[Chairman's Review](index=4&type=section&id=Chairman%27s%20Review) Chairman Xu Jiqing reviews MMG's strong H1 2025 performance, achieving record profitability, EBITDA, and EBIT, with significant profit attributable to equity holders, driven by increased copper production, higher commodity prices, and cost reductions - MMG achieved **record profitability** in H1 2025, with **EBITDA and EBIT reaching new highs**, and **profit attributable to equity holders significantly increasing to $340 million** compared to the prior year period[5](index=5&type=chunk) - Strong profit growth was primarily due to **overall increased copper production** from its three copper mines, **higher market prices for copper, gold, silver, and zinc**, and **reduced unit costs at Las Bambas**[5](index=5&type=chunk) - MMG's **net debt decreased by $903.3 million** from the end of 2024, driven by strong operating cash flow and early repayment of the Khoemacau joint venture loan, **reducing the group's leverage ratio from 41% to 33%**[5](index=5&type=chunk) - The company continues to advance strategic capital programs at Las Bambas, Khoemacau, and Kinsevere, and announced the **acquisition of Anglo American's Brazil Nickel assets** to expand its future mineral portfolio[6](index=6&type=chunk) [CEO's Report](index=5&type=section&id=CEO%27s%20Report) CEO Zhao Jing reports MMG's significant operational and financial growth in H1 2025, highlighting asset portfolio strengths, team capabilities, and strategic execution, with improved safety, robust financials, and strong production - In H1 2025, MMG achieved **leapfrog growth in operations and financials**, with its **balance sheet reaching its strongest level in a decade**[11](index=11&type=chunk)[15](index=15&type=chunk) - **Copper sales and production significantly increased** across its three copper mines (Las Bambas, Khoemacau, Kinsevere), while **zinc production from Australian mines remained stable**[12](index=12&type=chunk) 2025 Key Mineral Production Guidance | Mineral | Production Guidance (tonnes) | | :--- | :--- | | Copper | Up to 522,000 | | Zinc | Up to 240,000 | | Las Bambas Copper | Up to 400,000 | - The company's focus for the second half of the year is on achieving **safe and reliable operations**, **strict cost and capital management**, and **maintaining long-term growth momentum**[13](index=13&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This chapter analyzes MMG's H1 2025 financial and operational performance, covering revenue, expenses, mine-specific results, cash flow, financial resources, acquisitions, development projects, and risk management [Performance Overview](index=6&type=section&id=Performance%20Overview) MMG achieved significant financial growth in H1 2025, with revenue up 47% to $2.817 billion, EBITDA up 98% to $1.54 billion, and profit attributable to equity holders surging 1511% to $340 million H1 2025 Key Financial Metrics (Year-on-Year) | Metric | 2025 (million USD) | 2024 (million USD) | Change % | | :--- | :--- | :--- | :--- | | Revenue | 2,817.0 | 1,918.2 | 47% | | EBITDA | 1,539.9 | 779.0 | 98% | | EBIT | 1,058.8 | 311.1 | 240% | | Profit for the Period After Tax | 566.3 | 79.5 | 612% | | Profit Attributable to Equity Holders of the Company | 340.0 | 21.1 | 1,511% | - Revenue growth was primarily driven by **increased sales volume ($678.1 million)** and **higher commodity prices ($220.7 million)**, with copper concentrate sales from Las Bambas and Khoemacau being the largest contributors[23](index=23&type=chunk) H1 2025 Revenue by Commodity (Year-on-Year) | Commodity | 2025 (million USD) | 2024 (million USD) | Change % | | :--- | :--- | :--- | :--- | | Copper | 2,208.6 | 1,373.0 | 61% | | Zinc | 233.5 | 224.2 | 4% | | Gold | 148.6 | 89.0 | 67% | | Silver | 139.9 | 112.2 | 25% | | Cobalt | 7.5 | 1.3 | 477% | [Prices and Sales Volume](index=8&type=section&id=Prices%20and%20Sales%20Volume) In H1 2025, MMG experienced general price increases for major commodities, with gold seeing the largest gain, while copper and cobalt sales volumes significantly increased H1 2025 LME Average Cash Prices (Year-on-Year) | Commodity | 2025 (USD/tonne or ounce) | 2024 (USD/tonne or ounce) | Change % | | :--- | :--- | :--- | :--- | | Copper | 9,432 | 9,097 | 4% | | Zinc | 2,739 | 2,641 | 4% | | Gold | 3,071 | 2,205 | 39% | | Silver | 32.77 | 26.11 | 26% | | Cobalt | 29,019 | 27,174 | 7% | | Lead | 1,959 | 2,121 | (8%) | | Molybdenum | 45,444 | 45,994 | (1%) | H1 2025 Payable Metal in Products Sold (Year-on-Year) | Commodity | 2025 (tonnes or ounces) | 2024 (tonnes or ounces) | Change % | | :--- | :--- | :--- | :--- | | Copper | 237,651 | 157,503 | 51% | | Cobalt | 482 | 92 | 424% | | Gold | 47,968 | 39,311 | 22% | | Silver | 4,337,251 | 4,245,706 | 2% | | Zinc | 89,201 | 92,464 | (4%) | | Lead | 16,061 | 23,961 | (33%) | | Molybdenum | 1,207 | 1,635 | (26%) | [Operating Expenses and Other Financial Items](index=9&type=section&id=Operating%20Expenses%20and%20Other%20Financial%20Items) MMG's total operating expenses increased by 18% to $1.2582 billion in H1 2025, driven by higher production costs at Las Bambas and unfavorable inventory changes at Kinsevere, while net finance costs decreased - Total operating expenses increased by **$195 million (18%) to $1.2582 billion**, primarily due to **higher operating expenses at Las Bambas ($59.5 million)** and **unfavorable inventory movements at Kinsevere**[31](index=31&type=chunk) - Exploration expenses increased by **$15.3 million (56%) to $42.5 million**, mainly due to **increased drilling activities at Las Bambas**[32](index=32&type=chunk) - Khoemacau acquisition and integration costs decreased by **$19.9 million**, while **net other income increased by $51.9 million (419%) to $39.5 million**, primarily attributable to **favorable foreign exchange impacts at Las Bambas and the release of tax provisions**[32](index=32&type=chunk) - **Net finance costs decreased by $28.5 million (17%) to $139.5 million**, primarily due to **lower debt balances and reduced interest rates**[33](index=33&type=chunk) [Mine Analysis](index=10&type=section&id=Mine%20Analysis) This section details the H1 2025 production, sales, revenue, operating expenses, and costs for MMG's key mines, showing strong copper growth and cost control, despite some operational challenges [Las Bambas](index=10&type=section&id=Las%20Bambas) Las Bambas produced 210,637 tonnes of copper in concentrate in H1 2025, a 67% increase year-on-year, with revenue up 60% to $2.0068 billion, driven by higher grades and recovery rates, and C1 costs reduced to $1.06/pound Las Bambas H1 2025 Production and Sales (Year-on-Year) | Metric | 2025 | 2024 | Change % | | :--- | :--- | :--- | :--- | | Copper in Concentrate Production (tonnes) | 210,637 | 126,198 | 67% | | Copper Sales Volume (tonnes) | 190,577 | 125,668 | 52% | | Revenue (million USD) | 2,006.8 | 1,256.0 | 60% | - **C1 costs decreased to $1.06/pound** (2024: $1.81/pound), primarily due to **increased copper production and higher by-product credits**[37](index=37&type=chunk) - **2025 copper production guidance remains at 360,000 to 400,000 tonnes**, and **C1 cost guidance is lowered to $1.40/pound to $1.60/pound**, mainly due to **favorable gold, silver, and molybdenum prices and reduced treatment charges**[38](index=38&type=chunk) [Kinsevere](index=12&type=section&id=Kinsevere) Kinsevere produced 25,425 tonnes of copper cathode in H1 2025, a 19% increase year-on-year, with revenue up 25% to $234.6 million, benefiting from the expansion project ramp-up, despite national power supply instability Kinsevere H1 2025 Production and Sales (Year-on-Year) | Metric | 2025 | 2024 | Change % | | :--- | :--- | :--- | :--- | | Copper Cathode Production (tonnes) | 25,425 | 21,278 | 19% | | Copper Sales Volume (tonnes) | 25,270 | 21,465 | 18% | | Revenue (million USD) | 234.6 | 188.3 | 25% | - **C1 costs were $3.17/pound** (2024: $3.14/pound), a slight increase primarily due to **higher cash operating costs, partially offset by increased copper production**[42](index=42&type=chunk) - **2025 copper cathode production guidance remains at 63,000 to 69,000 tonnes**, with production likely to be at the lower end due to **power supply instability**; **C1 costs are expected to be at the upper end of the $2.50/pound to $2.90/pound guidance range**[43](index=43&type=chunk) [Khoemacau](index=14&type=section&id=Khoemacau) Khoemacau produced 22,043 tonnes of copper in concentrate in H1 2025, a 121% increase year-on-year, with revenue up 122% to $199.9 million, driven by MMG's full six-month ownership and increased ore mined, with C1 costs reduced to $2.05/pound Khoemacau H1 2025 Production and Sales (Year-on-Year) | Metric | 2025 | 2024 | Change % | | :--- | :--- | :--- | :--- | | Copper in Concentrate Production (tonnes) | 22,043 | 9,982 | 121% | | Copper Sales Volume (tonnes) | 21,244 | 9,717 | 119% | | Revenue (million USD) | 199.9 | 90.2 | 122% | - **C1 costs were $2.05/pound** (H1 2024: $2.65/pound), showing **improvement**[47](index=47&type=chunk) - **2025 copper production guidance remains between 43,000 and 53,000 tonnes**, and **C1 cost guidance is between $2.30/pound and $2.65/pound**, consistent with previous guidance[48](index=48&type=chunk) [Dugald River](index=16&type=section&id=Dugald%20River) Dugald River produced 84,426 tonnes of zinc in concentrate in H1 2025, a 6% increase year-on-year, with revenue flat, driven by higher mill throughput, and C1 costs reduced to $0.65/pound Dugald River H1 2025 Production and Sales (Year-on-Year) | Metric | 2025 | 2024 | Change % | | :--- | :--- | :--- | :--- | | Zinc in Concentrate Production (tonnes) | 84,426 | 79,284 | 6% | | Zinc Sales Volume (tonnes) | 70,153 | 69,353 | 1% | | Revenue (million USD) | 227.5 | 226.1 | 1% | - **Zinc C1 costs were $0.65/pound** (2024: $0.67/pound), showing **improvement**, primarily due to **higher zinc production, lower treatment charges, and reduced selling expenses**[50](index=50&type=chunk) - **Full-year zinc production is expected to be between 170,000 and 185,000 tonnes**, with **C1 costs anticipated to be at the lower end of the $0.75/pound to $0.90/pound guidance range**, mainly benefiting from **higher silver prices and lower treatment charges**[51](index=51&type=chunk) [Rosebery](index=18&type=section&id=Rosebery) Rosebery's zinc in concentrate production decreased by 22% to 23,505 tonnes in H1 2025, with revenue down 8% to $141 million, due to lower ore grades and equipment reliability challenges, while C1 costs increased to negative $0.32/pound Rosebery H1 2025 Production and Sales (Year-on-Year) | Metric | 2025 | 2024 | Change % | | :--- | :--- | :--- | :--- | | Zinc in Concentrate Production (tonnes) | 23,505 | 30,263 | (22%) | | Zinc Sales Volume (tonnes) | 19,048 | 23,111 | (18%) | | Revenue (million USD) | 141.0 | 152.7 | (8%) | - **Zinc C1 costs increased to negative $0.32/pound** (2024: negative $0.42/pound), reflecting the **decline in zinc production**[53](index=53&type=chunk) - **Full-year zinc in concentrate production is expected to be between 45,000 and 55,000 tonnes**; **C1 costs are revised down from the previous guidance of $0.25/pound to $0.40/pound to between negative $0.10/pound and positive $0.15/pound**, primarily benefiting from **higher precious metal prices**[54](index=54&type=chunk) [Cash Flow Analysis](index=20&type=section&id=Cash%20Flow%20Analysis) In H1 2025, MMG's net cash inflow from operating activities significantly increased by 130% to $1.185 billion, while net cash outflow from investing activities decreased by 83%, and financing activities turned into a net outflow H1 2025 Net Cash Flow (Year-on-Year) | Metric | 2025 (million USD) | 2024 (million USD) | Change % | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 1,185.0 | 515.3 | 130% | | Net Cash Flow from Investing Activities | (424.2) | (2,464.9) | 83% | | Net Cash Flow from Financing Activities | (246.2) | 2,123.6 | (112%) | | Net Cash Inflow | 514.6 | 174.0 | 196% | - **Net cash inflow from operating activities increased by $669.7 million (130%)**, primarily due to **increased sales volume at Las Bambas ($603 million)** and **generally higher commodity prices ($220.7 million)**[57](index=57&type=chunk) - **Net cash outflow from investing activities decreased by $2.0407 billion (83%)**, mainly because **$2.0428 billion was paid for the acquisition of Khoemacau copper mine in 2024**[58](index=58&type=chunk) - **Net cash flow from financing activities decreased by $2.3698 billion (112%)**, primarily due to **net loan repayments of $388.8 million in H1 2025** (compared to net loan drawdowns of $1.8898 billion in 2024) and **dividends of $103.7 million paid to non-controlling interest holders of the Las Bambas joint venture**[58](index=58&type=chunk) [Financial Resources and Liquidity](index=20&type=section&id=Financial%20Resources%20and%20Liquidity) As of June 30, 2025, MMG's total equity increased by $782.4 million to $7.0609 billion, with net debt reduced to $3.5391 billion, and the gearing ratio decreasing from 41% to 33%, indicating significantly improved financial health Financial Resources Overview as of June 30, 2025 | Metric | June 30, 2025 (million USD) | December 31, 2024 (million USD) | Change (million USD) | | :--- | :--- | :--- | :--- | | Total Assets | 15,486.3 | 14,985.9 | 500.4 | | Total Liabilities | (8,425.4) | (8,707.4) | 282.0 | | Total Equity | 7,060.9 | 6,278.5 | 782.4 | MMG Group Gearing Ratio (Year-on-Year) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Debt (million USD) | 3,539.1 | 4,442.4 | | Total Equity (million USD) | 7,060.9 | 6,278.5 | | Gearing Ratio | 0.33 | 0.41 | - As of June 30, 2025, the Group had **undrawn debt facilities of $2.841 billion** and **had not breached any covenant requirements**[61](index=61&type=chunk) [Major Acquisitions and Disposals](index=21&type=section&id=Major%20Acquisitions%20and%20Disposals) MMG announced in February 2025 the acquisition of 100% equity in Anglo American's Brazil Nickel assets for up to $500 million in cash, aligning with its growth strategy to expand its global footprint and base metals exposure - MMG announced on February 18, 2025, the **acquisition of 100% equity in Anglo American's Brazil Nickel assets** for a total cash consideration of **up to $500 million**[62](index=62&type=chunk) - The acquisition consideration includes **$350 million upfront cash**, **up to $100 million in nickel price-linked contingent consideration**, and **up to $50 million in development project-linked contingent consideration**[62](index=62&type=chunk) - This transaction aligns with MMG's growth strategy, marking the **company's first investment in Brazil**, and will **expand its presence in the nickel sector**[62](index=62&type=chunk) [Development Projects](index=22&type=section&id=Development%20Projects) MMG's Kinsevere Expansion Project (KEP) continues its ramp-up to extend mine life to 2035 with 80,000 tonnes of copper cathode annually, while the Khoemacau expansion plans a new concentrator to increase capacity to 130,000 tonnes of copper in concentrate per year - The **Kinsevere Expansion Project (KEP) continues its ramp-up**, with **copper recovery at the sulphide concentrator exceeding 75%** and **roaster conversion rates reaching 88%**[66](index=66&type=chunk) - The KEP project has a **rated annual capacity of 80,000 tonnes of copper cathode**, extending Kinsevere's mine life to at least 2035, and **an additional 12MW of diesel generators are being procured to mitigate power instability**[66](index=66&type=chunk) - The **Khoemacau expansion project plans a new 4.5 million tonnes per annum concentrator** to expand mine capacity to **130,000 tonnes of copper in concentrate per year**, with the **feasibility study expected to be completed by end-2025** and **first concentrate production in 2028**[66](index=66&type=chunk) [Contracts and Commitments](index=22&type=section&id=Contracts%20and%20Commitments) In H1 2025, MMG entered into 479 contracts with an annual operational or capital value of $607.8 million, optimizing production, development, and supply chains across its mines, and advancing renewable energy initiatives - In H1 2025, MMG entered into **479 contracts**, with a total annual operational or capital value of **$607.8 million**[68](index=68&type=chunk) - Las Bambas optimized its production and development plans through new and revised agreements, and **increased on-site storage of critical materials** to maintain operational continuity and flexibility[69](index=69&type=chunk) - Dugald River is **evaluating the feasibility of a wind farm** to expand renewable energy use and has established a **new concentrate logistics chain for rail transport to Townsville Port**[73](index=73&type=chunk) [Employees](index=23&type=section&id=Employees) As of June 30, 2025, MMG Group employed 5,220 full-time staff, with total employee benefits expenses of $271.5 million in H1 2025, primarily due to increased profit-sharing at MLB, and the company maintains competitive compensation and development programs - As of June 30, 2025, the MMG Group employed **5,220 full-time staff** (2024: 5,092 staff)[76](index=76&type=chunk) - Total employee benefits expenses for H1 2025 were **$271.5 million** (2024: $190.4 million), with the increase primarily due to **MLB profit-sharing expenses ($65.2 million)**[76](index=76&type=chunk) - The company's compensation policy aligns with market practices, including **fixed remuneration, performance incentives, insurance, and medical support**, and provides **training and development programs**[76](index=76&type=chunk) [Growth Exploration Activities](index=23&type=section&id=Growth%20Exploration%20Activities) In H1 2025, MMG actively pursued growth exploration across its mining areas, completing 77,949 meters of drilling, focusing on near-surface skarn and porphyry copper mineralization at Las Bambas, resource testing at Kinsevere, and new extensions at Khoemacau and Dugald River - In H1 2025, MMG completed a total of **77,949 meters of drilling** across **249 drill holes**, with an average depth of 313 meters[85](index=85&type=chunk) - Las Bambas exploration drilling focused on **near-surface skarn and porphyry copper mineralization**, evaluating the mineral potential in the area between the Chalcobamba and Sulfobamba pits[77](index=77&type=chunk) - Khoemacau's deep drilling confirmed the **continuity of mineralization in Zone 5 at a depth of 1,800 meters**[81](index=81&type=chunk) - Dugald River discovered **new extensions of zinc-lead-silver mineralization in the EDR area**, expanding the known depth of sulphide mineralization[82](index=82&type=chunk) [Financial and Other Risk Management](index=25&type=section&id=Financial%20and%20Other%20Risk%20Management) MMG's financial risk management policies remained unchanged since end-2024, with the company hedging commodity prices, monitoring interest rate risks, and managing liquidity through debt facilities and early payment agreements - MMG's financial risk management policies have **not changed since December 31, 2024**[87](index=87&type=chunk) [Commodity Price Risk](index=25&type=section&id=Commodity%20Price%20Risk) MMG faces commodity price volatility for copper, zinc, lead, gold, silver, molybdenum, and cobalt, and in H1 2025, entered into various commodity transactions, including fixed price swaps for 93,100 tonnes of copper, to hedge sales prices - As of June 30, 2025, MMG entered into **fixed price swaps for 93,100 tonnes of copper**, with fixed prices ranging from **$9,000/tonne to $10,093/tonne**, for settlement from July 2025 to February 2026[94](index=94&type=chunk)[225](index=225&type=chunk) Sensitivity Analysis of Commodity Price Changes on Profit After Tax and Other Comprehensive Income (H1 2025) | Commodity | Commodity Price Change | Profit Increase (million USD) | Other Comprehensive Income Decrease (million USD) | | :--- | :--- | :--- | :--- | | Copper | +10% | 3.0 | (57.7) | | Zinc | +10% | 2.6 | - | | Total | | 5.6 | (57.7) | | Commodity | Commodity Price Change | Profit Decrease (million USD) | Other Comprehensive Income Increase (million USD) | | :--- | :--- | :--- | :--- | | Copper | -10% | (3.0) | 57.7 | | Zinc | -10% | (2.6) | - | | Total | | (5.6) | 57.7 | [Interest Rate Risk](index=27&type=section&id=Interest%20Rate%20Risk) MMG is exposed to interest rate risk primarily through interest-bearing loans and surplus cash investments, with floating-rate financial instruments creating cash flow interest rate risk, and a 100 basis point change in interest rates impacting profit after tax by approximately $16.9 million - MMG is primarily exposed to interest rate risk through **interest-bearing loans and investments in surplus cash**, with **floating-rate financial instruments creating cash flow interest rate risk**[96](index=96&type=chunk)[228](index=228&type=chunk) Interest Rate Sensitivity Analysis (H1 2025, Change in Profit After Tax) | Interest Rate Change | Financial Assets (million USD) | Financial Liabilities (million USD) | Total (million USD) | | :--- | :--- | :--- | :--- | | +100 basis points | 1.9 | (18.8) | (16.9) | | -100 basis points | (1.9) | 18.8 | 16.9 | [Liquidity Risk](index=27&type=section&id=Liquidity%20Risk) MMG manages liquidity with sufficient debt facilities and had no loan covenant breaches as of June 30, 2025, further enhancing liquidity through early payment agreements with Minmetals Non-ferrous and CITIC Metal Peru Investment for up to $280 million - MMG has **sufficient debt facilities to manage liquidity**, and as of June 30, 2025, the Group's loans **had not breached any covenant requirements**[98](index=98&type=chunk)[230](index=230&type=chunk) - The company has agreements with Minmetals Non-ferrous and CITIC Metal Peru Investment Co., Ltd., allowing for **early payments on shipped and inventoried Las Bambas products, totaling up to $280 million**[98](index=98&type=chunk)[230](index=230&type=chunk) [Country and Community Risks](index=28&type=section&id=Country%20and%20Community%20Risks) MMG operates in various regions outside Hong Kong, facing political, economic, and community risks, including regime changes, currency fluctuations, regulatory revisions, and social unrest, particularly in the DRC and Peru, and actively collaborates with governments and communities to mitigate these - MMG faces various country and community risks, including **regime or policy changes, currency exchange rate fluctuations, changes in licensing regimes, government regulatory changes, and community unrest**[101](index=101&type=chunk)[236](index=236&type=chunk) - The **2018 Mining Code revision in the Democratic Republic of Congo increased the tax burden on mining companies**; the **Las Bambas region in Peru experienced significant political turmoil and community instability**[101](index=101&type=chunk)[236](index=236&type=chunk) - The company will continue to **work closely with relevant government departments and community groups** to mitigate potential risks from social instability and unforeseen events to Las Bambas' operations[101](index=101&type=chunk)[236](index=236&type=chunk) [Contingent Liabilities](index=28&type=section&id=Contingent%20Liabilities) MMG's contingent liabilities include bank guarantees of $351 million with no significant claims, and tax-related contingencies in Peru where SUNAT has appealed favorable tax court rulings for Las Bambas, potentially leading to significant liabilities if appeals fail [Bank Guarantees](index=28&type=section&id=Bank%20Guarantees) As of June 30, 2025, MMG had bank guarantees totaling $351 million, primarily related to mining leases, rights, exploration licenses, or major contracting agreements, with no significant claims reported - As of June 30, 2025, MMG's **bank guarantees amounted to $351 million** (December 31, 2024: $330.7 million)[103](index=103&type=chunk)[220](index=220&type=chunk) - These guarantees are primarily related to the terms of **mining leases, mining rights, exploration licenses, or major contracting agreements**, with **no significant claims reported at the end of the reporting period**[103](index=103&type=chunk)[220](index=220&type=chunk) [Tax-Related Contingencies](index=28&type=section&id=Tax-Related%20Contingencies) MMG faces complex tax issues in Peru, where SUNAT disputes Las Bambas' withholding and income tax audits, involving hundreds of millions in potential liabilities; despite favorable tax court rulings, SUNAT has appealed, and a final decision could take years, potentially leading to significant liabilities if appeals fail - Peru's National Tax Administration Superintendence (SUNAT) disputed Minera Las Bambas S.A. (MLB)'s 2014-2017 withholding tax audits, arguing for a **30% tax rate instead of the applied 4.99%**[107](index=107&type=chunk)[222](index=222&type=chunk) - MLB received a **favorable ruling from the Peruvian Tax Court in 2024**, dismissing SUNAT's appeal and revoking the related appealed assessments for the 2014-2017 tax years, totaling **$557 million**[107](index=107&type=chunk)[223](index=223&type=chunk) - The Tax Court also upheld MLB's position on the 2018 income tax audit, ruling that Las Bambas is entitled to claim **tax losses of $429 million** and obtain **interest deductions on $378 million in bank loans and $242 million in shareholder loans**, cumulatively eliminating **$2.016 billion in potential tax liabilities**[108](index=108&type=chunk)[110](index=110&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) - SUNAT has filed judicial appeals against the Tax Court's rulings, with a **final decision potentially taking several years**; if the appeals are unsuccessful, it could lead to the **recognition of significant liabilities**[107](index=107&type=chunk)[109](index=109&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) [Future Outlook](index=30&type=section&id=Future%20Outlook) MMG is committed to long-term growth targeting metals for a low-carbon future, achieved through prudent cost and risk management and operational excellence, while continuously enhancing asset value and exploring diversification opportunities - MMG is committed to **long-term, orderly growth**, supported by **ambitious production targets for metals essential for a low-carbon future**, and executing its strategy through **prudent cost and risk management**[111](index=111&type=chunk) 2025 Production Outlook by Mine | Mine | Mineral | Production Outlook (tonnes) | | :--- | :--- | :--- | | Las Bambas | Copper | 360,000 to 400,000 | | Kinsevere | Copper Cathode | 63,000 to 69,000 | | Khoemacau | Copper | 43,000 to 53,000 | | Dugald River | Zinc | 170,000 to 185,000 | | Rosebery | Zinc | 45,000 to 55,000 | - The Khoemacau mine plans to **increase annual copper in concentrate production to 130,000 tonnes by 2028**, involving the **construction of a new 4.5 million tonnes per annum concentrator**[117](index=117&type=chunk) - Dugald River is **studying the feasibility of constructing a wind farm** to supplement its solar power purchase agreement and **reduce its carbon footprint**[118](index=118&type=chunk) [Other Information](index=32&type=section&id=Other%20Information) This chapter discloses MMG's directors' and major shareholders' interests, details loan agreements linked to controlling shareholder performance, and outlines share schemes, corporate governance, dividend policy, and committee structures [Directors' Interests in Shares, Underlying Shares, and Debentures](index=32&type=section&id=Directors%27%20Interests%20in%20Shares%2C%20Underlying%20Shares%2C%20and%20Debentures) As of June 30, 2025, MMG directors Zhao Jing and Xu Jiqing held company shares, representing a minimal percentage of total issued shares, primarily from vested performance awards Directors' Long Positions in the Company's Shares as of June 30, 2025 | Director Name | Nature of Interest | Number of Shares Held | Approximate % of Total Issued Shares | | :--- | :--- | :--- | :--- | | Zhao Jing | Personal | 240,984 | 0.002 | | Xu Jiqing | Personal | 940,050 | 0.010 | - Mr. Zhao Jing's **240,984 share interest** is from **vested performance awards granted under the 2022 Performance Award**, which vested on June 2, 2025[120](index=120&type=chunk) - Mr. Xu Jiqing's **940,050 shares** represent the balance of the 2015 and 2016 Performance Awards, which have vested and are subject to a shareholding lock-up period[121](index=121&type=chunk) [Major Shareholders' Interests in Shares and Underlying Shares](index=33&type=section&id=Major%20Shareholders%27%20Interests%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, China Minmetals Corporation and its subsidiaries, through Minmetals Hong Kong Holdings Limited, beneficially held 8,186,032,923 shares, representing 67.43% of MMG's total issued shares, making them the controlling shareholder Major Shareholders' Long Positions in the Company's Shares as of June 30, 2025 | Major Shareholder Name | Capacity | Number of Shares Held | Approximate % of Total Issued Shares | | :--- | :--- | :--- | :--- | | China Minmetals Corporation | Interest of Controlled Corporation | 8,186,032,923 | 67.43 | | China Minmetals Corporation Limited | Interest of Controlled Corporation | 8,186,032,923 | 67.43 | | Minmetals Non-ferrous Metals Co., Ltd. | Interest of Controlled Corporation | 8,186,032,923 | 67.43 | | Abon Enterprises Limited | Interest of Controlled Corporation | 8,186,032,923 | 67.43 | | Minmetals Hong Kong Holdings Limited | Beneficial Owner | 8,186,032,923 | 67.43 | - The **major shareholder's stake is 67.43%**, a slight decrease from 67.49% after the completion of the rights issue on July 15, 2024, primarily due to the **11,516,714 shares vested on June 2, 2025**[122](index=122&type=chunk) [Loans](index=34&type=section&id=Loans) MMG's loan agreements contain specific performance obligations for its controlling shareholder, China Minmetals, where a change in control or ownership below 50% could trigger a default, leading to immediate repayment, thus ensuring the controlling shareholder's continued influence - MMG's loan agreements contain conditions requiring the **controlling shareholder to fulfill specific performance obligations**, and a breach of these obligations would lead to **loan default**[124](index=124&type=chunk)[125](index=125&type=chunk) - Multiple loan agreements, such as the **ICBC Renewal Loan, Bank of China Sydney Branch Loan, and China Construction Bank Loan**, stipulate that if China Minmetals ceases to beneficially own more than 50% of the company's share capital or loses control over the company, the **loans will become immediately due and payable**[126](index=126&type=chunk)[127](index=127&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk)[139](index=139&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) - As of June 30, 2025, the **ICBC Renewal Loan and the June 2023 ICBC Loan remained undrawn**, while the **Bank of China Sydney Branch Loan had $190 million drawn**, the **China Construction Bank Loan had $100 million drawn**, the **China Development Bank Loan had $512.4 million drawn**, the **March Syndicated Loan had $700 million drawn**, and the **2024 Syndicated Loan had $130 million drawn**[126](index=126&type=chunk)[127](index=127&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[134](index=134&type=chunk)[136](index=136&type=chunk)[139](index=139&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk) [Share Schemes](index=39&type=section&id=Share%20Schemes) MMG's Performance Award Plan incentivizes employees by aligning their interests with group growth; in H1 2025, 11,516,714 performance awards from the 2022 plan vested, and the 2025 Long Term Incentive Plan's cash structure was approved, with vesting contingent on achieving resource growth, financial, and market-related performance targets - Performance awards aim to **retain and incentivize selected employees of Group member companies**, aligning their interests with the **Group's development and growth**[146](index=146&type=chunk) - As of June 30, 2025, a total of **11,516,714 performance awards** under the 2022 Performance Award vested in June 2025, representing approximately **0.09% of the company's total issued shares** on that date[146](index=146&type=chunk)[148](index=148&type=chunk) - The vesting of performance awards is contingent upon achieving certain performance conditions, such as **resource growth, financial, and market-related performance targets**[148](index=148&type=chunk) [Corporate Governance](index=40&type=section&id=Corporate%20Governance) MMG is committed to maintaining high standards of corporate governance through a high-quality board, effective internal controls, and transparency to shareholders, having complied with all code provisions of the Corporate Governance Code in H1 2025 - MMG is committed to maintaining **high standards of corporate governance practices** through a **high-quality Board, effective internal controls, and transparency and accountability to all shareholders**[150](index=150&type=chunk) - The company has **complied with all code provisions** of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025[150](index=150&type=chunk) [Dividend Policy](index=40&type=section&id=Dividend%20Policy) MMG's dividend policy aims to deliver long-term shareholder value through a combination of value-accretive growth and dividend returns, with the Board considering future growth plans, financial health, liquidity, and economic conditions before recommending dividends - MMG is committed to providing **long-term value to shareholders** through a combination of **value-accretive growth and dividend returns**[151](index=151&type=chunk) - Dividend payment decisions will depend on various factors, including the **company's future growth plans, expected operating and financial conditions, liquidity, balance sheet strength, diverse shareholder interests and expectations, and overall economic conditions**[151](index=151&type=chunk) - The company may distribute dividends in the form of **cash, company shares, or a combination of both**[152](index=152&type=chunk) [Audit and Risk Management Committee](index=41&type=section&id=Audit%20and%20Risk%20Management%20Committee) As of the report date, MMG's Audit and Risk Management Committee comprises six members, including four independent non-executive directors, chaired by Mr. Chan Ka Keung, and is responsible for financial reporting, monitoring systems, and advising the Board on high-risk matters - The Audit and Risk Management Committee consists of **six members**, including **four independent non-executive directors and two non-executive directors**, with **Mr. Chan Ka Keung as Chairman**[153](index=153&type=chunk) - The Committee is primarily responsible for **financial reporting, monitoring systems and controls**, and advising the Board on **high-risk matters, risk management, and internal controls**[153](index=153&type=chunk) - The Committee has **reviewed the Group's unaudited condensed consolidated interim financial statements** for the six months ended June 30, 2025[153](index=153&type=chunk) [Directors' Securities Transactions](index=41&type=section&id=Directors%27%20Securities%20Transactions) MMG has adopted a standard code for directors' securities transactions, no less stringent than the Listing Rules, and all directors confirmed compliance for the six months ended June 30, 2025 - MMG has adopted a **standard code for directors' securities transactions**, whose terms are **no less stringent than the Model Code** set out in Appendix C3 of the Listing Rules[154](index=154&type=chunk) - All directors confirmed their **compliance with the Model Code and the Standard Code for Securities Transactions** for the six months ended June 30, 2025[154](index=154&type=chunk) [Changes in Directors' Information](index=42&type=section&id=Changes%20in%20Directors%27%20Information) Since the 2024 annual report, MMG's Board has seen several changes, including Mr. Xu Jiqing's new role at China Minmetals, Mr. Zhao Jing's appointment as CEO, Mr. Cao Liang's re-designation as Non-Executive Director, and adjustments to independent non-executive directors' fees Details of Director Changes | Director Name | Position | Details of Change | | :--- | :--- | :--- | | Xu Jiqing | Non-Executive Director | Ceased to be a member of the Audit and Risk Management Committee and the Governance, Remuneration, Nomination and Sustainability Committee, appointed as Senior Vice President of China Minmetals. | | Zhao Jing | Chief Executive Officer and Executive Director | Appointed on April 12, 2025. | | Cao Liang | Non-Executive Director | Resigned as CEO, re-designated as Non-Executive Director, and appointed as a member of the Audit and Risk Management Committee and the Governance, Remuneration, Nomination and Sustainability Committee. | | Chen Ying | Independent Non-Executive Director | Appointed as an independent director of China State Shipbuilding Corporation Limited. | - The basic director's fees for independent non-executive directors Peter CASSIDY, Leung Cheuk Yan, Chan Ka Keung, and Chen Ying were **adjusted from AUD188,000 to AUD193,000 per annum**, effective January 1, 2025[156](index=156&type=chunk) [Repurchase, Sale or Redemption of the Company's Listed Securities](index=43&type=section&id=Repurchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2025, neither MMG nor any of its subsidiaries repurchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2025, **neither the company nor any of its subsidiaries repurchased, sold, or redeemed any of the company's listed securities**[157](index=157&type=chunk) [Independent Auditor's Report](index=44&type=section&id=Independent%20Auditor%27s%20Report) Deloitte Touche Tohmatsu reviewed MMG's condensed consolidated interim financial statements for H1 2025, concluding that nothing came to their attention suggesting the statements were not prepared in all material respects in accordance with HKAS 34 - Deloitte Touche Tohmatsu reviewed MMG's **condensed consolidated interim financial statements** for the six months ended June 30, 2025[159](index=159&type=chunk) - The review was conducted in accordance with **Hong Kong Standard on Review Engagements 2410**, with a **limited scope and no audit opinion expressed**[160](index=160&type=chunk) - Based on the review, the auditors noted **nothing that caused them to believe the condensed consolidated interim financial statements were not prepared, in all material respects, in accordance with HKAS 34**[161](index=161&type=chunk) [Financial Statements](index=45&type=section&id=Financial%20Statements) This chapter presents MMG's condensed consolidated interim financial statements for H1 2025, including the income statement, comprehensive income statement, statement of financial position, statement of changes in equity, and cash flow statement, along with detailed notes [Condensed Consolidated Interim Income Statement](index=46&type=section&id=Condensed%20Consolidated%20Interim%20Income%20Statement) MMG achieved revenue of $2.817 billion in H1 2025, a 47% year-on-year increase, with EBITDA at $1.5399 billion, EBIT at $1.0588 billion, profit for the period at $566.3 million, and profit attributable to equity holders at $340 million H1 2025 Condensed Consolidated Interim Income Statement Summary (Year-on-Year) | Metric | 2025 (million USD) | 2024 (million USD) | | :--- | :--- | :--- | | Revenue | 2,817.0 | 1,918.2 | | EBITDA | 1,539.9 | 779.0 | | EBIT | 1,058.8 | 311.1 | | Profit for the Period | 566.3 | 79.5 | | Profit Attributable to Equity Holders of the Company | 340.0 | 21.1 | | Basic Earnings Per Share | 2.80 US cents | 0.23 US cents | [Condensed Consolidated Interim Statement of Comprehensive Income](index=47&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) MMG reported a profit for the period of $566.3 million in H1 2025, with other comprehensive loss of $16.4 million primarily from hedging instruments, resulting in a total comprehensive income of $549.9 million, of which $329.5 million was attributable to equity holders H1 2025 Condensed Consolidated Interim Statement of Comprehensive Income Summary (Year-on-Year) | Metric | 2025 (million USD) | 2024 (million USD) | | :--- | :--- | :--- | | Profit for the Period | 566.3 | 79.5 | | Other Comprehensive (Loss)/Income | (16.4) | (27.4) | | Total Comprehensive Income for the Period | 549.9 | 52.1 | | Total Comprehensive Income Attributable to Equity Holders of the Company | 329.5 | 5.4 | - Other comprehensive loss primarily resulted from **changes in hedging instruments designated for cash flow hedges ($23.5 million loss, net of income tax benefit of $7.1 million)**[168](index=168&type=chunk) [Condensed Consolidated Interim Statement of Financial Position](index=48&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2025, MMG's total assets were $15.4863 billion, total equity $7.0609 billion, and total liabilities $8.4254 billion, with net current assets improving significantly from a negative $467.1 million to a positive $651.3 million, indicating enhanced liquidity Condensed Consolidated Interim Statement of Financial Position Summary as of June 30, 2025 | Metric | June 30, 2025 (million USD) | December 31, 2024 (million USD) | | :--- | :--- | :--- | | Total Assets | 15,486.3 | 14,985.9 | | Total Equity | 7,060.9 | 6,278.5 | | Total Liabilities | 8,425.4 | 8,707.4 | | Net Current Assets/(Liabilities) | 651.3 | (467.1) | - **Current assets increased to $2.0498 billion** (December 31, 2024: $1.5021 billion), primarily due to **an increase in cash and cash equivalents**[169](index=169&type=chunk) - **Current liabilities decreased to $1.3985 billion** (December 31, 2024: $1.9692 billion), primarily due to a **significant reduction in current loans**[170](index=170&type=chunk) [Condensed Consolidated Interim Statement of Changes in Equity](index=50&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, MMG's total equity increased from $6.2785 billion to $7.0609 billion, driven by $340 million profit attributable to equity holders and $337.5 million from non-controlling interests' subscription of subsidiary shares H1 2025 Condensed Consolidated Interim Statement of Changes in Equity Summary | Item | Total Attributable to Equity Holders of the Company (million USD) | Non-controlling Interests (million USD) | Total Equity (million USD) | | :--- | :--- | :--- | :--- | | As at January 1, 2025 | 3,419.0 | 2,859.5 | 6,278.5 | | Total Comprehensive Income for the Period | 329.5 | 220.4 | 549.9 | | Non-controlling interests arising from share subscription | - | 337.5 | 337.5 | | Dividends paid to non-controlling interests | - | (103.7) | (103.7) | | As at June 30, 2025 | 3,747.2 | 3,313.7 | 7,060.9 | - **Profit for the period attributable to equity holders of the company was $340 million**, and **profit attributable to non-controlling interests was $226.3 million**[171](index=171&type=chunk) [Condensed Consolidated Interim Cash Flow Statement](index=51&type=section&id=Condensed%20Consolidated%20Interim%20Cash%20Flow%20Statement) In H1 2025, MMG generated $1.185 billion net cash from operating activities, used $424.2 million in investing activities, and had a net outflow of $246.2 million from financing activities, resulting in a net increase of $514.6 million in cash and cash equivalents, with an ending balance of $707.3 million H1 2025 Condensed Consolidated Interim Cash Flow Statement Summary (Year-on-Year) | Item | 2025 (million USD) | 2024 (million USD) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 1,185.0 | 515.3 | | Net Cash Used in Investing Activities | (424.2) | (2,464.9) | | Net Cash (Used in)/from Financing Activities | (246.2) | 2,123.6 | | Net Increase in Cash and Cash Equivalents | 514.6 | 174.0 | | Cash and Cash Equivalents as at June 30 | 707.3 | 621.0 | - **Net cash inflow from operating activities significantly increased**, primarily due to **higher receipts from customers ($3.1373 billion)** and a **positive net settlement of commodity hedges**[173](index=173&type=chunk) - **Net cash outflow from financing activities** was mainly due to **repayment of external loans ($1.5177 billion)** and **related party loans ($514 million)**, as well as **dividends paid to non-controlling interests ($103.7 million)**[173](index=173&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=52&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes to MMG's condensed consolidated interim financial statements, explaining the basis of preparation, accounting policies, segment information, expenses, finance income and costs, income tax, earnings per share, dividends, and various asset and liability items [General Information and Independent Review](index=52&type=section&id=General%20Information%20and%20Independent%20Review) MMG Limited, incorporated in Hong Kong, primarily engages in the exploration, development, and mining of copper, zinc, gold, silver, molybdenum, lead, and cobalt deposits, with its H1 2025 condensed consolidated interim financial statements presented in USD and approved by the Board - MMG Limited is incorporated in Hong Kong and primarily engaged in the **exploration, development, and mining of copper, zinc, gold, silver, molybdenum, lead, and cobalt deposits**[174](index=174&type=chunk) - The condensed consolidated interim financial statements for the six months ended June 30, 2025, are **presented in USD** and were **approved for issue by the Board on August 12, 2025**[174](index=174&type=chunk) - These condensed consolidated financial statements are **unaudited** but have been **reviewed by the company's Audit and Risk Management Committee and external auditors**[174](index=174&type=chunk) [Basis of Preparation](index=52&type=section&id=Basis%20of%20Preparation) The condensed consolidated interim financial statements are prepared in accordance with applicable Listing Rules disclosure requirements and HKAS 34, on a going concern basis using the historical cost convention, with no significant impact from HKAS 21 (Amendment) Lack of Exchangeability - The condensed consolidated interim financial statements are prepared in accordance with the **applicable disclosure requirements of the Hong Kong Stock Exchange Listing Rules** and **Hong Kong Accounting Standard 34 Interim Financial Reporting**[175](index=175&type=chunk) - The statements are prepared on a **going concern basis** and adopt the **historical cost convention**, except for financial assets and liabilities measured at fair value through profit or loss and other comprehensive income[178](index=178&type=chunk) - **HKAS 21 (Amendment) Lack of Exchangeability**, effective in 2025, has **no material impact on the Group's financial position and performance** for the current and prior periods[179](index=179&type=chunk) [Segment Information](index=54&type=section&id=Segment%20Information) MMG's operating segments include Las Bambas, Kinsevere, Khoemacau, Dugald River, Rosebery, and other operations, with Las Bambas contributing the majority of revenue and EBITDA in H1 2025, and copper being the primary revenue source, reflecting overall improved performance - MMG's reportable segments include **Las Bambas, Kinsevere, Khoemacau, Dugald River, Rosebery, and other operations**[182](index=182&type=chunk) H1 2025 Segment Revenue and EBITDA Summary (million USD) | Segment | Revenue | EBITDA | | :--- | :--- | :--- | | Las Bambas | 2,006.8 | 1,310.5 | | Kinsevere | 234.6 | 30.4 | | Khoemacau | 199.9 | 89.6 | | Dugald River | 227.5 | 66.0 | | Rosebery | 141.0 | 54.8 | | Other | 7.2 | (11.4) | | Total | 2,817.0 | 1,539.9 | - **Copper is MMG's most significant revenue source**, with **copper revenue reaching $2.2086 billion in H1 2025**, accounting for **78.4% of total revenue**[184](index=184&type=chunk) [Expenses](index=57&type=section&id=Expenses) In H1 2025, MMG's total expenses were $1.7765 billion, with cost of sales at $1.5085 billion, employee benefits at $271.5 million, and contract and consulting fees at $386.7 million, while exploration expenses increased and Khoemacau acquisition transaction and integration costs significantly decreased H1 2025 Key Expenses (million USD) | Expense Category | 2025 (million USD) | 2024 (million USD) | | :--- | :--- | :--- | | Cost of Sales | 1,508.5 | 1,380.4 | | Total Employee Benefits Expenses | 271.5 | 190.4 | | Contract and Consulting Fees | 386.7 | 309.0 | | Exploration Expenses | 42.5 | 27.2 | | Khoemacau Acquisition Transaction and Integration Costs | 0.3 | 20.2 | - **Total employee benefits expenses increased to $271.5 million**, primarily due to **MLB profit-sharing expenses**[186](index=186&type=chunk) - **Khoemacau acquisition transaction and integration costs significantly decreased**, reflecting **lower acquisition costs in 2024 and reduced expenses after asset integration in 2025**[187](index=187&type=chunk) [Finance Income and Finance Costs](index=58&type=section&id=Finance%20Income%20and%20Finance%20Costs) In H1 2025, MMG's finance income was $6.9 million, mainly from interest, while total finance costs decreased to $146.4 million from $181.6 million in the prior year, primarily due to reduced interest expenses from third parties and related parties H1 2025 Finance Income and Costs Summary (million USD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Total Finance Income | 6.9 | 13.6 | | Total Finance Costs | (146.4) | (181.6) | | Interest Expense - Third Parties | (59.8) | (129.5) | | Interest Expense - Related Parties | (55.9) | (70.0) | - **Net finance costs decreased by $28.5 million (17%)**, primarily due to **lower debt balances and reduced interest rates**[33](index=33&type=chunk) [Income Tax Expense](index=59&type=section&id=Income%20Tax%20Expense) In H1 2025, MMG's income tax expense significantly increased to $353 million from $63.6 million in the prior year, primarily due to higher profit before income tax, and the company recognized $0.2 million in current income tax expense under OECD Pillar Two rules H1 2025 Income Tax Expense Summary (million USD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current Income Tax Expense | 379.6 | 55.0 | | Deferred Income Tax (Credit)/Expense | (26.6) | 8.6 | | Total Income Tax Expense | 353.0 | 63.6 | - **Income tax expense increased by $289.4 million**, primarily due to **higher underlying profit before income tax**[33](index=33&type=chunk) - In accordance with OECD Pillar Two rules, the company recognized a **current income tax expense of $0.2 million** for the six months ended June 30, 2025, expected to be levied on its **Singaporean subsidiary**[191](index=191&type=chunk) [Earnings Per Share](index=60&type=section&id=Earnings%20Per%20Share) In H1 2025, MMG's profit attributable to equity holders was $340 million, resulting in basic and diluted earnings per share of 2.80 US cents, calculated based on the weighted average number of ordinary shares and deemed issued shares from the long-term incentive plan H1 2025 Earnings Per Share Summary | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company (million USD) | 340.0 | 21.1 | | Basic Earnings Per Share (US cents) | 2.80 | 0.23 | | Diluted Earnings Per Share (US cents) | 2.80 | 0.23 | - The **weighted average number of ordinary shares used for calculating basic earnings per share was 12,130,849 thousand shares**, and for **diluted earnings per share was 12,150,116 thousand shares**[193](index=193&type=chunk) [Dividends](index=60&type=section&id=Dividends) MMG's directors do not recommend paying any dividends to ordinary shareholders for the six months ended June 30, 2025 - The directors do not recommend paying any dividends to ordinary shareholders for the six months ended June 30, 2025 (2024: nil)[194](index=194&type=chunk) [Property, Plant and Equipment](index=61&type=section&id=Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, MMG's net book value of property, plant, and equipment was $11.6741 billion, a slight decrease from the beginning of the year, with additions of $420.6 million and depreciation and amortization of $468.1 million, and no impairment indicators identified H1 2025 Property, Plant and Equipment Movement Summary (million USD) | Item | Amount | | :--- | :--- | | Net book value as at January 1, 2025 | 11,722.6 | | Additions | 420.6 | | Depreciation and amortisation | (468.1) | | Net book value as at June 30, 2025 | 11,674.1 | - Management believes that **no indicators of impairment or reversal of impairment were identified** within any of the Group's cash-generating units during the reporting period[196](index=196&type=chunk) [Intangible Assets](index=61&type=section&id=Intangible%20Assets) As of June 30, 2025, MMG's net book value of intangible assets was $1.0439 billion, a slight decrease from the beginning of the year, with depreciation and amortization of $0.3 million during the period H1 2025 Intangible Assets Movement Summary (million USD) | Item | Amount | | :--- | :--- | | Net book value as at January 1, 2025 | 1,044.2 | | Depreciation and amortisation | (0.3) | | Net book value as at June 30, 2025 | 1,043.9 | [Principal Subsidiaries with Material Non-Controlling Interests](index=61&type=section&id=Principal%20Subsidiaries%20with%20Material%20Non-Controlling%20Interests) As of June 30, 2025, MMG's total non-controlling interests were $3.3137 billion, primarily from Las Bambas ($2.4833 billion) and Khoemacau ($830.4 million), with Las Bambas paying $103.7 million in dividends and Khoemacau issuing $337.5 million in shares to Khoemacau Holdings Limited Non-Controlling Interests Summary as of June 30, 2025 (million USD) | Subsidiary | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Las Bambas Joint Venture and its subsidiaries | 2,483.3 | 2,372.0 | | Khoemacau Joint Venture and its subsidiaries | 830.4 | 487.5 | | Total | 3,313.7 | 2,859.5 | - For the six months ended June 30, 2025, the **Las Bambas joint venture paid dividends of $103.7 million to its non-controlling shareholders**[198](index=198&type=chunk) - The **Khoemacau joint venture issued shares to Khoemacau Holdings Limited**, representing **45% of the total issued shares**, amounting to **$337.5 million**[199](index=199&type=chunk) [Derivative Financial Assets/(Liabilities)](index=63&type=section&id=Derivative%20Financial%20Assets%2F%28Liabilities%29) As of June 30, 2025, MMG's current derivative financial assets were $0.1 million, while current derivative financial liabilities were $24.3 million, primarily comprising commodity derivatives (copper) and cash flow hedges (copper) Derivative Financial Assets/(Liabilities) Summary as of June 30, 2025 (million USD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current derivative financial assets | 0.1 | 11.0 | | Current derivative financial liabilities | (24.3) | (0.7) | - The Group's commodity derivative financial liabilities include **$22.4 million receivable from a related company of the Group**[203](index=203&type=chunk) [Trade and Other Receivables](index=63&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, MMG's trade receivables were $414.2 million, mostly current, and non-current other receivables were $104 million, including amounts from Glencore and SUNAT, with total receivables from related companies at $187.2 million - As of June 30, 2025, the Group's **trade receivables balance was $414.2 million** (December 31, 2024: $443.7 million), with **most aged less than six months**[204](index=204&type=chunk) - **Non-current other receivables were $104 million** (December 31, 2024: $125.5 million), including amounts **receivable from Glencore for the MLB acquisition project** and **receivables from SUNAT for the 2011 and 2012 VAT audits**[205](index=205&type=chunk) - The Group's trade receivables, other receivables, and prepayments include **$187.2 million receivable from related companies of the Group** (December 31, 2024: $242.2 million)[204](index=204&type=chunk) [Share Capital](index=64&type=section&id=Share%20Capital) As of June 30, 2025, MMG had 12,140,531 thousand issued and fully paid ordinary shares, with share capital of $4.3842 billion, reflecting the issuance of 11,517 thousand new shares from vested 2022 performance awards and 3,465,433 thousand new shares from the 2024 rights issue Share Capital Movement Summary as of June 30, 2025 | Item | Number of Ordinary Shares (thousand shares) | Share Capital (million USD) | | :--- | :--- | :--- | | As at January 1, 2024 | 8,656,047 | 3,224.6 | | Employee performance awards exercised and vested | 7,534 | 2.8 | | Rights issue | 3,465,433 | 1,152.4 | | As at December 31, 2024 | 12,129,014 | 4,379.8 | | Employee performance awards exercised and vested | 11,517 | 4.4 | | As at June 30, 2025 | 12,140,531 | 4,384.2 | - In H1 2025, **11,516,714 new shares were issued due to the vesting of 2022 performance awards**[206](index=206&type=chunk) - The rights issue completed in July 2024 issued **3,465,432,486 new shares**, with **proceeds of $1.1524 billion** (net of transaction costs) used for **loan repayment**[206](index=206&type=chunk) [Reserves and Retained Earnings](index=65&type=section&id=Reserves%20and%20Retained%20Earnings) As of June 30, 2025, MMG's total reserves were negative $1.8599 billion, with retained earnings at $1.2229 billion, reflecting a total comprehensive income of $329.5 million for the period and a $28.2 million appropriation to surplus reserve Reserves and Retained Earnings Summary as of June 30, 2025 (million USD) | Item | Total Reserves | Retained Earnings | Total | | :--- | :--- | :--- | :--- | | As at January 1, 2025 | (1,871.9) | 911.1 | (960.8) | | Total Comprehensive (Loss)/Income for the Period | (10.5) | 340.0 | 329.5 | | Appropriation to surplus reserve | 28.2 | (28.2) | - | | As at June 30, 2025 | (1,859.9) | 1,222.9 | (637.0) | - The cash flow hedge reserve records the **gain or loss portion of hedging instruments**, including **commodity hedges and interest rate swaps attributable to equity holders of the company**[208](index=208&type=chunk) [Loans](index=66&type=section&id=Loans) As of June 30, 2025, MMG's non-current loans totaled $3.9996 billion, current loans $241.8 million, and total loans (excluding prepaid financing costs) were $4.2464 billion, with a significant portion from related parties and an effective annual interest rate of 5.2% Loans Summary as of June 30, 2025 (million USD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current loans | 3,999.6 | 3,740.1 | | Current loans | 241.8 | 888.7 | | Total loans (excluding prepaid financing costs) | 4,246.4 | 4,635.1 | | Loans - Related parties (non-current) | 2,519.0 | 1,705.0 | | Loans - Related parties (current) | 26.3 | 861.3 | - For the six months ended June 30, 2025, the **effective annual interest rate on loans was 5.2%** (2024: 5.2%)[209](index=209&type=chunk) [Trade and Other Payables](index=66&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, MMG's trade payables balance was $393.6 million, with $365 million aged less than six months, and the aging analysis is calculated from the creditor's invoice date - As of June 30, 2025, the **trade payables balance was $393.6 million** (December 31, 2024: $387.2 million)[210](index=210&type=chunk) - Of this, **$365 million** (December 31, 2024: $384.3 million) was **aged less than six months**[210](index=210&type=chunk) [Deferred Revenue](index=67&type=section&id=Deferred%20Revenue) As of June 30, 2025, MMG's total deferred revenue was $349.6 million, with $20.7 million current and $328.9 million non-current, reflecting $11.2 million recognized during the period and $13.7 million in interest accretion Deferred Revenue Summary as of June 30, 2025 (million USD) | Item | Amount | | :--- | :--- | | As at January 1, 2025 | 347.1 | | Deferred revenue recognised during the period | (11.2) | | Interest accretion on discounting | 13.7 | | As at June 30, 2025 | 349.6 | | Current | 20.7 | | Non-current | 328.9 | [Significant Related Party Transactions](index=67&type=section&id=Significant%20Related%20Party%20Transactions) MMG engaged in significant related party transactions with China Minmetals and its group companies, including non-ferrous metal sales, commodity derivatives, and interest expenses, with total payables to related parties at $2.637 billion and receivables at $187.2 million as of June 30, 2025, and several loan agreements revised H1 2025 Transactions with China Minmetals and its Group Companies Summary (million USD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Sales of non-ferrous metals | 1,303.3 | 777.2 | | Loss on commodity derivatives | (15.3) | (23.2) | | Interest expense | (55.9) | (70.0) | Significant Related Party Balances Summary as of June 30, 2025 (million USD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total amounts due to related parties | 2,637.0 | 2,609.3 | | Total amounts due from related parties | 187.2 | 242.2 | - The financing agreements between MMG SA and Top Create, and MMF and Top Create, were **revised in June 2025**, with **Top Create replaced by Minmetals Hong Kong as the lender**, and **repayment periods and interest rates adjusted**[216](index=216&type=chunk)[217](index=217&type=chunk) [Capital Commitments](index=69&type=section&id=Capital%20Commitments) As of June 30, 2025, MMG had capital expenditure commitments totaling $515.3 million, contracted but not recognized as liabilities, primarily for property, plant, and equipment Capital Commitments Summary as of June 30, 2025 (million USD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property, plant and equipment (within one year) | 499.1 | 261.3 | | Property, plant and equipment (more than one year but not more than five years) | 15.2 | 129.0 | | Intangible assets (within one year) | 1.0 | 0.8 | | Total | 515.3 | 391.1 | [Contingent Matters](index=69&type=section&id=Contingent%20Matters) MMG's contingent matters include $351 million in bank guarantees with no significant claims, and tax-related disputes in Peru where SUNAT has appealed favorable tax court rulings for Las Bambas, potentially leading to significant liabilities if appeals fail - As of June 30, 2025, MMG's **bank guarantees amounted to $351 million**, with **no significant claims reported**[220](index=220&type=chunk) - Peru's National Tax Administration Superintendence (SUNAT) disputed Las Bambas' withholding and income tax audits, involving **hundreds of millions of dollars in potential tax liabilities**[222](index=222&type=chunk)[223](index=223&type=chunk) - Despite favorable tax court rulings, SUNAT has filed judicial appeals, with a **final decision potentially taking several years**; if the appeals are unsuccessful, it could lead to the **recognition of significant liabilities**[223](index=223&type=chunk)[224](index=224&type=chunk) [Financial and Other Risk Management](index=71&type=section&id=Financial%20and%20Other%20Risk%20Management) MMG's financial risk management policies remained unchanged since end-2024, covering commodity price hedging, interest rate monitoring, and liquidity management through debt facilities and early payment agreements, while also addressing country and community risks - MMG's financial risk management policies have **not changed since December 31, 2024**[225](index=225&type=chunk) - The company manages commodity price risk through **commodity transactions such as fixed price swaps for copper and zinc sales**[225](index=225&type=chunk) - MMG has **sufficient debt facilities to manage liquidity**, and as of June 30, 2025, **had not breached any loan covenant requirements**[230](index=230&type=chunk) - The company faces

Group 1 - Copper prices have surged to a 15-month high, reaching $10,173 per ton, driven by increased risk appetite and expectations of a Federal Reserve rate cut this week [1] - The market anticipates a 25 basis point rate cut, with expectations of two additional cuts by the end of the year, which typically supports copper prices by boosting demand and weakening the dollar [1] - Supply disruptions, such as reduced output from Kamoa-Kakula Mine and the shutdown of Codeco's El Teniente Mine, have led to a tight copper supply, while demand remains robust due to increased investment in China's power grid and the peak season for electric vehicle sales [1] Group 2 - The domestic copper mining sector's price-to-earnings (PE) ratio has been running between 10-15x over the past three years, with a continuous increase in valuation this year due to declining supply growth and strong domestic demand [1] - It is expected that the copper price will reach $10,500 per ton in Q3-Q4 2025, driven by improved supply-demand dynamics and macroeconomic support, which will enhance corporate profit expectations [1] - The disparity in valuation between domestic and international sectors is anticipated to narrow as perceptions of supply shortages and demand growth improve, with domestic valuations expected to rise to 15-20x [1] Group 3 - Related companies in the copper mining sector listed on the Hong Kong Stock Exchange include Luoyang Molybdenum (03993), Zijin Mining (02899), China Nonferrous Mining (01258), Minmetals Resources (01208), Jiangxi Copper (00358), and China Railway (00390) [2]

Group 1 - Copper prices have surged to a 15-month high, reaching $10,173 per ton, driven by increased risk appetite and expectations of a Federal Reserve rate cut this week [1] - The market anticipates a 25 basis point rate cut, with potential for two more cuts by the end of the year, which typically supports copper prices by boosting demand and weakening the dollar [1] - Supply disruptions, such as reduced output from Kamoa-Kakula Mine and the shutdown of Codeco's El Teniente Mine, have led to a tight copper supply, while demand remains robust due to increased investment in China's power grid and the peak season for electric vehicle sales [1] Group 2 - The domestic copper mining sector's price-to-earnings (PE) ratio has been running between 10-15x over the past three years, with a continuous increase in valuation this year due to declining supply growth and strong domestic demand [1] - It is expected that the copper price will reach $10,500 per ton in Q3-Q4 of this year, driven by improved supply-demand dynamics and macroeconomic support, which will enhance corporate profit expectations [1] - The disparity in valuation between domestic and international sectors is anticipated to narrow as perceptions of supply shortages and demand growth improve, with domestic valuations expected to rise to 15-20x [1] Group 3 - Related companies in the copper mining sector listed on the Hong Kong Stock Exchange include Luoyang Molybdenum (03993), Zijin Mining (02899), China Nonferrous Mining (01258), Minmetals Resources (01208), Jiangxi Copper (00358), and China Railway (00390) [2]

Group 1 - The core viewpoint of the articles indicates a significant rise in copper-related stocks and prices, driven by expectations of a Federal Reserve interest rate cut and strong demand in various sectors [2][3][5] - On September 12, copper futures surged to 80,880 yuan/ton, reflecting a broader increase in commodity prices [3] - Analysts suggest that recent economic data has paved the way for a potential interest rate cut by the Federal Reserve, which could positively impact commodity prices [4][5] Group 2 - The copper supply side is facing challenges, with slow capacity release and increased supply pressure from overseas disruptions, leading to a structural imbalance in supply and demand [6] - Short-term demand for copper is expected to be strong due to the upcoming "golden September and silver October," with robust needs from the new energy and power sectors, as well as a gradual recovery in real estate and traditional consumption [7] - Long-term demand for copper is projected to grow significantly, with estimates suggesting an additional demand of at least 10 million tons by 2035 driven by electric vehicles, AI, and power infrastructure [7][8] Group 3 - The rapid development of AI technology is increasing the demand for copper, particularly in data centers, which are expected to consume between 200,000 to 500,000 tons of copper annually by 2027, representing a compound annual growth rate of 26% [8] - The rise of data centers and AI is anticipated to contribute an additional 3% to global copper demand by 2027, while electric vehicles are expected to account for only 5.2% [8] - Geopolitical tensions are also driving demand for copper in defense spending, as various military applications require significant amounts of copper [8] Group 4 - Market analysts believe that the current copper price uptrend is just beginning, with multiple factors contributing to a potential long-term revaluation of copper [9] - Institutions like New Lake Futures and Minsheng Securities highlight that the combination of macroeconomic data supporting a Fed rate cut, ongoing supply tightness, and resilient demand will likely keep copper prices on an upward trajectory [9]

Group 1 - The core viewpoint of the articles highlights the significant activity in the Hong Kong copper sector, driven by a major merger announcement between Anglo American and Teck Resources, which could be the largest mining merger in over a decade, reflecting a strong bet on future copper demand [1] - Copper stocks have shown notable gains, with Jiangxi Copper rising nearly 8%, Minmetals Resources up nearly 7%, and China Nonferrous Mining increasing by 6%, indicating a bullish sentiment in the market [2] - The rise in copper demand is attributed to the increasing consumption in artificial intelligence data centers, which are projected to consume over 4.3 million tons of copper in the next decade, equivalent to the annual production of Chile, the largest copper supplier [1] Group 2 - The demand for copper is also being driven by increased government defense spending, which requires substantial amounts of copper for various military equipment, including bullets, fighter jets, and missile systems [1] - The overall trend indicates that global copper consumption has been on the rise for years, while new supply is expected to struggle to keep pace with this growing demand [1]

一边是在AI军备竞赛中愈发不可或缺，另一边，随着各国政府加大国防支出，从子弹壳、喷气式战斗 机到导弹系统等武器装备，也正需要大量铜。(格隆汇) 港股有色金属股普遍活跃，其中铜业股涨幅最为明显，其中，江西铜业股份涨近8%表现较佳，且刷新 上市新高价，五矿资源涨近7%，中国有色矿业涨6%，中国黄金国际涨超1%。 消息上，当地时间9月9日，英美资源集团和加拿大泰克资源公司正式宣布将合并。若获得监管机构批 准，这将成为十余年来全球矿业最大规模合并案。在不少业内人士看来，这出矿业领域的"世纪交易"， 实质上便是对铜这一工业金属未来需求的巨额押注。全球铜消费量已持续攀升多年，但新增供应量预计 将很难跟上需求增速。 人工智能的崛起显然正在推动铜需求的激增，这一金属正被大量投入耗电量惊人的数字中心服务器集 群。一个人工智能数据中心的年耗电量，可能就足以媲美数十万辆电动汽车的总和。研究机构 BloombergNEF的数据显示，未来十年全球数据中心将消耗超过430万公吨铜，这几乎相当于全球最大供 应国智利一年的产量。 | 代码 | 名称 | 最新价 | 涨跌幅 ▽ | | --- | --- | --- | --- | | 00 ...

Core Points - Brazil's antitrust regulator, Cade, has initiated an investigation into Anglo American's nickel asset sale in Brazil, valued at approximately $500 million, to MMG, a subsidiary of China Minmetals [1] - The investigation was prompted by third-party complaints and does not guarantee that the transaction will be blocked [1] - The sale is part of Anglo American's broader restructuring plan after rejecting a £39 billion takeover bid from BHP last year, aiming to divest non-core assets to alleviate financial pressure [1] - Anglo American's coal asset sale fell through in August due to the buyer's withdrawal, and the future of its diamond subsidiary, De Beers, is uncertain due to demands from the Botswana government for increased ownership [1] - The complaint regarding the nickel transaction originated from CoreX Holdings, founded by Turkish investor Robert Yildirim, who recently acquired a nickel-iron mine in Colombia, positioning CoreX as a direct competitor [1]

Group 1 - The company's net profit for H1 2025 increased by 1511% year-on-year, with revenue reaching $2.82 billion, a 46.9% increase [1] - The significant profit growth is primarily attributed to the Las Bambas copper mine, with net profit from the Bonbast copper mine increasing by $264 million year-on-year [1] - The C1 cost of the Bonbast copper mine decreased to $1.07 per pound (equivalent to $2,359 per ton), marking the lowest level in recent years [1] Group 2 - The company plans to increase copper production to over 600,000 tons within the next five years, with the Bonbast copper mine's output expected to rise from 323,000 tons in 2024 to over 400,000 tons [2] - The Kinsevere copper mine is transitioning from open-pit to underground mining, with production projected to increase from 45,000 tons in 2024 to 80,000 tons within two years [2] - By 2028, the company's annual copper production is expected to reach 610,000 tons, with equity production at 400,000 tons, representing a 50% increase over five years [2]

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 | 截至月份: | 2025年8月31日 | 狀態: 新提交 | | --- | --- | --- | | 致：香港交易及結算所有限公司 | | | | 公司名稱: | 五礦資源有限公司 | | | 呈交日期: | 2025年9月3日 | | | I. 法定/註冊股本變動 | 不適用 | | FF301 第 1 頁 共 10 頁 v 1.1.1 FF301 II. 已發行股份及/或庫存股份變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01208 | 說明 | | | | | | | | | 已發行股份（不包括庫存股份）數目 | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | 12,140,530,416 | | 0 | | 12,140,530,416 | | 增加 / 減少 (-) | | | 0 | ...

Investment Rating - The report maintains an "Outperform" rating for the company [5][3][17] Core Views - The company is benefiting from increased production and rising precious metal prices, leading to a significant reduction in main mine costs [1][3] - In H1 2025, the company's revenue reached $2.82 billion, a year-on-year increase of 46.9%, while net profit attributable to shareholders soared by 1511% to $340 million [1][8] - The Las Bambas copper mine has been a key contributor to profit growth, with its C1 cost dropping to $1.07 per pound (equivalent to $2,359 per ton), the lowest in recent years [1][8] Financial Performance - The company expects copper production to increase by over 50% within the next five years, with annual copper output projected to reach 610,000 tons by 2028 [2][11] - The report forecasts net profits of $732 million, $927 million, and $1.019 billion for 2025, 2026, and 2027 respectively, reflecting growth rates of 352%, 26.6%, and 9.9% [3][17] - The company's earnings per share (EPS) are projected to be $0.06, $0.08, and $0.08 for the years 2025, 2026, and 2027 [3][17] Production and Cost Analysis - In H1 2025, the Las Bambas copper mine produced 211,000 tons of copper, along with by-products including 43,000 ounces of gold and 2.44 million ounces of silver [2][9] - Operating costs per ton of copper (excluding depreciation and interest) decreased by $1,436 year-on-year to $3,697 per ton in H1 2025 [2][9] - The report anticipates further cost reductions in the second half of 2025 due to rising precious metal prices [1][8]