First Quantum Minerals Ltd. (FM) Q1 2026 Earnings Call Transcript

operator today at this time i would like to welcome everyone to the first quantum minerals q1 2026 results conference call all lines have been placed on mute to prevent any background noise after the speaker's remarks there will be a question and answer session if you would like to ask a question during this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Benita To, Director, Investor Relations and Capital Markets. Please go ahead.

Thank you, Operator, and thank you, everyone, for joining us today to discuss our first quarter results. During the call, we will be making forward-looking statements, and as such, I encourage you to read the cautionary notes that accompany this presentation, our MD&A, and the related news release. As a reminder, the presentation is available on our website and that all dollar references are in U.S. dollars unless otherwise noted. On today's call are Tristan Paschal, our Chief Executive Officer, Ryan McWilliam, our Chief Financial Officer, and Rudy Battenhorst, our Chief Operating Officer. And with that, I will turn the call over to Tristan for opening remarks.

Thank you, Benita, and thank you, everybody, for joining us today to discuss our first quarter results. 2026 has begun with important progress, including strong performance above design capacity at the new Consanchi S3. Rudy will later discuss in more detail the Middle East, global supply and indirect pressures, particularly in relation to prices for some of our major inputs, such as fuel, but also from the Quattro exchange rate in Zambia. Ryan will speak more on these cost impacts later. Fuel supply from the Middle East has become increasingly uncertain. Our priority is to safeguard the continuity of our operations in this challenging environment. This has required rigorous monitoring and planning, and the team has been proactive in enhancing our fuel sourcing strategies. These actions include securing alternative supply routes, building contingent identifying and implementing 20 million litres of diesel annually, and we currently have sufficient two months of operations and through active monitoring and coverage beyond this time frame. Based on these precautions, we believe fuel supply can be actively managed to avoid any impact on productising measures that can be readily deployed without compromising future. These initiatives include stricter operational disciplines on truck haul routes, on idle of fuel burn rates, and on rationalising non-frontline equipment. of infuel. These actions complement the existing innovations that have been applied across our operations that not only drive tangible improvement in cost, safety and productivity, but also fuel efficiency. These are not pilots or concepts, they are technologies operating at scale and delivering measurable outcomes. We have highlighted a number of them in our quarterly presentation in conveying the recently commissioned rail run conveyor, as well as the electrification of our fleet and the extensive use altogether impacted by the Middle East tensions and for originating countries including Zambia. The current environment underscores the strategic value of our smelter at Katsanchi which is a significant regional producer and generated approximately 1.1 million tons of sulfuric acid in 2025. Almost all of it was consumed on site in our leaching circuits for cathode production. However the smelter expansion is fully ramped up And depending on the geology, there is heightened risk in today's environment. Balance sheet actions taken over the last two years of operations and building resilience. First quantum is in the... And I'm confident in our ability to manage through this period of market volatility. I will now pass the call to Rudy to discuss...

Thank you, Tristan. During the first quarter of 2026, both Zambian operations effectively managed the above normal seasonal rainfall. However, total copper production declined 4% quarter over quarter to 96,000 tons due to lower production at Sentinel and Kansanji, reflecting lower grades in line with the mine Copper sales totaled 90,000 tons, approximately 6,000 tons below production due to the timing of shipments and the restocking of inventory at Kansanji following strong sale volumes in the fourth quarter of last year. Turning first to Consanchi, copper production in the quarter was 45,000 tonnes, down 2,000 tonnes from the previous quarter, driven by lower feed grains and recoveries partially offset by higher throughput levels attributable to the S3 concentrator circuit. It is pleasing to report that S3 throughput increased steadily during the quarter and milling rates stabilized approximately 25 percent above design capacity. This supported increased processing of long-term lower grade stockpiles which lowered overall feed grade compared to the prior porto. We expect this great impact to diminish as stripping activity increases at Southeast Dome exposing fresh oil for direct feed to the S3 circuit. At Sentinel copper production also totaled 45,000 tons a reduction of nearly 3,000 tons from the previous quarter this decrease was due to lower grades and recoveries although partially offset by improved throughput which benefited from improved reliability of the primary crushes and higher tailings thickener throughput during the quarter two new upgraded tailings thickener feed wells were installed and commissioned with a expected expected early in the second quarter. Input Crusher 4 was decommissioned for relocation. The railrun conveyor transitioned from permissioning to full operations and expansion of the trolley assist network continued. Enterprise continued to deliver excellent performance with record quarterly production of 12,000 tons of nickel. A 41% increase from the previous quarter driven by higher grades and recovery. Milling rates in a quarter were moderated to sustain these recoveries. Our priorities at enterprise remained focused on improving ore quality, grade control and mining productivity. At Guelmoraine copper production was 2,900 tons and gold production was 7,700 ounces. With a timing change in the transition to CIL processing, GWELD will continue sulfide processing for the remainder of this year and the transition to a primary gold operation has been deferred to 2027. As a result we have revised 2026 copper guidance to approximately 7,000 tons and gold guidance to between 30 and 40,000 ounces. Thank you and with that I will turn the call over to Ryan for the financial events.

see positive signs of the Indonesian government pursuing policy to restrict supply growth, which has resulted in a strong start to the year from the nickel price. This, combined with the strong operational performance which Rudy described, meant that enterprise had the best margins of all our assets in the first quarter financial performance. Revenue was down 5%. This low revenue, together with increased hedge losses, drove a 30% reduction in EBITDA for the quarter. it. Adjusted loss per share of $0.18 reflects this lower EBITDA. Copper C1 cash costs rose 14%, driven by lower Zambian production and higher labor costs. The continued strength of the Zambian Quacha is a key driver of these costs. This was partly offset by stronger gold prices, which delivered $0.12 per pound by product credit and continued to provide valuable cost support in a volatile environment. Nickel C1 cash costs improved by $0.60 per due to selling to cost guidance. We generally update our guidance later in the year in respect to the performance of our assets and any changes in key input prices. We've continued to take this approach this year where we have not made any changes to guidance for the recent movements in oil, gold and copper prices nor the Quattro exchange. We have, however, adjusted our guidance to reflect three structural changes in our business in the first quarter. The first and largest change is the inclusion of low-grade stockpile processing in Panama. Secondly, as Rudy discussed, Gold McGrane switched to a copper-focused production strategy for 2026 to result in increased byproduct credits, as gold is now treated as a byproduct rather than a primary product. And thirdly, we have updated guidance for the sale of Chayeli. As a result of these changes, we have updated our C1 cash cost range to $2.15 to $2.40 per pound. up 20 cents from prior guidance. This revised guidance continues to be based on the commodity assumptions used at the start of the year of our initial guidance, namely a Brent crude oil price of $70 per barrel, a gold price of $4,000 per ounce, and a quatria U.S. dollar exchange rate of 25. Clearly, the impact of the conflict in the Middle East represents a risk to our cost guidance due to the impact of higher fuel prices. Fuel accounts for roughly 15% of our cost space, including about 8% with the balance coming directly through contractors. The current gas oil futures would equate to a potential $0.20 increase on unit costs relative to our revised guidance based on our direct exposure to fuel and our estimate of the indirect impact on things such as freight costs. Further to that, a sustained Zambian quadra would increase costs by around another $0.10. $0.20 gold prices are estimated to provide a partial offset of approximately $0.05, meaning the combined impact of all these changes would be a potential increase of approximately 25 cents per pound to our copper cost guide. A lot of this would come through in the second half. You could see costs impacts typically lag at the modest price. Fuel generally reflects gas will have a two-month lag. Contractors and freight costs respond almost immediately while other costs follow over three to six months. Capital expenditure, we've increased full year 2020 to reflect a $75 million to $100 million in project-specific capital associated with Kobe Panama. In addition to the CapEx, we also expect to incur approximately $100 million in operating costs and $50 million in working capital, resulting in a total of about $250 million for the three months of pre-commissioning. Any proceeds from the copper concentrate sales will be reinvested directly into the PS&M program, supporting community engagement, and regional supply chains. Now, turning to the balance sheet. Following strong bank support and the improvement in our credit outlook after establishing the new syndicated term loan in RCF in February, we successfully issued an upsized $1.5 billion 10-year unsecured bond. This is our longest bond tenor to date and lowest coupon. It's a strong market confidence in our balance sheets and long-term corporate exposure. These were used to repay a portion of the RCF and repurchase the remaining $1.35 billion of 2029 secured notes. This simplifies our debt structure and returns the bond portfolio to a fully unsecured. Our nearest bond maturity is now 2031, and our final bond maturity is extended to 2036. We also announced the sale of Caeli in Turkey, further simplifying the portfolio and unlocking $340 million of cash proceeds, including a $50 million advance received in Q1. Q1 resulted in a $144 million loss. We have some remaining hedges in the second quarter, and on these remaining positions, we estimate potential losses of approximately $154 million on copper and $8 million on gold at current spot price. We have no hedges beyond Q2, and we'll have full exposure to spot prices starting in the second half of the year. Given that margins remain healthy at prevailing copper prices, we're comfortable having this exposure and do not plan to enter any new hedges for the time being. And lastly, net debt increased by $92 million to $5.3 billion, reflecting planned CapEx interest in tax outflows partially offset by EBITDA generation, the Chayeli advance, and favorable working capital movements. Although copper fundamentals continue to be supportive, elevated Middle East tensions have created headwinds for our cost profile outlook. Against that backdrop, our focus remains firmly on cost and controlling what we can to protect margins and keep the business well positioned. I will now hand the call back to Tristan.

Thank you, Ryan. As Ryan noted, we were pleased to receive a formal approval to proceed on April 7, 2026, with the passing of Resolution No. 20 serial was mined while the concession was in force and is therefore the property of First Quantum. This is also an important step in the responsible environmental management that includes 30,000 to 40,000 tonnes of copper preservation and safe management since November 2023. We will be taking a conservative and measured approach to recommissioning the processing facilities in order to ensure the highest quality of operations that is practically achievable after a long period of shutdown. While we have made solid progress in the first quarter on the work required to prepare the facilities for the introduction of national readiness program is well underway. With maintenance and regressing across the process plant, the mine fleet and supporting infrastructure, initial inspections indicate that overall the asset integrity remains strong, albeit minor repairs will be required. primarily related to the second cleaner, column flotation and concentrator handling circuit. In operation, we expect to run the process with only one-third of nameplate capacity and will follow a program that will allow us to test. We have launched the demonstrating a strong talent pipeline to support the stockpile. Also, commensities are expected to generate further employment through local Panamanian contractors and indirect jobs across local industries. These jobs are being created at an important moment for Panama, especially for nearby communities that are facing elevated levels of Unreport 7 of the Comprehensive Environmental Audit being undertaken, and we remain ready to find a resolution for the situation at the mine 19 and 2023. The mine created over 38,000 received goods and services from over 2,000 Panamanian companies. Cobra Panama has always operated at the highest environmental standards and has the potential to be a meaningful contributor to the country's economy and provide tangible benefits. In the meantime, public support for a resolution is critical and we continue at 26 a total of 214 events reached approximately 82,000 people directly in face-to-face interactions and over 2,000 direct community engagements were recorded that aided and strengthened our immediate priority. First Quantum remains a growth. We continue to progress our growth projects to maintain optionality and position ourselves to move decisively when the balance sheet is ready. The TACA TACA project in Argentina is our most advanced greenfield project and one of the largest, highest quality undeveloped copper assets globally to deliver the 43-101 technique which confirmed the scale and quality of the asset. The technical report represented an important step in the ongoing preparation of our RIGI application and the evaluation of future funding options. TACA TACA is expected to follow First Quantum's tried and tested design of large-scale sag mill processing trains. The project will initially be developed with a processing capacity of 40 million tonnes per annum that will self-fund an eventual expansion to 60 million tonnes per annum. Average annual cost be 291,000 tonnes over the first 10 years of operation and approximately 200,000 tonnes over the life of mine. The project economics are compelling with an 8% after-tax NPV of commodity prices in IFC to align Takataka with IFC's performance standards, which are globally recognised benchmarks to ensure the project is developed in line with international best practices while creating sustainable benefits for communities and the economy. This agreement is the project's position for potential funding options, responsible and sustainable mining practices. I'm greatly excited about the opportunity at Takataka and the benefits our in-house project planning and development team this team has built the two largest greenfields in the last two decades and more importantly these projects were delivered according to plan and at low capital intensities will be built in a similar profile with an initial mine life of 35 years and a large resource base takataka has great potential to be first quantum's and next cornerstone project there remains further work to de-risk the project and position it for construction readiness. We will continue to advance the SIA and prepare for submission of the RIGI application. In parallel we are evaluating optimal and ensuring the balance sheet is well positioned. We will be taken in a disciplined manner, taking into account the financing plan and the status of our other operations. The challenges that have reinforced these priorities allow us to navigate near-term uncertainty while protecting our long-term growth plan. We wish to maintain safe and productive performance across our operations and continue to strengthen the balance sheet to ensure the company is well positioned. Together, these priorities provide resilience through the current environment while positioning the company for sustainable shareholder value creation over the long term. Operator, I'm happy to open the lines for questions.

At this time, if you would like to ask a question, press star followed by the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question is from Ralph Profiti with Stiefel Financial Corporation.

Thank you, Operator, and good morning, everyone. Tristan, thank you for the thorough review of supply chain issues. My question is whether your team has done some work on sort of the absolute order of magnitude of that 320 million liters annually that's consumed, and what could be a realistic target for savings? Is sort of 10% the number that's too conservative or do you think you get higher efficiencies?

Thanks for that. Yeah, there's a lot of initiatives underway and yes, we definitely, I mean, just in terms of haul distances, you know, particularly an interim measure on short dumping because we expect, you know, ultimately the Middle East situation will resolve but we're definitely going to live with something that's going to be here for, even if it's fixed today for probably six months or so in duration, that does present the opportunity for short dumping on waste dumps. But then in sort of long, in particular, already, but there is the opportunity with the OEM to switch that to a lower idle, impacting cycle time. And we're taking those long-term practice.

Your next question comes from Oris Wakauda with Scotiabank.

Hi, good morning. Nice to see the progress at Cobra Panama. I'm curious whether, is it fair to say that you've been given permission to operate everything at Cobra Panama outside of fresh ore mining?

Thank you. Yeah, look, the stockpile approval to we get the assets running and very preparing the operation and getting in a good stage around what happens now. Pretty much everything that would be involved but not drill and blast and it's running as the initial and then all the way through the process plants uh everything through at this stage we'll be starting up one trainer that a few months left on a set of liners in there we want to run those out before we would change those liners but yeah overall it's pretty much all the operation okay and thank you

for that and do you still think you need sort of six to nine months to ramp up once you assuming there is a deal to restart fresh mining i'm just wondering if there's a big pre-strip that needs to be caught up on or whether that six to nine months could be quicker now just given you've got the soft start in terms of operating the plant ahead of that or yeah look um we don't have a full approval to restart and if and when that comes through um but this is an important step both environmentally.

There's a lot of focus on boarding, making sure that people are retrained and re-induction training so that rushing in, we want to make sure that things are done. The bottleneck's going to be in mine fleet, back online.

Your next question is from Ionis, with Morgan Stanley.

First question on Cobra Panama again. Could you talk about public opinion and how it's shaping up across the country, going into the completion of the audit, and also the expected update from the president, because we've seen conflicting headlines. So I'm interested to hear what you're seeing based on your engagement with people around the country and also with your own polls that you might be running.

Hi, Ernest. Yes, sure. Look, public perception around the mine is critical, and we have done detailed work in polling and trying to answer that. We've been using Gallup, the electoral tribunal, to attain that status-driven methodology by which they go about polling data. Their last survey for reopening the mine, it's a tangible benefit, the mine do come through the people. So, majority see the reopening in operations as indication because it's under those conditions. There are other polls out there, and you'll see commentary around that. As far as we know, Gallup is the only tribunal elected.

Very clear. And just one clarification. You mentioned that the proceeds from the processing piles will go towards the cost of the PS&M program. But from a financial point of view, when we look at your EBITDA and cash flow for the coming quarters as eventually the mill restart, how do we think about it? Is it a function of the proceeds just of setting that $15 million per month and incremental financial benefit?

Yeah. So the way we look at it is that the processing of the stockpiles and using that material, you know, for example, to take that feed through a month number, that increases more people and more activity. And the way we look at it is over.

Your next question comes from Anita Soni with CIBC World Markets. Hi, guys.

Thanks for taking my question. First question, just the commissioning costs. I think you talked about $90 to $100 million. Is that included in the cost guide that you increase the cost for purchasing stock out, or is that over and above, and where would that kind of show up as that's the case?

Yeah, thanks, Anita. Ryan, do you want to comment on that?

Yeah, hi Anita. So, three elements to the cash outflows will incur. The first is $75 to $100 million in CapEx and getting the plant ready for processing, and that's the reason for our change in CapEx guidance for the year. The second is around $100 million in operating costs, which is included in the guidance you see for our revised C-1. And then the third is an incremental $15 million working capital bill, which we expect as part of getting that plant back online. So a total of $250 million, $200 million are included. Secondly, that increase in our C-1 cost guidance for the year.

Okay, thanks, that's clear. Secondly, I just wanted to understand, at Kinsanshi, how on the mixed ore grades and recoveries, you mentioned they were negatively impacted. How long do you expect that to persist? Is that all year or just half year? I guess you get through some of the stripping that you're doing there.

Yeah. Rudy, do you want to take that? Yeah. Hi, Anita.

We're currently progressing quite well with the southeast stripping. And as we move towards the back end of the year, we'll expose fresher ore for direct feed to the S3 circuit. And that obviously allows for both improved recovery as well, because we transition from a mixed, tarnished, oxidized type of material that is prevalent in the long-term stockpiles to a fresher sulfide product. And we will definitely see some improvements in recoveries there. Currently, on the stockpile material and on some mineralized waste material going through the S3 circuit, the rougher recoveries are actually quite good at 90%, but as we progress through the rest of the plant, we do lose some recovery. Once we're on fresh sulfide, that changes dramatically, and we will see that in the back end of the second half of this year.

Your next question is from Cody Hayden with Deutsche Bank. good morning and thank you for taking my questions first and this was kind of touched upon already but you mentioned numerous fuel reduction initiatives i was wondering if you could maybe speak about where you expect to get the greatest benefits and how quickly you expect those to see those flow through and then second are you able to provide a bit of an update around some of the work streams at takataka and how you see that project progressing throughout the remainder of Thank you.

Hi, Cody. Well, perhaps, and I can just…

Hi, Cody. I just mentioned these various initiatives in play already and planned for the reminder of this year. Our biggest asset that we've always employed at both our site and at Cobre Panama is the use of our trolley assist network that is rapidly being expanded at both Consanxi and And obviously, the measures around shore dumping on waste dumps and really parking unnecessary equipment where it's not needed is our greatest short-term benefit. But the employment of those initiatives on all of our sites will continue because that really makes a lot of sense as far as fuel consumption is concerned.

The question on Takataka was on the work plan. As I understood your question was on the work plans and the milestones to here and the timing around that. So we released the 43-101 technical report during the year and during the quarter and that basically underlines around the MPV and from here that flows into the RIGI application. We currently, and that includes a permit shortly behind that. The riggy, I think, and we've also seen that, you know, and that includes.

Your next question comes from Lawson Winder with Bank of America.

Thank you very much, Operator, and hello, Tristan. Hello, Rudy and Ryan. Thank you for today's update. Can I ask about some of the other bottlenecks that have been kind of referred to on this call and in the release and things that we've heard about in the press? So, you know, one, for example, is, you know, we've heard about shipping backlogs at some of the ports in Africa, particularly Dar es Salaam. What about some of the other ports like Walbur's Bay and Durban? Are you seeing any disruptions there? And then if I could just ask a follow up after you address that question on input availability.

Sure, Lawson. So, yeah, certainly the situation in the Middle East has had an impact on shipping. I mean, I don't think it's the same level as what we saw indeed during COVID. When you have a situation anywhere in the globe where ships are contained, the global availability of shipping is affected and that affects the transport time. There just aren't enough ships remaining to cover the normal side of a knock-on effect. We haven't seen that significantly yet. uh in in African ports uh Dara Salah and Anode is right now and just more in terms of supplies coming in use all of those ports uh and the overland routes um but just as it was during COVID times you know some of that's a little bit unpredictable so definitely in the Middle East you know precursors so and those are the ones which are in COVID because helpful and then just

thinking about some of the um rebel cost inputs assessing those or it's into availability it's mostly on price.

We haven't seen the big move yet. It's just that given the situation, you know, so for example, fuel takes too much really happened yet.

Your next question is from Matt Murphy with BMO Capital Markets.

Hi, can I just ask another one on the COBRE costs? Because the 20 cents a pound increase across firm guidance to me I get you know like a mid fours cash cost for Panama um so does that sound right and like how quick you see that coming off as as the year progresses climate sure I'm at that spot on so we expect C1 from stockpile to be around 450 as one is what he ran set up and you get into the stockpile processing next year, force closer to $350,000, but certainly you incur higher costs, particularly

at the beginning when you're running lower throughputs as you wrap up production.

Okay. All right. Thanks. And then can I just ask a follow-up on Zambia? So, interestingly, on your chart with the diesel price, it looks like it dropped a bit in March. What are you seeing in April in terms of your diesel price? And how should we think about the increasing costs at Sentinel versus Consanchi. Looks like Sentinel's been increasing a bit more.

Sure. Hi, Matt. So firstly, we didn't see the impact of higher diesel prices through the quarter. As we noted, there's around a two-month lag. And you see in that chart that pre-the-run conflict diesel prices were around 85 cents per liter. Currently, we're seeing around $1.60 per litre as high as $2, and then in the forward curve, that's coming off to around $1.40 to $1.60 through the second half of the year. That's obviously changing a lot day to day. But as we sit here today, I think broadly you can think about it as double the price, what we saw two months ago, and that will start flowing through later. This reminds me of your second question, Matt. Oh, Sentinel. So Sentinel costs. The big difference there, Matt, clearly, and Sanchi, we have the tailwind from gold prices. So at Sentinel, it's that double whammy of lower grades, stronger Quacha, and then no byproduct credits. And we do expect some of that to change in the second half of the year, particularly as we get better grades. You will see we do expect the Sentinel cost to come down, therefore comfortable with the overall cost guidance with the exception of some of those market-related costs.

Your next question is from Myles Alsup with UBS.

A couple of questions. Maybe first of all, with Cobra Panama and the more permanent agreement that you'll be looking to strike with the government, have any discussions started yet? I mean, how is your kind of thought process evolving around the type of structure you could agree to with the government on a look-forward basis? That's the first question. I'll come back with the second after.

Thanks, Myles. Hi. So, yeah, look, it's just too early to say. All we can see is that it will be a new agreement. I mean, the Law 9 situation and Law 406 is quite clear that it will be different from that setup, and the government has said that publicly. we have not engaged on formal conversations, official discussions around that, but we're keeping an open mind on the structure. We've certainly done our homework in terms of what that could look like. It needs to be durable. It needs to make sense for all stakeholders. It needs to make sense for shareholders, but also for Panamanians.

Okay. And on Consanxi and the smelter expansion, what's the incremental sulfuric acid that you'll be producing? Is it kind of meaningful, and what sort of revenue could that be generating?

So at the moment, we're selling around 10,000 tons per month in acid. There's potential to increase that to 20,000 tons. That's contingent on the grades we see in the pit, as Rudy noted. But if we did sell that incremental amount at the current spot price for salt peric acid, we're seeing in Zambia of around $250 per ton. That'd be around $3 million incremental revenue per month. With the caveat being it's a fast-evolving situation, let's see how we go through Q2.

Your next question is from Craig Hutchison with TD Cowan.

Hi, guys. Good morning. Most of my questions are answered, so maybe I'll just ask a question on Guelb. The deferral production this year of, I think, 35 to 40,000 ounces, how should we think about that being spread out over the next few years? Should we assume it gets spread out over 2027, 2028, and 2029? Because I didn't see you guys update your guidance going forward there. Thanks.

Rudy, please.

Yeah, no. Hi, Craig. The reason for the change at Guelph Moraine for this year is driven by the procurement and delayed deliveries and construction of a treatment plant that we need to build at the back end of the CIL circuit in order to reduce the weak acid-dissociable cyanide levels reporting to tailings so as a result we will continue to process sulfide ore with intermittent oxide treatment during the course of this year every month or two months to support the transition to full dore production next year and maybe just to note then for the balance of our guidance parent what you should assume is the gold we expect to produce this year will move to years two

and three of the guidance period and the incremental copper production that we're showing this year. We'll move out of two years of the guidance. We'll update that three-year guidance in January of next year to account for that.

Perfect. Thanks, guys. Your next question is from Ian Russo with Barclays.

Thank you. Just a quick question on the Cobra Panama side. You obviously gave us an idea of the OPEC spend and the Working Capital Board, but just wanted to get a sense of the funding situation at Panama. How much cash is at the sort of asset level, and will there need to be some loans or, I guess, funding from First Quantum and KPMC to fund some of this sort of, I guess, processing of the stockpiles? And then just second question or follow-up question on the cost side, I guess, from what Matt was saying as well. I mean, it seems like the incremental cost seems to be a lot more than the 100 million OPEX you've mentioned within that, if you sort of try to back calculate it from the C1 cost. So just trying to understand what else sort of contributes to that 20 cents increase in the C1 cost other than the Cobra Panama side.

Thanks, Ian.

We predominantly hold cash at a group level and then fund down into the business as required. So you should assume that we'll be funding that $250 million of cash flow needed to restart for the stockpiles. And Obviously, that will then be refunded as we move into production and producing cash there. The second question, Ian, so, yeah, we see one cost we expect for the stockpile to around $450, and then incremental to that you have the around $100 million of CapEx plus another $50 million of working capital bills.

Your next question is from Anita Soni with CIBC World Markets.

My follow-up, I think, has been asked, but I'm just going to ask one last one on enterprise. The grades were fairly strong, and I think you've delivered, you know, like a pretty solid first quarter. How does enterprise look over the course of the year? Because you're, you know, tracking very well to your guidance, 30 to 40.

Hi, again, Anita. Rudy, can you answer that one?

Hi, Anita.

Yeah, spot on.

We're tracking very well to our guidance. We're seeing the start of the second quarter very strongly again, and as the nickel price also has responded favorably, we will re-evaluate some stripping activity at Enterprise probably in the second half of this year, depending on the fuel situation. But enterprise is really nicely set up at the bottom of the pit and in its development to work in the next stages to deliver a strong year, and we don't foresee any changes to...

Operator, we're coming up to the hour, so we'll take one more question. Thank you.

Your next question is from Oris Bacauda with Scotiabank.

Sorry, thanks for the follow-up. Again, just coming back to Cobra Panama. So outside of the completion of the environmental audit, which I assume now is due, I think you said imminently here over the next couple of weeks, is there anything else outstanding from your perspective that may be required to start the engagement with the government on a new agreement?

So the comprehensive audit, we believe, is pretty imminent. so the fifth report came out in early April and that was, they said, 88.84% progress so 147 of the 370 total commitments had been analysed 223 remains to be closed out but the overriding finding was of no environmental damage just on reforestation, on reporting and so on The next interim audit, the report six, is due out imminently, and then the final report. We see that as being not necessary, that things have to be completely sequential, but certainly it will be any other elements impacting on that. You know, the three constructs on that environmental structure and on the commercial arrangements, and we just need to get into those standard governments' views. direct engagement.

There are no further questions at this time. I'd like to turn the call back over to Mr. Pascal for any closing remarks.

Thank you, operator. And I'd like to thank everybody for joining the call today. For all our analysts and investors in Toronto, I'm looking forward to see you at our annual dinner next week. Thanks, everybody.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.