Core Insights - Highland Copper Company is making significant progress on its 100%-owned Copperwood Project, moving towards a near-term construction decision [1] Funding and Support - The Copperwood project is under consideration for a $50 million grant from the Michigan Economic Development Corporation, pending final approval from the Senate Appropriations Committee [2] - Wakefield Township has requested a separate $50 million infrastructure grant from the Michigan legislature, demonstrating strong local support for the project [3] - The proposed grant aims to enhance economic development in Gogebic County by upgrading local infrastructure, which will also support the Copperwood project [4] - Local leaders, including Wakefield Township Supervisor Mandy Lake and Congressman Jack Bergman, emphasize the project's importance for domestic copper production and job creation [5] Engineering and Development - Highland has awarded Front-End Engineering and Design contracts to DRA Global for mine and process plant engineering, and to Foth and Tetra Tech for water management and tailings disposal facility engineering, respectively [6] - The company plans to transition into Phase 2 of its engineering program in Q3 2025, targeting 35% completion for mine and process plant engineering and 85% for the tailings disposal facility by Q1 2026 [7] - Successful completion of metallurgical drill programs has been reported, with 400 kilograms of core samples sent for analysis, achieving results comparable to previous tests [8] Environmental Mitigation - The 2025 construction season focuses on fulfilling obligations related to environmental mitigation, including the planting of nearly 20,000 trees [10] - An off-site stream mitigation project is underway to replace undersized culverts with a 50-foot-span bridge, enhancing fish habitat and meeting mitigation obligations [11] Strategic Outlook - The company is focused on key work programs to enable a construction decision for Copperwood in 2026, including site preparation, engineering progress, and funding opportunities [12]

Financial Data and Key Metrics Changes - Consolidated net revenues for Q1 2025 totaled $627 million, an 8% increase year over year but a 15% decrease compared to Q4 2024 [21][22] - Adjusted EBITDA reached $125 million, representing a 3% decrease year over year and a 36% decrease compared to Q4 2024, with an adjusted EBITDA margin of 20% [22][23] - Mining cash cost significantly dropped to $0.11 per pound from $0.26 per pound year over year, while smelting cash cost increased to $1.17 per pound from $0.98 per pound in the same period last year [10][12] Business Line Data and Key Metrics Changes - Zinc production in Q1 2025 was 67,000 tons, down 23% year over year and 8% quarter over quarter, impacted by operational challenges and heavy rainfall [10][11] - Smelting segment sales reached 130,000 tons, a decrease of 6% year over year and 14% quarter over quarter, primarily due to lower production at certain facilities [11][12] - Aripuana's production volume declined due to intense rainfall, but metallurgical recoveries improved and costs remained within guidance [14][15] Market Data and Key Metrics Changes - The LME zinc price averaged $2,838 per ton in Q1 2025, reflecting a 16% increase year over year but a 7% decrease quarter over quarter [29] - The LME copper price averaged $9,340 per ton, up 11% year over year and 2% quarter over quarter, indicating strong market fundamentals [31] - The LME silver price averaged $32 per ounce, up 37% year over year and 2% quarter over quarter, supported by concerns around future availability [32] Company Strategy and Development Direction - The Cerro Pasco integration project is progressing well, with construction of the tailings pumping system expected to begin in Q2 2025, aimed at extending operations for over ten years [17][35] - The company is focused on improving margins through disciplined operational performance and cost control, while also enhancing production capacity at Aripuana [7][16] - Exploration remains a key pillar of the long-term strategy, with ongoing geological studies and efforts to extend the life of assets [35] Management's Comments on Operating Environment and Future Outlook - The management acknowledged the challenging macro environment marked by volatility, geopolitical tensions, and inflation, but remains confident in the medium to long-term fundamentals for key metals [6][7] - The company expects to normalize production variations over the coming quarters and is taking measures to recover production lost in Q1 2025 [48][86] - Management emphasized a disciplined approach to financial and operational strategies, prioritizing cash generation and smart capital allocation [37][86] Other Important Information - The company invested $50 million in CapEx during Q1 2025, primarily for sustaining activities, with total CapEx guidance for 2025 remaining unchanged at $347 million [23][24] - The liquidity position remains healthy, with available liquidity of approximately $721 million at the end of Q1 2025 [26] - The net debt to adjusted EBITDA ratio increased from 1.7 times to 2.1 times, primarily due to seasonal cash balance decreases [27] Q&A Session Summary Question: Can you provide more details on geotechnical issues at Vasante and production levels at Cerro Lindo? - Management explained that geotechnical issues at Vasante were due to a collapse in a high-grade mineral stope, which is being addressed to recover production [42][44] - Production at Cerro Lindo is expected to recover throughout the year, with improvements anticipated in other mines as well [46][48] Question: What are the impacts of recent trends on TCRCs and leverage expectations? - Management noted that TCs have decreased to $80, which will impact smelter profitability, but most contracts are already closed for the year [50][52] - Leverage is expected to reverse throughout the year, with targets to maintain or slightly lower leverage compared to the end of 2024 [58][59] Question: Will the negative working capital of $265 million be fully reversed this year? - Management indicated that working capital is expected to be flat on an annual basis, with a significant one-off tax payment affecting Q1 results [64][66] Question: How is the company managing tariff risks? - Management stated that they are not currently exposed to tariffs on zinc and are monitoring the situation closely, with expectations of stable demand in the U.S. market [78][80]

Core Viewpoint - Patagonia Gold Corp. has entered into an investment agreement with Black River Mine Inc. for up to US$40 million to support the development of its Calcatreu Project in Rio Negro, Argentina [1][2]. Investment Agreement Details - The Investor will acquire up to 40 million preferred shares at US$1.00 per share, totaling US$40 million in gross proceeds [2]. - The Investor is a newly formed corporation controlled by Carlos J. Miguens, who is the Lead Investor [3]. - The Investment Agreement includes a Shareholders' Agreement that will govern the affairs of PG Canada [3]. Distribution Policy - The Investor will receive 80% of the "Available Cash" until it has received US$40 million, with the Company receiving the remaining 20% [7]. - After the Investor receives the Preferred Distribution Amount, the Company will receive 100% of the Available Cash until it has received US$60 million [7]. - Following this, the Company will receive 60% of the Available Cash, while the Investor will receive 40% [7]. Financing Use - Proceeds from the Financing will be exclusively used for the development of the Project and to cover related fees and expenses [6]. Project Overview - The Calcatreu Project is located in Rio Negro, approximately 85 kilometers south of Ing Jacobacci [10]. - The Project has an estimated 746,000 contained AuEq ounces in measured and indicated resources and 390,000 contained AuEq ounces in inferred resources [12]. Company Background - Patagonia Gold Corp. focuses on gold and silver projects in the Patagonia region of Argentina and is one of the largest landholders in Santa Cruz province [15].