29Metals Faces Cost Pressures and Legal Uncertainty Despite Production Gains
29Metals Limited reported a stronger June quarter with increased copper production at Golden Grove, offset by higher costs and deferred capital spending on the Gossan Valley project. The company also secured a final $54 million insurance payout and improved liquidity despite ongoing operational challenges at Capricorn Copper.
- Copper production rises to 5.6kt at Golden Grove, zinc output declines
- C1 costs surge to US$2.09/lb due to lower by-product credits
- Growth capital guidance trimmed to $61–82 million reflecting Gossan Valley deferrals
- Capricorn Copper remains suspended with water inventory reduced by 1.3 gigalitres
- Final $54 million insurance payment received related to 2023 extreme weather event
Operational Highlights and Safety Improvements
29Metals Limited has delivered its June 2025 quarterly results, showcasing a notable uptick in copper production at its flagship Golden Grove operation. Copper output climbed to 5.6 kilotonnes, up from 4.1 kilotonnes in the previous quarter, driven by higher ore tonnage milled and improved copper grades. Zinc production, however, fell to 12.3 kilotonnes from 17.0 kilotonnes, reflecting lower zinc grades and recovery rates.
Safety metrics improved with the Group’s total recordable injury frequency (TRIF) dropping to 6.3 from 8.3, and lost time injury frequency (LTIF) falling to 1.3 from 2.1, underscoring ongoing commitment to workplace safety.
Cost Pressures and Capital Guidance Revision
Despite higher copper production, the company faced rising unit costs, with C1 costs increasing sharply to US$2.09 per pound of copper sold, compared to US$0.76 in the prior quarter. This was primarily due to reduced by-product credits and lower stockpile movement credits, which weighed on overall cost efficiency. All-in sustaining costs (AISC) also rose to US$3.29 per pound.
Reflecting a strategic shift, 29Metals revised down its 2025 growth capital expenditure guidance to between $61 million and $82 million, from an earlier range of $76 million to $97 million. This adjustment is mainly due to deferrals related to the Gossan Valley project, where surface civil construction has commenced following receipt of all necessary approvals. The first ore from Gossan Valley remains on track for the second half of 2026, promising to add production flexibility and higher-grade ore to Golden Grove’s portfolio.
Capricorn Copper Update and Environmental Progress
Capricorn Copper continues to be in suspension, with no mining or exploration activities during the quarter. However, the company made significant progress in reducing water inventory by 1.3 gigalitres since suspending operations in March 2024, aided by a successful wet season that concluded in April. Surface water levels are now below the maximum operating level, improving the site’s environmental compliance status.
Cost management efforts yielded a 22% reduction in suspension-related operating and capital costs quarter-on-quarter, down to $9 million. Regulatory progress is ongoing, with the application for a long-term Tailings Storage Facility (TSF) 3 on track for submission in the September quarter of 2025, a critical step toward a sustainable restart of operations.
Financial Position and Corporate Developments
Financially, 29Metals strengthened its liquidity position, reporting $202 million in available group liquidity at quarter-end, up from $182 million. Net drawn debt decreased to US$135 million from US$140 million. The company also received the final $54 million payment from its insurance claim related to the 2023 extreme weather event at Capricorn Copper, bringing total proceeds to $115 million.
On the corporate front, Ashish Gupta was appointed as a Non-executive Director, enhancing board expertise. Meanwhile, legal proceedings involving EMR Capital Investment remain unresolved, with an appeal hearing scheduled for early August 2025, injecting some uncertainty into the company’s legal landscape.
Overall, 29Metals navigated operational challenges with resilience, maintaining full-year production guidance despite disruptions at the Xantho Extended mine and deferrals in capital spending. The company’s focus on cost control, environmental compliance, and strategic project development positions it well for the coming quarters.
Bottom Line?
As 29Metals advances Gossan Valley development and manages Capricorn Copper’s suspension, investors will watch closely for cost trends and regulatory milestones shaping its 2026 outlook.
Questions in the middle?
- How will sustained higher C1 costs impact 29Metals’ profitability if by-product credits remain low?
- What is the timeline and likelihood of regulatory approval for Capricorn Copper’s long-term TSF?
- How might the outcome of the EMR Capital legal appeal affect 29Metals’ financial and operational plans?
