Richard Hatch

Richard Hatch from Berenberg noted the removal of underlying earnings by business unit from disclosures and challenged the positive portrayal of the aluminium business, pointing to deteriorating margins. He also questioned the rising costs and performance at the Iron Ore Company of Canada (IOC).

Answer

CFO Peter Cunningham stated the reporting change was for simplification and alignment with peers. He clarified that the apparent margin decline in the aluminium smelting business is due to high internal transfer prices for alumina, and the underlying business is performing well. For IOC, he attributed the weaker EBITDA to lower pellet prices, the absence of a prior-year insurance claim, and necessary investment to position the mine for the future.

Richard Hatch of Berenberg questioned the removal of a disclosure, challenged the positive commentary on the aluminum business's performance, and asked about the rising costs at the Iron Ore Company of Canada (IOC).

Answer

CFO Peter Cunningham said the reporting was simplified to align with peers. He explained the aluminum segment's underlying performance is strong, with profitability appearing lower due to high internal alumina transfer prices. For IOC, he cited lower pellet prices, a prior-year insurance claim comparison, and necessary mine investments as drivers of the cost performance.

Richard Hatch of Berenberg asked for the rationale behind removing underlying earnings by business unit from disclosures and challenged the positive commentary on the aluminium business, pointing to margin deterioration and rising costs at IOC.

Answer

CFO Peter Cunningham explained the reporting change was for simplification and peer alignment. He clarified that the aluminium margin pressure is a transfer pricing effect from high internal alumina costs, while the underlying business is performing well. For IOC, he attributed lower EBITDA to weaker pellet prices and necessary mine investments for future performance.

Richard Hatch inquired about the production outlook for the Salobo mine for 2025-2026, specifically regarding grade and throughput expectations. He also asked for details on the current business development pipeline, including the types and sizes of deals being considered.

Answer

Wesley Carson, VP of Mining Operations, stated that while Salobo grades are expected to drop slightly into 2025-2026, this will be offset by the Salobo III ramp-up and increased throughput, leading to a slight production increase. Haytham Hodaly, SVP of Corporate Development, described the deal pipeline as robust, with opportunities ranging from $100 million to $700 million, focusing on development-stage funding for both polymetallic and precious metals companies. President & CEO Randy Smallwood added that deal sizes are trending larger and projects are closer to construction.