CFO in 2022. He successfully executed the strategic plan to unlock Copperworld, including achieving our stated balance sheet targets ahead of schedule and helping to facilitate the Copperworld partnership with Mitsubishi. He was the architect behind our holistic capital allocation framework, which positioned the company to embark on generational investments across the business while also increasing shareholder dividends for the first time in more than a decade. His deep knowledge of the business and strong collaboration with operations and finance have been central to driving significant free cash flow generation, accelerating the de-risking of our growth pipeline, and positioning HUD-Bay for continued long-term value creation. Rob Carter's appointment as Chief Operating Officer recognizes the significant impact he has had on the business through his successful strategic oversight of our Canadian operations. His leadership in Manitoba revitalized the operations into becoming what I have termed the golden child of HUD Bay and a sustainable cash flow contributor. Over the past year, he has brought that expertise to our British Columbia operations. I am extremely proud of the best practices his team has implemented at Coffin Mountain, and they are well on their way to becoming a sustainable cash flow contributor. Rob's deep focus on safety and continuous improvement is contagious, and I look forward to seeing him implement that positive culture throughout the entire operating platform. It is bittersweet to announce Andre's upcoming retirement. He has been a key contributor to our operational success in being able to deliver on our many growth objectives. At the same time, I want to congratulate him on his retirement. For those who know Andre, you may know that implementing management systems is very important to him. I have no doubt his legacy will live on at HUD-Bay through the many systems he put in place to ensure continued efficiency and long-term success. As CEO of HUD-Bay, I look forward to continuing to work closely with both Eugene and Rob in executing our strategy to deliver strong cash flow from our diversified operating platform while unlocking value in our growth pipeline for all our stakeholders. With that, I will now discuss our second quarter operating and financial performance, starting on slide three. HUD-Bay delivered another quarter of steady operating performance and industry-leading margins. We achieved record trailing 12-month adjusted EBITDA of $1.3 billion, driven by our unique copper and gold diversification and focus on cost control across the business. During the second quarter, our operations delivered consolidated copper production of 28,000 tons and gold production of 51,000 ounces. Proper production increased from the first quarter with British Columbia operations achieving higher mill throughput, more than offsetting the lower planned mill throughput in Peru. Consolidated gold production was lower, primarily due to lower milled gold grades. We are on track to achieve our full-year production guidance for all metals. We continued to achieve industry-leading margins during the second quarter with consolidated cash costs of negative 40 cents per pound of copper and sustaining cash costs of $1.39 per pound of copper. Our diversified operations in Canada and Peru continued to achieve operating efficiencies and deliver strong gold byproduct credits, which have more than offset external cost pressures and allowed us to improve our 2026 consolidated cash cost guidance. During the second quarter, we realized quarterly revenues of $631 million and adjusted EBITDA of $321 million. Operating cash flow before change in non-cash working capital was $210 million, remaining relatively consistent with the first quarter. Adjusted net earnings attributable to owners were $114 million, or $0.28 per share. Slide 4 highlights the consistent delivery of free cash flow as a result of our steady operating performance and expanding margins. With our enhanced balance sheet and diversified free cash flow generation, we are well positioned to fund our attractive growth pipeline. While most of our revenues continue to be derived from copper, revenue from gold represents a meaningful portion of total revenues, with 38% of gross revenues from gold in the second quarter. Our cost control efforts continue to focus on navigating external cost pressures, such as higher fuel prices and consumable costs. We continue to manage costs and deliver strong margins through initiatives to further improve throughput and enhance operating efficiencies. We are well insulated from these external cost pressures due to our diversified operating platform, with significant byproduct credits from gold production and the polymetallic nature of our ore deposits. After accounting for our sustaining capital investments, but before growth investments, we generated over $100 million in free cash flow during the quarter, similar to the first quarter. Over the last 12 months, we have generated more than $400 million of free cash flow, which has further solidified our financial strength and positioned us well to prudently reinvest in high-return growth opportunities across the business to enhance our exposure to copper and gold. As of June 30, our total liquidity was over $1 billion, including $890 million in cash and cash equivalents and $154 million available on our revolving credit facilities. At the end of the quarter, we had a net cash position of $80 million, bringing our net debt-to-ebitur ratio to negative 0.1 times, the lowest level in more than a decade. Turning to slide 5, our Peru operations continued to demonstrate steady operating performance with production and costs in line with full-year expectations. The operations produced 19,000 tons of copper, 5,000 ounces of gold, 565,000 ounces of silver, and 277 tons of molybdenum during the second quarter. Production was slightly lower compared to the first quarter, in line with expectations due to the planned semi-annual plant maintenance shutdown. We continue to be on track to achieve our 2026 production guidance for all metals in Peru. Total material moved in Peru was 24 million tons during the second quarter of 2026, and in May, the highest monthly total material moved over the last 10 years was achieved. The team realized improved productivity from enhanced fleet efficiency and the implementation of haulage optimization strategies. Mill throughput levels averaged approximately 86,000 tons per day in the quarter. We received permit amendments to further increase annual milling capacity at Constantia to 34 million tons per annum from the previous 31 million tons. This permit update enables additional capacity to further optimize Constantia's operations and deliver strong copper production. We continue to advance the installation of pebble crushes at Constantia to increase milled throughput rates starting in the third quarter of 2026. Milled copper grades decreased slightly compared to the first quarter due to blending targets implemented to control contaminants in the concentrate. Sales volumes were impacted by a temporary buildup of concentrate inventory at the port caused by ocean swells that resulted in temporary port closures and delayed scheduled shipments. As a result, approximately 10,000 dry metric tons of copper concentrate sales were deferred to early July. Second quarter cash costs in Peru were $1.66 per pound of copper. This increase compared to the first quarter was due to lower gold byproduct credits with the depletion of the Pampacantra gold stockpile in Q1, higher fuel prices, and the planned semi-annual plant maintenance shutdown. Cash costs outperformed the low end of the 2026 guidance range despite external cost pressures, positioning the operations well to achieve the full-year guidance range. Moving to our Manitoba operations on slide 6, we continued to execute our strategic initiatives during the quarter, navigating short-term operational hurdles while positioning the business for an expected strong second half of the year. Our Manitoba operations produced 40,000 ounces of gold, 2.3 thousand tons of copper, 4.8 thousand tons of zinc, and 209 thousand ounces of silver in the second quarter. Compared to the prior quarter, gold and copper production was lower due to lower tons milled. Production in the second half of 2026 is expected to be higher than the first half due to grade sequencing and higher ore output from LALOR, and we have reaffirmed full-year production guidance for all metals in Manitoba. To address labor availability constraints in the quarter, we engaged an experienced mining contractor to advance the 1901 deposit. This strategic decision has enabled the team to redeploy our skilled internal workforce to other critical development areas at Lalor. We have simultaneously increased our internal capacity by onboarding and upskilling several new employees to enhance long-term operational self-sufficiency. The Lalor mine hoisted an average of 3,500 tons of ore per day in the quarter. While the operations experienced minor production impacts from an unplanned hoist gearbox failure in June, the hoist is now repaired and fully operational, and the team strategically prioritized high-value gold zones to maintain consistent feed for New Britannia. The 1901 deposit delivered approximately 7,600 tons of development ore in the quarter and continues to progress toward full production in late 2027. The New Britannia mill processed approximately 1,900 tonnes per day in the second quarter, matching the gold ore output from Lalor. New Britannia continued to achieve steady gold recoveries of approximately 90%. The stall mill processed less ore than the prior quarter, consistent with the Lalor base metal production. The stall mill achieved gold recoveries of 71% in the second quarter, continuing to reflect recovery-focused initiatives. We have initiated early works on installing new tailings lines between the two mills, which is expected to increase pipeline capacity to enable higher throughput and leaching of gold-bearing tailings material at New Britannia from base metal ore originally processed at Stahl. Manitoba gold cash costs in the second quarter were $776 per ounce. The increase compared to the first quarter was primarily due to lower gold production and higher unit operating costs across mining, milling, and G&A. Despite the increase, cash costs were within the guidance range for 2026, and we remain on track for achieving full-year cash cost guidance for Manitoba. At our operations in British Columbia, we continue to focus on advancing our multi-year optimization plans as outlined on slide 7. Copper Mountain produced 6.5 thousand tons of copper, 5.6 thousand ounces of gold, and 71 thousand ounces of silver in the second quarter. Production increased compared to the first quarter for all metals as a result of higher ore mined, improved grades, and higher mill throughput. We continue to expect higher production in the second half of the year as the mill improvement projects take effect, and we are on track to achieve our 2026 production guidance in British Columbia. Milled copper grades during the second quarter of 2026 were higher compared to the first quarter. However, copper and gold recoveries during the quarter declined due to the ramp-up of mill throughput during the quarter, which revealed a grinding constraint in the ball mills. Several grinding initiatives are underway, alongside flotation, advanced process controls to improve recoveries. British Columbia saw cash costs of $3.22 per pound of copper. Costs were higher than the prior quarter, primarily as a result of higher mining costs, less deferred stripping, and lower byproduct credits. Although the second quarter cash costs were above the 2026 guidance range due to external cost pressures, we expect to achieve the full-year cash cost guidance in British Columbia. The next slide highlights the significant progress we have made with our optimization efforts at Copper Mountain. Mining activities reached a record total material movement of 30 million tons in the second quarter. As part of the accelerated stripping program, this production resulted in a record daily average mining rate of 331,000 tons per day ahead of budget. This ramp-up was supported by the successful commissioning of a new production shovel in April. During the quarter, blending initiatives from the main pit maintain stable ore feed to the mill, allowing the operation to prioritize waste stripping activities to expose higher value mining fronts in the future. The mine is now positioned favorably to unlock high-grade copper from the main pit starting later this year. During the second quarter, the mill processed 3.6 million tons of ore, which increased 17% compared to the first quarter of 2026 despite operating constraints on the primary sag mill. The quarterly mill throughput averaged approximately 40,000 tons per day, the highest quarterly average achieved since our acquisition. Mill performance continues to demonstrate the benefits from the second sag mill and the mill optimization initiatives. The primary sag mill was temporarily shut down in late June and will be offline for approximately one month to replace the feed and head. The replacement is tracking on schedule and will remove the constraints previously in place due to the liner erosion event that occurred late last year. While repairs are underway in the primary sag mill, the second sag continues to operate. The mill remains on track to achieve its permitted capacity of 50,000 tons per day in the second half of 2026. During the quarter, the new Ingebel project achieved a significant milestone, celebrating the official groundbreaking of the project expansion. The event was attended by executives, the BC Minister of Mining and Critical Minerals, the chief of the Upper Similkameen Indian Band, and regional leaders and representatives of the community. The groundbreaking comes shortly after the government of British Columbia added New Ingebel to its list of priority resource projects, recognizing initiatives that support economic growth, responsible resource development, and create long-term value across the province. New Ingebel enhances the copper and gold production profile and secures a longer mine life at Copper Mountain. The project is designed to access higher-grade mineralization while improving operational efficiency with a stripping ratio approximately three times lower than current mining areas. We are advancing critical infrastructure required for the expansion, including the construction of an access road, a bridge across the Similkameen River, and the development of an East Hall road to link New Ingerbelt with existing operations. We have also initiated a targeted drilling program focused on upgrading existing inferred resources to reserves. Growth capital expenditures in British Columbia in 2026 are expected to increase by approximately $30 million to $115 million related to additional costs associated with infrastructure development at New Ingebel. The brownfield investments we are making in our operating portfolio will result in consolidated copper production increasing by 24% to approximately 150,000 tons next year, as shown in slide 10. We also continue to take significant steps towards enhancing our attractive copper growth pipeline. At Copperworld, feasibility activities are progressing well, with 95% of the engineering work completed and the sanctioning decision remains on track for later this year. The DFS is expected to reflect higher capital expenditures as compared to the 2023 pre-feasibility study, primarily due to typical cost inflation along with new capital related to project scope changes that would allow for future mill expansion optionality while continuing to generate robust economics. On June the 24th, Copper World received proceeds of $52 million in long-term, low-cost, non-amortizing U.S. municipal bonds carrying a fixed interest rate of 4.5 percent and an initial mandatory tender date of July 2, 2036. We completed the acquisition of Arizona Sonoran in June, adding the Cactus Project to our significant U.S. copper growth business. As shown in Site 11, the transaction brings together two highly complementary copper growth assets in Arizona and strengthens Hudbay's position as a premier America's focused copper company with a pipeline of long-life, low-cost assets located in Tier 1 jurisdictions. High-quality copper assets are scarce globally, especially in good mining jurisdictions, and CACTUS is the highest-grade undeveloped open-pit copper oxide project in the world, as seen on slide 12. CACTUS enhances our long-term copper production profile, expands the U.S. growth pipeline, and is expected to generate significant operational efficiencies and regional synergies with the staged development of Copper World and CACTUS. The staged development of the two projects will allow us to utilize the full potential of our Arizona technical team by advancing Copper World through definitive feasibility studies and towards a sanctioning decision later this year while focusing on integrating Cactus into our Arizona business, advancing permitting activities, and kicking off an updated pre-feasibility study. We expect to spend approximately $30 million at Cactus in the second half of 2026 on the updated pre-feasibility study, performing site de-risking activities and conducting exploration activities. The updated Cactus PFS is expected to be completed in the second half of 2027. The Cactus project envisions a simple operation with a conventional open pit mine and a heap leach and SXCW facility facility to produce made in America copper cathode. It is a brownfield site with key infrastructure already in place which together with the high copper grade makes the upfront capital intensity attractive. With Cactus expected to come into production after Copperworld, we will be able to leverage our skilled team at Copperworld and our comprehensive regional knowledge to apply to the future development of Cactus. This will include replicating our copper world development and permitting success at CACTUS, redeploying our trained construction team, and realizing project efficiencies and cost savings. Together, the two assets expand our strategic footprint in the United States, positioning us as one of only a few operators capable of producing refined copper domestically to support the U.S. critical mineral supply chain. Our third development asset in the United States, the Mason Project, is a large-scale open-pit copper project in Nevada with the potential to be the third largest copper mine in the United States. During the quarter, we commence pre-feasibility study activities at Mason, and we expect the study to be completed in the second half of 2027. As we continue to advance all these attractive growth initiatives across the portfolio, we We remain committed to prudently allocating capital to the highest risk-adjusted return opportunities under our holistic capital allocation framework. Concluding on slide 13, our focus on demonstrating continued operational excellence while prudently advancing our many organic growth opportunities will deliver significant copper production Looking ahead, our growth roadmap is clear. By next year, our attractive brownfields investments are expected to increase production by 24%. By the end of the decade, Copper World will increase annual copper production levels by 70% to approximately 250,000 tons. And with the stage development of cactus and mason to follow,
