Capricorn Copper Suspension Continues as Water Management Remains Key Hurdle

Operational Highlights at Golden Grove

29Metals Limited’s March Quarter 2025 report underscores steady progress at its flagship Golden Grove mine. Copper production reached 4.1kt, while zinc output remained robust at 17.0kt. Notably, the company achieved a significant reduction in C1 costs to US$0.76 per pound of copper sold, down from US$1.82 in the previous quarter, reflecting effective cost discipline and operational efficiencies. The All-in Sustaining Cost (AISC) also improved markedly to US$2.07 per pound, benefiting from lower capital expenditure following the completion of the Tailings Storage Facility 4 (TSF 4) project.

Development of the Gossan Valley project continues on schedule, targeting first ore extraction in the second half of 2026. This project is positioned as a key growth driver, expected to enhance milled head grades and extend Golden Grove’s mine life beyond a decade. The company has commenced grade control drilling and is advancing key tender packages, signaling a methodical approach to project execution.

Capricorn Copper: Navigating Suspension and Environmental Compliance

Capricorn Copper remains under suspension following the March 2024 decision, with the company prioritising water inventory reduction and regulatory engagement. The March quarter saw a 0.3 gigalitre reduction in surface water inventory, the largest quarterly decrease since operations were suspended. Post-quarter end, water levels fell below the Maximum Operating Level, an important milestone for resetting the asset’s compliance footing.

29Metals is progressing long-term water management solutions, including the design of a replacement water treatment plant, although works are currently on hold pending further progress on restart imperatives. The company has also confirmed Tailings Storage Facility 3 (TSF 3) as the preferred long-term tailings solution, with regulatory approval applications planned for the September quarter of 2025.

Financial Strength and Debt Refinancing

Financially, 29Metals completed a senior debt refinancing during the quarter, which included an US$18 million prepayment. This refinancing reduces debt levels, extends maturities, and simplifies the debt structure by combining the revolving credit facility and term loan, removing near-term repayment pressures. The revised debt service cover ratio (DSCR) covenant excludes capital expenditures related to the Gossan Valley project, supporting ongoing investment in growth.

As of March 31, 2025, the company reported unaudited group liquidity of $182 million, down from $268 million at the end of 2024, reflecting ongoing operational and capital activities. The resolution of a Capricorn Copper insurance claim is expected to deliver a final payment of $54 million in the June quarter, further strengthening the balance sheet.

Outlook and Strategic Priorities

29Metals maintains its production and cost guidance for 2025, with a clear focus on productivity improvements, cost discipline, and environmental compliance. The company’s priorities include maximising free cash flow at Golden Grove, advancing the Gossan Valley project, and progressing the imperatives necessary for a sustainable restart of Capricorn Copper. Exploration activities are ramping up, with planned expenditures increasing to $10–14 million in 2025, aimed at resource extension and conversion near existing operations.

While the suspension at Capricorn Copper presents ongoing challenges, the company’s methodical approach to water management and regulatory alignment suggests a cautious but constructive path forward. Meanwhile, Golden Grove’s operational momentum and the strategic debt refinancing provide a solid foundation for future growth.