29Metals reported a significant drop in copper production costs alongside steady zinc output and progress on critical infrastructure projects in its March 2025 quarterly update.
- Golden Grove C1 copper costs fall to US$0.76/lb
- Completion of TSF 4 tailings storage facility
- Capricorn Copper achieves largest water inventory reduction since suspension
- Senior debt refinancing extends maturity to 2028 with US$18 million prepayment
- Zero recordable or lost time injuries during the quarter
Operational Highlights at Golden Grove
29Metals Limited’s March 2025 quarterly report reveals a mixed but largely positive operational picture. At its flagship Golden Grove mine, copper production dipped to 4.1 kilotonnes from 5.3 kilotonnes in the previous quarter, primarily due to lower ore grades and a temporary power outage. Zinc production remained relatively stable at 17.0 kilotonnes. Despite these production challenges, the company achieved a remarkable reduction in C1 costs to US$0.76 per pound of copper sold, down from US$1.82 in the December quarter, underscoring improved operational efficiency and cost management.
Significant infrastructure progress was made with the completion of the Tailings Storage Facility 4 (TSF 4), which promises to lower long-term tailings deposition costs and reduce permitting risks. Additionally, a secondary portal at Gossan Hill was established to enhance ventilation and operational flexibility, while exploration drilling activities resumed after a two-year hiatus, signalling renewed investment in resource growth.
Capricorn Copper’s Environmental and Regulatory Advances
At Capricorn Copper, the company reported a successful wet season with treated water releases fully utilised, resulting in a 0.3 gigalitre reduction in surface water inventory; the largest quarterly decrease since operations were suspended. This progress has brought surface water levels below the Maximum Operating Level, a critical milestone in resetting regulatory compliance and advancing the asset towards a sustainable restart.
29Metals continues to engage constructively with regulators regarding future underground dewatering at Esperanza South and is prioritising the TSF 3 tailings storage facility for approval, with an application planned for the September quarter. Cost reductions at Capricorn Copper were also notable, with operating and capital expenditures down 22% quarter-on-quarter, reflecting ongoing efforts to streamline the suspended operation.
Financial Position and Corporate Developments
Financially, 29Metals completed a senior debt refinancing that included an $18 million prepayment, reducing leverage and extending debt maturity to 2028. This refinancing also excludes capital expenditures for the Gossan Valley project from debt service covenant calculations, supporting future growth investments. Group liquidity stood at $182 million at quarter-end, down from $268 million, reflecting the lump sum payment of $14 million in stamp duty to minimise interest costs.
Post-quarter, the company reached an in-principle settlement on a $115 million insurance claim related to the 2023 extreme weather event at Capricorn Copper, with a final payment of $54 million expected in the current quarter. Meanwhile, legal proceedings involving EMR Capital and previous shareholders remain ongoing but are indemnified, limiting direct financial exposure for 29Metals.
Looking Ahead
29Metals maintained its full-year production guidance and continues to focus on operational optimisation, regulatory approvals, and infrastructure development. The Gossan Valley project remains on track for first ore in the second half of 2026, promising to extend the life and flexibility of Golden Grove. Safety remains a priority, with zero recordable or lost time injuries reported for the quarter, reflecting a strong safety culture across the group.
Bottom Line?
With costs down and key projects advancing, 29Metals is positioning itself for a stronger operational and financial future, though regulatory and operational risks remain to be navigated.
Questions in the middle?
- How will ventilation and seismic challenges at Xantho Extended impact Golden Grove’s production in coming quarters?
- What is the timeline and likelihood for regulatory approval of TSF 3 at Capricorn Copper?
- How will the finalisation of the insurance claim settlement influence 29Metals’ liquidity and capital allocation?