter.

With improved guidance and consistency from our operations, we are tracking to reach the midpoint for our guidance for all metals.

I would now like to turn the call over to Teitur to provide a summary on our financial results. Thank you for your attention.

Thank you, Andres, and good morning, everybody. I'm very pleased to be able to present a strong financial quarter for the company.

The company's financial performance was supported by strong operational results, as Andres has just now presented, coupled with favorable copper and gold prices. These factors enabled the company to achieve another quarter of strong financial performance.

The revenue for the quarter came in at $1 billion with our revenue remaining heavily weighted towards copper, which accounted for 79% of the revenue mix.

Gold and nickel contributed 13% and 3%, respectively. With the price of gold hitting all-time highs, we have seen our gold revenue contribution climb by about 2 to 3 percentage points.

During the quarter, our Chilean mines, Candelaria and Caserones generated 74% of the company's revenue. In combination with Chapada in Brazil, operations in South America represented 95% of total revenue.

Looking at volumes sold inventory levels of concentrate and realized pricing. During the period, we sold approximately 79,000 tons of copper at a realized price of $4.61 per pound, which is slightly better pricing than the average LME spot price for copper during the period.

As disclosed in our pre-release in October, we incurred a shipment delay of approximately 20,000 tons of copper concentrate at Caserones due to weather-related impacts at the port of Punta Totoralillo. This has resulted in company carrying higher than normal inventory levels at the end of Q3. This elevated level of inventory is expected to unwind during Q4, and thus having the revenue and cost of goods sold associated with this inventory to be recorded in the fourth quarter, 2025.

Traditional pricing impact in the third quarter was positive by $11 million, primarily driven by gold ounces that settled in the quarter. The realized gold price during the quarter was just below $3,900 per ounce. At the end of the quarter, 78,000 tons of copper were provisionally priced at $4.65 per pound and 34,000 ounces of gold were provisionally priced at $3,800 per ounce and remain open for final pricing adjustments in Q4.

Turning to Slide 14. Production costs totaled $490 million for the quarter, consistent with the past few quarters. At Candelaria, total costs were higher compared to previous quarters due to higher mining costs and higher ore milled during the period and due to reclassifying certain stripping costs from sustaining CapEx to production costs.

Cash costs have continued to benefit from strong gold prices and remain in the $1.90 range. For the full year, we reiterated the cash cost guidance of $1.80 to $2 per pound for Candelaria.

Caserones costs for the third quarter are lower than normal due to inventory build relating to the deferred shipment of concentrate into the fourth quarter, representing approximately $20 million in costs associated with this delay.

Costs in the third quarter also benefited from certain one-off credit notes from certain suppliers and due to a new and more cost-effective equipment maintenance contract. Total costs were in line with expectation of $158 million for the quarter when adjusted for the above-mentioned items.

Cash cost at Caserones were $1.86 per pound and benefited from better TCRC terms, stronger cathode production and byproduct credits as well as lower contract costs as mentioned earlier.

We expect cash costs in the fourth quarter to continue to benefit from strong cathode production and byproduct pricing and have lowered our guidance range for Caserones to between $1.15 to -- sorry, $2.15 to $2.25 per pound, representing an approximate $0.30 per pound decrease.

Chapada's total cost for the third quarter amounted to $96 million, reflecting higher mill throughput during the quarter and volumes sold.

C1 costs continued to decrease compared to prior period and came in at $0.50 per pound for the quarter, primarily due to higher byproduct credits from gold prices. We are reducing the full year cost guidance range again to $0.90 to $1 per pound from the previous guidance range of $1.10 to $1.30 per pound. On a consolidated basis, our C1 cost for the quarter was $1.61 per pound, well below our full year guidance range of $1.95 to $2.15 per pound.

Based on the adjustments mentioned above, we are, as previously mentioned, reducing our consolidated cash cost guidance range to $1.85 to $2 per pound for the full year.

Total capital expenditure, including both sustaining and expansionary investment was $160 million for the quarter and $485 million for the 9 months of the year.

Full year guidance for the total capital expenditure has been revised down by $45 million to $750 million due to a deferral of projects at Candelaria and Caserones, as well as reclassifying some of the capitalized stripping costs at Candelaria to production costs. For sustaining capital, we expect spending to increase going into the fourth quarter to reflect the roughly $170 million that remains to meet guidance for the full year.

At Vicuna, capital expenditure during the quarter was $51 million and year-to-date, $126 million and is tracking to guidance of $250 million for the full year. Q3 expenditure was primarily focused on field activities for water program, drilling, trade-off studies, engineering, cost estimation and permitting and preparation for the integrated technical study in the first quarter 2026.

Our key financial metrics for the third quarter are presented on Slide 16. Adjusted EBITDA for the quarter was $490 million, with a 49% margin. Adjusted operating cash flow for the quarter totaled $383 million and for the first 9 months totaled just below $1 billion, including cash tax payments of close to $300 million. The company achieved solid free cash flow from operations of $169 million despite the impact of $113 million working capital build during the quarter.

Adjusted earnings amounted to $255 million for the quarter, which translates to an adjusted EPS of $0.18, an improvement of 64% from last quarter.

Turning to cash generation during the third quarter. We entered the quarter with around $279 million in cash and a net debt position of $135 million. We generated adjusted operating cash flow of $383 million after cash tax payments of $86 million and incurred a working capital build of $113 million.

The sustaining capital investment amounted to $109 million, which resulted in free cash flow from operations for the quarter of $169 million. We had total shareholder and NCI distributions of $43 million during the quarter, of which $17 million related to the payment of regular dividends. After debt, leasing and interest payments as well as the deferred payment of $10 million relating to our Caserones acquisition, we ended the quarter with cash of around $290 million and a net debt position of $108 million, excluding lease liabilities.

By the end of the year, we expect to be essentially net debt free. We continue to advance the process to increase our revolving credit facility as part of our strategy to fund future growth plans. We have a number of interested banks, both existing lenders and potential new lenders and have been progressing term sheets and expect the process to conclude towards year-end or in the early part of next year.

So overall, a very good quarter that aligns with the financial outlook that we provided at our June Capital Markets Day.

So, I will now turn the call back to Jack for some final remarks.

Thank you, Teitur. I'll take a few moments to discuss one of our near-term growth initiatives, which we outlined at our Capital Markets Day back in June.

Cathode production at Caserones continues to improve. We delivered another strong quarter and are on track to produce approximately 24,000 tons of cathodes this year compared to an original plan of approximately 16,000 tons. Total cathode plant capacity is roughly 35,000 tons.

As we discussed in June, our goal is to capture an additional 7,000 to 10,000 tons of cathode production from a baseline of 15,000 tons which was the average annual production over the 2 years prior to us acquiring Caserones. Over the past 8 to 12 months, we've implemented several key operational improvements. Firstly, we enhanced leaching practices, including better dump leach coverage and higher irrigation rates.

Secondly, we have increased oxide material placement on the dumps supported by improved geological understanding and tighter waste control in the open pit. These actions are now translating into higher cathode output as the benefits flow through with leach cycle residence times.

As mentioned by Juan Andres, we also recently completed an update to our hydrogeological leaching model, improving our ability to predict leaching kinetics and incorporate recent operational gains. Based on these improvements, we see potential for future annual cathode production to increase further, which we are now analyzing.

On the next slide, before reaching the closing remarks, I would like to outline a few upcoming catalysts to look out for. We're in the final stages of completing our reapplication and see a potential window to submit before the end of the year.

In the first quarter of 2026, we expect to complete the integrated technical report for the large-scale fully integrated development and operations plan for the Vicuna project. This milestone will outline a clear path for Lundin Mining to become a top 10 global producer once in full scale operation at Vicuna.

In parallel, and as Teitur mentioned, we're advancing our financing strategy to support these growth plans. We've initiated the process to increase our revolving credit facility and continue to see strong interest from our existing banking partners as well as future lenders. We expect this process to conclude towards the end of this year or early part of next year, as Teitur mentioned.

At Chapada, the Saúva project represents a compelling near mine growth opportunity with the potential to add 15,000 to 20,000 tonnes of copper and 50,000 to 60,000 ounces of gold annually, production increases of approximately 50% and 100%, respectively, for the Chapada operation. And the study includes expanding grinding capacity to process higher grade ore from Saúva through the Chapada mill.

Permitting and technical work are underway with the pre-feasibility study targeted for completion by the end of this year. We look forward to providing further updates as this exciting project continues to advance.

Touching on the conclusions now. We delivered our best quarter year-to-date, producing 87,353 tonnes of copper at a C1 cash cost of $1.61 per pound. Strong operations and higher gold prices enabled us to raise production guidance and lower consolidated cash costs. The copper guidance midpoint increased by 11,500 tons to 319,000 to 337,000 tons of copper driven by stronger cathode production at Caserones and improvements in the leaching circuit at Caserones.

Cash cost guidance at Caserones and Chapada dropped lowering the consolidated midpoint by $0.125 to $1.85 to $2 a pound. We generated $383 million in adjusted operating cash flow, strengthening our balance sheet with the company expected to essentially be net debt free by year-end. We continue to be in strong financial standing as we look to advance our growth initiatives at Lundin Mining.

Looking ahead, our priorities remain focused to continue to deliver on strong safety performance which directly supports our operational excellence programs, advancing near-term growth and preparing Vicuna for potential sanctioning in 2026.

The company enters Q4 well positioned with key catalysts over the next 4 to 6 months, including, as mentioned, a RIGI application in the near term and an integrated technical report for Vicuna.

All-in-all, a very solid quarter, and we remain poised to deliver a strong overall 2025.

Operator, I'd like to now open up the call for questions. Thank you.

[Operator Instructions] The first question will be coming from the line of Orest Wowkodaw of Scotiabank.

Congratulations on the strong quarter. I'm just curious with the integrated technical report for Vicuna District, I guess, only a couple of months now from completion. Just curious if there's been any thought to any potential scope changes on what Phase 1 or Phase 2 could look like and whether we should still be anticipating, call it, around 175,000 ton a day operation for -- that would reflect Jose under Phase I? Or -- I'm just trying to understand if any of the goalposts have been locked in at this point or whether the project scope is still under discussion?

Orest, thanks for the question. I would say that, broadly speaking, the scope for Phase 1 has not changed significantly since we last gave an update on Jose Maria, which is considered to be Phase 1 for the Vicuna project. We're working through this integrated technical report, which will have a lower level of definition as you get into the later phases.

But I would say our level of confidence, especially for Phase 1 continues to grow with that -- those numbers that you mentioned there. So, the oxides, we're looking at opportunities, continuously looking at areas where we can improve costs and drive value. And I think as this technical report comes together and we put all the phases together and look at various trade-offs like that will show in Q1 when the report is published, but Phase 1 specifically, we continue to refine and derisk on scope that was -- that we've been speaking about for the last number of quarters here. So, we're on track and no significant changes should be expected from Phase 1 particularly.

Okay. And just as a follow-up on the time line, just given already in November, do you have a sense of when in Q1, we could anticipate that?

I can't pinpoint an exact date for you, Orest. But I would say in the towards the latter part of Q1. That will be coming out with the results. And then, there's going to be a period between when we come out with the results and when we actually publish a technical report. But obviously, the team is working very hard on trying to get everything together. So that, some part in the second half of Q1, we'll be able to publish the results followed by the report coming out within 45 days of when the results get published.

The next question will be coming from the line of Lawson Winder of Bank of America Securities.

Very nice quarterly results, and thank you for today's update. If I could also ask about the integrated Vicuna plan and just get a sense for one aspect that Filo had previously proposed, which was this idea of a precious metals-focused initial starter pit.

I mean, for a smaller company like Filo, it made a lot of sense. For a larger company like Lundin, perhaps it's just not enough capital or cash flow to really move the needle. But I mean, that would be in a much lower gold price than I would make a comment like that, I think in the current gold price, I mean, is there any thoughts potentially doing some sort of precious metals-focused starter pit with Filo in conjunction with the Phase I at that you just spoke about?

Right now, we're still considering kind of going ahead with the base plan that we've outlined Phase 1 being Jose Maria. Of course, with commodity prices going higher, we see if there's opportunities to maximize value based on that -- based on market conditions.

But right now, Lawson, I would say Phase 1 still is very much contemplating Jose Maria and then Phase 2 being the oxides of Filo, which includes base and precious metals. So, to summarize, no, we're not considering changing the scope right now.

Okay. Perfect. And then, just thinking about some of the opportunities that lie ahead, including the success you've had at Caserones, this update we're looking for in early 2026 on Sauva. The current 2026 CapEx plan that you've laid out, is there a risk that ex Vicuna, that could change materially from what you currently have in the market?

It's Teitur, here. But on CapEx, we have not guided any CapEx for the company in 2026. What we did say at the Capital Markets Day that we had around about $155 million, I believe it was for the Sauva expansion, and that number remains intact.

And then as we think about Caserones, I mean, could you expect something material or I guess the way to think about it then is, can you expect something materially higher from what you guys are on track to spend this year?

No, I don't think so. I mean, we will come up with our usual annual guidance in January, and all that will be disclosed, but I would not expect any significant deviations on current trends. No.

And that increase in cathode production that we outlined in the presentation doesn't come at any real additional capital requirements, which is why it's such a robust opportunity. And really, the team has been -- behind it has been just working on optimizing the leaching circuit. So, as Teitur said, we wouldn't expect to come out with any materially increased capital numbers for Caserones specifically.

[Operator Instructions] And our next question will be coming from the line of Daniel Major of UBS.

Congrats on a good quarter. Just first question on the oxide production profile at Caserones is 25,000 ton run rate this year. Is that a reasonable assumption to bake into the subsequent couple of years? And can you remind us what was embedded in the 130,000, 140,000 guidance? I've got about 15,000 tons previously. So is there upside to that '26 previous guide number?

Daniel, this is Juan Andres. Thank you for the question. Yes. I think the answer to your question is yes. Looking forward we're looking at sustaining that level of production from the cathode plant. So, 24,000, 25,000 tons per day, at least for the next, let's say, 3, 4 years is a good, good assumption.

Okay. And then, just a question on -- follow-up on the CapEx, sorry, if I'm getting some of the numbers mixed up here. But is it fair to assume the sustaining CapEx for the group, excluding any spend at Vicuna would be a similar kind of run rate, so like $400 million or so?

And then on top of that, you're assuming in late FID of Vicuna late in the year, probably a similar run rate of spend at the Vicuna. So, are we looking at a similar sort of $650 million, $700 million range. Is that reasonable for CapEx for next year, excluding any other FIDs?

Yes. I mean, we -- as I said, we will come up with further detailed guidance in January. But this year, we guided $530 million in sustaining CapEx for the full year, and we've now guided that down to $410 million. I think it's important to say that, that saving is -- or that reduction is not really a saving. It's more a deferral of projects from 2025 into 2026.

Also remember, our CapEx guidance is based on cash payments, not incurred activity. But I think that run rate from about the current of 2025 run rate we have, it should be roughly what we expect to see going forward.

Just to clarify, $530 million down to $510 million.

Sustaining CapEx, excluding growth CapEx.

Okay. Yes. And for Vicuna, like we're going through the 2026 budget now with the Vicuna team. And similarly, we would be updating kind of the guidance range on that. But hopefully, we'll be in a position where we can continue to ramp up with activities prior to a sanction decision. So, it wouldn't be like -- you could expect that provided progress continues on the trend that it is, that it would be higher than -- higher next year than it is this year.

Okay. That's clear. And then, maybe just a final one. This reasonably sizable working capital build in the quarter, $112 million or something, which puts you not up quite a bit in terms of working capital year-to-date. Would you expect that to reverse in the fourth quarter?

Yes, I would expect that. It's always hard to predict the exact timing of year-end shipments, et cetera. But if everything goes according to plan, we should see an unwind of that in the fourth quarter, yes.

[Operator Instructions] And our next question is coming from the line of Dalton Baretto of Canaccord.

Congrats on a great quarter and also a great choice appointing Ron as CEO of Vicuna. I wanted to ask about some of these cross-border negotiations that are still ongoing. Jack, can you sort of remind us what elements are under discussion? What the status is? And what's going to be assumed in the technical report when it comes out?

Thanks, Dalton. Yes, I fully agree. It's great to officially bring Ron over to Vicuna, starting effectively tomorrow once Lundin Gold gets through their quarterly results.

So the -- there's a binational treaty that exists today between Chile and Argentina. I think it was established in 1997. There is on that treaty of Vicuna protocol that exists during this current exploration phase that the project is in. So, we're able to kind of move from one side of the border to the other freely. And at the moment, what we would be looking at doing is specifically when we get to Phase 4, and we're mining from Filo sulfides and getting to full scale, that would require the binational treaty to turn into kind of an exploitation arrangement.

And at that time, we would be contemplating significant pieces of infrastructure like desalinated water line, potentially concentrate slurry line and really integrating all of the infrastructure together during that final phase of the project. But initially, what we're looking at doing is building Jose Maria, 100% within Argentina and then trucking the concentrate out. And so, we don't need to have that significant uplift in that treaty. But we have time. There is engagement between both the Chilean and Argentinian authorities to elevate this national treaty into exploitation phase, but that's not required during the initial years of production through Jose Maria.

Got it. So, no concerns around moving the concentrate out through Chile, no concerns around bringing water up or any of that kind of stuff?

I think it's early days that we're working on that plan and that scope, and we have time to ensure that we do it the right way. So far, our baseline schedule is intact. And I think dialogue is strong, and we just need to continue building on that momentum. So overall, I think we're feeling very positive about all phases, and we'll just continue to derisk as we bring the project forward towards integrated study and eventual sanction.

Got it. And then, once the study comes out and you put a pin in it, what are sort of the next remaining steps before an FID?

So, I think having fiscal stability, having the integrated technical report released and published, having our financing plan so that Lundin Mining can ensure that we can fund our 50% portion of Phase 1. And then, there's various permits that we're still working through and government agreements in the provincial level at San Juan that we would need to receive. We're updating our environmental impact assessment as well.

So, there's a number of kind of items on the checklist that we would be required to fulfill before going to the shareholders being BHP and Lundin Mining for a sanction decision. But we're progressing well on all of those fronts.

So this could be a sort of a back half of next year type thing?

If we continue to progress on the plan that we currently are on, then it's not out of the question to have a sanction decision coming at the back half of next year. Of course, a lot of work to be done between now and then, and we're working to make sure that we get all of our ducks in a row to achieve that. So, that's the hope.

That's great. And maybe just one last one. This is more of a confirmation thing than anything else. What you're applying for under RIGI, it's is all the phases, right?

That's a great question. So, because we have Jose Maria and Filo del Sol together now under Vicuna Corp within the same SPV, the projects are integrated together and they're looked at as one large-scale project. However, for us, it's important to get fiscal stability and approvals and permits for Phase 1 as we have much more definition around Phase I, but the intention would be achieving fiscal stability on the entire Vicuna project, which includes both Jose and Filo and potential future discoveries in the region. As we know, it's a very prospective area, and we definitely feel like we'll be finding more minerals as we continue to spend more time in the area.

Thank you. And there are no more questions in the queue. At this time, this does conclude today's conference call. You may all disconnect.