Mmg Stock

[Interpreted] Good day, everyone. Welcome to MMG's 2026 Interim Results Investor Webcast. [Operator Instructions].

I will now hand over to Godfrey Guo Yu, Chief of Staff of the company.

[Interpreted] Good day, investors and analysts. Welcome to MMG's 2026 Interim Results Investor Webcast. You are judged today by members of the company's executive committee, including Mr. Zhao Jing, CEO and Executive Director; Mr. Song Qian, CFO and Executive Director; Mr. Troy Hey, Executive General Manager, Corporate Relations; Mr. Wang Nan, COO; Ms. Xiangjun Guan, Interim Executive General Manager, Commercial and Development; Mr. Weiquan Xia, President of Africa Operations; and Mr. Xuesong Chen, President of Las Bambas.

Please take a moment to note the disclaimer on the screen. This presentation should be read together with the company's interim results announcement for the 6 months ended 30th June 2026 released on 11th August 2026. The presentation contains forward-looking statements that are subject to risks and uncertainties, and actual outcomes may differ from those statements. So we will start today's presentation.

Today, we will cover the company's overall performance for the first half of 2026, our financial results and our strategy and outlook. In addition, following a very strong period of resource growth, we will also provide a dedicated update on our latest resource growth results and what they mean for MMG's future developments. The management team will take questions after the presentation.

I will now invite our CEO, Mr. Ivo Jing Zhao to begin.

[Interpreted] Thank you, Godfrey, and welcome, everyone, to today's results presentation. In the first half of 2026, MMG remained focused on safety, operational stability and growth continued to advance stable production across our mines, progress key projects and improve costs while delivering a record interim results. I'll begin with an overview of our performance for the first half. As always, I would like to start with safety. Safety is MMG's most important value and the foundation of everything we do. No matter the market environment or stage of growth, there's no trade-off between safety and results.

In the first half of 2026, our safety performance improved compared with the same period last year. Our significant event frequency with energy exchange was approximately 0.6 per million hours worked, total recordable injury frequency was approximately 2.1 per million hours worked. At the same time, we recognize that every incident matters to the individual, their family and their team.

In the second half, we'll continue to strengthen visible safety leadership, deep and critical risk management particularly for vehicles and mobile equipment, embed City more deeply into planning and execution and further improve contractor safety management. Our goal remains unchanged. Every employee and contractors go home safely. This is a core responsibility of management and our most important commitment to our people, their families and the communities where we operate.

Let me first share the company's overall performance for the first half. What stands out is that while maintaining safety and operational stability. MMG delivered record operational and financial performance and further strengthened its capacity for future growth. Revenue reached USD 4.54 billion. Profit after tax was USD 1.37 billion, including close to USD 900 million attributable to equity holders of the company. Operating cash flow exceeded USD 2.2 billion with profitability and cash generation, both substantially stronger.

Operationally, copper production reached 267,000 tonnes, the highest first half level in nearly 8 years. Our major operations remained steady and continue to progress towards full year production targets. At the same time, stronger contributions from byproducts such as gold and silver further supported earnings quality and cost competitiveness. These results reflect a higher quality operating performance. We also strengthened our balance sheet, support our project pipeline and reinforce the platform for long-term sustainable value creation.

In summary, there are 4 areas from the first half that I would highlight. First, our operating foundation is stronger. Our mines continued to perform well overall. The span does continue to demonstrate the scale, cost and cash flow strength. Kinsevere continues to ramp up its expansion project and release benefits. Khoemacau's operating performance improved, while our 2 Australian operations further enhanced profitability through operational excellence and the multimetal advantage.

Second, our financial position has improved significantly. Strong operating cash flow together with approximately USD 1.6 billion financing completed in June further improved liquidity and capital allocation flexibility. With net debt significantly reduced, we now have a stronger balance sheet, greater funding capacity and more strategic flexibility.

Third, our copper growth pathway is becoming clearer. The Khoemacau 130,000 tonne expansion is progressing steadily, and we are also actively evaluating the longer-term pathway to 200,000 tonnes, the significant resource growth achieved this year further expands our development options and provides a stronger foundation for future production growth and value creation.

Fourth, we are building MMG for the future. by advancing remote operations, automation, electrification and digital platforms and by scaling proven technologies across our global assets, we're improving safety, efficiency and sustainability and strengthening the company's long-term competitiveness.

Overall, the first half was not only about record financial results. More importantly, we strengthened our operating base, improved our financial capacity and created more opportunities for future growth. Looking ahead, we believe the energy transition, electrification, digitalization and new forms of infrastructure will continue to drive long-term demand for critical minerals. The metals we produce, including copper, zinc, gold, silver, molybdenum, nickel and cobalt are fundamental to these trends.

They're used in power and data infrastructure, renewable energy, battery storage and advanced manufacturing. This is an important reason why we remain confident in the long-term outlook for our industry. MMG's value is not based on a single commodity. It is supported by a diversified metals portfolio that underpins transition and modern industrial development. As the nickel Brazil transaction progresses, our future-facing metals portfolio will be further strengthened. Against this long-term backdrop, regarding our growth strategy, it is focused on increasing asset value and unlocking growth potential from a stable operating base.

In copper, Las Bambas has operated stably for more than 3 years, and remains a key pillar of cash flow and earnings. Kinsevere continues to release benefits from this expansion Khoemacau Phase 2 expansion is under construction and will lift copper production capacity to 130,000 tonnes per year. We're also assessing the longer-term pathway to 200,000 tonnes. In zinc, Dugald River and Rosebery are more than zinc assets. from gold, silver, copper and lead byproducts continue to improve profitability and cost competitiveness allowing us to create more value from each ton of ore.

Beyond organic growth, we'll continue to expand our opportunity set through exploration, development stage investments, innovation-led improvements and disciplined acquisitions, while maintaining capital. Growth depends not only on high-quality resources, but also on our ability to keep improving how we operate. Technology and innovation are not separate from operations. There are practical tools to improve safe efficiency and long-term competitiveness. In recent years, we have continued to advance remote operations, automation, electrification and digitalization. The Las Bambas remote operations center to Dugald River digital twin, electric equipment trials and green energy projects are all practical examples of this strategy. these investments, we aim to operate more safely, more efficiently and with a lower carbon footprint while replicating proven practices across our global asset base.

Regarding community and sustainability, growth also depends on long-term trust with communities, governments and other stakeholders. We believe stable operations create more than production and financial returns. They also support employment, education, health care, infrastructure and community capability. Over the past year, MMG continued to invest in communities across our operating regions, covering areas such as property reduction, health and well-being, education and access to clean water.

Community investment exceeded USD 60 million with Las Bambas accounting for the majority. These investments support local development and also provide the foundation for long-term operational stability. We'll continue to operate responsibly and shared value in a stable, transparent and sustainable way. Looking ahead, our vision is to become a leading international mining company for a low-carbon future.

To achieve this, we are focused on 3 layers of growth. First, we'll continue to increase the value and competitiveness of our existing assets through operational improvement capital discipline and technology innovation, improving safety, efficiency, cost and cash flow. Second, we'll drive organic growth around our existing regions and core commodities, particularly copper through expansion, optimization and exploration-led resource growth. Third, within an appropriate risk framework, we'll position the company in new regions and future-facing metals, using development projects and quality acquisitions to preserve long-term growth options.

Through this pathway, MMG will continue to play an important role as China Minmetals oversees mining and contribute to the China Minmetals strategic target of reaching 1 million tonnes of copper production by 2030. Delivering these goals require stronger earnings, cash flow and balance sheet capacity.

I will now invite our CFO, Ms. Qian Song, to present the company's financial results.

[Interpreted] Thank you, Ivo. In the first half of 2026, MMG delivered a record interim result, operational improvements, higher sales volumes and stronger prices for key metals supported record first half financial metrics. Revenue increased 61% to USD 4.54 billion. EBITDA reached USD 2.73 billion, with EBITDA margin rising to 60%. Profit attributable to equity holders was approximately USD 900 million, up 164%. Net operating cash flow reached USD 2.23 billion, up 89%.

At the same time, net debt fell to USD 610 million, and gearing reduced from 33% to 6%. And overall profitability, cash generation and the balance sheet all improved materially, providing a strong platform for the next phase of growth. Revenue growth was driven by 2 main factors. First, prices for major products, including copper, gold and silver remained at strong levels. Second, our operations remained stable and sales volumes improved amplifying the benefits of higher prices.

Copper remains our most important source of revenue and cash flow. At the same time, Higher contributions from gold, silver and molybdenum byproducts improved earnings quality and added resilience to the portfolio. Higher earnings translated into stronger cash flow. In the first half, operating activities generated USD 2.23 billion of cash inflow, reflecting significantly stronger cash generation. We also completed a financing transaction further improving liquidity and financial flexibility, while continuing to support existing operations and growth projects, we increased our cash position and strengthened our capacity to fund future developments.

Looking at the individual operations, I will start with Las Bambas. Copper production reached 210,000 tonnes in the first half and full year production guidance remains at 380,000 to 400,000 tonnes. Ferrobamba and [ Telcobamba ] were mined at an integrated manner, supporting stable grades and recoveries. Increased contributions from precious metals and molybdenum byproducts further improved operating performance. Las Bambas delivered revenue of USD 3.31 billion, up 65% with an EBITDA margin of 68%. We Three consecutive years of stable operations, together with a high-quality resource base and a strong cost position means that Las Bambas remains MMG's most important source of earnings and cash flow.

Kinsevere is moving into a phase of capacity release as the KEP project continues to ramp up. Copper production reached 34,000 tonnes in the first half, up 33% year-on-year. Mining volumes and throughput both improved significantly. Power reliability continues to improve, and the battery energy storage system expected in the fourth quarter should further strengthen power security. With higher production and improved operations, revenue increased 17% to USD [ 398 ] million and EBITDA was 4x the prior year level. As ramp-up continues and operational improvements take effect, the mine still has meaningful upside.

Khoemacau produced 22,000 tonnes of copper in the first half. The mine continued to progress equipment mobilization and underground developments. Stable supply of high-grade ore from Zone 5 supported improving head grades. EBITDA was approximately USD 120 million, up 35%. At the same time, the 130,000 tonne expansion remains on track with first copper concentrate targeted for the first half of 2028. As the expansion is delivered, Khoemacau will become an important engine of future copper growth for MMG.

Dugald River, despite weather impacts early in the year, Dugald returned to normal operating and logistics rhythm in the second quarter. Zinc production reached 87,000 tonnes, up 3%. The higher throughput and zinc recovery above 90% helped offset lower grades and India. Supported by higher byproduct volumes and stronger zinc and sulfur prices Dugald River again demonstrated strong operational resilience and cash generation. Revenue increased 50% to USD 340 million, and EBITDA rose 92% to approximately USD 130 million.

Finally, Rosebery. Zinc production declined 21% to 19,000 tonnes, reflecting lower grades in the deeper ore body. However, on a zinc equivalent basis, production increased 3%, demonstrating the strength of Rosebery's multimetal operating model. higher silver and gold production, together with stronger metal prices significantly increased byproduct credits. Revenue increased 73% to USD 244 million. And EBITDA reached USD 130 million. Rosebery once again showed that a multimetal portfolio can continue to create value across different market conditions. In addition to improved earnings, our balance sheet was also strengthened.

At the end of the first half, total borrowings were approximately USD 2.57 billion, and net debt had fallen to USD 610 million. In June, we completed approximately USD 1.6 billion of financing, which will be used to refinance existing loans and is expected to save approximately USD 30 million to USD 40 million of interest expense per year. This transaction further optimized our capital structure, improved liquidity and created additional capacity for future growth. with significantly stronger operating cash flow, a much stronger balance sheet and an expanding set of growth opportunities, we believe it is important to provide greater clarity on our capital allocation principles and priorities.

At MMG, capital allocation is ultimately about creating long-term value. On one hand, we continue to strengthen operating cash flow through our portfolio of high-quality cost-competitive assets. At the same time, our diversified funding sources enhance financial flexibility and provide capacity to support future growth. Our capital allocation framework is built around 5 priorities: first, maintaining our existing operations. We'll continue to invest in sustaining capital, safety and asset reliability to ensure our operations remain safe, stable and reliable. This is the foundation of long-term value creation, consistent production and sustainable cash generation. meeting our financing obligations and maintaining strong balance sheet.

Over recent years, we have significantly reduced net debt and strengthened our financial position. Today, our balance sheet provides strong support for future investment, while enhancing our ability to navigate commodity cycles and capture new opportunities.

Third, supporting growth. We will prioritize high-quality growth opportunities, including brownfield expansions, resource growth through exploration and investment opportunities that align with our strategic direction and creates long-term value. Together, these initiatives will continue to grow MMG's resource base and future production capacity in the low carbon future.

Fourth, technology and innovation. Through digitalization, automation and smart time mining operations will continue to improve safety, sustainability, productivity, efficiency and cost performance, strengthening the long-term competitiveness of our business.

Fifth, shareholder returns. We'll progressively establish a sustainable approach to shareholder returns, allowing shareholders to share in the benefits of MMG's future growth. From a capital allocation perspective, MMG is in the strongest financial position it has been in for more than a decade. A significantly stronger balance sheet and are generating cash flow at levels we have not seen for many years. With the strong support of our major shareholder, China Minmetals, we also have the capability to execute our projects and deliver on our growth ambitions. Looking ahead, we do not see growth and shareholder returns as a trade-off. Supported by our strong balance sheet and growing cash generation, we believe MMG is well positioned to pursue both.

Supported by our strong balance sheet and growing cash generation, we believe we can continue to invest for growth while progressively establishing a sustainable shareholder return framework, allowing shareholders to share in the benefits of MMG's future growth. believe disciplined capital allocation, a strong balance sheet and a clear growth pathway, we will provide the foundation for sustainable long-term value creation.

I will now hand back to Ivo.

[Interpreted] Thank you, Mr. Qian. For a mining company, resources shape both today's performance and tomorrow's potential. This year, MMG achieved significant growth in this resource base. This reflects the results of sustained exploration investment over recent years and further strengthens our long-term growth potential. Let me now take you through the latest resource and reserve update.

As of 30th June 2026, after depletion, mineral resources increased across all reported metals. Copper mineral resources reached approximately 20 million tonnes of contained metal, up 7% with net increase of about 1.4 million tonnes. This marks the third consecutive year of copper mineral resource growth for MMG. Zinc, silver, gold, lead, molybdenum and cobalt resources are also increased. In all resources, copper, zinc, silver, gold and molybdenum all increased, demonstrating our ability to convert resource growth into future mineable value.

The most important point on this slide is the approximately 1.4 million tonnes of newly added copper resources. That is equivalent to more than 10 years of production from a 100,000 tonne per year copper operation. Importantly, this growth was primarily generated through our own sustained exploration and resource evaluation work. It demonstrates our ability to create value through exploration and to support growth through resources.

MMG's resource base and South America, Africa, Australia and North America, giving us a global and diversified resource portfolio. The standout achievement this year was the maiden mineral resource for the [ Qube ] copper silver deposit at Khoemacau in Botswana. Qube contains about 1.4 million tonnes of copper and 90 million ounces of silver, significantly enhancing Khoemacau's long-term growth potential. At the same time, the [ ISA ] corridor project in Canada reported a maiden mineral resource for the High Lake East deposit, adding a new resource base for future development.

In Australia, the Hercules deposit at Rosebery was returned to the mineral resource for the first time since 2015, further supporting a longer operating future for the mine. These results show that we can continue to increase the value of our existing assets while also discovering and developing new growth opportunities. Resource growth does not happen by chance. It is the result of sustained investment over time. Over recent years, MMG has increased exploration expenditure from USD 19.1 million in 2020 to USD 102 million in 2025 with a further USD 56.3 million spent in the first half of 2026.

This investment is creating value in 3 ways. First, it is creating value beyond our original expectations within existing assets. Khoemacau is a good example. Since acquisition sustained exploration has added approximately 2.2 million tonnes of copper resources and 124 million ounces of silver resources, significantly exceeding the original acquisition assumptions. This has materially enhanced value of the asset and strengthened its future expansion for long-term growth potential.

Second, it is extending mine life. The return of the Hercules deposit to the Rosebery mineral resource provides additional support for decades of future operations. Third, Well, this year, we are celebrating the 90th anniversary of the Rosebery mine.

Third, it is building the next generation of growth opportunities. The maiden resources at Qube and High Lake East, together with high-grade drilling results as well as rule near Dugald River, show there remains a significant exploration potential around our existing assets.

Looking ahead, we'll continue to pursue a value-led exploration strategy, linking resource growth, reserve conversion and project development more closely and turning resource potential into growth and long-term value. This final slide summarizes the latest resources and reserves across our major assets.

From a portfolio perspective, Las Bambas remains our largest core asset and our strongest source of cash flow. Khoemacau has further strengthened its long-term growth potential through the death progress of the expansion project. Our Australian assets continue to provide a stable multimetal resource base, while Kinsevere and ISO corridor provide important future options for the company.

Overall, in the first half 2026, MMG, not only delivered record operating and financial performance, we also further strengthened our future growth capacity. We improved safety performance, maintained stable operations, strengthened balance sheet and funds to key projects and delivered significant resource growth. Resources shape both today and tomorrow, a third consecutive year of copper resource growth, together with a series of new discoveries gives us confidence in MMG's long-term outlook.

In the second half, we will remain focused on disciplined execution and delivery of our full year targets. With a stronger balance sheet, a richer resource base and a clearer growth pathway will continue to create long-term sustainable value for shareholders.

Thank you. This concludes our presentation. We will now move to Q&A.

[Operator Instructions].

Chris [ LaFemina ], please go ahead.

[Interpreted] Can you hear me management? Yes, you are very clear. Okay. First of all, congratulations, management for the very good results for the first half I have 2 questions first. regarding dividend. Just now, Mr. Qian said that in the future, dividend is going to be sustainable. So in the future regarding dividend company management is more inclined towards a fixed dividend ratio. And then every year, concerning the actual dividend, it is going to fluctuate according to results. Is this the way or are you going to set a fixed arrangement? So every year, the dividend will not be lower than last year. So it is going to be a progressive dividend. So that's my first question.

Mr. Qian, please.

[Interpreted] Thank you, Chris. I have heard your 2 suggestions. They are very good suggestions. So as you said, now we are working on solving some technical obstacles. Last year, there was the $500-odd million retained loss in this year. In our report, we already said that in July, Las Bambas received the first dividend, and this had effectively lower the retained loss to a certain level. So it has been reduced by both, it is now at $400 million. So in the second half, we'll continue this work, we'll make further improvements within the year, our target is that within this year, if we can -- we hope to overcome the technical obstacle. After that, on that foundation, we will see what dividend capability we have so that we can deliver good returns to shareholders as we disclosed just now, we have already decided on this. So we would like to achieve our company's growth as well as shareholder returns at the same time.

[Interpreted] Thank you, Mr. Qian. My second question is also about finances. In the first half, CapEx was around USD 550 million for the whole year guidance is about USD 1.6 billion to USD 1.7 billion. So now we are already in mid of August. So regarding CapEx progress, how is it like -- are you really going to spend this much, USD 1.6 billion to USD 1.7 billion for the whole year.

[Interpreted] Yes, Chris, at the beginning of the year, we made that estimate. While CapEx of various mines are in accordance with our plan, and they progress gradually. For Las Bambas, many projects have to wait till Q3, Q4, to reach the peak. So there is no change to our annual plan.

Next, Jimmy of Citi.

[Interpreted] I am Jimmy from Citi. First of all, congratulations on your very good first half results. Looking at your balance sheet, it is improving. So I have several questions. I will ask them one by one. My first question is about Kinsevere. So the C1 cost of Kinsevere in Q1 comparing with Q2 increased quite a lot. So for Q2 and Q1, can you explain the factors behind this increase and give us a breakdown.

Full year guidance is to [ 2.5 to 2.9 ] in the first half, [ 2.96 ].So is it true that for the second half, that would be a decline expectation? So for this full year guidance, so what kind of sulfuric acid price and diesel price is it based on? So how are the prices right now in the second half? What are the factors leading to the decline in C1 costs? That's my first question.

[Interpreted] Thank you, Jimmy, for your questions. We will ask Mr. [ Zhao ] to answer the question.

[Interpreted] Okay. For Kinsevere, in Q2 cost comparing with Q1 increased significantly. This is because of the impact from the Middle East war for diesel and sulfuric exit, the price was pushed up. And then regarding explosives, that's another factor leading to a higher cost within our guidance range, higher than our guidance range. So for the price estimate, well, last year, diesel price was around 1.5 to 1.7. Now it is being adjusted.by the government to about 3.15.

Sulfuric exit at the beginning of the year, the budget was about $300, and now it is already $1,000 per tonne. So our guidance range did not change because in the second half of the year. So when Middle East war came to an end and also we are also bringing in energy storage, battery energy storage system. So that will reduce our diesel consumption for sulfuric exit. So we -- when we increase production and our TMO system is in place, then sulfuric exit production capacity will be enhanced, referring to our roasting system. So we have maintained the price at the beginning of the guidance set at the beginning of the year. Second question, is about subsequent acquisition.

Now reading -- looking at your balance sheet for this half year is very healthy. Gearing is down to 6%. And then your reserve has turned positive already in your statements.

[Interpreted] So concerning cash allocation, dividend payments and acquisitions, what is your guidance and direction for Nickel Brazil acquisition, is there any update?

[Interpreted] Thank you. Mr. Qian. Thank you. Let me answer the question on nickel Brazil. Right now, it is still in the approval process by EU. And all the documents required by EU had been submitted by us already. Subsequently, I believe that -- in the process, EU will continue to scrutinize information from us. And according to that process in the future, in the coming 2 to 3 months, so they should be able to complete their scrutiny and they're betting within the specified time. So we will work with our counterparty and we hope to complete the EU approval and settlement as soon as possible. So when it comes to our preparation, apart from EU, all the other administrative approval has been obtained, and our capital is in place. So once EU approval is completed, then we can very quickly complete settlement of the project. That's the first question.

Second question is about use of funds. Just now, Mr. Qian already commented, overall speaking, we will strike a balance between shareholder returns and our company's business development. Regarding business development and future business growth, there is no way we can give a timetable. However, some time ago, when we communicated with investors from our company strategies point of view, we are a growth style company will continue to explore different pathways of development. including M&A. And for M&A, that would include projects in production and also greenfield projects or early-stage projects. So we are still examining all these targets. So far, there is not a definite timetable. If there is concrete progress, we will disclose to the market. timely.

[Interpreted] Thank you, Ms. Qian. My last question is about Las Bambas community. So, Troy, my question is for you.

Happy to see stable operations of Las Mambas. In South America for over 3 years. benefit from the significant improvement in social community relations in overseas. We know that MMG has mines in various countries. And could you share the experience in relationship management for our community and other stakeholders in various regions? In addition, they introduced the progress and achievements in ESG fields in recent years.

Thank you for the question, Jimmy. And I think we've learned so much at Las Bambas in since 14 when we took over around the way we approach community, how we build relationships and our approach, and we're applying that increasingly to our operations in other countries. I think there is no doubt Las Bambas is one of the greatest challenges in global mining in terms of sharing benefits and involving community in that complex operation, and we've learned a lot from looking to others, but also from the team we've built there.

And now we are applying those approaches around the world, and particularly in Khoemacau, which is our next biggest challenge in terms of expanding that operation in a new country. And I think what we call the Corazon Las Bambas project around building benefits for the country, for the community, for all stakeholders around our development we are applying those principles at Khoemacau now, and we really look forward to working with both communities, government of Botswana and others to make that model work. that goes to our sustainability practices generally. If you look at the way the world of sustainability is moving in mining.

It is becoming increasingly demanding at an asset and a national at an international level around how we comply with all the requirements of accreditation, whether that's tailings, whether that's compliance to international transparency, whether that's the geopolitical challenges of moving in a critical minerals world and investing in countries. And MMG's position since its birth as an ICMM member has always been to do and to be at the benchmark, it's not leading in terms of how we approach all aspects of sustainability management. that is even more relevant now because government's communities are looking at how projects are developed and how they participate in the benefits more than they ever have. and including looking at how benefits are kept in country, including of beneficiation and downstream benefits.

And so while we've come a long way in the years of MMG's existence, we also know that the expectations are rising all the time. And we can see that in our group and in how we resource and how we approach all of the operations in the countries. And we would say that, I think when we look at the partners, we will need to work with in the future, MMG is really well positioned now. But we have a huge both compliance and relationship management challenge to keep working, and we have full support from China Minmetals, our major shareholder and from the Board and management of LNG to make this work. And we know that, that is a critical enabler for us as a company to be successful in the future. So thanks for the question, Jimmy.

That's very clear, and happy to see the great work in the committee relationship.

[Interpreted] Hagen, please. Can you please state your name and your organization. Please go ahead.

Yes. It's Hagen Bahnemann from Mercury RC. Apologies. I've logged in from my personal account couldn't update the profile name. Congratulations on a fantastic financial result. I just had a couple of questions. One was, where does the management team see the largest opportunities for efficiency and productivity coming from in the mining and processing activities over the next 12 months.

Okay -- a full question. And would you like to take...

Yes, Hagen, this is Nan here. Thank you for the question. I guess as a mining company, the fundamental is safety, and safety is the foundation of our operations. And then that will ensure the continuity and the safety of our operations and then also our people Secondly, in terms of the mining efficiencies is in terms of our cost and then the mining productivity, mining rate and then how we leverage our existing equipment capacities to maximize the production. In terms of the resource, we want to look at sort of high-quality resources to support our production and then support our long-term sustainability of the operation. So the stability and then gradually improve our productivity. I think that's our focus.

Right. Okay. And then the second question was just in relation to Dugald River zinc mine.and understand that there's been some growth in copper resources at the site. Is there any time -- is that meaningful? And if it is meaningful, is there any time line around changes in mining activities to take advantage of that? And if there is -- will that require significant changes of capital for -- to the processing facilities?

Yes. Thank you. I'll continue to answer that question, Hagen. In terms of that were, the copper target was very significant for Dugald River as a zinc mine. So that really diversified our view from zinc. At this stage, we can see a high-grade core and then with some surrounding materials. So the geological feature is different from our zinc structure there. So we still need a fair bit of analysis to understand that particular target and the ore body. And then right now, so we'll do some background analysis and then also further drilling hopefully, in the near future, we'll bring that into our resource book. And then after that, there is a further studies and then look at what will be the best value proposition for Dugald and then maybe sort of some synergy between copper and zinc.

[Interpreted] Next question is from Miriam of Bank of America. Please go ahead.

[Interpreted] I am Miriam from Bank of America. Congratulations on your excellent results. from the perspective of cash flow, balance sheet and also profit, we have seen our growth I have several questions. First, for Las Bambas. In July, you talked about your operations, and you also discussed with us the guidance. So in the first half regarding copper production volume, it reached 52% for the whole year. And for C1 costs in the first half, it's 0.55. Now if we look into the second half and compare it with the first half for production volume, so do you think it will stay at the level in the first half? And then the next point is both Ferrobamba and Chalcobamba or would there be other factors that may affect production volume? And then for C1 cost, if we exclude the impact of byproduct cost. If we look at the other costs in the second half of the year, do you think you will be able to maintain the level in the first half of the year?

My second question is we have seen a very good growth on your part. So given that background, regarding inventory, So are you going to keep the 130,000 tonnes of reserve in 2028. And then for the Canada project, will there be further progressed?

My third question is regarding finances. Do you have plan for financing and for interest rate after this year and last year financing, financial interest expenses came down. So do you have any assessment of the room of decline in financial costs for the second half of the year.

My next question is about your hedging policy. How is it like -- looking at your cash flow statement, there is a hedging outflow of $220 million. So are you going to make adjustments to your future hedging policy?

[Interpreted] Thank you, Miriam, for your questions. You asked many questions. We'll answer them one by one. for us about operating cost of Las Bambas. We'll ask Mr. Zhao to take your question.

[Interpreted] Okay. Thank you for your questions. Regarding production volume, while production volume will go according to the grade of the mine and also other conditions. So in the first half of the year, our performance was better than expected in our budget will continue to maintain this current condition. As such as now, according to our mining sequence, there will be changes. This year, production volume will be maintained at 380,000 to 400,000 tonnes this range. We will try our best to work towards 400,000 tonnes?

Second question is about the 2 pits, Ferrobamba and Chalcobamba, the allocation of them. In the first half, Ferrobamba volume is bigger. Chalcobamba is of a lower volume. So byproduct volume is then better because Ferrobamba by-product grade is better. In the second half, we'll make adjustment slightly. So there will be more from Chalcobamba and less from Ferrobamba. But for the whole year, basically, they will be more or less the same. Chalcobamba, 52%; Ferrobamba, 48%. So when we look at the split between these pits, we do not look at the prevailing production. We will also look at future production. Every year, we will do a whole life cycle plan so that we can maximize the value of the whole mine.

The third question is about cost. In the first half, our cost was actually very good. Thanks to byproduct volume and our main product volume. In the first half, we maintained our guidance production volume. Overall speaking, so it is close to our newly reported cost. But of course, there will be some of the objectives and unforeseeable factors like commodity price. So we will make use of our own management to try our best to overcome cash flow pressure. So that's the above is my answer regarding Las Bambas.

[Interpreted] Regarding Khoemacau, the newly added resource volume and reserve, Mr. Nan, please.

[Interpreted] Thank you for your question. For Khoemacau, increase in volume. Now the major discovery in the quay area. For resource volume that we have announced, it is as of 30th of June, and exploration still continues in the Qube area. So right now, our foremost task is to reach production volume of 130,000 tonnes. And regarding Qube increase in resource, we have incorporated that into the 200,000 tons of research and research finding will be announced to the market in due course.

[Interpreted] Okay. Regarding the ISO Canada project, please?

[Interpreted] Yes. For the Canadian project, it is now in the exploration stage, referring to our strategy. We have a 3-year exploration plan. And now we are in the second year -- this year, there are some good discoveries, which are reflected in our resource and reserve report. Now when we continue to implement our exploration plan in the future, we believe that prospect is going to be quite good. But looking at the overall development conditions in that region, there is not sound infrastructure to support our development yet. So at this stage, our main focus is in the early-stage exploration so as to enhance the resource volume. And then by doing that, we hope to enhance the value of the project.

Thank you, Ms. Guan. Mr. Qian, about financing and hedging.

[Interpreted] We have already disclosed our company's net debt of only [ $600 million ] as of the end of the first half. So in the first half, we have operating cash flow of $2.2 billion. And then the very soon, we can achieve 0 debt because our cash generating capability is more than $300 million. But then the main source of funds will be from Las Bambas. Our internal structure is such that there are other expansion projects, including Khoemacau and also the future nickel Brazil, they need funds. So we need to provide funds for them from our headquarters. And looking at Lamb and also the parent company into the consolidated statements, there is the need for some time and process. In relation to corporate governance structure and legal and compliance. So now, when you look at the consolidated cash flow with adequate cash, it doesn't reflect our headquarters cash flow situation. So there is still the need for our process. So that's why we still have financing need.

Regarding the development projects, is still the need for input of funds in the future. And we'll do detailed assessment on our free cash flow to see whether it can support development or if the capital market is very good. For example, this time, we issued CB, a 0 interest rate and it is issued with -- at a premium. So this can improve our financial position, lower financial cost. And this is also good to shareholders benefit. So we will consider doing such financing.

In the second half, room for decline in financial cost where we have to take an overall view the financial statements, you can see some finance financial expenses. They will be more or less the same as the first half because we have the new $800 million CB issuance. So there will be some finance expenses in relation to provisioning, but that is not cash flow expense. It is only on the basis of financial arrangement.

And then last year, there are also some finance costs in relation to the CB issue, but there won't be cash outflow in the second half, there will only be USD 30 million to USD 50 million of cash outflow in finance expenses. But from a financial statement point of view, it may reach USD 150 million, but this has not been announced yet. So this is about financing and hedging, financing and finance costs.

Regarding hedging your observation is correct. We have $220 million of cash flow. But when it comes -- but this is -- but there is also cash outflow. So with our OCI assessment, we have made provision. So there won't be a big impact to this year's income and loss. Looking into the future, our company needs a stable operating cash flow guarantee. So we will go according to market changes and our own funding needs. We will do dynamic assessment whenever it is reasonable, we will maintain a certain degree of hedging. But our hedging policy has to be approved by the Board there is complete process and stringent restrictions. We have also to make complete information disclosure.

Thank you. So I don't know whether we have answered your questions, Miriam.

Yes, yes, your answers are very clear. I have no further questions. Thank you very much for your clear answers management.

Next question is from Yaoting Tu from Citic Securities.

[Interpreted] I am from Citic Securities. My name is Yaoting Tu. Congratulations on the record results in the first half of this year. I have 2 questions. First question is, just now, Mr. Zhao gave detailed explanation on Khoemacau. And this year, it is -- you explained the main discovery of the new quay area, which will be the main increase of resource reserve. And then this is 30,000 tonnes of there is 30,000 tonnes of current expansion and the 200,000 tonnes mentioned in your feasibility study, what is the impact on that? And what is the latest expansion plan just now. Mr. Chen this year regarding the mining sequence. So in the second half, Chalcobamba will account for more share. So byproduct reserve or quantity is smaller than Ferrobamba. So is it higher in grade. Regarding cost of Las Bambas in the second half of the year, is there any outlook?

Thank you for your question. First question will be taken by Mr. Nan Wang.

Yes. Thank you. Let me take your question on Qube discovery. For this discovery, for overall KCM and MMG's resource volume, it is highly meaningful because if you look at the total volume as of 30th of June, regarding the resource volume, it is slightly less than Zone 5, but exploration work is still continuing. So in the future, regarding resource volume, we will continue to report to the market.

Regarding the expansion support for the whole mine is volume is very large. So it is incorporated into the 200,000 tonnes of feasibility study. And for the 130,000 tonnes, basically, in the past, we had already reported on it. And for Qube, first of all, we need to do further exploration. And then it will be incorporated into the 200,000 tonnes of research scope for this 200,000 tonnes. So it is now progressing in order. And the next note will be at 18 months. Thank you.

On your second question yes, Chalcobamba grade is higher than Ferrobamba. However, our production is in an integrated way between the 2 pits. So when we start our work, we will first do a matching so that the grade will be within stable zone and then our recovery rate, well, as you know, we have 2x our grade and also our recovery rate. So these 3 metrics are all important. Our goal is to maintain grade in a stable range so that our recovery rate can be higher. Now we are at around [ 90 ]. So our production effect is good.

For Chalcobamba, it has more impurities for Ferrobamba impurities are less. And our milling and matching is to control the impurities and recovery rate. For the whole year, the 2 pits are in good percentage. So Chalcobamba, 52%; Ferrobamba, 48%. Production volume is going to be towards the upper range of our guidance. We will try our best to reach that.

Then regarding cost, in the first half, cost was very good, but in the second half, we expect -- that cost has been reduced a bit, but it is difficult to reach the level in the first half of the year. because there is diesel explosive, manual, repair expenses, these will increase. However, we will try our best to offset such increase. So I think the -- we'll work towards the cost estimate that we already announced to the market in relation to repair and maintenance.

[Interpreted] Next question is from Joy of GS, please.

[Interpreted] I am Joy from Goldman Sachs. I have 2 questions. First, about Las Bambas. So regarding its byproduct volume, in the first half this year, by product, no matter whether it's molybdenum or gold. So mainly molybdenum, comparing with second half of last year and overall last year in the first half, there is an increase on a half-on-half basis. In the second half, for molybdenum production volume, what will be its amount. So looking at operations, comparing with second half of last year, it remains flat and looking at mining from the 2 pits. I think it is going to be rather balanced for the whole year. So in the second half, for byproduct volume, is it going to be more or less the same as the first half?

Secondly, regarding Las Bambas, there is some copper inventory. So what is your plan of presale. So for acquisition of Nickel Brazil, in terms of progress, it seems to be slower than previously expected. So looking at a wider dimension in the future regarding M&A decisions, will it be affected by this delay in acquisition. So which area of acquisition will be your main focus in terms of future acquisitions.

[Interpreted] Thank you for your questions. First question will be taken by Mr. Chen. Next question by Ms. Qian.

[Interpreted] Okay. Thank you for your questions. In the second half, regarding byproduct production volume, in terms of mining sequence, it has been adjusted as compared with the first half. So molybdenum copper, gold volume is lower than Chalcobamba and also imperatives are more. So these are unfavorable factors. But by doing some matching and milling, we will solve the issue of impurities Besides we are continuing some technological innovation and optimization work in the first half. We started a series of work. For example, we separate copper and molybdenum. And also, we have updated some use of chemicals, and then we have created a new auxiliary selection column. These will help improve our recovery rate.

For Chalcobamba, there are some unfavorable factors, but with technological innovation achievements in the second half, by-product production volume will be more or less the same as our budget and estimates. So looking at our whole year announcement, you can make your judgment.

Regarding inventory, inventory is at normal level. So we have increased inventory and then, regarding delivery, it is in accordance with production, of course, there are some social factors impact, but our transportation capability can be adjusted. So there is room for adjustments within a certain range. If there is redundant amount, then we can also ship out later, but we have to look at the Latin American situation and also the shipment schedule overall speaking, I think our inventory is at normal level as of 30th of June. Inventory is 10,000 tonnes roughly at the port.

[Interpreted] Let me take your question about M&A. As you said, for Nickel Brazil, the EU approval took longer time than expected, and it actually exceeded our expectation. Given this overall large environment, we're now various countries have formulated their key metal policies. So geopolitics, have caused deeper, bigger impact to us. Now this is actually a risk. And so we have to manage such risk in a better way. At the same time, from a development point of view, we will also look at our current operation region. We will put the focus in the current region, mainly in Africa, Latin America and Australia. We already have mature operations there, and we have more operations there. We have experience with government relationships. So we have rich resources there as well. So they are our focus regions in business development.

Besides, we are making adjustment to our strategies. We will expand our scope of collaboration. We will try to identify more working partners. So that together, we can share geopolitical risk and business development risk. So by making adjustments to our strategies, we hope that we can better manage and navigate these risks.

[Interpreted] A follow-up. You talked about collaboration. So is it true that you are going to identify some working partners? Will they be foreign companies or Chinese companies. Will you insist on controlling the operation? Or will you just make equity investment?

[Interpreted] So we are quite flexible in this regard. We will not rule out Chinese companies or international mining companies as our working partners, there's no problem with that. So will we insist on having a controlling stake. We do not have a strict requirement on this. So our strategy is that we want to share our operation and development experience. So different types of equity structure can be considered. We are flexible, and we have an open mind on that.

[Interpreted] Next question is from [ Wang Xiao ] from Citic, please.

[Interpreted] Congratulations on your excellent first half results. So I am more concerned about your Congo mine. In the first half, results are very good, but then Industry policy changes are big. In relation to cobalt quota and also copper concentrate export and also some byproduct tax. So my question is, recently, given all these industrial policies in Congo, what impact are there on you? So how are you going to phase up to that? And then regarding future investment, what are your thoughts?

[Interpreted] Thank you for your question. We'll ask Mr. Xia to take your question.

[Interpreted] Thank you. for your questions. For Kinsevere, at present, our products copper and cobalt hydroxide. So regarding Congo's policies, on exports of copper gold mine and Cobalt gold mines, well, the downstream industry chain will be extended, but we were not affected by -- we will not be affected by this policy.

Regarding investment in Democratic Republic of Congo first will focus on exploration with our existing mining rights and also peripheral role exploration opportunities. So we are discussing with the authority to see whether there will be M&A opportunities around Kinsevere.

[Interpreted] Thank you. So I have a follow-up question. Regarding cobalt hydroxide project, it has been suspended for some time. So are there any ways for you to restart it? Given the cobalt policies, industrial policies of Congo, is there anything you can fight for?

[Interpreted] Now regarding the export quote system, it is still continuing. So can we start our cobalt production. It all depends on government policies. We have to see whether the quarter policy can be relaxed.

[Interpreted] Next question, [ Tianjin ] from Kayan Securities.

[Interpreted] Good morning management. I am Tianjin Tien from Kayan. Congratulations on your first half results. which are excellent. I have 2 questions. First, Mr. Chair. My question is about Las Bambas. What is the overall operating situation in the first half? Have you encountered road blockade.

And then in the second half of the year, after the new President to office, have there been problems and impacts on operations for Khoemacau. So your company has considered building a copper smelter in Botswana. So has there been any progress that you can share with us. If yes, then how much will be its CapEx timetable and related information, can you share more with us?

[Interpreted] Mr. Chen will take the first question. Mr. Xia will take the second question.

[Interpreted] Okay. As Mr. Zhao mentioned earlier, for Las Bambas in the first half of the year, our operations were very good. We exceeded our expectations on a number of metrics. Overall situation was quite good. You talked about road blockade or closure for same there was no road closure. But when it comes to our mine, it is as long as 700 kilometers long of land transport kilometers of land transport, it is in the southern corridor. There are many mines there. And we are the most in one.

So the road closures for other mines would also affect us. So in the first half, there was some time where there was road closure. But that was mainly related to transport ministry of the government and also some road repair in local communities. But road to closure, this did not last long, it's only within 1 week, and we will help to negotiate between the 2 sides and small path and smooth road overall speaking, was there and it did not impact our overall transportation in the first half.

Your second question is about the new president after he assumed position, looking at his speeches he seems to be friendly towards foreign investors in the private economy. Now we are making appointment with the relevant government departments so that we can report to them on the production and operation of Las Bambas. And we can also report to them about the importance of communities and economy of Peru. So then we will assess the overall government's attitude towards us. Overall speaking, we will continue to maintain the situation in the first half of the year so that there will be a relatively good external operating environment. We will rule out some exceptional factors because this year, there will be the super El Nino phenomenon. And we understand that -- this is a very big challenge to the new government. If they cannot handle, this Super El Nino phenomenon and also the problems arising from it, then there may be instability. And there will be some unstable impacts on -- or to our external operating environment. That's for me.

[Interpreted] Thank you for your question for Khoemacau. Are we going to build a smelter? Well, for Botswana government, they have some expectation on the construction of smelter by Khoemacau. Are we going to do that? Well, we have to do a feasibility study. Now we are working with the Queensland university. We commissioned them to do a feasibility study in Q3 and Q4. Before Q4, the study will be submitted to us. And together with the government, we hope that we can give them some sort of support. Thank you I hope I have answered your question.

Thank you, management. You have given very clear answers. I have no further questions.

[Operator Instructions].

[Interpreted] Because of time, we will conclude the Q&A session now. We will hand the floor back to Mr. Zhao.

[Interpreted] Thank you, everyone, for joining today's call. This concludes the meeting. If you have any further questions, please contact our IR team. Goodbye.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[Interpreted] Good day, everyone. Welcome to MMG's 2026 Second Quarter production report briefing. [Operator Instructions] Before we begin, please allow me to read the disclaimer for today's briefing. The contents of this meeting is intended solely for participating investors and analysts. The audio recording and transcript are provided for reference only. MMG has not authorized any third-party organization to distribute materials relating to this meeting. The company and its affiliates accept new liability for a loss arising from the reproduction, redistribution or use of any part all of the meeting content. Investment involves risk and investors should exercise caution and make their own assessment before making any investment decision.

I will now hand over to MMG's Chief of Staff,[indiscernible].

[Interpreted] Good day, investors and analysts, welcome to MMG's 2026 Second Quarter Production Report Briefing. We are joined today by members of the company's executive committee, including Mr. Jing Zhao, Chief Executive Officer and Executive Director; Mr. Qian Song, Chief Financial Officer and Executive Director; Mr. Troy Hey, Executive General Manager, Corporate Relations; Mr. Wang Nan, Chief Operating Officer, Ms. Juan Tianjin, Interim Executive General Manager, Commercial and Development; Mr. [indiscernible] President, Africa Operations; and Mr. Chen Carson, President of Las Bambas.

Today's briefing will consist of 2 parts. First, Mr. Zhao Jing, our CEO, will provide an overview of our second quarter operations. After the presentation, the management team will take questions from investors and analysts. The operator will explain the Q&A post after the presentation. With that, I will hand over to Mr. Zhao.

[Interpreted] Thank you, [indiscernible]. Good day, everyone. I'm pleased to provide an update on MMG's operating performance for the second quarter of 2026. Before discussing our operating results, I would like to begin with safety, which remains our highest priority. Safety remains the foundation of our operations and the responsibility on which will not compromise.

In Q2, the company recorded a total recordable injury frequency of 2.19 million hours worked and a significant event with energy exchange frequency of 0.82 per million hours worked, both higher than in the previous quarter. We are treating this seriously across all sites, we're strengthening proactive reporting, reinforcing critical risk controls and increasing focus on contractor management and frontline supervision. We remain committed to improving safety performance and ensuring every employee returns so safely.

Turning to operating performance. In Q2, the company made steady progress in stabilizing production, improving efficiency, optimizing costs, advancing key projects and strengthening capital management. MMG's total copper production reached approximately 138,000 tonnes, while zinc production totaled around 56,000 tonnes, both remaining broadly in line with the same period last year. Byproduct output increased strongly with silver production up 13% year-on-year to 2.826 million ounces. Molybdenum up 35% to 955 tonnes, gold production reaching 28,000 ounces. Stable core production, together with stronger byproduct performance demonstrates the resilience of our asset base and the benefits of a diversified production mix.

Against the stable production spectrum, our sites continue to improve cost, while key Growth projects progressed in an orderly manner. I will now review the performance of our core assets, starting with Las Bambas copper business. Las Bambas continues to reinforce its position as a large-scale, low-cost copper operation and remains a key contributor to MMG's cash flow and earnings. In Q2, Las Bambas produced 109,000 tonnes of copper in concentrate, 8% higher quarter-on-quarter, but 5% lower year-on-year. All grade and recovery remained healthy, supporting a solid production base. Notably, Las Bambas business now sustained stable operations for more than 3 consecutive years. During the second quarter, logistics and concentrate transportation were relatively smooth with no major disruptions.

First half payable copper sales reached 213,000 tonnes, up 12% year-on-year, underscoring the operations reliability and the effective execution of our logistics system. On community relations, the company continued constructive engagement with local governments and communities supporting regional development and strengthening the basis for long-term cooperation. These efforts continue to foster a supportive environment for sustained mine operations. Following a solid first half performance Las Bambas is well positioned to reach the upper end of this full year production guidance copper. Cost performance was also strong. First half C1 costs were USD 0.55 per pound, placing Las Bambas in the first quintile of the global cost curve based on publicly available industry data. Reflecting this performance, the company has lowered full year C1 cost guidance to USD 0.85 to USD 1.05 per pound.

Overall, the most significant changes at Las Bambas in recent years are not only reflected in production and cost performance, but also in continuous improvement in operational quality and asset resilience. After years of effort, the mine has achieved over 3 consecutive years of stable operations with stronger community relations, more mature logistics system and significantly enhanced operational certainty. As the high core quality core asset and a strong source of cash flow for the company Las Bambas not only provide solid support for current performance also lays a strong foundation for advancing the company's growth strategy. Optimizing capital allocation and enhancing shareholder returns is the key pillar in ensuring the company's fundamental stability navigating through cycles and achieving long-term value creation.

Turning to Kinsevere, copper production in Q2 was close to 17,000 tonnes, a 24% year-on-year growth and demonstrating strong operating momentum. Sulfide processing project continued to ramp up with benefits becoming increasingly visible. In Q2, all processed by the sulfide concentrator increased year-on-year, providing stable source of new copper concentrate feed for the roasting and exit plant system. Looking to the second half, continued mining and pushback activities at the Central and Mashi pits are expected to further improve head grades, supporting capacity ramp-up and stronger site performance. Overall, the Kinsevere expansion is gradually entering the value realization phase. We expect to support this year's production growth and cost improvement targets while contributing meaningful incremental copper output for the company.

Next, Khoemacau. Khoemacau is the key driver of MMG's medium- to long-term production growth. In the second quarter, Khoemacau produced 11,000 tonnes of copper in concentrate, broadly in line with the same period last year. and 7% higher quarter-on-quarter. All processed was lower due to earlier delays in development mining and equipment supply. As new equipment is progressively commissioned and development work continues ore availability is expected to improve in Q2 or in the second half. Mining has also advanced into the higher-grade Zone 5 area. During the quarter, head grade remained above 1.6% and concentrate recovery stayed above 88%, providing solid support for production. Cost performance continued to improve. First half actual C1 costs were USD 1.25 per pound. Reflecting this performance, the company has lowered full year cost guidance to USD 1.722 per pound while maintaining production guidance at 48,000 to 53,000 tonnes.

Expansion work is progressing as planned. First, copper concentrate from Phase 2 is expected in the first half of 2018. Once completed, annual production capacity expected to rise from approximately 50,000 tonnes today to 130,000 tonnes. While life of mine average C1 costs are expected to fall below USD 1.6 per pound. In parallel, the company has started the pre-feasibility study for Phase 3, which targets annual production of 200,000 tonnes and will further expand the as long-term growth potential.

In summary, each of our 3 copper mines plays a distinct and vital role. Las Bambas provide stable cash flow, Kinsevere is starting to unlock the value of its expansion and Khoemacau offers substantial future growth potential. Together, these core copper assets are driving sustained growth in production positioning MMG to steadily advance towards a strategic goal of becoming 1 of the world's top 10 copper producers.

Turning now to zinc business. Do go River. In Q2, Dugald River produced 46,000 tonnes of zinc in concentrate, up 6% year-on-year. with concentrator recovery consistently above 90%. Mining and processing activities were broadly in line with plan, operations remained stable. As the impact of first quarter weather events or logistics gradually eased, concentrate transportation and shipments normalized in Q2, previously accumulated inventory was released effectively and quarterly sales exceeded production. Higher grades and improved recovery also drove strong by-product performance with lead and silver production increasing 53% and 63% year-on-year, respectively, further strengthening the mine's earnings contribution for the full year, Dugald River remains on track to produce 170,000 to 180,000 tonnes of zinc in concentrate. On cost, stronger silver prices, higher lead and silver output and lower zinc treatment charges supported the first half actual C1 cost of USD 0.6 per pound of zinc well below the full year guidance range of USD 0.8 to USD 0.95 per pound. The company will continue to monitor silver prices and adjust full year cost guidance as appropriate.

Turning to Rosebery. Rosebery continues to benefit from its polymetallic resource base. Second quarter zinc equivalent production reached 34,000 tonnes, up 7% quarter-on-quarter. Zinc output was lower year-on-year due to mine sequencing, but the sites continued to optimize product mix and by-product value through its zinc equivalent production strategy. Higher precious metal grades also supported strong byproduct performance with silver and gold production increasing 36% and 9% year-on-year, respectively. Higher precious metal output and stronger prices supported first half actual C1 costs of negative USD 2.23 per pound of zinc. Reflecting this performance, the company has lowered full year cost guidance from negative USD 0.6 to negative USD 0.1 per pound to negative USD 1.5 to negative USD 1 per pound.

With continued contribution from precious metals, Rosebery remains on track to achieve full year zinc equivalent production of 125,000 to 140,000 tons. Overall, Dugald River continues to deliver stable operations and cost advantages, while Rosebery is realizing further value from polymetallic exposure. Together, the 2 zinc mines provide resilient cash flow and support the company's profitability and cost competitiveness. Now I would like to briefly discuss the company's recent corporate developments. During Q2, the company achieved a significant milestone in the capital markets. In June 2026, with strong investor support, completed a new share placement and issued 0 coupon convertible bonds at premium, raising approximately USD 1.6 billion in net proceeds.

Despite the challenging market environment, the transaction was well oversubscribed, reflecting investor confidence in the company's strong fundamentals and promising growth outlook. The proceeds from this transaction will primarily be used to repay higher cost debt and support expansion at our core mines, whilst also building up our financial capacity for future growth initiatives. The capital raise allowed us to reduce our interest expense, increase cash flows and provide us with greater flexibility in how we execute our organic growth expansion. As a result, the company's financial resilience has been significantly strengthened, laying more solid foundation for future growth. However, funding is only the enabler to a clear and actionable growth strategy. Looking ahead, our priorities are centered on 3 key areas: operational improvement, project delivery and resource growth.

MMG will account for the majority of Min Metals announced 1 million tons of annual copper production by 2030. This production target will be driven by 3 key factors: ongoing optimization of existing operations, capacity expansions from projects currently under construction and the development of untapped resource potential in regions like Botswana. Each of these drivers is supported by well-defined projects, ensuring that our growth is firmly rooted in execution rather than mere ambition. We're also focused on positioning the company for long-term success. The value of a mining company is driven not only by its current production but also by the resources it secures for the future. As such, we'll continue to intensify exploration efforts and actively assess external M&A opportunities to support sustained long-term growth.

In summary, our goal is to maximize the value of our existing assets while laying a solid foundation for future expansion. Thank you. This concludes my presentation. Next, we'll address any questions you may have and engage in further discussion. I will hand back to the operator to begin the Q&A session.

[Interpreted][Operator Instructions] Jack from Citi, please.

[Interpreted] Okay. I am Jack from Citi. First of all, congratulations on the very good operating results during the first half Mr. Mr. [indiscernible], I have 4 questions. First question, I'll go through the questions 1 by one. The 1 -- the first is about Las Bambas. In the first half, production volume exceeded expectation. So my question is, in the second half, do you think production volume can be kept at the first half level? So that is the very simple question. You will expect that for the whole year. For the whole year production volume, will that be the possibility of upward adjustment? Second question also about Las Bambas. So according to our understanding, the company had achieved quite low C1 cost. To a large extent, this is because of byproducts and price. Apart from that, are there other factors? Because in the first half, operating price had declined a bit. Actually, the decline is quite apparent. So apart from that factor, are there other operating factors so that the Las Bambas cost is kept at low level. So these are the questions about Las Bambas.

[Interpreted] Okay. Thank you, Jack, for your questions. We will ask Mr. Chen to answer the question, please.

[Interpreted] Okay. Thank you, Jack, for the question. So for production volume, well, for our production volume, so it is based on the mining, sequencing, mining ore grade and also nature of the ore, so that will be volatility. So we have to continue to optimize our oil processing, mining and also equipment, the synergy, coordination among different equipment in order to maintain this level. In the second half, our volume, as Mr. Zhao said just now, will be maintained as our guidance. However, we will try our best to achieve the upper range of the guidance. Secondly, regarding cost control, your observation is very detailed. Operating price showed volatility but our costs performed very well.

The main reason is that in our daily work, we have reinforced our control of production cost and we have achieved some good results. Looking into the future, cost control will continue to be stable. There will be also some impacts from diesel. However, the impact is not big. So with diesel suppliers, we have negotiated on a new price mechanism. So the main purpose is to achieve risk sharing and also benefit sharing. So we want to be able to truly reflect changes in the market. So as just said, we want to be able to lower our C1 cost.

[Interpreted] My second question is about Kinsevere. So we realized that in Q2 cost on a quarter-on-quarter basis rose. What are the reasons behind? Is it because of the cost of silver, which has risen -- so for Kinsevere in the second half, what would be the cost trend, please? And in Kinsevere, when it comes to energy and sulfur, sulfate costs, how will it be?

[Interpreted] So okay, we will ask Mr. Qian to take the question.

[Interpreted] Okay. Thank you, investor. Thank you. So for Kinsevere in the first half, C1 cost was 2.96 million. So in Q2, comparing with Q1, costs had risen. This is mainly because of cost increase of sulfate and diesel. However, for the whole year cost guidance will be within USD 25 to USD 2.9 per pound. So in the second half, when we ramp up and production volume increases, our cost will come down. Regarding sulfate and diesel, well, there will be some impact to cost but not a big impact. So in Q2, for stability of electricity, well, grid power can reach 90%, diesel power generation, 10%. So in other words, the use of diesel does not cause a big impact to us. At the same time, when they come to -- when it comes to sulfuric acid. So when our roasting and also plants ramped up, then that would also be bigger production volume. Production volume every day is risen. So after that, our self-produced sulfuric acid can supply for like 50% to 80% of our need. So it can be digested ourselves. So only 20% will have to be bought from the market. So overall cost impact is not very big.

Third question, Troy. I will ask in English.

So Troy, can you give us an update on the Peruvian presidential election and its potential impact on operations at Las Bambas, please.

Thanks for the question, Jack. We have the new president inaugurated on the 28th of July, which is Peru Independence Day. And so -- we're looking forward to working with the new government. But as always, it's last couple of years, as Eva said, the last 3 years have been very successful in terms of operation and stability and that has been through what was a difficult time politically in Peru. We're seeing a much more stable period ahead in terms of the new Fuji mura government. We will continue to work with communities, with government. We are in very active negotiations with a number of the communities logistics, beside from some regular kind of day-to-day challenges have generally been working very, very well and we see the stability of the Peruvian landscape probably being slightly better than it has been previous years. But also there are many challenges ahead for us to manage. I think the important thing for us is that over the last 10 years or so, which has been 1 of the more difficult times in terms of Peruvian stability. We've continued to operate very well. And so we're looking ahead, we're very confident we have build relationships with the new ministry, which will be announced soon, and we look forward to continuing in other couple of years of very stable operations at Las Bambas.

Great work at Las Bambas. My last question is also regarding to -- my last question is regarding the progress on the Brazilian nickel asset acquisition. Can you also give us an update on that? .

[Interpreted] We will ask Ms. Guan to take this question.

[Interpreted] Okay. Jack, regarding Nickel Brazil acquisition. Now we are in the process of getting euro-US approval. well, the transaction data has been extended to 31st October up to now. The documents required by EU had already been submitted. So we hope that EU can very quickly start approval of the project. And we hope that within the year, this deal or transaction can be closed.

[Interpreted] Lawrence of BOCI.

[Interpreted] Mr. Zhao, I have a question, so looking at Las Bambas, in Q2, precious metal byproduct production volume is significantly lower than in Q1. So why is that so? In the future, so for example, this year and thereafter, when it comes to precious metal byproduct from this mine, how will it be?

[Interpreted] Okay. Lawrence, thank you for your question. Let me take your question. Regarding the decline in operation quality, it is mainly because of mining sequencing and also structure of processed ore. So we have Ferrobamba and Chalcobamba in Q2, and then the or processed volume is lower than in Q1. For Ferrobamba, the grade of operation is higher. So as a result, the overall operating quality has come down from the previous quarter. Now we are talking about byproducts, they are not the main products. So the production volume is based on our processing or mining sequencing and also the ore grade and so on. Because of these changes, these are within normal range, there are fluctuations within certain stage, and it doesn't represent a long-term trend. I hope I have answered your question.

[Interpreted] Okay. Chris from Balyasny.

[Interpreted] Congratulations on your very good results. My question is about Dugald River. The copper discovery in early July, so you issued an announcement saying that in Q3, you would do some drilling and excavation works. So if the result is positive, then subsequently, what steps will you take? And how long will it take before it can start operation.

[Interpreted] Thank you for your questions. I'll ask Mr. Wang to take the question.

[Interpreted] Thank you, Chris, for your questions. For the rural discovery of copper -- so for Dugald River and MMG, it is very favorable and positive as a discovery. At present, our next step work is to drill more holes do more drilling, and we have to assess the overall mine. And the next step is that we have to look at the joke standards and requirements and we hope that we can upgrade the resource amount. So our next step is to do exploration and to do more drilling on site. And you ask when can production start? Well, after the whole drilling is done, then we will do geological analysis and also we will assess the ore or the mine itself, and this will take some time. But from discovery to information that we have right now, concerning do got River, I think this is a very positive discovery from a strategic point of view.

[Interpreted] Okay, [indiscernible], please?

[Interpreted] I am from CICC, [indiscernible]. So first of all, congratulations on your good performance in Q2. I have 2 questions. First, Las Bambas. So I have a more specific question about the 2 pits in Las Bambas in Q2 or in the first half, -- what is the actual configuration or allocation? So is it going to be 50 to 50 guidance and then in Q1 for copper sales volume in Las Bambas, what is the reason that it is below production volume? That's my first question. Second question about Kinsevere. So what is the fixed cost of recovery? And then how much is the increase comparing with the pre Middle East crisis. And then what is the windfall profit tax guideline. It is about the copper price is almost like 14,000, right? These are my 2 questions.

[Interpreted] Okay. Thank you. We'll ask Mr. Qian to take your first question. Second question will be taken by Mr. Xia and let's see whether there will be a supplement later. Thank you.

Okay. Thank you for your questions. For Chalcobamba and Ferrobamba pit, so in Q2, from Ferrobamba 56% is the ratio, Chalcobamba, 44%. That's the mining ratio. In the second half, there will be a change. So there will be more from Chalcobamba, but basically, the ratio will be around 50 to 50. From Ferrobamba there will be a bit more, but not too much, not a lot more. And secondly, for Q2, sales volume being lower on a quarter-on-quarter basis, that is because in Q1, some concentrate sales was affected last year by harbor-related reason. And so in Q2, we followed our production volume to sell.

[Interpreted] Regarding your second question for Kinsevere, electricity consumption. Just now we mentioned that in Q2, 90% of electricity is from the power grid, the price is around 1.2 to 1.3. And then for the diesel generation about 10% in Q2 there was impact from the Middle East war and diesel price was doubled from 1 point something to USD 2.43 per liter. So overall, regarding diesel generation power from diesel generation, the cost is doubled. But the share of it was quite low out of our total cost. So its impact to the overall cost, it's not very big.

[Interpreted] And regarding windfall profit tax based on our internal team calculation and our communication, it will not checker any excess tax excess profit tax.

[Interpreted] Okay. Next one. 141, please. Can you please state your name and your organization. You can speak now. Thank you.

[Interpreted] My question is -- so you have already raised USD 1.6 billion. So within the year, would there be other acquisition plan? I heard something about Africa, a plan about Africa. So is it going to be finalized within the year?

[Interpreted] Thank you for your question. Well, just now, we talked about the USD 1.6 billion and the major use of proceeds. So you can continue to stay tuned. If there is anything that needs to be disclosed or acquisition plan, so we will make disclosure duly.

[Interpreted] [Operator Instructions] Thank you. Leaders, There are no questions online. So now we'll pass the floor back to our CEO, Mr. Zhao.

Okay. Thank you for spending time with us to join this meeting. So we will end the call here. If you have further questions, please contact our IR team. Thank you.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[Interpreted] Welcome to MMG Limited's First Quarter 2026 Production Results Conference Call.

Before we begin, please allow me to read the safe harbor statement. The information presented in this call is intended solely for the participating investors and analysts. The audio recording and written transcript are for reference purposes only. MMG has not authorized any third party to distribute the content of this call. The company and its affiliates assume no responsibility or liability of any kind for any loss arising from the republication, redistribution or use of any part or all of the content of this call.

We would also like to remind you that market conditions involve risks and investment decisions should be made with due caution.

So now I will pass the time to our management.

[Interpreted] Good day, everyone. Welcome to MMG Limited's First Quarter 2026 Production Results Conference Call. Joining us today are members of the company's senior management team, including Mr. Zhao Jing Ivo, Chief Executive Officer and Executive Director; Mr. Qian Song, Chief Financial Officer and Executive Director; Mr. Troy Hey, Executive General Manager, Corporate Relations; Mr. Wang Nan, Chief Operating Officer; Ms. Guan Xiangjun Sandra, Interim Executive General Manager, Commercial and Development; Mr. Xia Weiquan, President of Africa Operations; and Mr. Chen Xuesong, President of Las Bambas.

I will now hand over to Mr. Zhao Jing Ivo, who will walk you through the company's operating highlights for the first quarter. Following the presentation, the management team will be pleased to take your questions. The moderator will announce the Q&A instructions after the presentation. So Mr. Zhao, please go ahead.

[Interpreted] Thank you, Godfrey. Good morning, good afternoon, everyone. I'm pleased to share an update on MMG's operational performance for Q1 2026. Safety comes first in everything we do. It is a core principle that guides all of our operations.

Before turning to our operational highlights, let me briefly touch on our safety performance. In Q1 2026, MMG saw further improvement in safety performance. The total recordable injury frequency was 1.85 per million hours worked. Significant Events with Energy Exchange Frequency was 0.34 per million hours worked. Both metrics improved from the previous quarter, providing a solid foundation for stable operations throughout the period.

During the first quarter, we made steady progress across production growth, cost control, project development and sales. Overall, our results were in line with expectations.

Let me now walk you through 5 key highlights.

First highlight, copper growth, zinc resilience, precious metals uplift. In the first quarter, our total copper production reached nearly 130,000 tonnes, up 9% year-on-year. Las Bambas produced over 100,000 tonnes of copper in concentrate, a 6% increase with mill recovery improving to 89.5%. Kinsevere delivered nearly 17,000 tonnes of copper cathode, up 44% year-on-year as the sulphide expansion project continued to ramp up. Khoemacau produced nearly 11,000 tonnes of copper in concentrate, broadly flat compared to the same period last year.

Turning to zinc. Our 2 Australian operations continue to demonstrate resilience. Total zinc production for the quarter was about 50,000 tonnes. Dugald River delivered over 40,000 tonnes of zinc in concentrate, up 1% year-on-year with recovery rates remaining above 90%. And Rosebery produced about 9,000 tonnes of zinc in concentrate, while zinc equivalent production exceeded 31,000 tonnes, up 8% year-on-year.

In terms of by-product precious metals, gold production exceeded 32,000 ounces up 24% year-on-year. And silver production reached approximately 2.9 million ounces, up 27% year-on-year. The increase in precious metals production continue to have the positive impact on our financial performance.

Second highlight, C1 cost speeds guidance across the board. Higher byproduct credits from strong precious metal prices, together with continued operational efficiency improvements drove a reduction in actual C1 cost during the quarter.

Las Bambas reported a C1 cost of USD 0.45 per pound of copper, well below the full year guidance range of USD 1.2 to USD 1.4 per pound. Khoemacau delivered USD 1.25 per pound below the guidance range of USD 2 to USD 2.3 per pound. Kinsevere came in at USD 2.69 per pound, in line with full year expectations. Dugald River reported USD 0.77 per pound of zinc, below the guidance range of USD 0.80 to USD 0.95 per pound.

Rosebery reported negative USD 1.8 per pound of zinc, outperforming the guidance range of negative USD 0.6 to negative USD 0.1 per pound. Should precious metal prices remain at current levels, where we assess our full year C1 cost guidance across relevant operations taking into account all production metrics and provide updates and subsequent reports.

Certain highlight our operations held firm despite the complex external landscape. Las Bambas, our flagship asset, took proactive steps ahead of Peru's election year. During the first quarter, the mine maintained stable performance across production, community relations and logistics providing solid support to the company's overall results.

On production front, Las Bambas delivered over 100,000 tonnes of copper in copper concentrate, laying a strong foundation for the full year target of 400,000 tonnes. On sales, thanks to the drawdown of port inventories and stable road logistics, payable copper sold, we reached about 120,000 tonnes in third quarter, significantly exceeding production for the period.

On community relations, the Corazon de Las Bambas initiative continued to deepen, helping the mine achieve nearly 3 years of stable operations, the longest such period in the mine's history.

Through the work for taxes mechanism, the mine continued to support local public infrastructure, including education projects, further strengthening community trust. Recently, Las Bambas and the local government of Apurimac formally signed an agreement for the improvement of the educational services of the Erasmo Delgado Vivanco comprehensive educational institution project with total investment of over PEN 30 million.

The project will directly benefit 548 local students. It plans to build 22 new classrooms and library and other supporting facilities, equip them with modern teaching materials and furniture and introduce teaching training programs systematically improving both teaching conditions and quality.

In light of the unique external environment around this year's Peruvian general election, we'll continue to closely monitor local political and social development, maintain proactive engagement with communities and government authorities and take appropriate steps to ensure operational continuity and achievement of our full year production targets.

Fourth highlight, Khoemacau drives operational improvements and advances expansion, strengthening long-term foundation. As activities progress to the northern part of Zone 5, Khoemacau's ore mill grade improved to 1.63% in Q1. However, ore supply was constrained during the quarter due to lower than planned mining contractor equipment availability and mining sequence.

With new equipment arriving in March, development advance reached 1,400 meters for the month, and we expect ore supply to gradually increase in the coming quarters.

On Phase 2 expansion, the company held a groundbreaking ceremony in February. Key long-lead equipment has arrived on site and early works, including camp construction, road development, land acquisition and recruitment are already underway. Construction of the new process plant is progressing as planned with first concentrate expected in the first half of 2028.

Upon completion of Phase 2 project, Khoemacau's annual copper capacity will increase from approximately 50,000 tonnes to 130,000 tonnes with associated sulfur output exceeding 4 million ounces per year. The mine's life-of-mine average C1 cost is expected to fall below USD 1.6 per pound of copper.

In addition, the company has already initiated a pre-feasibility study for Phase 3, targeting 200,000 tonnes per annum. Khoemacau is one of MMG's core growth engines over the next 5 years with a clear project time line and well-defined cost target, it will provide strong support for the company's sustainable growth.

Fifth highlight, market tailwinds supported margins and profitability. Although metal prices experienced some volatility during the first quarter, they remain elevated overall, providing strong support to the company's profitability and further highlighting the value advantage of our mining assets.

Among base metals, the LME copper price averaged USD 12,800 per tonne. Copper concentrate supply remains tight with spot treatment and refining charges averaging negative USD 79.5 per tonne. This trend allows mine site to capture greater value, which benefits our copper business directly.

Meanwhile, the average zinc price was USD 3,240 per tonne and spot zinc. TC/RCs fell to near 0, providing a favorable environment for our zinc operations.

On precious metals, prices remained elevated with gold averaging USD 4,875 per ounce, and silver averaging USD 84 per ounce. The strong precious metals prices not only helped lower C1 cost across our mines, but also directly contributed to higher earnings. Our stable operations combined with favorable market prices have further highlighted the value of our asset portfolio and put us on a solid footing to achieve our full year target.

Overall, MMG made steady progress across all key areas in first quarter of 2026, operational results at each of our mines met and exceeded expectations, laying a solid foundation for the full year. Going forward, our work will remain focused on 4 key areas.

First, continuing to strengthen safety management to safeguard our operations. Second, steady advancing the Khoemacau expansion project to reinforce medium to long-term growth. Third, continuously optimizing cost structure to enhance core competitiveness. Fourth, maintaining stable operations across production, community engagement and logistics at all times, consolidating performance and mitigating operational risk.

In closing, I would like to express my sincere gratitude to all MMG employees for their hard work and to our investors for your continued trust and support. That concludes my remarks. My colleagues and I would now be happy to take your questions. Moderator, please open the floor for Q&A. Thank you.

[Interpreted][Operator Instructions]

[Interpreted] I have several questions. First question is about Las Bambas. So in the first quarter, the share of copper concentrate is actually higher in the overall copper volume. So it has risen as compared to the past quarters, I would like to know what is the reason behind? And will this be sustainable in the coming period?

And then the second question is for gold and silver, production volume has risen and the rise is actually bigger than the growth in copper volume. So will this last in the coming period? Or is it only for this period that there is a higher volume for precious metals?

The third question is about Kinsevere. In the first quarter, there was no sale of cobalt. So what is the company's plan on that?

Fourth question, regarding Khoemacau. In the first quarter, the sale of copper sales volume is smaller than production volume. What is the reason behind that?

[Interpreted] Let me answer the first question concerning the concentration of copper concentrate. Well, first of all, because in the first quarter, well, 70% of the copper was taken from Ferrobamba and only 30% from Chalcobamba. And for Ferrobamba mine, because of the proposition of the copper extracted, well, there is a higher concentration of copper concentrate as a result. And also the quality of the copper is also higher. So that's the situation regarding Ferrobamba. Besides, we have also enhanced our milling and processing arrangement and process. So as a result, the overall grade has also been enhanced.

[Interpreted] Now let me answer your question about sale of cobalt. In fact, we have already started the sales process of cobalt. However, within the territory of Congo, the logistics route is relatively longer. And when it comes to cobalt sales, actually, it is taking place within the territory of Congo. And according to the arrangements and process, in April, we're going to upload the Congo -- upload the cobalt onto the vessels. And when the cobalt is uploaded to the vessels, then sale will be recognized in the books. So you will be able to see the sale of cobalt in our financial statements starting the second quarter.

[Interpreted] Then the next question is about Khoemacau. So why is it that the sales volume of copper is lower than the production volume?

[Interpreted] Well, this is because of a change of the sales conditions this year. As a result, some of the products are still on the route, on transit. So we are now catching up in terms of the sales rhythms. And very soon, we will be able to see the volume of sales catching up with production volume.

[Interpreted] Just now you -- the difference in composition of the mine between Ferrobamba and Chalcobamba of Las Bambas. So this year, for the whole year, do you have the mine composition of these 2 mines, please.

[Interpreted] This year, for the whole year, the breakdown is like this. Ferrobamba, it is 56%, Chalcobamba, 44%. So as a result, in the first quarter, as I mentioned earlier, the share of Ferrobamba is bigger than Chalcobamba. And as a result, the production volume of both silver and gold has increased. At the same time, the grade of the copper also improved. Right now, it is roughly at a 50-50 proportion.

So my first question is for Troy about the Peruvian presidential elections and Las Bambas. So let me use English to us directly. From the perspective of Corporate Relations, I would like to ask Troy, do you have any latest updates on the Peruvian presidential election? And how to assess whether the election would affect Las Bambas operation. This is my first question, and I will ask one by one.

[Interpreted] First of all, congratulations on your very good results. And you have also done a good job in relation to C1 costs. Actually, your results have exceeded expectations.

Thank you for the questions. Let me just take a step back. The elections were something we were looking out to from late last year. We have set the site up very well to deal with any disruptions. And so far, the result has been very good. The site continues to operate. We have no significant disruptions from the current election process.

The process itself has gone through the first round. There has been some intellectual difficulties and that count will take longer. But I think most people are expecting that there will be a runoff election somewhere in around the 7th of June.

I'm sorry, sir. Can you move closer to the microphone? Because your line is very blurred. I cannot hear you clearly.

Sure. Is that any better?

Yes, it is now much better. Can you repeat your answer?

Sure. So we have -- thus far, we have seen no significant impact from the election process on Las Bambas operations. But very much we're watching the development of election closely. The first round has been held due to some electoral difficulties. It's -- we don't have an outcome, but we expect that somewhere in mid-May, and that will most likely lead to a follow-up election runoff in about June 7.

The focus on Las Bambas is very much on making sure we are prepared for any delays that may come. But I think so far, we have been not seen any impact and also to work with whichever new government forms. The experience we've had since 2014 is that even when there are periods of significant uncertainty or disruption according because of political change, the institutions of Peru are strong.

Our relationships are well developed and they're increasingly strong, working, understanding with communities means that especially over the last 3 years, we have had largely uninterrupted operations at Las Bambas and including keeping our logistics chain open and our [indiscernible] flowing.

So we see this election continuing through midyear. We are working really hard to prepare for anything that might happen. But so far, so good. And we hope that the election delivers a clear outcome, and we believe in Peru to return to a period of more stable political leadership.

But just to your question, even there, there has been times of political uncertainty, I think Las Bambas has shown its ability to work very closely with the government and Peru has shown the strength of institutions that have kept the mining from industry over. So thanks for the question.

[Interpreted] My second question is related to Las Bambas C1 cost. In the first quarter, the C1 cost was low. And then in the first quarter, behind this low C1 cost, was there some one-off factor? And in the future, will there be other one-off factors contributing to the low C1 cost?

And also in C1 costs, well, some factors are related to byproducts. So basically, in the first quarter, production volume is in line with expectation, and we believe that if production volume is going to continue for the full year in this similar pattern, then the numbers will be within expectation.

So I would like to know what will be the overall situation and your projection in relation to the volume as well as the byproducts.

[Interpreted] My answer is your analysis is correct. In the first quarter, apart from the price of byproducts, there was no other factor affecting C1 cost.

[Interpreted] Then in the coming quarters, will there be other one-off factors or events that may affect the C1 cost apart from this impact in relation to byproducts?

[Interpreted] I believe you are asking about the employee or staff profit sharing arrangement. Well, there is no impact from this on C1 cost. So my conclusion is that there is no other factor that may cause an impact on C1 cost.

[Interpreted] My last question is now that there is a conflict in the Middle East and oil price has risen, and there is also a shortage in diesel. So with the cost increase, will that affect your mine operations? At the same time, how is the diesel supply situation, please?

[Interpreted] So let me comment, first of all, on the security of diesel supply. Well, in the near-term period, we don't see any risk arising from diesel supply, but we will continue to watch the situation in the Middle East. And then there is also the fuel price situation. So recently, there was quite big international volatility in fuel price. But when it comes to the share of oil consumption or oil-related consumption in our overall metrics, well, of course, there is some price impact.

However, because the overall share of oil consumption in our total matrix is relatively small. For instance, in the low-priced products, the share is only 2% to 3%. And in other different products, its share is also only 10% to 11%. So overall speaking, its share in percentage is rather small in our overall total. So the impact as a result is also small to us.

[Interpreted] Miriam Chan of Bank of America.

[Interpreted] Congratulations on your very good first quarter results. First question is about Las Bambas. In the first quarter, copper sales volume is bigger than production volume. So this is because of a decline in port inventory. Right now, how much is the situation regarding cost inventory? In the future, are you going to see sales volume gradually be more or less the same as production volume?

Second question is about Kinsevere. So regarding the supply of sulphide and also procurement of sulphide. Now that the Middle East conflict situation is continuing. So in the future, will there be impact on your copper production volume arising from sulphide supply and sulphide procurement? And how much is the share of sulphide costs? How is the cost sensitivity in this regard?

The third question is about Khoemacau. In the first quarter, there was some restriction in relation to the use of contractor equipment. So how is the situation now in the second quarter? Do you think that your production volume can gradually pick up, as you said earlier?

[Interpreted] Let me answer your first two questions. For the first question, it is about the sales of copper at Las Bambas. In the first quarter, it is true that sales volume is bigger than production volume. That is because of the inventory at the port. So -- but then gradually in the first quarter, it has been digested in relation to the port inventory.

And so in the second quarter, we expect that the sales volume will gradually be more or less the same with production volume. But there will be a time gap for sales volumes to gradually move to the same level as production volume. And so as a result, there would be a small amount of inventory remaining, this is a normal situation about inventory. So we don't see that there will be a big difference between production volume and sales volume.

The second question is about Kinsevere and also sulphide. Well, it is true that sulphide would cause a big impact to our Kinsevere operations. However, we have already gradually built up our own capability in terms of sulphide consumption.

So as a result, right now, with our self-supporting capability, we're able to satisfy 75% of our use of sulphide and consumption amount of sulphide. So the sulphide supply and sulphide price will only cause limited impact on our costs.

Of course, if there is an increase in sulphide price, there will still be some impact on us. However, we already have some sulfur inventory, and we are talking with the suppliers to try to make sure that we can actually stabilize the sulphide supply so that we can minimize the impact on our overall operations.

[Interpreted] Regarding Khoemacau production volume, it is true that in the first quarter, it has been impacted by equipment availability as a result, production volume [indiscernible]. In April, we had already seen the equipment coming to place for mining. So as a result, production volume has started to pick up.

In the second quarter, we believe that there would be an increase in production volume of copper concentrates. So it will be subject to the availability of the equipment. But overall speaking, the trend is an upward one.

[Foreign Language]

[Interpreted] First of all, congratulations about last night's report on QPR, which is bigger than expectation, it's very good. My first question is in relation to C1 costs in the third quarter. So I think as mentioned earlier, C1 cost has actually been better than expectation, including Las Bambas mine, though this is mainly because of the gain or yield from byproducts.

And you also mentioned just now that the share of Ferrobamba is bigger in Q1. Now I want to know for the whole year, what is the production volume guidance for precious metals?

And then my second question is related to Kinsevere. So for the increase in copper volume, the contribution from Kinsevere was quite big. So this is stated to -- my question is related to electricity supply and also your production capacity ramp up. Can you give more details on these 2 points?

[Interpreted] Let me first answer your first question in relation to precious metals. So you just asked for guidance on production volume of precious metals. In fact, we have not disclosed or reported on guidance of precious metal production volume. However, since this is closely related to our core products of copper and zinc, so if you can refer to our production volume guidance of copper and zinc, then you will be able to somewhat tell production about precious metals.

[Interpreted] Now let me comment on production volume at Kinsevere. Production volume has increased. That is because we have put in place a number of solutions on site, including replacement and also overhaul of some old and broken down equipment. So in the first quarter, basically, we have already completed 70% of the on-site solutions and arrangements. That's why there is going to be a contribution to the production volume.

In relation to the production ramp-up, so far, we have seen quite satisfactory performance. So there is an increase from 2,000 per tonne to 3,000. And then in terms of power grid, again, we have seen improvement comparing first quarter 2026 and fourth quarter 2025, there is already an improvement of around 80-kilowatt hours. And then in the first quarter, we believe that production volume has been better than expected. So production volume had also achieved the budgeted or expected levels set at the beginning of the year.

[Interpreted] My question is regarding the breakdown in share between Ferrobamba and Chalcobamba of Las Bambas last year.

[Interpreted] Last year, the breakdown was around 50-50.

[Foreign Language]

[Interpreted] My question is about Khoemacau. So there is a 200,000 tonne of pre-research volume. So I would like to know the timetable from the pre-research stage all the way to the formal research stage to making final decision. So if there is indeed the production of 200,000 tonnes being put in place, were actually, in terms of timing, do you need to wait for the completion of the 130,000 tonnes that would be round about at around first quarter in 2028. Is that the time line?

[Interpreted] Now let me answer your question in relation to the timetable. So first of all, in terms of our investments and research, we have to follow established rhythm, and it has to be done in phases. So first of all, for this year, we will be working on the pre-feasibility stage. And then next year, in the first half, we hope to be able to get approval for the pre-feasibility so that we can get into the stage where we can really start to do research.

And then in 2028, we believe that at that time, we will be able to get the approval process done for the research, that is the possibility to do research. And then basically, when it comes to some fundamental infrastructure, for example, the building of roads, we can advance our work on that a little bit.

But then in terms of investment, you really have to wait till the approval of research for us to start the investment stage. So basically, we have to follow all the investment and research processes.

So you can say that it is really not easy to introduce and start new projects. So that is the reason why it is not easy to increase production volume. In terms of timetable, there is the possibility of advancing the overall work and progress, but such possibility will be rather small.

[Interpreted] My next question is about the project, Nickel Brazil. How is the progress so far? Is it true that it has to wait till the end of this year?

[Interpreted] So concerning Nickel Brazil, first of all, the deal has to be approved by EU. And recently, we saw some progress. We have already submitted some documents. And we are also working on some outstanding questions. It is very difficult to predict the time table. But based on our experience and observation of EU's practice, the work may take longer than 90 days. But we are now working with our counterparts. We are trying our best to expedite the overall procedure and approval process.

But it is very difficult to predict an exact time as to when the whole process can be completed. Overall speaking, we are making a lot of efforts to expedite the whole process.

[Interpreted] Congratulations on your very good results. Many of my questions have been asked earlier by other participants. So now I have 2 more questions to ask. The first question is about Nickel Brazil. Just now I heard that there is the 90-day timing in relation to the overall process. So is it true that after getting approval from EU, then there can be the completion or settlement of the Nickel Brazil transaction?

My second question is about your financial situation. Now you enjoy quite good cash flow, especially after selling out some inventory in the first quarter. So in the past 2 years, you focused a lot on debt repayment. In the coming period, what will be the share between debt repayment and dividend payout?

[Interpreted] Okay. Regarding the 90 days, let me clarify the situation. So 90 days is the maximum period for the second stage of EU approval process. So for the other settlement conditions, those had already been satisfied. So now we are only waiting for approval from EU. Once EU gives approval, the settlement of the deal can take place.

[Interpreted] Now let me answer the question in relation to our financials. So first of all, our operation was in good shape. So that's why we enjoy quite good cash flow. And right now, what we need to do is continue to do a good job with our operations and to complete all our mine expansion projects. So these are related to structural changes.

So in fact, our leverage ratio has already improved. Right now, we are at around 30%. So we are no longer in the situation. In the past few years when we need to focus a lot on debt repayment. And then when it comes to the work that we need to do, well, first of all, there are several potential uses of our cash flow, including dividend payments and also the Khoemacau CapEx.

But right now, we have to work on solving all the technical obstacles in relation to the payment of dividends. We believe that at the end of 2026, we may be able to solve the technical obstacle. And then we will have the condition to make payment of dividend to our shareholders. But we have to look at the situation at that time in making decision as to dividend payments.

[Interpreted] So congratulations on your first quarter results. My first question is about Khoemacau. In the first quarter, Khoemacau cost was relatively smaller than your annual guidance. So that was because of high price of silver. Apart from this, are there other factors leading to such decline in cost?

And then the second question is about Kinsevere electricity. So what is the electricity structure? And also what is the latest update in relation to photovoltaic energy storage?

Third question is that now you enjoyed a search or an increase in your revenue. So does your company have any 15th Five-Year Plan?

[Interpreted] Regarding the cost of Khoemacau, in the first quarter, coal was lower than guidance. This is mainly because of credit from byproducts. So only this sector had already made contribution of around USD 1 per pound. So other than that, there is no other impacting factor.

[Interpreted] So your question about electricity supply in Kinsevere. So basically, in the second -- at the end of the second quarter, we'll be able to complete building and construction of the related facilities project. And we believe that it will commence operation in the third quarter. As a result, our overall operating quality can improve, and there would be more stable electricity supply for Kinsevere mine.

[Interpreted] Let me answer your last question on company strategy. So first of all, as you know, our strategy has been stable for the long term. Our company is a growth style company. So basically, in terms of growth, there are 2 major avenues. There is organic growth as well as strategic growth. For organic growth, basically, we are expanding our production. We are optimizing and improving our assets and we are removing bottlenecks in our production. And we are also increasing -- we hope that we can increase our production capacity and production volume in a sustainable way.

And then when it comes to strategic growth, basically, it includes M&A and also our collaboration with our strategic partners. All these will be carried out in according to our strategy and our plan with discipline. And all these are done in order to improve our long-term shareholders' value.

And in fact, our strategies are well aligned with our parent company's 15th Five-Year Plan strategy. This time, we have added a new pillar about technology and innovation. So by including this new pillar, we will be hoping to reduce cost, improve efficiency and also to improve our safety dimension. Thank you.

[Interpreted] We do look forward to the contribution of technology and innovation to your improvement in operations and results.

[Interpreted] Thank you very much for joining this conference call. If you have further questions, please feel free to contact IR department. Thank you.

[Interpreted] The call is concluded here. Thank you.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Good morning, everyone. I am Guo Yu Godfrey, MMG Chief of Staff. Welcome to our 2025 Annual Results Investor Conference. Today, there are 55 participants on site and 123 online. A quick note for our investors attending in person. Inside your seatback, you will find the Chinese version of the results presentation booklet. Please contact my colleagues at present.

First, I would like to introduce the leadership attending today's meeting. Mr. Cao Liang, Chairman of the Board; Mr. Zhao Jing, Chief Executive Officer and Executive Director; Mr. Qian Song, Chief Financial Officer and Executive Director; Mr. Wang Nan, Chief Operating Officer; and Ms. Guan Xiangjun, Interim Executive General Manager of Commercial and Development. In addition, Mr. Troy Hey, Executive General Manager of Corporate Relations; Mr. Chen Xuesong, President of Las Bambas; and Mr. Xia Weiquan, President, Africa, also joining the meeting online. At the same time, we are honored to have the Chief Non-Executive Director of the company, [ Mr. Leung Cheuk Yan ] with us; and Non-Executive Director, Mr. Yue Wenjun, who is also present today.

Please take note of the disclaimer on the screen. Today, we will report on the company's 2025 performance review, financial results, strategy and outlook. The management team will be available to answer your questions after the presentation.

Now I would like to invite Mr. Zhao Jing, Chief Executive Officer of the company, to speak.

Thank you, Guo Yu. Welcome, everyone, to today's results conference. I'm very pleased to see so many investors, analysts and friends from the media here in person. And I also thank those joining us online. Let's now begin today's presentation.

First, I would like to report on the company's safety performance. Safety has always been a core value at MMG and our commitment and focus in this critical area have never wavered. In 2025, the company's significant events with energy exchange frequency was 0.8 per million hours worked. Total recordable injury frequency was 2.1 per million hours worked. While our safety performance consistently ranks favorably among peer companies of the International Council on Mining and Metals, safety indicators showed a slight increase compared to 2024. Therefore, we emphasize that the company will continue to focus on risk management and advance the prevention and control of high potential injury events.

In practical terms, before any task begins, all potential risks, especially those involving personal safety must be fully identified and effective control measures implemented in advance. Work can only proceed when risks are under control. Safety is not just a slogan on the wall. It is embedded in how our work is planned and executed and the commitment to ensuring every employee returns home safely. Going forward, we will continue to maintain the highest standards.

Next, I will cover the company's operational performance. I still recall that at last year's results conference, our company leadership mentioned, thank you, investors, for crossing the winter with us. Spring is about to arrive. Looking back now, for MMG, 2025 can be described as a spring of blossom and the harvest of fruit. It marked our first bountiful year. As you may remember, at the end of 2022, our Las Bambas mine faced 3 consecutive months of transport disruptions. It was a difficult period for the company, and it was during that challenging time that I took on my role at Las Bambas.

Now thanks to the efforts of the company's management and all employees. We can see the light at the end of the tunnel. Las Bambas has achieved 3 consecutive years of stable operations. And in 2025, its copper production ranked among the global top 10. At the same time, production of other metals, such as zinc, gold and silver has also advanced steadily. Building on the strong momentum in the metals market, our financial performance has also seen significant improvement.

In 2025, we set new historical records. Full year revenue reached USD 6.22 billion, a 39% year-on-year increase and full year net operating cash flow reached USD 2.69 billion, a 67% year-on-year increase, driven by revenue growth. Our net profit after tax reached USD 955 million, a 161% year-on-year increase with net profit attributable to shareholders reaching $509 million, a strong lift from $162 million in 2024. At the same time, our balance sheet continued to improve. In 2025, net debt fell to USD 3.35 billion, gearing ratio further down to 33%, both hitting historic lows.

It is a fundamental truth in our industry. A mining company's long-term growth is built on its resource base. For this reason, resource replenishment has always been a core strategic priority for MMG. We consistently strengthen our foundation through ongoing exploration of existing mines and through high-quality external acquisitions. According to the company's resources and reserve statement as of June 30, 2025, our copper equivalent resources are close to 27 million tonnes with copper resources about 18.6 million tonnes. Geographically, our resources are diversified across a global asset portfolio spanning South America, Africa and Australia.

This broad spread effectively reduces our exposure to risk in any single region and then significantly enhances our overall operational resilience. Exploration is a strategic imperative for MMG, essential for both unlocking resource potential and maximizing asset value. Our growing operating cash flow enabled us to increase exploration spending across all our mines in 2025. We'll continue to prioritize these efforts to drive resource growth and ensure long-term sustainability.

In terms of sustainable development, in 2025, we officially joined the United Nations Global Compact, embedding the highest standards of human rights, labor and the environment into our corporate culture. At Las Bambas, our 3 years of stable operations signify not only continuity in production and transport, but also our commitment to the symbiotic existence of the environment and the community. Through the Corazon de Las Bambas project, we support local enterprise development, leveraging the government's works for taxes policy. We support local education and infrastructure construction, ensuring that development dividends truly benefit thousands of households.

In Australia, the Rosebery mine has been operating for 90 years. Since 1936, the vitality of this mine has been sustained, not only by the professionalism and dedication of generations of miners, but also by the long-term -- long-standing trust and cooperation of the local community. We're guided by the principle that corporate value is built on the foundation of social responsibility. From the Andes to Africa to Australia, we are committed to responsible operations that deliver sustainable value for the long term. With a diverse portfolio spanning copper, zinc, gold, silver, molybdenum, lead and more, MMG is well positioned to navigate volatile markets. And 2025 was a year that put that diversity to the test and delivered.

The metals market was marked by strong performance across the board. Copper prices rose 44%, gold climbed 65%, and silver surged an impressive 148%. These gains were driven not only by industrial demand, but also by the growing role of metals as financial hedging assets. Copper, our core metal illustrates the structural shift underway. The energy transition from EVs to AI data centers has made copper the lifeblood of the new industrial economy. Yet new supply faces mounting challenges, social and environmental approvals, geopolitical pressures and rising extraction costs. The result is a widening global supply gap.

In this environment, our diversified and resilient portfolio is a distinct advantage. We are embracing the new cycle with confidence, well positioned to create sustainable value for our shareholders. Our vision for copper is clear to build a scalable, future-oriented portfolio that delivers long-term value. This starts with maintaining stable operations at our existing sites while driving strategic growth through disciplined expansions and new developments.

Our twin-track strategy in South America and Africa is the backbone of that vision. Las Bambas provides a foundation of stability and cash flow. In Africa, we are unlocking the full potential of Khoemacau. Construction of the 130,000 tonne expansion is on track for first half 2028 commissioning. And this year, we begin a pre-feasibility study for a potential 200,000 tonne expansion, a clear signal of our conviction in the asset. While organic growth is our core focus, we're also actively pursuing external opportunities. Through disciplined M&A, technological innovation and early-stage positioning, we'll continue to strengthen our resource base and expand our growth horizons.

There's a clear thread running through our zinc strategy. We see beyond the metal itself. We are transforming from a pure zinc producer into a multi-metal value creator while embedding low-carbon principles into everything we do. At Dugald River, we are steadily advancing the green energy transition, bringing clean energy to the heart of operations. At Rosebery, we are unlocking value from byproducts so much so that precious metals now contribute more than zinc, rewriting the story of this historic mine. That concludes the operational update.

Now I'd like to hand over to Mr. Qian to walk us through financials.

Thank you, Mr. Zhao. Good morning, honorable investors and analysts on site and online. I will present the financial performance and related outlook. As Mr. Zhao just mentioned, 2025 marked a historic breakthrough across multiple financial metrics for the company, driven by higher metal prices and increased production. Full year revenue reached USD 6.2 billion, up 39% year-on-year. EBITDA hit USD 3.4 billion up 67%, with EBITDA margin expanding to 55%, positioning us at a highly competitive level within the industry.

Net profit after tax was around USD 960 million, up 161% year-on-year. Operating cash flow and free cash flow exceeded USD 2.7 billion and USD 1.6 billion, respectively, injecting strong momentum into our growth. On this foundation, our balance sheet continued to strengthen. Net debt fell to USD 3.4 billion, a historic low. Our gearing ratio improved by a further 8 percentage points to 33%, building an even more stable foundation for our future strategic initiatives.

Now let's take a closer look at the financial performance of each mine. In 2025, Las Bambas delivered EBITDA of USD 2.83 billion, a 78% increase year-on-year with EBITDA margin of 64%. Ores from the Ferrobamba and Chalcobamba pits are blended with throughput reaching record highs and copper recovery consistently above 90%. With the mine achieving the scale effect of 400,000 tonnes of annual copper production, unit operating costs fell by 26%. Combined with higher copper and precious metal prices, this generated very strong cash flow.

The Las Bambas joint venture declared its first ever dividend to shareholders with total distribution of USD 1.854 billion, of which MMG's share was USD 1.159 billion. Since March 2023, Las Bambas has now achieved 3 consecutive years of stable production with a very solid operational foundation. This steady step-by-step progress has brought Las Bambas to a major milestone from stable operations to dividend returns. It has truly become the engine and cornerstone of the company's value.

At Khoemacau, following a profitable first full year after its 2024 acquisition, EBITDA reached USD 167 million in 2025, a 43% increase year-on-year. A new mining contractor is now fully mobilized and construction of the paste fill plant is progressing steadily. These efforts continue to strengthen the mine's operational foundation, paving the way for future capacity expansion. On February 6, 2026, construction of the 130,000 tonne expansion project officially began. Once commissioned, the mine's C1 cost is expected to fall below $1.6 per pound, positioning it among the global cost leaders and opening new avenues for future profit growth.

We are fully focused on breaking through production bottlenecks and unlocking growth momentum with operational progress and market opportunities now moving in sync. At Kinsevere, EBITDA reached USD 100 million, up 49% year-on-year. This reflects higher production, lower cost, the continued ramp-up of the expansion project and the positive impact of higher copper prices. After a clear-eyed assessment of the challenges, including cobalt export quotas, power supply volatility and fiscal and tax uncertainties in the DRC, the company recognized an asset impairment of USD 290 million. We believe this impairment creates the conditions for Kinsevere to improve its asset base, shed past burdens and move forward with greater agility to unlock future value.

We are confident in overcoming the power supply bottleneck and building strength through these challenges. On one hand, we're taking multiple measures to secure power supply, including continued deployment of a 12-megawatt diesel generator set and battery energy storage system, while actively expanding our power cooperation with SNEL. On the other hand, upgrades to core facilities are progressing in an orderly manner, including flotation line, roaster and electrowinning tank house, laying a solid hardware foundation for higher capacity and optimized costs.

Now turning to the financial performance of our 2 zinc mines. In 2025, the Dugald River mine produced 183,000 tonnes of zinc, a 12% increase year-on-year, a new record since commissioning. Recovery rates remained consistently above 90% and core throughput exceeded 2 million tonnes for the first time. This strong production performance, combined with higher zinc and silver prices drove mine EBITDA to USD 176 million, up 4% year-on-year.

The Rosebery mine continued to demonstrate the unique value of its multi-metal model, driven by strong prices for byproducts such as gold, silver and copper, mine EBITDA reached USD 168 million, a 36% increase year-on-year. Notably, mine EBIT also exceeded USD 100 million, 2.5x that of 2024. This multi-metal synergy has added significant depth to this century-old mine, positioning Rosebery to move steadily toward its next century. This concludes the summary of our asset financial performance.

In 2025, we saw not only a significant increase in copper prices, but also month-on-month gains in precious metal prices. With effective cost control across our mines, gold and silver made substantial contributions to the C1 cost credit becoming an important pillar of our profitability. Supported by strong operating cash flow from stable operations and a favorable market environment, we will steadily advance our CapEx plans. In 2026, CapEx is planned between USD 1.6 billion and USD 1.7 billion, focused on 2 key areas.

First, securing the presence, sustaining CapEx to strengthen our existing operational base focused on core mines such as the Ferrobamba mining area and the tailings storage facility expansion at Las Bambas, providing a solid foundation for stable production. Second, investing in the future. Approximately USD 400 million is planned for the Khoemacau expansion project in 2026, using growth capital to drive our future growth engine. The project's total capacity intensity per tonne of copper is expected to be controlled below USD 15,000. Every investment we make is aimed at more stable output, better costs and more sustainable growth.

While advancing our CapEx plans, we remain firmly committed to maintaining a healthy balance sheet. Two key initiatives contributed to this in 2025. First, the inaugural dividend from the Las Bambas JV, of which MMG's share was USD 1.159 billion. Second, the successful issuance of a $500 million zero coupon convertible bond, replacing existing shareholder loans. Leveraging these initiatives, we made several early debt repayments, including the early repayment of USD 500 million in debt for the Khoemacau JV, further reducing our interest-bearing liabilities. As of the end of 2025, our gearing ratio reached a new low, and our asset liability structure was further optimized. Compared to our peers, our gearing ratio is now below the industry average. A healthy balance sheet is the foundation that allows us to navigate cycles and achieve stable long-term growth.

Now let's warmly welcome Mr. Cao Liang, Chairman of MMG, to address us.

Good morning, everyone. It's a pleasure to be with you today. This year's report is particularly meaningful for me. In my new role, I am deeply focused on governance and long-term strategy on behalf of the Board and our major shareholder. And I'm genuinely proud of what we've accomplished, steady progress and real results across the business. So I would like to thank Mr. Xu Jiqing, our former Chairman, for his effort and contribution to the company's development.

Now on this slide, you can see our overall corporate governance framework. For MMG, our tangible strengths are clear, high-quality assets and operational excellence. But our true competitive edge comes from something less visible, yet more fundamental, our mature high standard governance principles and the professional international multilingual management team. This is the very foundation of our stable and long-term development and the key driver of our continued success. We have built a strong, reliable and effective corporate governance framework. The Board oversees the company's strategies and policies, ensures adequate capital and management resources to support their execution and provides comprehensive oversight of financial controls and compliance.

Our Board committees such as audit and risk management, and governance, remuneration, nomination and sustainability provide strong support for strategic decision-making and risk control. At the operational level, the Executive Committee manages day-to-day operations and reports business progress to the Board. With extensive international mining experience, our senior management team ensures seamless coordination across asset operations, acquisitions, business development and stakeholder engagement.

This year, we established the Innovation and Technology Steering Committee to guide the strategic direction and governance of our technology portfolio, driving digital transformation and smart innovation to power the next phase of growth. Looking ahead, we will harness the collective energy of our Board, employees, partners and stakeholders to build a truly global mining enterprise. With an open mind, we will build consensus. With pragmatic action, we will meet challenges. And with firm conviction, we will create lasting value together.

And here on this slide, you can see our vision. Building on the solid governance framework, MMG's management has a long-term vision to create a leading international mining company for a low-carbon future. As the flagship overseas mining platform of China Minmetals Corporation, MMG plays a critical role in supporting its major shareholders' strategic goal of achieving over 1 million tonnes of copper production by 2030. On this journey, we'll advance on 3 fronts. First, driving operational excellence through innovation, controlling costs rigorously, maximizing efficiency and unlocking value through technology.

Second, deepening organic growth, focusing on copper and strengthening our production base through optimization and expansion of existing assets. Third, positioning for external growth, building a robust pipeline of opportunities with an emphasis on early-stage projects to create new possibilities and growth momentum. With these measures, I'm confident that MMG will navigate any future metal market cycle with resilience and live up to the trust of every shareholder.

For 2026, our goals are clear and our priorities are focused. On the production front, we expect full year copper output of 490,000 to 530,000 tonnes, and zinc output of 220,000 to 240,000 tonnes. To achieve this, we'll focus on 4 priorities: strengthening operational excellence, advancing stable growth, building financial resilience and delivering sustainable returns to our shareholders. Finally, on behalf of the Board, I want to express my sincere gratitude to all employees, shareholders, partners and friends for your continued trust and support. Thank you all.

Thank you, Mr. Cao. And thank you to all our leaders for their presentations. MMG attaches a lot of importance to market value management and shareholder return. We're of the view that market value is not only the market's fair judgment of our company's value. If we do a good job in market value management, it is also an important communication platform with investors. By listening to the market and investors, we can better understand market expectations, and we can also integrate internal and external wisdom.

Now in 2025, altogether, we have organized 164 investor communication sessions. And then we also organized on-site visits to Las Bambas. For the whole year, there are more than 2,000 investors whom we have communicated with. So this is a reflection of the IR department's work. Looking into 2026, so on the screen, you can see 6 points. So we will continue to do a good job. We will work hard to achieve win-win for the company as well as investors.

Now we will move on to Q&A session. You are most welcome to ask questions. First question, the lady on the second row here.

Management, I am Hannah from MS. Congratulations on the company's outstanding results this year. I have a few questions. First, this year, well, it is March now. And then in Peru, it is quite close to the election. So regarding Las Bambas, can you comment on the overall operation and also some update on the Peru election?

Second question, for Phase 2 Khoemacau, it was approved, and it is expected that it would be commissioned in the first half 2028. In relation to the amount of resource and production volume, do you have concrete plan and goal for the 15th Five-Year Plan? In Canada, for the copper zinc mine, will there be some projects that will be started?

Third question. So regarding the Brazil acquisition, what is the latest status? Do you have any time line that you can share with us?

Thank you for the questions. First question is about Peru and Las Bambas operation and also the impact from their election. Well, Mr. Chen is now responsible for the operations of Las Bambas. I will defer to him. And then later on, I will elaborate. And then the next question is about Phase 2 of Khoemacau production volume. And then we will ask Mr. Chen to answer and Mr. Wang can supplement. And then regarding Brazil acquisition, Ms. Guan can comment.

Okay. Mr. Chen, please. Can you please answer the question on Las Bambas?

Okay. Thank you very much for your question. For Las Bambas, for 3 consecutive years, we achieved very stable operation. In 2025, we had very good production outcome. As you said, in Peru, in April this year, they would have election. In order to stabilize operation, together with the local communities and various tiers of government, we had already entered communication -- forward-looking communication and continuous dialogue. At the same time, we have put in place a contingency plan.

On site, we have established a strategic mine reserve so that for our mine, even under special circumstances, it can still achieve stable production. Besides, we will continue to pay attention to external situation and make adjustments to our strategies in order to guard against risk. In this way, we can ensure the security and stability of our annual production.

Thank you for the question. Let me supplement. Las Bambas has been operating in Peru for more than 10 years. And over the past 10 years, we had seen the changeover of government and President a number of times. So our major work is to ensure stable relation with local communities and government. At the same time, there is also local project in Las Bambas to enhance our community relations. So basically, we focus a lot on making all preparations with local communities and local government. As I said earlier, in order to guard against risk, we have done a lot of preparation to stabilize production. For example, reserve and also supplies of important materials are being ensured so that we have the room -- enough room to guard against risk. That's the first question.

Next question about Khoemacau Phase 2. Regarding Khoemacau Phase 2 project, in -- at the end of Q1 2028, it would achieve 130,000 tonnes of capacity scale. And then during 15th Five-Year Plan period in 2026, in the first year of the 15th Five-Year Plan, we already started the Khoemacau 200,000 tonne pre-study or examination. So by 2030, we believe that we are able to achieve the production scale of 200,000 tonnes.

Mr. Nan, please, can you supplement?

Yes. Yes. Let me supplement. Regarding resource volume at Khoemacau, since MMG's takeover, we have already started a lot of exploration work. At present, a lot of exploration equipment and personnel have already entered the site and have started work. So we firmly believe that in 2026 and the years thereafter, through all the exploration work of target areas and actual exploration work as well as exploration work by drones, we will be able to expedite our work.

Well, regarding the company's mines, well, not only about Khoemacau reserve and production target, I would like to also ask about the other mines during the 15th Five-Year Plan.

For the 15th Five-Year Plan, we are now devising the strategies. And when we have clearer guidance, then we can let the market know.

The next question is about the Brazil Nickel project. Ms. Guan, please.

Thank you for the question. Now actually, last year, in October, our company announced to the market an update on our exploration work. As said earlier, regarding the project, we have put in place a 3-year exploration plan. So through these 3 years exploration work, we hope to be able to enhance the Izok and High Lake mines resource volume. Based on current exploration result, especially the work done last year, progress is very satisfactory. However, we will do further analysis so that our resource volume this year can be better realized in the exploration report.

Regarding our work this year, we'll continue our exploration work, and it will continue in the coming 2 years. Regarding the development plan, for this asset, resource volume has a good foundation. However, it is close to North Pole. So there is a lack of infrastructure. So in the past almost 10 years period all along, we have been urging the Canadian government to work more on infrastructure, including roads and ports. And when various governments pay more attention to critical metals, the Canadian government had also enhanced this item in their agenda. So recently, we have expedited our work with the Canadian government and also local indigenous villages communication. So we can only develop this project with the support of local government and indigenous communities.

So regarding this project, it is going to be of a longer term. Comparing with the Botswana expansion project, this is going to be of longer term. Early this year, well, you can see a better relationship between China and Canada. This is a good timing. It is favorable to our further studies and further plan of this project. The second project is about Brazil Nickel, okay? At present, we are in the process of EU's approval. And at present, we are working closely with another working partner to get the approval. So we hope that within first half this year, we can get the approval from EU and then we can complete the settlement of this project. Thank you.

Okay. The gentleman on the first row, please.

Congratulations on your good results. I have 2 questions. I'm a reporter. For Las Bambas, last year, copper concentrate produced 410,000. This year, the target is 400,000 tonnes. So it is rather conservative as a target. Is it related to the election? What will be copper price like in 2026? Are you going to spend some CapEx on the expansion of other potential projects?

Thank you for your questions. You talked about 410,000 tonnes Las Bambas production volume and this year's estimate. Well, Mr. Qian can comment and then our CFO will talk about CapEx.

Thank you. Let me -- thank you for your question. In 2026, we believe that regarding our production volume guidance, it is going to be a reasonable one. Based on existing resource volume and foundation, we will maintain a high level production. So we will optimize the Ferrobamba and Chalcobamba pits. At the same time, for the process plant and also related facilities and technology, we will make investment. So we are now in the process of assessment of various options. When we achieve critical progress, we will disclose to the market. We think that the existing production volume guidance is a reasonable one. It is not a very conservative one.

Right. Mr. Qian, please.

Regarding copper price outlook, well, we are positive, especially for the long-term copper price increase. But for short-term copper price, we will not make a concrete judgment. That's the first point. Secondly, regarding CapEx, in 2026, our CapEx will be at USD 1.6 billion to USD 1.7 billion. Now we have taken into consideration the market environment with rapid increase in copper price, how can we deliver maximum return to shareholders? We'll seize this opportunity to increase production volume as soon as possible. So we are thinking of different solutions in different angles to increase our production volume.

At Las Bambas, our plan is that next year, we will increase CapEx by USD 800 million to USD 850 million on upgrading and revamping existing production facilities. And just now, we already reported that at the existing process plant and also the extraction plants, we will build infrastructure. And for existing infrastructure, we will redevelop and relocate them. At the same time, at Khoemacau, we plan to complete the Phase 2 expansion project. And in February this year, that had started already. For the whole year, that will mean an increase of expenses by USD 400 million.

Just now in your booklet, you stated that by 2030, you will achieve copper production volume of 1 million tonnes. So is it possible that there are some potential expansion projects that have not been announced yet? Do you have that consideration?

At present, for China Minmetals Group, there is a strategic goal by 2030 to achieve 1 million tonnes. And for MMG, as an important overseas resource developer and operating platform of China Minmetals, we will try our best to help the group to achieve this goal. However, we still have to look at our existing operation of our good quality assets and do a good job. At the same time, we will also identify internal organic and inorganic growth potential. We will let the market know right away as long as we can satisfy market disclosure requirements.

Okay. The lady on the second row, please, can you please briefly introduce yourself?

Management, I am from -- I'm [ Merriam ] from Merrill Lynch. Congratulations on the outstanding results. I have a few questions. First, just now, you said that very quickly, you will formulate a 5-year plan. So do you have a concrete time line in which month or in which quarter will it be released?

Second, regarding your dividend policy, what is your dividend policy? This year, if copper price continues to remain high and if cash flow improves, then this year, is there the possibility of dividend payment?

Third question, you have a USD 170 million loss from a kind of hedging. So what is your hedging policy in relation to your mines? And in the future, how do you see this situation to evolve?

My fourth question is, at present, in Congo, regarding cobalt, will there be production? And you still have quota of a few hundred tonnes. So how are you going to deal with it?

Thank you for your questions. First question is about MMG's 5-year strategic plan. So as I said earlier, we have started to formulate our coming 5-year plan. And now we have to look at the overall group and various mines strategies for the coming 5 years. We are working on it now. And at appropriate time, we will make disclosure.

Regarding dividend and hedging, Mr. Qian will answer. And for cobalt in DRC, I will ask Mr. Weiquan to answer.

All right. Regarding dividend policy of our company, we attach much importance to shareholders' return. At the same time, we will put in place very prudent long-term asset allocation framework so as to ensure a stable return for shareholders, and we can also meet future capital needs. Every year, the Board assesses our company's financial position and make decision on dividend.

At present, if you look at the order of capital allocation, first of all, we have to support organic and extension growth projects so as to make sure that given the current environment, we can make sure that our production is favorable to our long-term value and shareholders' return. Capital will be invested into projects that are higher than investment cost in terms of exploration and expansion. At the same time, we want to lower our debt level.

And number three, we will try to remove obstacles in paying dividend. According to Hong Kong laws, listed companies can only pay out dividend from retained earnings. As of end 2025, we have accumulated retained loss of more than USD 500 million. So the number has already decreased by about USD 200 million. In 2025, our main mine, Las Bambas already distributed dividend to direct shareholders. And it had already reduced the accumulated loss to the parent company. So when conditions are right, we will carefully consider the situation, and we will then make decision to pay dividend to shareholders.

And then regarding to value preservation, well, the management considers this as a very prudent risk management measure. We will also strictly comply with internal control process of MMG. By doing value preservation hedging, we can ensure certainty of cash flow. So we do not only consider market circumstances, we will also consider overall operation of the company. MMG's goal in hedging and value preservation is to ensure that we will not be affected by downside risk, especially when the market is volatile. We want to ensure safe cash flow. At the same time, we can enjoy the benefit from upside in the market.

So for our annual strategy, we do not have a ceiling in terms of hedging. We want to make sure that it would be -- that there would not be excessive hedging. At the same time, we do not allow speculative hedging activities. I would like to supplement that when it comes to such measures, it is part of our approval process every year, it has to be evaluated and it has to be scrutinized. And based on our operating plan and risk situation every year, we will make decisions. So we are very prudent in risk management.

So we are positive in relation to the long-term fundamentals. At the same time, we'll consider short-term factors that may lead to short-term volatility. Those factors are also carefully considered by us. So all the hedging decisions will be in line with our annual strategy devised by the Board. We want to make sure that these 2 are consistent, and we will make sure everything will be stable. Yes. Now the Board approves an annual hedging strategy. And in fact, we do have a preestablished ceiling or upper limit, and we won't go beyond that ceiling or upper limit. That is the point I would like to correct on.

Now Mr. Xia, please.

Regarding DRC, cobalt sale quota and also Kinsevere production. In 2025 for Kinsevere, we have got 75 tonnes of cobalt quota. In 2026, based on existing communication, we believe that the quota will be 30 tonnes per month. And the annual quota document has not been released yet. Our company will actively communicate with the government to strive for more quota. As of the end of February 2026, regarding the 2025 quota, there are 30 tonnes of cobalt metal that had been already packed into vessels. And for 2025 and 2026, if all cobalt quotas are sold, then based on the cobalt price in February 2026, we believe that Kinsevere can achieve a USD 25 million revenue.

And then regarding production strategy, given the current market environment, whether our company will resume cobalt production, that will depend on the market and also regulatory changes. We'll also consider the government's quota policies. So we are prepared. We are ready to resume cobalt production any time.

Next, the gentleman on this side, please. We have adequate time today. So don't worry, you will all have opportunities.

Management I am Feng Jingshan, Jimmy from Citi. Congratulations on your outstanding results. I have 3 questions. First question for Mr. Zhao. Looking at your 15th Five-Year Plan, you have the plan to produce 1 million tonnes of copper. So will it be mainly from internal growth or you need to do M&A? And then what is the project progress in Peru? And then what will be your interface with MMG in relation to spin-off or stripped mine resources, will they be incorporated into MMG or China Minmetals Group? That's my question.

Thank you for your question. This is a challenging question. Starting last year, we set this goal of 1 million tonnes of production. So now we are producing 500,000 tonnes within MMG. And then there are a few 10,000 tonnes in other areas. So that explains the remaining 500,000 for 1 million. So basically, they are from the few greenfield projects. You mentioned those projects or assets and there are some stripped assets. And just now, you also talked about Glencore in Peru. Those are also greenfield projects. So they are some major components.

Apart from greenfield, we do not rule out M&A. So regarding 1 million tonnes, I think there are 3 parts. One is the existing -- the other -- the existing ones that are under production, the other is those that are within exploration. The other is the existing ongoing projects. So for the Peru projects, I think 10-odd years ago, around in 2008 and 2009, we made some acquisitions. And there has been a certain time period in the past that we plan to develop it, but it is in the south of Peru, and it is to the north of Las Bambas, but then there are different community concerns. But during the development process, there are community issues in nearby mines. So we were not able to continue to work. So our work was suspended in 2012. And then at that time, we also did some maintenance.

After the past 10-odd years, there are other mines near that project. And later on, neighboring community relations have improved. So the overall community situation has improved. Our relationship with the government has also improved. A few years ago, copper price was only $2. Now it's $5 to $6 already. So all these are favorable factors. And now for the majority shareholder, we have taken note of these positive changes. So starting last year, we started to do some study and research, and we have formulated teams. Now we have got a 20-odd person team. There are Chinese and also foreigners in the team. So gradually, we have been ironing out some issues, and we have also renewed some scientific studies. Can we complete the work within the 15th Five-Year Plan period? We will do our best. We cannot guarantee. But then actual conditions have seen quite big improvement. So can they be incorporated into MMG's resources? Well, we have to wait and see.

You talked about 3 other copper assets. One is in Pakistan, 20,000 to 30,000 tonne production volume. There is one in Afghanistan and Pakistan. So in 2008 and 2009, that was acquired in Pakistan, that project was newly explored. It is quite heavy grade or heavyweight one. Well, we are not that familiar with those projects. They are related to another listed company, but those projects are up to 10 million level in production. And will they be incorporated into our listed company and also whether Glen will be incorporated into MMG, our focus is to operate our existing assets well. There are 3 mines that are in production. The 3 are copper mines, 2 are zinc mines, and then there is a greenfield project in Canada, Izok Lake. So for these projects, we want to stabilize production volume. We want to enhance their assets. And then there are also early-stage exploration and so on.

We have to work well in cost control and CapEx. We are already very busy with all these work. Besides, we need to maintain good relationship with local communities and governments so as to ensure stable, highly efficient operations. On this basis, we will also consider M&A, not only assets within our group, but also external assets. And then we will comply with all the rules. So we will do all necessary due diligence and assessment. We will comply strictly with all the requirements of the Hong Kong Exchange. And then under the supervision of all nonexecutive directors, we will make sure to deliver transparent disclosure.

My next question is about CapEx in 2026. Just now you said that there would be a bigger increase of CapEx for Las Bambas. Regarding subsequent CapEx, how should we consider its continuity? So in the future, will it be more or less the same in 2026? Or will it go back to the past level? So for future production volume at Las Bambas, will there be some room for increase in the future? Looking at 2026 CapEx, there will be some increase. Looking at current copper price, your free cash flow is quite adequate. So in 2026, regarding debt reduction and dividend, how are you going to split the free cash flow, the remaining free cash flow?

Thank you, Jimmy. Regarding CapEx, well, every year in our budget, we will consider the next year's CapEx plan, and we will also disclose to the market. For future years arrangement, so we have to wait till the process being completed in the second half before we can disclose.

And then you also asked a question about -- okay, yes. Yes. As you said, strong market growth delivers to the company very good cash flow performance. And regarding utilization of cash flow, as I mentioned earlier, we will follow the order that I mentioned. We have to first make sure that we can deliver the organic growth projects. And at the same time, we will also do exploration and development of neighboring areas to make sure that existing operating projects can stabilize production. And finally, we'll consider to improve dividend policy limitations so that our company will gradually possess the conditions to pay dividend to investors.

My last question is regarding your one-off expenses and loss. In the second half of the year for impairment and hedging, if these are accelerated, then profit is very good. For one-off loss, just now you talked about your policy of hedging. In 2026, given your expectation about copper price, this year, regarding your hedging policy, how will it be executed? Yes, I know that there is upper limit, but how -- what will you consider in the execution of strategies for hedging loss in 2026, how do you see will be the profitability? For impairment for Kinsevere, there was one big provision. In the future, regarding the other mines, what is your expectation about impairment? And will there be further impairment risk for Kinsevere? That's all from me.

Okay. Let me continue my answer. Thank you, Jimmy. For hedging loss, well, my view is our company wants to make sure the stability of our cash flow. At the same time, we want to enjoy the benefits from market upside. This is the major goal. So the inevitable result will be the hedging. We want to make sure that it will be opposite to our sales direction. So when price increases on one hand, my profit increases fast.

I want to make sure that at the same time, for the hedging work that I have done, it may lead to a loss. It will lead to a loss. This is for sure. So looking into the future, we will still put in place a sound risk control policy to make sure that while we enjoy benefit from market upside, we can still avoid or prevent some uncertain factors that may lead to important threats done to our cash flow. So we want to guard against that. So that is our basic policy. It will not change.

Your second question is about impairment. Regarding impairment at the end of each year, according to rules, listing company rules, we will do an impairment test on all our mine assets. The principle is to compare the recoverable amount and the book amount. If recoverable amount is lower than the book value, then that part will have to be subject to impairment. At the end of last year, we have prudently assessed various mines, and we realized that for DRC, as reported earlier, the cobalt policy -- sales policy has changed, and there are issues about power supply, and there is also unstable fiscal policy. So for the recoverable amount, there is a gap of USD 290 million. So that's why we made the impairment.

Apart from that, for all the other mines, we have rather adequate headroom. We have quite adequate room. So at the moment, we do not see any impairment risk. For Kinsevere, power supply is such that we are trying our best to resolve the problem. Production system is ramping up for copper production. So I believe that in 2026, at present, we do not see any big need of impairment.

The gentleman on the third row, please.

Management, I am [ Lu Zhen Xiang ] from BOCI. I have 2 questions. First, regarding Las Bambas. This year, CapEx was quite big. So for this mine, how long will this high CapEx last? And for this mine, how much is the maintenance CapEx besides -- this mine has started dividend distribution. So what is its dividend policy apart from CapEx? Is it true that dividend will be paid out as much as possible?

My second question is, some time ago, I read some media reports saying that the DRC government may raise electricity tariff. So regarding Kinsevere, do you see an increase in tariff really?

Okay. Thank you for your questions. Regarding Las Bambas expenses and dividend, I will defer to Mr. Qian. For electricity tariff, Mr. Xia can answer.

Thank you, Mr. Zhao. Thank you for your questions. Regarding Las Bambas, expenses are all maintenance expenses. There is no growth expenses. As I said earlier, for the 2 major mines of ours and the process plant facility, the TSF and so on, all these need maintenance expenses. The purpose is to maintain the production capacity of 400,000 tonnes at the TSF. As said earlier, at Las Bambas, since our takeover, the original owner designed capacity was only 300,000 tonnes.

But in our hands, we adopted different ways to increase production steadily so as to reach 400,000 tonnes. But the grade of the mine is being lowered, and we are doing our best to stabilize production. So for these measures, they also entail maintenance CapEx. So that's the reason.

If the market maintains the current strong trend, then it can generate strong cash flow. And as you said, if there is no other expansion or neighboring M&A, then we will try our best to distribute dividend as much as possible. So dividend will be given priority.

Regarding electricity tariff, Mr. Xia, please.

For DRC government, right now, the tariff is around USD 0.10, and we have not received any update in relation to tariff increase.

Congratulations to you, management. Last year, your results were very good, your cash flow, your liabilities level all performed well. So that is the result of many years of work at Las Bambas after there was a problem. Mr. Zhao had done very good work to achieve this result. So I'm grateful. I am an individual investor. Last year, in October, I attended this event as well. So it has been less than a year, but you have achieved a lot. I have a question about supply, global supply.

At present, copper price rises fast, especially this year, no matter whether you talk about year-on-year or half-on-half basis, there was a big increase. So will this increase mean very fast increase in CapEx globally so as to increase supply? Now my concrete question is, first, will there be big investment into the capital market? If yes, then this increase in capital investment, of course, there will be a lagging behind effect. A few years later, it would lead to a meaningful increase in supply.

So there would be an increase of a considerable scale in supply, right? Besides, we will consider also scrap copper and also existing mines. So with an increase in production volume, there may be a lowering in grade. So overall speaking, in the coming 5 years or even longer period, how will be supply like 5 years later, that is in 2030? For MMG in 2030, according to my calculation, comparing with last year, there will be an increase by 200,000 tonnes. So within the coming 5 years, if copper price stays high or if there is a big growth, then I think the situation will be very good. So my question is basically about supply.

Thank you. Thank you for your question. Last year, we had much communication. Thank you very much for your support. Regarding CapEx, well, you asked a very difficult question. I will try to answer it because it is more of a macro level. Regarding investment, well, copper as a metal has many financial attributes. Looking at the current industrial demand, it is not satisfied yet. So in the future, if you look at AI, big data centers, electricity and other industries demand, there would be continuous increase in revenue.

And in the past 10 years, many big mining companies invested not as much as what we have expected into project development and infrastructure. So in the past 10, 15 years, there have not been many newly developed mines. So -- as a result, well, copper price will have to reach a certain high level in order to motivate these mining companies to put in big CapEx.

So based on what you said, the current price is still not enough to lead to very fast increase in CapEx, right? Well, apart from rise in copper price, other costs also rise quite significantly. So various mining companies will have their own judgment about their psychological copper price or to which level the copper price has to reach before they make big investment. And based on development timetable of various recent projects, the development cycle is getting longer and longer, sometimes more than 10 years. And that also includes getting local approval. For Las Bambas and our Peru projects, we have seen that.

So for a new project, from formation of the project, including all the environmental assessment and all the audits and so on, the whole journey is very long. There may be other sudden happenings. So we think that very often such cycle will be longer than 10 years. So we believe that certain conditions have to be met before an increase in investment. Different companies will have different judgment. Some may have mines with better endowments, and they would advance their investment. But for other situations, well, the cycle may be longer. So now do we need to do more exploration since the cycle has lengthened? Well, different cycles are investing more into maintenance and operations and exploration in order to achieve growth.

Now you talked about scrap copper as well. In fact, for steel and iron, we have seen the situation already. Different metals have different cycle. So when the demand-supply equilibrium is reached, well, we have attended some other association meetings, but it seems that copper -- the copper equilibrium has -- will not be reached so quickly. So -- I don't know whether Ms. Guan will supplement.

Let me supplement. Looking at current dynamics in the market, basically, people or everybody likes copper, everybody likes to increase resource volume and production volume of copper. For newly increased resource volume, it will save CapEx by working on green projects and M&A. But looking at current recent market transactions for BHP, hoping to acquire British and American resources or the merger with Teck and also some time ago, there were also some very hot transactions. Everybody wants to increase its exposure to copper through these transactions.

So right now, for our greenfield projects and mature greenfield projects, there is a lag. So as a result, for big mining companies, they'd rather do M&A between companies rather than identifying new greenfield resources to develop. So regarding transactions, for mature projects, there is still inadequate mature projects in the market. That's the point I would like to add.

Well, I have 2 points to share with you.

Well, because of time, can you please be concise?

Yes. First point, for MMG, as said earlier, in 2030 or last year, there was an increase in volume by 200,000 tonnes. So based on what you said, the ratio of increase is quite big. This amount, 200,000 tonnes doesn't sound big, but then in fact, the impact is already quite good, right? So another point is regarding injection of assets. At present, looking at current copper price, operating cash flow this year should see an increase by more than USD 1 billion. Then in that case, you should have the strength to acquire some assets, other group's assets. So as a minority shareholder, I hope that this can be accelerated. So what do you think?

For your first point, what is your actual -- what is your specific question? Okay. As we reported earlier, we give priority to existing expansion projects. For example, to stabilize the 400,000 tonnes production of Las Bambas and also Khoemacau, 200,000 tonnes. This is now underway. So these developments are quite certain in our existing pathway. You mean the increase of 200,000 tonnes? That also includes the volume in Southern Africa. So it is within our plan already.

Regarding injection of assets and M&A, Ms. Guan, can you comment?

Regarding injection of assets, our view is this. For our company all along, we define our company as a growth company. So we will actively consider various M&A opportunities apart from organic growth. So we will consider other M&A targets, but we do not limit ourselves to assets owned by the group. We consider a wider scope. So we will assess our existing resource and reserve volume. At the same time, we will have to consider various risks and the economic considerations as well. So we do not rule out possible M&A of group assets. But if there are other opportunities better than existing assets within the group, then we will attach different priority. So we will assess the economic value of various projects that will be given more priority.

Well, in 2024, we acquired Khoemacau. So you can see that basically, we will select a region with better potential to do M&A, and we rely on our own operation and exploration capability to do a better job. And of course, we will give a lot of deep thoughts and consideration. So in the future, regarding future M&As, they will be in line with our current M&A strategies.

Any further questions? Last question, please.

Management, I am from Huaxin Securities. I have a question regarding Las Bambas. Last year, the cost was USD 1.14 C1 cost. So this year, it's slightly higher than last year, right? So what is the consideration? Is it because of the mining grade coming down? Or is it because an increase in logistic costs? So the recovery rate from the milling or process plant would be higher, right? So that's my question.

Mr. Qian, C1 cost of Las Bambas, please.

So you are asking about C1 cost, correct? Well, you may have realized from estimates and long-term investors of our company will know that our guidance, our production guidance and so on, our budget are relatively conservative because we want to make sure that even if there are unfavorable changes in the market, all our estimates and budget and assumptions can support our company's long-term development. So they will deviate a bit from our actual cost as a result.

Last year, our guidance indicators are higher than the actual C1 cost metrics. So given the same price assumptions, if we adopt the current market price, then for Las Bambas, actual production cost may be lower than our guidance by USD 0.20 to USD 0.30.

Okay. We will give this lady an opportunity.

I'm [ Zhu Wei ] from Goldman Sachs. I have a question about strategies. Now how do you evaluate M&A opportunities in the market? 2 years ago, you said that after Khoemacau, copper price has been breaking record. And so how are M&A opportunities of copper right now? Apart from copper, well, you have also acquired Brazil Nickel. So for other basic metals and gold and precious metals, which will be your focus in M&A?

Ms. Guan, please?

Greetings. Well, talking about our strategies, well, the timetable is longer. From short-term M&As perspective, in the coming 3 to 5 years, if we look at commodities, we like copper most. But as you said just now, in the market, everybody likes copper. This is a consensus, so to speak. So right now, if we want to acquire a large-scale producing copper asset in a good region, then basically, there is no such opportunity right now. So what we need to consider is -- so we may have to lower our target a bit from this high year's target. So we will focus more on Latin America and Africa.

There are certain risks relatively speaking, but we have mature experience in these regions. So we like those projects with a certain scale. But then if you look at projects that are being built right now, there are still some opportunities. For greenfield projects, we like more mature greenfield projects. So no matter whether we are talking about permit available or the studies being completed to a more mature stage.

So from a project point of view, we do have some targets that we are looking at. But for some of the targets, we think that within the near future, they may be available in the market. But right now, they are still not. So we are still doing technical assessments. From commodities point of view, we like best -- we like copper best. You also mentioned precious metals just now. For us, we will consider precious metals and also concurrent copper and gold assets and so on. But precious metals within the short term are not within our consideration.

Okay. Because of time, once again, thank you all for your interest and support for our company. And MMG is happy to develop a brighter future together with long-term capital and patient capital. We have prepared some snacks outside for you to enjoy. So thank you very much.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Hello, everyone, and thank you for joining MMG's 2025 Fourth Quarter Production Report Teleconference.

Before we begin, I would like to remind you that today's discussion may include forward-looking statements and other information intended exclusively for participating investors. The materials provided, including any audio or written transcript of this call are for reference purposes only. MMG has not authorized any third party to reproduce, distribute or disseminate the contents of this meeting. Neither the company nor its affiliates accept any responsibility or liability for any use, distribution or reliance on all or any part of the remarks made during today's discussion.

Please be advised that financial markets inherently involve risks. Investment decisions should be made with careful and prudent judgment. We strongly encourage all investors to conduct their own independent analysis and due diligence before acting on any information shared during this call.

Joining us today from MMG's management team are Mr. Zhao Jing Ivo, Chief Executive Officer and Executive Director; Mr. Qian Song, Chief Financial Officer; Mr. Wang Nan, Chief Operating Officer; Ms. Guan Xiangjun Sandra, Interim Executive General Manager, Commercial and Development; Mr. Xia Weiquan, President, Africa; and Mr. Chen Xuesong, President, Las Bambas.

I will now hand over to Mr. Zhao Jing Ivo to take you through MMG's operational performance for the fourth quarter and the full year 2025. After the presentation, we will also open the line for questions. Thank you.

Okay. Thank you, and welcome to MMG's Fourth Quarter Production Report Teleconference. I'm very pleased to share an update on MMG's operational performance. Safety is MMG's first value. As always, let me begin with our safety performance.

In 2025, our safety performance was generally in line with the previous year. The total recordable injury frequency was 2.06 and a significant event with energy exchange frequency was 0.80 per million hours worked. However, we observed an increase in safety performance indicators during the fourth quarter. This reminds us of the importance of staying focused on the safety of all employees and contractors. Moving forward, we will continue to strengthen proactive field task observations to ensure the effective implementation of critical controls and enhance contractor safety management.

Now let's turn to our production results. 2025 was a year of strong operational performance for MMG with record and near-record results across our key assets. Total copper production for the year reached 507,000 tonnes, a 27% increase over 2024 and a clear milestone beyond the 0.5 million tonne threshold. This result reflects our strategic focus on copper with our 3 copper mines, particularly our flagship asset, Las Bambas, making a key contribution. Total zinc production reached 230,000 tonnes, up 6% year-on-year with Dugald River delivering its highest annual production on record. Byproduct precious metals also performed strongly. Gold production reached 118,000 ounces, up 22% year-on-year and total production reached 10.6 million ounces, up 17% year-on-year. These byproducts are important contributors to MMG's revenue and helped to support our financial performance, particularly during periods of strong precious metals market conditions.

Next, I will go through our performance by business segment. First, the corporate portfolio. Las Bambas achieved a historic operational breakthrough in 2025, with annual copper production exceeding 410,000 tonnes. This represents a 27% year-on-year increase, solidifying its position as one of the world's top 10 copper mines. This result was above the upper end of guidance and was the second highest annual production since the mine began operations. This outstanding performance was driven by improved operating efficiency and stable mining operations at both Ferrobamba Pit and Chalcobamba Pit.

Notably, in 2025, Las Bambas set new records for ore mined, ore mills and recovery rates. On cost, thanks to byproduct credits from stronger precious metals prices, the full year average C1 cost was USD 1.12 per pound of copper, better than our guidance range. On community relations, Las Bambas made positive progress by working closely with local communities and the Peruvian government. Through the heart of Las Bambas program, we helped local communities set up a business in transportation, infrastructure, agriculture and catering services. These businesses provide services to the mine and create stable income for local residents. We also invested in local education and infrastructure through Group's Works for Texas program.

This allows Texas to be used for community development more quickly and efficiently. These efforts have helped build a strong and stable relationship with the government and communities, supporting the mine's nearly 3 years of stable operations. For 2026, Las Bambas production guidance is 380,000 to 400,000 tonnes of copper in copper concentrate. We expect average C1 costs to be in the range of USD 1.20 to USD 1.40 per pound. If precious metals prices stay strong, actual C1 costs may be lower. With its C1 cash cost position in the lowest 1/3 of global copper mines, Las Bambas enjoys a robust cost advantage.

In the context of current strong copper prices, this offers considerable profit resilience and reinforces the stability of our business. Next, Kinsevere. In 2025, Kinsevere focused on ramping up its expansion project. It produced about 53,000 tonnes of copper cathode, up 18% year-on-year. The full year average C1 cost was USD 3.12 per pound. This year, Kinsevere's focus will be addressing challenges, including improving power supply stability, stabilizing production, optimizing the concentrator and roaster and fixing bottlenecks in the hydrometallurgical process. For 2026, Kinsevere copper production guidance is 65,000 to 75,000 tonnes with C1 cost guidance of USD 2.50 to USD 2.90 per pound.

Now Khoemacau. In 2025, Khoemacau produced about 42,000 tonnes of copper in copper concentrate. During the third quarter, the change in mining contractors caused a short-term impact on the mining volumes. However, by the fourth quarter, operations recovered and mining expanded into the higher grade Zone 5 North area, this supported higher head grades and improved recovery rates, supported by stronger silver prices and lower ore development costs.

Full year C1 costs were USD 1.97 per pound, better than the guidance range. For 2026, as mining moves into higher-grade ore in Zone 5 North and with progress in mine development and the Phase 3 project, copper production is expected to increase. Production guidance is 48,000 to 53,000 tonnes in copper concentrate with C1 cost guidance of USD 2 to USD 2.30 per pound. If fuel prices stay strong, actual C1 cost maybe further improved.

I'd also like to share an update on Khoemacau's extension plan. Khoemacau is a new mine that MMG acquired in March 2024. It has attractive resource potential and a clear expansion plan. In December 2025, the Board approved the feasibility study for the Phase 2 expansion. This is an important part of our global mining strategy in Africa. After completion, annual production capacity is expected to increase to 130,000 tonnes of copper in copper concentrate with annual silver production exceeding 4 million ounces.

Early works have already started, including camp construction, land acquisition with recruitment and procurement of long lead items. Main construction is planned to commence this year with first copper concentrate expected in the first half of 2028. After commissioning, Khoemacau's average C1 costs are expected to drop to below USD 1.50 per pound, which would significantly improve the mine's profitability and strengthen MMG's position in the global copper supply market. In addition, ongoing exploration at Khoemacau has identified more expansion potential. Annual capacity could increase to 200,000 tons of copper and copper concentrate in the future. We plan to start a pre-feasibility study for the next phase of the expansion this year.

For our Zinc portfolio, we delivered record annual results with zinc production reaching 183,000 tons. This result exceeded the prior year by 12% year-on-year and finished at the upper end of guidance, solidifying its position among the world's top 10 zinc mines. For the first time, annual ore processed exceeded 3 million tonnes with plant recovery rates staying stable at around 90%. These strong results were driven by the focus on operational efficiency and technical optimization, which helped the site to recover quickly and perform well after unplanned weather impact in the first quarter. On costs, the full year average C1 cost was USD 0.65 per pound of zinc, better than the previous guidance range.

This was mainly due to higher byproduct credits from stronger silver prices, lower treatment charges, high production levels and favorable exchange rates. Looking ahead to 2026, we anticipate potential constraints as the mine deepens alongside seasonal weather challenges in the first half. Our focus will be on enhanced planning and operational execution to maintain resilience through this period. Zinc production for the year is expected to be between 170,000 and 180,000 tons, with C1 cost guidance of USD 0.18 to USD 0.95 per pound. Again, if silver prices remain high, C1 costs may be further improved.

Rosebery also delivered a steady performance in 2025 with good execution of the mine plan. Full year zinc production was approximately 49,000 tonnes, while zinc equivalent production reached 140,000 tons. This highlights the value of Rosebery's polymetallic ore body and its effective approach to optimizing byproduct value. On cost, supported by an operating efficiency, high byproduct volumes and favorable precious metals prices, full year C1 costs were negative USD 0.94 per pound of zinc, significantly lower than the previous guidance range. Looking ahead, annual zinc production is expected to be between 45,000 and 55,000 tonnes. Based on 2025 realized to product prices, zinc equivalent production is expected to be 125,000 to 140,000 tonnes.

C1 cost guidance is negative USD 0.60 to negative USD 0.10 per pound. If precious metals prices remain strong, Rosebery C1 costs could improve further. Finally, I'd like to share an update on our recent senior management appointment. In December, Mr. Chen Xuesong was appointed as President of Las Bambas and Mr. Xia Weiquan as President, Africa Operations. These appointments aim to extend operating responsibilities to the asset level, strengthen frontline leadership in safety, production and cost optimization. Both Mr. Chen and Mr. Xia are on the line today and available to answer any questions about our asset operations.

To wrap up, MMG delivered a strong performance in 2025, unlocking production potential, while achieving steady progress on key growth projects. Looking ahead to 2026, we will remain focused on safety, stability and efficiency to support production reliability. At the same time, we keep advancing in key growth projects like the Khoemacau Phase 2 expansion to stress MMG's long-term value and resilience as a copper-focused diversified mine. On behalf of MMG, I would like to sincerely thank all investors and stakeholders for your support. We are committed to creating sustainable value for all shareholders. That concludes my remarks.

I will now hand the call back to the moderator. Thank you.

[Operator Instructions] Since no question on the line, this concludes the Q&A session. I will now hand the call back to Mr. Zhao for closing remarks. Thank you.

Okay. Thank you all for taking the time to join today's teleconference. If you have any further questions, please contact our Investor Relations team. See you next time. Thank you.