Teck Resources Ltd (TCKRF) Q1 2026 Earnings Call Transcript

Ladies and gentlemen, thank you for signing by. Welcome to Tech's first quarter 2026 earnings release conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. To join the question queue, press star then 1 on your touchstone phone. Should anyone need assistance during the conference call, they may reach an operator by pressing star then 0 on their telephone. This conference call is being recorded on Thursday, April 23, 2026. I would now like to turn the conference over to Emma Chapman, Vice President, Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for Tech's first quarter 2026 conference call. Today's call contains forward-looking statements. Actual results may vary due to various risks and uncertainties. Tech does not assume the obligation to update any forward-looking statements. Please refer to slide two for the assumptions underlying our forward-looking statements. We will reference non-GAAP measures throughout this presentation. Explanations and reconciliations are in our MD&A and the latest press release on our website. On today's call, Jonathan Price, our CEO, will provide highlights for the first quarter of 2026. Crystal Presti, our CFO, will follow with further details on our operational performance and financials in the quarter. on. Jonathan will then wrap up with closing remarks and an opportunity for Q&A. And with that, over to you, Jonathan.

Thank you, Emma, and good morning, everyone. We will start with the highlights from the first quarter, 2026, on slide four. We delivered a very strong start to the year, with robust financial results reflecting both disciplined execution across our operations and the cash flow generation potential of our portfolio. Our adjusted EBITDA more than doubled to $2.1 billion in the quarter, driven by record quarterly copper sales volumes, higher commodity prices, and the continued success of our optimized feed strategy in trail operations. This has supported robust cash generation, with $1 billion in cash flow from operations, contributing to a $338 million increase in our net cash position over the quarter. And with ongoing cash generation into April, we further increased our cash by nearly $300 million since March 31st, and our current liquidity is $9.8 billion as of yesterday. Throughout the quarter, we made considerable progress against our key near-term priorities. For our merger of equals with Anglo-American, we obtained regulatory approval from South Korea and advanced integration readiness. We had strong performance across all operations in both our copper and zinc segments. We are tracking well against our plans, with no changes to our previously disclosed annual guidance. At QB, the team delivered consistent performance, with production in line with Q4 2025 and record quarterly copper sales. We also made significant progress on the tailings management facility, or TMF, including completion of Rockbench 4. And we continue to advance the Highland Valley Mine Life Extension project with detailed engineering now over 90% complete and procurement nearing completion, with our capital guidance of $2.1 to $2.4 billion unchanged. All in all, there's been another strong quarter of performance in which we've demonstrated the resilience and potential of our assets and further improved our strong balance sheet. To turn into an update on the merger of equals with Anglo-American on slide five. We continue to make progress with regulatory approvals. As mentioned, we received approval from South Korea in the first quarter, and the approval from China is advancing. At the same time, we are making good progress on our integration planning work to ensure readiness to close and to position the combined business to hit the ground running from day We are moving steadily closer to creating a leading global critical minerals champion and realizing the significant value creation potential of Anglo Tech. We continue to expect closing of the transaction within 12 to 18 months from the announcement last September. Turning now to safety on slide 6, tech had very strong safety performance in the first quarter. Our high potential incident frequency rate for tech-controlled operations remained low, at 0.05 in the quarter. This is below our 2025 annual rate of 0.06, which matched tech's best ever annual result. Health and safety remain core values for tech, and we are focused on continual improvement and our vision of everyone going home safe and healthy every day. So turn to QB's performance in the third quarter on slide seven. I was a QB last week, and I'm incredibly pleased with the performance of the team there and the progress we are making at this Tier 1 asset, executing on the TMF action plan and driving operational stability. In the first quarter, we delivered robust and consistent performance with strong production of 56,000 tonnes. This was in line with Q4 2025, despite a planned maintenance shutdown and a shorter operating month in February. Mill availability of 92% was lower quarter-on-quarter as we completed our planned scheduled maintenance in January, which also had a slight impact on overall asset utilization in the quarter of 87%. Despite this, asset utilization in the quarter remained above the range assumed in our 2026 guidance. Throughput improved slightly quarter over quarter, reflecting enhancements in operational discipline and integration across the mine and the plant. Recoveries at 83% benefited from stable, continuous operations. Overall, there was continued operational stability at QV, with enhanced reliability and consistency in plant operations during the quarter. Slide 8 highlights the development of QB's TMS. While at site, we were able to see the significant progress the team has made in advancing development of the facility. These photos show the progress that we have made since many of you visited QB in November 2025. In the first quarter, we successfully completed Rock Bench 4. You can see that the dam crest has widened significantly, which enabled the raising of the dam wall with no associated downtime of the mill. We also advanced construction of the paddocks and development of the sand dam, as evidenced in the picture on the right-hand side. The sand production and quality improved from the installation of new cyclone technology late last year. Overall, sand deposition rates improved in the first quarter, and we continued improvement is expected throughout the year as we progress construction of the sand dam. slide 9 summarizes the status of QB's TMF development work which remains on track construction of the mechanical rock benches is aligned with our plan with the completion of rock bench 4 in Q1 we now expect to complete rock bench 5 by the end of the second quarter adding further widths to the dam press with the installation of the new cyclone technology late last year and the associated improvements in sand deposition we expect to continue to advance development of the sand dam to enable steady-state operations by year-end. We've decided to install a secondary sand cyclone system to further improve sand quality. The timing of installation will be determined in the second half of this year. Finally, the schedule for installation of the permanent infrastructure remains under evaluation and will be confirmed later in the year. While we have made significant progress on the TMS, there is still much work to be done throughout the remainder of the year. Importantly, completion of the development of the sand dam. And we remain acutely focused on closing out all remaining objectives. So turning to the Highland Valley Mine Life extension on slide 10, the project includes enhanced mine infrastructure, an expanded mobile equipment fleet, and a new maintenance shop. The infrastructure work includes a new tertiary grinding mill and replacement of an ag mill with a sag mill, upgrades to the flotation circuit, and upgraded power and water systems. Construction activities continue to ramp up across these work fronts and are progressing to plan. We have commenced construction of the new maintenance shop, made substantial progress along the tailings corridor, and advanced installation of pilings for the new tertiary mill. Early productivity indicators are positive. Detailed engineering is now over 90% complete, and procurement awards are now over 95% complete, with our focus now shifting to expediting the fabrication and then ensuring that timelines for delivery to site are maintained. We invested $188 million in project capital in the first quarter. Our capital expenditure guidance for the project is unchanged, at $900 million to $1.2 billion this year, which is a peak year for project spend, and $2.1 to $2.4 billion overall. There is also additional capitalized stripping at HBC to develop future mining areas, and this is expected to continue to ramp up over the remainder of the year. While we expect some impact from higher diesel prices, our 2026 guidance for capitalized stripping is unchanged at $450 to $500 million for the entire topper segment. This project will enable average annual copper production of 132,000 tons per annum at Highland Valley and extend the life of this core asset to 2046. With that, I'll hand over to Crystal.

Thanks, Jonathan. Good morning, everyone. I'll begin with our financial performance in the first quarter of 2026 on slide 12. As Jonathan mentioned earlier, our adjusted EBITDA more than doubled to 2.1 billion in the quarter, with margins expanding to 53% from 40% in the same period last year.

This was driven by our highest ever quarterly copper sales volume and significantly higher commodity prices, with copper prices averaging a record $5.83 U.S. per pound in the quarter.

There was also a meaningful contribution from increased byproduct revenue, particularly from silver. We continue to focus on cash flow generation through our optimized feed strategy at trail operations. This strategy continues to deliver positive results. Gross profit before depreciation and amortization from trail significantly improved to $258 million in the first quarter compared with $80 million in the same period last year. We continue to assess our feedstock strategies and remain agile to implement initiatives that will enhance trail operations, profitability, and cash flow. Slide 13 summarizes our financial performance in the first quarter of 2026 compared to the same period in the previous year. The 125% increase in our adjusted EBITDA was primarily driven by higher primary and by-product prices, which resulted in a total increase in adjusted EBITDA of over $1 billion. Lower smelter processing charges remained a tailwind as the concentrate market continues to be tight. Controllable factors made a positive contribution to EBITDA, with higher sales volumes resulting in a $232 million increase. Higher copper volumes were marginally offset by lower zinc sales from Red Dog, which were in line with our expectations. Now looking at each of our reporting segments in greater detail, I'm starting with copper on slide 14. In the first quarter, our gross profit before depreciation and amortization in copper increased 158% from the same period last year to $1.8 billion, primarily driven by record quarterly average copper prices and copper sales volumes and lower net cash unit costs. Gross profit margin before depreciation and amortization improved substantially to 62% from 47% in the same period last year. Operational performance was strong across all assets in our copper segment. Copper production increased 32% from Q1 2025 to 140,000 tons, including the significant increase in QB's production to 56,000 tons. We also achieved record quarterly copper sales at QB which exceeded production at 70,000 tons drawing down inventory built at the end of 2025. These sales were supported by normal operations at the shiploader at QB's port facility following the completion of repairs and return to service in February. Highland Valley's production increased 11,000 tons from Q1 2025 due to increased mill throughput and higher grades, partially offset by lower recoveries, as mill feed continues to be dominated by softer ore from the Lornex pit. Antamina's production grew 41,000 tons due to higher grade copper-only ore, as expected in the mine plant. And Carmen de Andacoyo's production increased to 14,000 tons due to higher copper grades and recoveries. Our copper net cash unit costs were significantly lower than the same period last year, down $0.27 U.S. per pound, reflecting higher production, lower smelter processing charges, and higher silver and molybdenum byproduct credits at QB and HVC. Looking forward, all of our annual guidance for 2026 to 2028 for our copper segment is unchanged. This year, we continue to expect further growth in copper production to 455 to 530,000 tons compared with 454,000 tons last year. Turning now to our next segment on slide 15. In the first quarter, gross profit before depreciation and amortization increased 72% from the same period last year to $387 million, driven by higher commodity prices, and as I mentioned previously, our continued focus on our optimized feed strategy at our trail operations. Gross profit margin before depreciation and amortization expanded to 37% compared to 29% in the same period last year. At Red Dog, zinc production of 106,000 tons reflected lower grades as expected in the mine plan, and zinc sales were above our quarterly guidance range of 52,000 tons. Despite the lower production, we reduced our zinc net cash unit cost by $0.18 U.S. per pound compared to the same period last year due to higher byproduct revenue, largely driven by increased silver prices as well as lower smelter processing charges. Refined zinc production at trail operations increased 16,000 tons compared to Q1 2025 as the zinc electrolytic plant was running at full capacity in the quarter. Looking forward, we expect Red Dog zinc sales for Q2 2026 to be between 30,000 and 40,000 tons consistent with the normal seasonality of sales. Our annual zinc guidance for 2026 to 2028 is unchanged, And we continue to expect zinc and concentrate production of 410,000 to 460,000 tons and refined zinc production of 190,000 to 230,000 tons in 2026. Looking more closely now at our unit costs on slide 16. In the first quarter, our net cash unit costs in both our copper and zinc segments decreased significantly compared with the same period last year. This was a function of disciplined execution at our operations with higher production and improved byproduct pricing. The current conflict in the Middle East results in some inflationary and supply chain risks, largely from diesel prices and, in particular, diesel imports into Chile. This inflationary risk to cost needs to be seen in the context of the material benefit on our unit costs from additional byproduct revenue, which currently more than offsets the impact of higher diesel prices. Our annual net cash unit cost guidance embeds conservative buy-product prices below those achieved last year and below current spot prices. If current commodity prices persist, this would be a benefit to our realized net cash unit cost for the year. Our annual 2026 net cash unit cost guidance ranges for both copper and zinc are unchanged, and we have provided sensitivities for our net cash unit costs to buy products and WTI prices. The largest sensitivities are currently expected to be for silver and the WTI oil prices as a proxy for diesel. In our copper segment, our annual net cash unit cost guidance for this year remains $1.85 to $2.20 per pound, compared with $2.03 per pound last year, and reflecting the growth in copper production that we continue to expect this year. For every $10 U.S. per ounce change in the silver price, our copper net cash unit costs are expected to move $0.02 U.S. per pound. Our 2026 guidance range embeds an assumption of $36 U.S. per ounce, and the spot price is currently trading at around $80 U.S. per ounce. For every $10 U.S. per barrel change in the WTI oil price, our copper net cash unit costs are expected to move $0.03 U.S. per pound. Our 2026 guidance is based on a WTI oil price of $0.65 U.S. per barrel, and the spot price is currently around $0.93 U.S. per barrel. In the zinc segment, we continue to expect our annual net cash unit cost for this year to be between 65 and 75 U.S. cents per pound, compared with 33 cents U.S. per pound last year, reflecting the expected decline in zinc production volumes this year. For every $10 U.S. per ounce change in the silver price, our zinc net cash unit costs are expected to move $0.05 U.S. per pound. And for every $10 U.S. per barrel change in WTI, our zinc net cash unit costs are expected to move $0.01 U.S. per pound. At Red Dog, we take delivery of all of our required diesel during the shipping season, and we are still consuming fuel shift in the third quarter of 2025. We are continuing to actively monitor the situation for any potential for further disruptions, including in the cost and supply of inputs. Turning now to our operating cash flow outlook on slide 17. With the cash flow we have already generated from operations in Q1 of this year, our illustrative EBITDA at cash flow from operations has further improved based on several copper pricing scenarios. Assuming an average copper price of $5.50 US per pound for the rest of the year, we could generate $6.6 billion in EBITDA and $5.5 billion in operating cash flows. And if copper prices remain at current levels, close to $6 US per pound for the remainder of the year, this could increase to around $7.1 billion in EBITDA and $5.9 billion in operating cash flows. These cash flows are primarily driven by our copper segment, including QB, with a significant contribution from our think segment. This illustrates the cash flow potential of the business, particularly if current copper prices are sustained. We expect strong operating cash flow conversion, particularly at QB. Turning to our balance sheet on slide 18, cash flow from operations in the first quarter was strong at $1 billion. This was despite an $834 million build in working capital due to seasonal working capital outflows throughout the quarter, including payment of the Nano royalty, as well as an increase in receivables at the end of the quarter due to higher sales volumes and higher commodity prices. As a result of our strong operating performance, we are building cash, with a $338 million increase in our net cash position in the quarter to $488 million. We have continued to generate cash into April, with a $276 million increase in our cash balance from March 31st, and our current liquidity is $9.8 billion as of yesterday. The cash flows generated from operations also support our capital investments as we continue to execute the HVC MLE project this year. We continue to maintain investment-grade credit ratings and to pay our regular base annual dividend of $0.50 per share, or $61 million in the first quarter. Overall, robust cash flow generation is strengthening our balance sheet and ensuring our resilient position. With that, I'll hand back Jonathan for closing remarks.

Thanks, Crystal. I'll come back to our key near-term priorities to wrap up on slide 20. First, we are working on securing the remaining regulatory approvals for our merger of equals with Anglo-American while advancing our integration planning. Second, we are focused on continuing to deliver safe, stable, and predictable operational performance against our plans and guidance. Third, we are pushing hard to progress the TMS development to achieve steady-state operations at QB this year to underwrite the full value of this extraordinary asset. And finally, we are advancing construction of the Highland Valley Mine Life Extension Project. With these key near-term priorities, we are setting a strong foundation for our next chapter at Anglo Tech as a global top five copper company, as we continue with our relentless focus on unlocking value for our shareholders. So with that, over to you, operator, for questions.

To join the question queue, please press star then 1 on your touchtone's telephone. You will hear a tone acknowledging your request. We ask that you please limit yourself to one question and one follow-up. If you're using a speakerphone, please ensure you lift the handset before pressing any keys. If you wish to remove yourself from the queue, you may press star then 2. The first question comes from Liam Fitzpatrick with Deutsche Bank. Please go ahead. The first question comes from Liam Fitzpatrick with Deutsche Bank. Liam, you may go ahead.

Good morning, Jonathan and team. First question just on QB, just around the installation of the permanent infrastructure. Can you just outline some of the key factors that will drive the timing there? And does it pose any risk to the production guidance that you've given?

Liam, thanks for that question. Firstly, I'll say it poses no risk to production guidance, but I'll let Dale Webb, our SVP of LATAM, just talk some of the timing considerations.

Hi, Liam. Thanks for the question. I think the primary drivers are really our progression in terms of getting the tailings down to steady state, and that's on track to achieve that by year end. Once we're able to achieve that, then we will find an operating window where we have an extended period of time where we don't need to do additional lifts, at which point we can implement and install that infrastructure. So we'd be looking at a period of time in 2027 to be looking to do that. That would be preliminary at this stage, which is under constant review as we progress the build of the tailings down.

Okay, thank you. My follow-up is on the trail asset. I mean, historically, this has not been, I guess, my biggest focus when looking at the numbers, but it's become quite material. Can you just help us sort of understand what a sustainable level of EBITDA for this asset will be moving forward? I mean, Q1 does look exceptional, but yeah, how should we think about Q2 and beyond?

Yeah, thanks, Liam. I'll get Brock to just start with a little bit on the operating strategy at QB, and then perhaps Crystal can just comment on the financial outcomes of that.

Good morning, and thank you, Liam. As Crystal stated in her opening comments, our strategies remain consistent for the past 18 months. There's two key drivers to profitability. One, it's our feedstock from concentrate and non-concentrate sources. We work closely with the commercial team to set up the feed strategy in advance to optimize pricing. Also note, it's an integrated zinc business for our principal feed source. It's from Red Dog. The second driver is capacity of the plant. We're focused on operating discipline. We have plant shutdowns this year in May and October.

I think really the future profitability of trail as we think forward every quarter, it's going to depend heavily on commodity prices, the TC environment, and FX rates. Those are all going to be drivers and as broadly critical to that. So what you're seeing is byproducts really driving the profitability in the quarter. And so I think it's challenging to measure that sort of EBITDA, but you really have to think about what your views are on commodity prices, the modeling offline.

Thank you.

From Myles Alsop with UBS. Please go ahead.

Great. Thanks and congratulations on a good quarter. Maybe just firstly on the merger kind of with Anglo, I mean, how are the discussions progressing with the Chinese regulators? Is there anything untoward? And how quickly once the assuming the approval comes through from China can you actually complete the merger and move forward? That was the first question.

Yeah, thanks, Miles. So, look, on the first point, the interactions with SAMR, the regulator in China, are proceeding very much on the normal course. You know, we continue, both ourselves and Anglo-American, to respond to information requests, which is, you know, quite typical at this point in time. And right now, we haven't received any requests for remedies arriving from this process. So it is very much a normal two-way technocratic process, if I can put it that way, and we'll continue to remain very engaged in that. As I mentioned before, we don't see any change to the timelines for closing in the transaction with this 12 to 18 months from the date of announcement still remaining in the transaction. Of course, we would look to do that as quickly as possible. There will be a number of considerations that I think you could expect to see one following the other.

Okay, thank you. And then on the TSX index, how's those discussions been progressing? Is it looking like you may get index inclusion now?

Well, there's been a few sort of green shoots coming through in that conversation as late. As you know, it's something we've been focused on since the announcement of the transaction, but I'll let Emma just provide a little bit of an update as to where we are with that right now.

Yeah, hi, Myles. I think the good news is we've seen some really positive momentum coming from the S&P and the TSX to find a practical solution to enable Angrotech to retain indexation as a combined entity on the TSX. I mean, this is ultimately being driven by market participants who really want this outcome. and we know that there is currently a consultation process ongoing which could help shape what the potential framework could look like to enable that indexation. But at the moment, we are hearing pretty positive feedback from the market that there is an incentive to try and find a positive solution and we just need to establish the timing of what that process could look like and hopefully see a conclusion reached ahead of close of the deal. So we'll work closely with the market and we'll work closely with the S&P and the CSX to try and get that determination for investors.

Great. Thanks. I'll jump back in the queue.

Thanks, Miles.

The next question comes from Anita Stoney with the IDC. Please go ahead.

Hi. Good morning, Jonathan and team. Thanks for taking the question and congratulations on a good quarter. Just a couple of questions. I just want to follow up on the indexation, and I guess you kind of addressed it as well because that came up in, I think the S&P was soliciting feedback from investors. So do you have any idea when you would hear whether or not you would be included in the index? Is there any, like, time frame?

We haven't had any specific time frame, Anita. And so I think there is obviously some variables that are uncertain, so things like the actual closing of the transaction. I think from the feedback that we've received from the market, there is a desire to try and accelerate getting the conclusion of that done so that it is done in advance of the close of the deal. But I don't believe that a set process and timeline has to be established at this point. And we will, again, try and work as closely as we can to try and facilitate accelerated...

To follow up on QB as well, is there anything that we need to consider going as the year evolves in terms of capacity within the tailing dam? At this stage, is there sufficient capacity ahead of you for Q2 and Q3, or could that be a bottleneck going forward? I understand the mill's running well, but I'm just thinking about the capacity for the deposition.

Yeah, so just at a very high level, You know, we've signaled that we expect Rock Bench 5 to be completed within this quarter, within Q2. You know, assuming we deliver that, then we expect to be able to operate throughout the remainder of 2026, unconstrained by the dam and by test capacity.

Another question, the NPI at 4 Mile, so that's come up. Is there any plans for you guys to monetize that, or how are you thinking about that royalty that you have?

Yeah, I have no specific plans for that right now. We recognize that that's a valuable asset that we have here in the portfolio, or it's a reflection of what is actually quite a large portfolio we have of various royalties associated with prior exploration projects that we've had in the tech stable. Obviously, very pleased to see how that project will advance over time. There's a lot of technical work that has there to still be done around the four-mile development, and that will further inform the value of the royalty that we hold. So something that we will remain very close to, of course, but that's one for the future.

Thank you. That's it for my question.

Thanks, Anita.

The next question comes from Craig Hutchinson with TD Con. Please go ahead.

My gosh, thanks for taking my question. Just on the potential for the JV between QB and Koyawasi, I think you guys had mentioned in Q1 that they're starting to have discussions there. Can you provide any updates on kind of where things stand with regard to a future JV between those two assets?

Thanks for that, Craig. Look, we remain very focused still, of course, on unlocking the full potential of QB and Koyawasi for all shareholders and stakeholders. you know, we're absolutely convinced that that combination will offer the fastest route to new copper growth. It will have the lowest risk, the lowest capital intensity, and therefore the highest returns relative to any standalone alternatives for either site. It will not in any way preclude the future. You know, we do see that as a dressing with scoping studies. We are progressing with permitting strategies. We are having engagements, you know, between the parties and stakeholders more broadly. So a lot's happening on that front, but of course nothing concrete to announce at this point.

Okay, Gary. And then one more question for me. Just on Highland Valley, there was really strong grades this quarter. What's the cadence look like from a grade perspective through the balance of the year? Does it drop off fairly significantly in Q2, or is it sort of steady state and then rolls off in the second half? Anything on grades would be helpful. Thanks.

Yeah, we do expect to see some reduction in grades, but Brock, perhaps you just want to comments on that a little more?

Thanks very much, Craig. So the grade in Q126 was expected and in line with our plan and in our annual guidance range. Grades in the first quarter were slightly higher than projected. That was a function of sequencing within the mine plant. We do, just as a note, we do expect some additional downtime in the second half of the year, so it is associated with the mine life extension project. As Jonathan mentioned, we're going to convert the autogenous mill to a sag mill and we're going to install the tertiary grinding mill so connecting those two things um will impact pass with uh so no change there okay great thanks guys thanks great the next question comes from carlos de alba with morgan's family please go ahead yeah thank you uh good morning everyone sorry uh if this question was asked before or the topic was addressed I joined a little bit late.

Has the Chinese authorities indicated any potential request in terms of asset divestitures or something of that nature as they go through the review of the proposed transaction?

Hi, Carlos. Yeah, we did address this earlier. Essentially, that process is unfolding under the normal course in terms of, you know, our responding to information requests that we're receiving from SAMR. No indication of any requests for remedies associated with the approval process at this time.

Thank you.

Thanks, Carlos.

We have a follow-up question from Miles Alsop with UBS. Please go ahead.

Great. Just on the guidance, obviously, a very strong first quarter. Do you think that the guidance now is more conservative? I can understand why you'd want to keep guidance conservative, but why was there no change to production guidance for the year?

We've worked very, very hard last year, but also this quarter, of course, to achieve the guidance and deliver the performance that we have this quarter, and we'll have to continue to remain very focused and work very hard to meet guidance through the balance this year, so we don't see any case for changing at this point in time.

Where do you see the key vulnerabilities as we stand today after the strong first quarter?

Look, I mean, it's just, you know, the mining industry is an unpredictable industry, and we just, you know, have lots of moving parts at all of our sites all of the time, and it's very important that we just remain focused on delivering the plans that we've put forward for the year. Of course, we're always striving for improvement and continuous improvement across our sites, but we think that the guidance that we set out for 2026 is appropriate in reflecting the potential of the assets that we have and reflecting known risks that exist around all of the assets that we have. So, you know, there's no specific issues that we are concerned about here. It's a matter of, you know, consistent production throughout the course of the year, establishing that steady baseline on which we can continue to focus on improvement above and beyond that.

Okay. And then maybe just one last question on the projects, Zafranal, Saniklis. Once the merger completes, how shelf-ready are they now? And in theory, could Duncan and yourself move those forward quickly to execution? Or do you think it will take, are there still issues that need to be resolved first?

I think for both projects at the moment, they are at a relatively advanced stage, but we don't yet have all of the permits that are needed. We do still have some studies to be completed and engineering to be further progressed. We're certainly targeting having these projects sanctioned ready either late this year or early next year, and then there will be decisions, of course, that will be considered by Anglo tech in our combined form.

Great, thanks. Thank you, Miles.

The next question comes from Brian MacArthur. This is Raymond James. Please go ahead.

Hi, good morning. Sorry, can I go back to the trail? And I appreciate it's difficult to forecast given the mix of feed and prices, but you sort of did the pull at $100 million in the fourth quarter and $2.50 this quarter, and prices are up. But did you benefit on a relative basis this quarter because you had less red dog feed? Were we feeding higher third-party this quarter where you're making a lot of profit? And if so, do we have to think about that variability going forward as well as pricing?

Yeah, I'll get you into just response in terms of the mix. I think the short answer is no, Brian. Morning, Brian. How are you?

In short, no, we've really kept our feed profile both stable and optimized, and that consistently comprises portions of Red Dog as well as third-party feed. And really, it's been the increase in pricing that has driven what we've done relatively.

But thank you. Great. Thank you very much. That's very clear.

Thanks, Brian.

Thank you. We are out of time for further questions. I will now hand the call back over to Jonathan Price for closing remarks. Please go ahead.

Okay. Thank you, operator. Thanks, everyone, for joining us today. As ever, any further questions, please follow up with Emma and the IR team and wish you all a good day.

Thanks.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.