ACG Acquisition (LON:ACG) hosted an investor presentation outlining its most recent operating results and providing guidance for the year ahead, as management described a “transformational year” marked by a shift from oxide gold production to sulfide-driven copper and zinc concentrate production.
Chair and CEO Artem told investors the company is moving from producing gold and silver from the oxide cap of its Turkish operation to producing predominantly copper by value once the sulfide plant starts up mid-year. He said the company produced 39,000 ounces of gold equivalent last year, which he noted was ahead of analyst guidance.
For the current year, management guided to total production of 20,000–22,000 tons of copper equivalent. Artem said the company will continue producing gold and silver doré while oxide ore remains, then transition to copper and zinc concentrates from mid-year.
CFO Patrick highlighted safety performance and operating execution. He said the operation has maintained a 0.66 LTIFR since operating, including during a period when the site workforce rose from roughly 280 people to approaching 500 as construction ramped up.
Patrick said the company began the year with production guidance of 34,000–36,000 ounces of gold equivalent, raised it to 36,000–38,000 ounces in the third quarter, and ultimately exceeded guidance with 39,000 ounces of gold equivalent.
On costs, Patrick said the company achieved an 18% reduction in C1 costs, which he described as the operating cost to run the mine and produce an ounce (including mining, processing, and G&A directly linked to production). He added that all other operating costs were down, while AISC increased slightly due to royalties that rose with higher gold and silver prices. Patrick said the operation was positioned in the first quartile of the gold cost curve, citing a figure of $1,244 per ounce.
Patrick provided additional detail on the split-year guidance. He said the first half will include about 17,500 ounces equivalent from oxide material that is already on stockpile, meaning no additional mining is required for those ounces. The material will be processed and sold as doré, with product delivered to Istanbul.
The second half of the year is expected to include a ramp-up period of roughly three months until commercial production is reached. Patrick said commercial production is expected to contribute 15,000–17,000 tons of copper equivalent, and he characterized the approach as conservative given the scale of the transition.
Patrick also said the company adjusted its mining sequence in response to stronger metals pricing, including what he described as copper reaching $13,000, and stable zinc markets alongside strong gold and silver prices. He said the company will shift mining to a northern area that requires more stripping early but is expected to unlock higher-grade zones sooner, particularly for copper. He added that the change is intended to support more homogeneous plant feed and de-risk operations over a longer mine life.
Construction lead Graham told investors the sulfide expansion project was 63% completed overall and said the work was on schedule and on budget. He said most equipment was already on site, with the two mills expected to arrive imminently. Graham also discussed progress on major components including thickeners, flotation equipment, and steel erection, and he said foundations for key areas were approximately 80% complete at the time referenced.
On the tailings storage facility, Graham said earthworks were well underway on two embankments and that a significant portion of required material had already been stockpiled, noting the dam is being built using rock from overburden stripping to help manage costs.
Graham outlined the remaining work sequence as he described it: assembly work in the first quarter, commissioning activities in the second quarter, and declaration of commercial production by July. He reiterated confidence that the schedule is achievable, citing equipment availability on site and ongoing installation progress. He also described the commissioning approach, with dry commissioning followed by wet commissioning (water testing) and then “hot commissioning” with low-grade ore, during which the plant would begin producing copper and zinc in smaller amounts while the system is tuned.
Patrick addressed the company’s financing position, describing a $200 million bond drawn in stages into an escrow structure and stating the company had drawn about six times. He said that with more than 60% project completion, net debt stood at $56 million. He added that by mid-year the bond is expected to be fully drawn at roughly $175 million, with a $25 million cushion to be released at completion. Patrick said ongoing oxide cash flows also support liquidity, and he referenced additional liquidity backstops including an RCF and an equity backstop facility.
In the Q&A, management addressed exposure to copper price volatility during ramp-up. Patrick said the company is focused on costs and cited an expected ramp-up year production cost of $2.50 per pound of copper, which he said provides a buffer relative to prevailing copper prices at the time of the call. On hedging, Patrick said he is “not a fan” of hedging base metals and indicated the company does not expect to hedge copper, though it would monitor the market for opportunities.
Artem also discussed revenue mix expectations, stating that in a “standard year” the company expects roughly 50% of revenue from copper, 25% from zinc, and 25% from gold and silver, while noting that the current transition year should have a higher contribution from gold and silver due to first-half oxide production.
Additional investor questions addressed the Enriched Ore Project and use of the heap leach facility. Management said permitting for the Enriched Ore Project is expected by year-end, while acknowledging permitting timelines are not fixed. Artem said the permits relate to processing waste stored on site and described it as improving environmental footprint. The company also said it is in discussions with several parties to utilize its heap leach facility to process third-party ore after completing processing of its remaining oxide material, and it would update the market if an agreement is reached.
Artem closed by reiterating that delivering the sulfide project on time and on budget is the year’s key objective and pointed to potential bond refinancing when the first call becomes available in January 2027. He also said the company is working to improve share liquidity and expects potential eligibility for FTSE index inclusion, while noting the company is also evaluating M&A opportunities but had nothing to announce during the presentation.
ACG Metals is a company with a vision to consolidate the copper industry through a series of roll-up acquisitions, with best-in-class ESG and carbon footprint characteristics. In September 2024, ACG successfully completed the acquisition of the Gediktepe Mine which is expected to transition to primary copper and zinc production from 2026 and will target annual steady-state copper equivalent production of 20-25 kt. Gediktepe produced 55koz of AuEq in 2024. ACG’s team has extensive M&A experience built through decades spent at blue-chip multinationals in the sector.
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