Welcome to the Lifestone Metals webcast to discuss the H1-2026 interim financial results and to provide an operational update. We'll finish today's event with a question and answer session. You can submit a question using the Q&A box at the top of the page. Please feel free to contact us directly for any questions not addressed in this webcast. Before we begin, I would like to remind everyone that today's event will contain forward-looking statements that involve risks and uncertainties that can cause actual results to differ materially from those in the forward-looking statements. Details of the forward-looking statements are contained in our July 29th news release on our website at www.lifesonemetals.com. Please see additional disclaimers which I'd encourage you to read in your own time. Joining me today is LifeZone Rentals Chief Executive Officer Chris Shawwalter and Chief Financial Officer Ingo Hoffmeyer. Without any further to do, I would like to turn things over to Ingo for the presentation.
Thank you. Thank you, Catherine, and thank you, everyone, for joining us to our Hedge One Interim Results news release. In the last webcast, we would like to speak a little bit about the nickel market. But the nickel market has undergone a noticeable fundamental reversal since late 2025. This fundamental shift is still intact, but it's the new base case. The main reasons for this shift are, number one, primarily cost drivers. Firstly, higher royalty rates. And secondly, in April this year, Indonesia adjusted the nickel or benchmark price formula by including common buy products. And secondly, there are supply factors. and this is Indonesia restricting their RKABs and flicking the oil supply outlook from a significant growth to a likely year-on-year decline. On the price chart on the right, you also see that there was some uncertainty in the last couple of weeks about how big this reduction actually is, but it becomes increasingly clear that there is in fact a reduction in these oil quotas. All of this means that the market is shifting towards a potential 2026 deficit so that's the new base case further near-term uncertainty is added by the war in the middle east when negotiations seem to progress constructively at least at times there's also risk of prolonged production traffic through the Strait of Hormuz and even geographical expansion of hostilities combined with a total Chinese sulfuric acid ban which is likely to last until the end of 2026, which is a risk to any nickel leaching operations in the Asia-tech region. In the long run, China's sentiment in Indonesia has turned negative, which is likely a sign of peak China's investment in Indonesia being a thing of the past. Still, we expect and we concede that consumers remain concerned about the increasing concentration of supply in Indonesia, Given that we still see more supply in Indonesia, non-Indonesian investments, that could mean that Indonesia from I believe 65% number goes up to 75% of world supply by the end of 2030. And that at the backdrop of still very sound demand growth in the nickel space from EV batteries as well as stainless steel. With this, I would like to hand over to Chris to give us more an update on the strategic funding and framework agreement discussions.
Good. Good morning, everyone. Thanks for attending. So, importantly, I'll kick off here kind of updating our strategic initiatives and milestones. And I think if we kind of highlight where we've been focused, obviously with the acquisition of BHP's stake last year, We have been engaged in a process. Really, we started by securing the bridge facility with Taurus. That was very important. So that $60 million we secured allowed us to commence with all the important pre-FID activities. We'll give an operational update on where that money is being deployed right now. But really important for us to keep momentum and show that the project is moving, marching forward. Now, importantly, regarding standard chartered process, we have disclosed previously that we have had a very competitive process. us. We have had multiple binding offers that we have been evaluating. And what I'd like to do importantly on this call today is really give some clarity as to where we are. So right now, as management, we have presented a recommendation to our board of directors, and the company has selected a preferred partner, and these discussions are in the final phase. Now, this investment will involve a strategic equity investment into the project, and that's going to be in parallel to the project finance process is being run by SOCJED. Now, this new equity investment is going to be a combination of both public and private, and we are at a point now as a company where we are very excited, and we expect to make an announcement in the very near term. So, as I said, this has been a very competitive process. It has taken time, but this is all running in parallel with negotiations with the government of Tanzania. I think if we go back to some of the social media we have put out over the past month, you would have seen meetings with the president of Tanzania, President Hassan. It's important to read through that meeting because those meetings, those high-level engagements with the president are more of a courtesy call to inform the president of what we've agreed in terms of this investment consortium, the investment structure, and how that ties into all our final negotiations with the government. So all of these multiple discussions, meetings, are all very much linked. So that is the announcement we're going to be making in the very near term. So very, very close. It's been a long process, but I think when the market sees the caliber and the credentials of the investment group that we are going to be bringing in, I think everyone's going to be very impressed. So really looking forward to getting this news out there. Okay, next. As I mentioned, the most important focus of the company right now outside of the strategic initiative of the funding is really deploying the capital from the tourist facility to maintain momentum and progress the project. Our chief operating officer, Eric Luton, has been incredibly busy building out a really phenomenal owner's team. I think with his experience historically with Idaho, he's been able to assemble a team of people that have tremendous experience in this part of the world. And so a lot of those new organizational readiness work streams and everything are fully underway. A big part of what we're doing right now is the expression of interest for all the work packages. That involves a lot of engagement with a mining commission, but approximately 850 million work packages have been out for tender. And those are the core functions for the construction process that's going to be commencing. So really, you know, the bulk Earthworks, ETCM, all those are in the market right now. A lot of the stuff on site, working very closely with Tenesco and the railway. The camp is being upgraded to accommodate all the construction personnel that are going to be on site. And then all the permitting activities and then all the geotechnical drilling as we prepare the box cut. So a lot of activity on site, and this is something we're going to want to get out a little bit more frequently so people can see the progress on site. And we will be putting forward some investor visits so people can visit the site, and we'll communicate that through our website. Okay, next. Okay, in terms of really our sustainability initiatives, I always emphasize the amount of time and effort we put in to engaging the local community. This is really paramount to how we conduct ourselves. The amount of time focused on the resettlement program, engaging with local community, and really demonstrating that we are, you know, that social contract with us and the local people is critically important. So a lot of this activity has been underway. The resalement program, the important part to update there is we are pretty much 100% complete for all the compensation payments. And we have brought in a new team led by Michelle Raftis, who has a lot of experience. We work with Fairy PHP. So that work stream is underway. And then really this is an ongoing engagement with the community. But, you know, I can't emphasize how important this is. So a lot of time and effort has gone into this, and we'll continue to do so. I want to emphasize, we announced earlier this year that we have engaged with the government of Burundi. This is something that was facilitated by the U.S. State Department, just given bilateral relationships between Burundi and the U.S. That's an important context because the bilateral relationships are really opening up Burundi to U.S. companies. You saw a sign ceremony with us and cobalt metals jointly engaging with commercial agreements with the Burundi government. The Musangaki deposit was discovered at the same time as Kabanga. So this is a very large laterite deposit in Burundi. And remember, we are right on the border of Burundi essentially with the Kabanga project. So we are looking at the opportunity to really scale up a long-term nickel region by linking Musangachi and Kabanga we have we've identified a number of synergies where the shared infrastructure between the two projects could unlock a larger project like Musangachi and so right now we're working on technical studies we're engaged with the government of Burundi and the mines minister there looking at work programs and studies that we're going to be commencing in the near term so so really a lot of future upside optionality if we can demonstrate that we can link Musangasi and Tabanga through a synergistic proposal. This is just, you know, additional Blue Sky for Lifestone to be able to unlock such a large nickel region.
And then in parallel, we have our team working on the recycling project with Glencore. This, we have gotten through all the piloting, lock cycle piloting and testing, and so where we are right now is going into the, you know, connecting towards FID. There is additional polymium work that's underway right now. There's also site identification, but this is, you know, I've emphasized this before that this is a very, very exciting project for us. We have a very strong relationship with Glencore. We've worked with them to identify a site. We'll be announcing that in the near term. And this is something that really is going to be the core first demonstration of our hydrometallurgical technical capabilities. This does include our patented know-how in terms of the hydromet, and this is something that is also very crucial to the U.S. government. So we've been applying for DOE grants to be able to beneficiate and refine platinum, platinum, and rhodium domestically in the U.S. ticks a lot of boxes for the U.S. policy right now and the current administration. So this is something that is going to get a lot of support from the government, and it's something that we are progressing with Glancorp. It fits very well in the Glancorp strategy, specifically on recycling. And so this is, you know, again, a very exciting project. It's commencing, and once we identify a site and finalize the next piloting, we're going to be progressing to FID with the goal of really building the first hydromet recycling facility for AutoCats in the United States. So a lot of progress on this front. Okay, I don't want to touch base on the stimulus group. A lot of what we focus on is the flagship project of Cabanga, but the Simulus Group, I mean, this is really the heart of the whole organization where a lot of projects are being studied. And I think we probably don't emphasize enough how much activity takes place at Simulus. I mean, this is – I mean, there's about 30 different projects and contracts underway right now where when you look at the supply chain security initiatives of a lot of countries, there has to be a strong emphasis on the downstream. So a lot of the processing and refining is where a lot of these choke points exist. And so what we're doing with Simulis is really identifying and studying all sorts of alternative flow sheets, engineering to look at different ways we can provide solutions, not only to our projects, but to other projects. So, again, there's a tremendous amount of work going on here right now. And the way we work with Simulis is, you know, we have the opportunity to really prioritize our projects, But the amount of projects we see produces a pipeline of additional projects that we can also look at. So we can decide to work with various clients if we have a strong view of one of the projects. So it's a really important part of our organization, and a lot of really important work is going on there right now. I'm going to turn it back over to Gingo.
Thank you, Chris. In terms of our Hedge One 2026 financial results, this year will be characterized by pre-FID activities around the Cabana Nickel project and Q2 was very much a continuation of Q1. We also strengthen our balance sheet, so we have 37.3 million of cash in the bank at the end of June 2026 compared to 21.1 million in December last year. Liquidity was 56 million because this includes 18.3 million of undrawn amounts from TORUS. As you saw yesterday, we have extended the availability period by three months until November 29th. In terms of operating cash flows, two things really. Number one, they are significantly better than last year in the comparative period, and there's two reasons for this. As Chris just mentioned, there is a stronger focus on similars. There's done fantastic work for external clients and have a strong pipeline. Last year, we were mainly focused on our internal project, so that's generated 1.3 million more in revenues. And then, as we announced last year, we have streamlined our corporate function. This has resulted in reduction in overhead costs. In terms of investing cash flows, they have gone up quite significantly. and this is characterized by an increase in the owner's team, increase of workers on-site, and there is more geotech and hydrotech investigations, including drilling work, and that's what you see in these numbers here. The difference between the $15 million investing cash flow and the $15.4 million, which is a higher number, is actually around $400,000 of interest received in investing cash flows. The strengthening of the cash balance was achieved by two activities. On the one side, we had a 23.3 million net proceeds equity raise with U.S. investors in April, and then we threw down 21.7 million out of the 60 million that we had agreed with TORS around this year, last year. The loss before tax was $7 million, and this includes high interest charges. Also, we had significant interest expense payments, and they relate to the convertible. But we had, I would call it one-off expenses at the end of March, because for the first two years of this four-year facility, we picked two-thirds of the interest, and that became payable after two years and that was the end of march this year so there were more than three million that went out for that and now it's kind of normalized every quarter they pay so far plus four percent in cash um the team size has gone up and this includes a significant amount of contracts in Tanzania is now 268 the large large majority of course work work in Tanzania year. With a loss of around 7 million, this translates in around 8 US dollars cents per share loss for the first half. Next page please. We would just like to highlight a group of entries that are non-cash and these are fair value changes. There is no various fair value instrument on our balance sheet. On the one side it's the embedded derivative, which is a derivative by definition needs to be fended every time of the report, a fairly low gain on warrants, and then a gain on remeasurement of the deferred consideration. The deferred consideration is, as Cliff mentioned this before, we bought PHB out, which was a deferred consideration. 10 million is payable 12 months after FID, and then indexed to a share price is 28 million 12 months after commercial production. When the share prices, there's various assumptions, but the biggest influencer for all of them is the share price. Unfortunately, the share price is reduced and that then ultimately means over the period from start of the year until 30th of June. And what this then means is that you have a fair value gain on all the instruments that have the fair value, the share price as an assumption. Next page, please. In terms of capital markets, our main project partners, of course, the government of Tanzania they own 16% and then Klinko on the US-based recycling project in terms of financing. The big piece is in the recent past where the 60 million glitch home facilities secured last year, then 15 million registered direct in November and then 25 million gross proceeds in April. We have around 90 million shares outstanding and a significant amount of potentially diluted shares or RSUs and options. The current market cap is around 300 million dollars and we work in close cooperation with the USDSC but also the MSP and Forge partners which spans North American partners, European partners and Japanese partners. and from the project finance perspective, we have also seen strong interest from African DFIs and ECIs. With that, I conclude the official part of the Hedge 1 interim press release and would like to hand over to Catherine for Q&A.
Thank you, Andrew and Chris. And to everyone in the room, a reminder, if you have a question, please raise this via the Q&A box located at the top of your screen and we'll be taking written questions today. And we have a few minutes for those. We have our first question, which is, can you please speak a little bit more about the remaining issues preventing execution of the amended framework agreement? And do you expect signing in 2026? Chris, over to you for this one.
Yeah, thanks. Yes, we absolutely expect signing. The way I would categorize this is that the framework agreement is intimately linked with the strategic process with standard charters. So, again, I'll emphasize that I would look at that meeting with the president of Tanzania as kind of a final cursey call. Part of that meeting is to inform her exactly what's taking place in the negotiations with the Tanzanian team, but also introducing the equity consortium. So when you see a meeting like that with our chairman going to meet with the president, you can read through that that is a very, you know, towards the very end of a process. We have had multiple engagements with the Tanzanians on the framework agreement. Really the last key modifications to the framework agreement are to align it with the strategic consortium. So, again, this is all tied together. I would ideally like to see a closing of the strategic process with the equity investors and a simultaneous closing of the framework agreement. So that is what we intend. Again, this is something that we have packaged as one pretty substantive process. But as we are very near to making an announcement on the strategic equity investment, we are also in the final phase of closing off the framework agreement. So all this is intimately tied.
Thank you, Chris. I see that two hands up. Would you mind writing your questions in the Q&A button to the left? It's right at the top of the screen, and we'll get to those. In the meantime, another question I think for you, Chris, is outside of the framework agreement, are all other infrastructure elements in place allowing for the project bill to kick off once funding is in place?
Yeah, absolutely. I think one of the benefits of this project is the amount of spend that the government of Tanzania has committed to infrastructure. So, you know, with the announcement that Standard Chartered has come in on the next stage of the funding for the rail, that was very important. That is going to be the next extension that will go to the Osaka location, the Osaka siding, and that's where we'll do the onboarding for the materials. So that right now in the current forecasted schedule should be complete before we commence production of the mine. And so if that ties up, then that's another key piece of infrastructure that's been committed. Now they've announced there's funding in place. So that's a very positive development. And parallel to that, obviously, the large Muraria Hydroelectric Dam has been commissioned. So Tanzania essentially is a net exporter of power, which is a uniquely privileged position for an African country to be in. So when it comes to power, rail, infrastructure, everything's in place. With the new upgraded 440 KVA line, we're going to be about 80 kilometers to tap into the grid. So really, in terms of infrastructure, we are in a very fortunate position. And now it's on us to just start commencing the full-scale construction. And what I can indicate, what our chairman's indicated recently in some of his interviews, we are pretty much there. We are going to build this mine. So we are going forward. And as I emphasized earlier, we are very keen to make this announcement and really, yeah, demonstrate to the Tanzanians that, you know, we're going to get out there and start building ASAP.
Thank you. The next question on Musangati, how should we be thinking about the 14-month exclusivity and what should we expect to see in terms of the event path and the potential capital spend as this project moves forward later this year and into 2027?
Yeah, I think the way we're looking at Musangati, I mean, this is a very complementary asset that really enhances the overall potential for this nickel region. I mean, when you look at the scale of a combined cabanga in Musangati, you are essentially for the Western markets, replacing an entire supply chain away from Indonesia and China. So that is a material scale for these two projects conceptually. So I think it's something we're going to put in a lot of time and effort looking at technical evaluations. With Kabanga being a sulfide and Lissagata being a laterite, we have identified certain synergies where we think we can lower operating costs, but a lot of this work has to be done. So the important thing for us right now is working with the Burundian government. They are getting a lot of support from DFIs. They have very, very strong support from the World Bank, the IMF. This is a very, very large project for the country, so it gets enormous support from the president. And this is something that we, you know, we will put the time and effort in, but we have to do the work. So there's going to be additional drilling to identify whether there's additional sulfide material below the laterite lens. We're going to be looking at alternative flow sheets to see if we can lower the operating cost of a traditional laterite project. And really, I think that's where we are right now. So this is a lot of, you know, exciting upside in the future, but a lot of work has to be done. So that's where we are right now.
Thank you. The next question is, can you expand on the experience of the expanded Kabanga Owners team?
Yeah, Igor, you want to take a third on that one?
Yeah, what we want to do is, in this particular, so there's a whole host of people, some we have announced already on social media, some are not personally announced yet, but we will, in the next couple of weeks and months, introduce individuals that work for Garrick-Mothor to the public, and we want to also introduce them through webinars. I mean, they include people who moved over from BHP, and they include people from Ivanhoe and other organizations in Africa with really extensive experience building, I would call them similar operations, in some cases more complex than our operations in neighbouring countries in Africa.
Thank you. We have another one, and for the ones with their hands up if you could please type a question that would be appreciated. What is required for the framework, what's required the framework agreement to be amended?
Yeah, I would categorize it as just as a concluding of one of the outstanding schedules of the framework agreement. So when we sign the framework agreement, the final schedule is the joint financial model. The joint financial model is linked to the feasibility study. And so what we've done is really you can't finalize that last schedule until you finalize really what the investment is going to look like. and there's a number of additional tax incentives that we have negotiated. So I think it's more closing out one of the outstanding schedules and aligning some of the components of the agreement with the incoming investment group and just making sure that all ties together. But we have essentially closed off and finalized all the key discussions with government. So this is now in a very advanced stage where it's going through the approval process on the government side. So more finishing off that schedule is how it categorizes.
Thank you. The next question is on Musangati, and the question is, have you had to staff up to incorporate the Musangati project work in the mix, or does your existing team have capacity as you await progress at Kabunga?
Yeah, I think we've been able to dedicate some of our current resources and team. To go in country, I mean, importantly, our, you know, on the geology side, we've deployed Ray Colsmith, who has a lot of experience on Musingaki, having been a geologist for a number of the previous corporates that were active in the region. So we had, fortunately, that in-house knowledge of the actual ore body through Ray's background. But there will be a small team built up in country, but we've been able to utilize some of our business development team. Simon Walsh specifically has been focused on this. And then, you know, some of the other teams have been pulled in as needed. So, you know, going carefully in small steps, but we've been able to deploy people's time and effort so far. And then we'll build out a team as required once we identify really what the work program is going to look like. And I think the next step will really be getting some drilling program underway. way. We're also working very close with cobalt metals. They are in the phase of digitizing. Well, the MOU they signed with the government of Burundi is to digitize a lot of the mineral information. And so the first set we would like them to digitize is the most engaging material. So there's a good shared relationship with cobalt. And what they're going to be focused on is going to benefit us.
Once that information is digitized, that can accelerate some of our technical work. thank you for the hands that are up are you able to to publish a question yeah I'm going to allow verbal questions so Gregory your hand was first so I'm going to unmute you one second but I think you can unmute yourself to ask your question apologies it's not letting me unmute you if you could please rather type your questions and I think there is one in the Q&A box. It's not letting you... I'm going to give it one more minute. If you could, please try type. That would be appreciated because we're unable to unmute. There we go. Just given the US government looks to have helped the initial steps at Musangati and an update on potential US DOE funding opportunities. Chris, I think that one would be for you.
Yeah, I think in terms of Burundi, there's a strong, there's an integrated bilateral effort underway between the U.S. and Burundi, so I think we will see involvement from the U.S. to support initiatives, whether that's through the U.S. Development Finance Corporation or some of the other trade organizations. So that's something we will definitely encourage, and we're in negotiations and constant contact with the U.S. side. And I think to emphasize on the Cabanga side, we have disclosed previously the relationship with the U.S. Development Finance Corporation. We have concluded all the due diligence required as a potential partner with them. That was for the political risk insurance. So that process, all the qualifications, all the due diligence has been completed. And so I think we'll be making further comments on that in the near term. And another question come in on the investment consortium, if there's any more details that can be provided. But I think what I would like to kind of add, this is, as I said, there's a combination of public and private investors. I think when we – if you can go back and look at the announcements we've made, the government entities we've engaged with, I think that's a good indication of kind of a Western consortium that we have been putting together. But this consortium of investors, it's going to be a combination of, as you said, public and private. But this is going to be best in class when we make the announcement. So we're very, very excited. I think the credentials of this investment consortium is going to be a big demonstration of the importance of Cabanga as a project, specifically as a key strategic metal that's being focused on by Western governments. So I think when we make the announcement, it's going to be very evident that this is a very, very high-priority project within this Western focus to secure supply chain security.
We have covered all questions within the Q&A today, so we're going to wrap up the webcast. A quick reminder that if you do have any further questions, please feel free to follow up with us directly or via email at info at LifestoneMetals.com. This concludes our website. I'd like to thank everyone for attending today's event and we look forward to speaking with you soon.
Thank you. Okay, thanks everyone. Thank you. Speak soon.
