MAC Copper Cuts Cash Costs 12% While Boosting Q4 Production 11%

Record Production and Cost Efficiency

MAC Copper Limited (ASX: MAC; NYSE: MTAL) closed 2024 on a high note, reporting its strongest quarterly copper production since taking ownership of the CSA Copper Mine. The December quarter saw output rise 11% quarter-on-quarter to 11,320 tonnes at a robust 4.1% copper grade, surpassing previous records set earlier in the year.

Equally impressive was the company’s operational discipline, which drove a 12% reduction in C1 cash costs to a record low of US$1.66 per pound. This improvement was underpinned by increased production volumes, tighter cost management, and operational efficiencies, positioning MAC competitively within the global copper sector.

Financial Strength and Debt Management

MAC’s financial footing remains solid, with cash and equivalents of approximately US$172 million at quarter-end and a net debt position reduced to US$132 million, reflecting a net gearing of just 15%. The company also secured an early repayment option on its mezzanine debt facility with Sprott, signaling a strategic focus on balance sheet simplification and deleveraging in 2025.

Liquidity was further bolstered by a well-supported A$150 million equity raise in October 2024, which, combined with operational free cash flow of around US$30 million in Q4, provides ample runway for ongoing growth initiatives and capital expenditure.

Growth Projects and Production Outlook

Looking ahead, MAC is targeting a significant production increase to over 50,000 tonnes per annum by 2026, representing a roughly 23% growth from 2024 levels. Key projects driving this expansion include the Ventilation Project, advancing steadily with completion expected by Q3 2026, and the QTS South Upper development, which commenced in Q4 2024 with ore mining anticipated to start in late 2025.

These projects aim to unlock additional mining capacity and extend the mine’s operational life, reinforcing CSA’s status as a high-quality, long-life copper asset. The company plans to update its production guidance following the release of revised reserves and resources data in February 2025.

Safety and Sustainability Progress

On the ESG front, MAC reported a material improvement in safety metrics, with the Total Recordable Injury Frequency Rate (TRIFR) dropping from 14.2 in Q3 to 10.9 in Q4 2024, and no recordable injuries recorded in the final quarter. This reflects the company’s intensified focus on training, coaching, and leadership engagement on site.

MAC also completed a materiality assessment and stakeholder analysis in 2024, laying the groundwork for its inaugural sustainability report due in Q1 2025. The company continues to prioritize environmental stewardship, with no reportable environmental incidents during the year and ongoing rehabilitation and infrastructure projects progressing on schedule.

Market and Operational Dynamics

MAC’s operational performance benefited from a favourable copper grade profile and the successful deployment of double lift stope extraction methods, which reduced dilution and enhanced ore quality. The company also anticipates further cost benefits in 2025 from a circa 70% reduction in treatment and refining charges and a weaker Australian dollar, which lowers Australian dollar-denominated operating costs when translated into US dollars.

Despite a slight dip in the average realised copper price to US$4.02/lb in Q4, MAC’s hedging program and operational efficiencies have helped maintain strong cash flow generation, supporting ongoing investment and debt reduction.