29Metals Reports 6.4kt Copper, Revises Zinc Guidance, Progresses Capricorn Restart

Copper Output Holds Steady Despite Xantho Extended Suspension

29Metals Limited (ASX:29M) delivered a March 2026 quarter copper production of 6.4kt at its Golden Grove operation, a modest dip from 6.9kt in the prior quarter but within guidance. This stability comes despite a temporary halt to mining at the Xantho Extended underground mine, the site’s key zinc and copper ore source, due to ongoing geotechnical risks linked to seismic activity. The company completed initial ground support upgrades post quarter-end as planned and is now undertaking further works to mitigate future production interruptions, with completion expected by December 2026.

The deferral of mining at Xantho Extended has prompted 29Metals to mine and mill replacement ore sources from other parts of the Golden Grove complex, including Oizon and Gossan Valley, to maintain full-year copper production guidance of 20-24kt. However, zinc production plummeted to 0.1kt from 3.4kt previously, reflecting the suspension of zinc-rich ore from Xantho Extended. Consequently, zinc guidance was revised down sharply to 5-25kt from an earlier 40-50kt range, alongside lowered gold and silver production forecasts.

Higher C1 costs of US$4.25/lb copper sold (up from US$2.46/lb) and an AISC of US$5.08/lb reflect the operational adjustments, including a $18 million stockpile movement charge and changes in by-product credits. Notably, Golden Grove’s diesel usage remains low, comprising about 3% of site costs, with procurement contracts intact despite global supply concerns.

Capricorn Copper Advances Toward Production Restart

At Capricorn Copper, the company marked significant progress in reducing water inventory, a critical barrier since the extreme weather event in March 2023 forced suspension of operations. Water levels are now substantially below the Maximum Operating Level, removing a key impediment to restarting production. The company is awaiting regulatory approval for its Tailings Storage Facility 3 (TSF 3), with a response to the regulator’s Request for Information scheduled for the September quarter 2026.

To accelerate the restart, 29Metals has commenced a Definitive Feasibility Study aimed at enabling a Final Investment Decision once TSF 3 approval is secured. The company is also exploring a range of non-dilutive funding options to finance the Capricorn restart and potentially accelerate growth initiatives across its portfolio, reflecting a strategic shift toward capital efficiency.

Strong Financial Position Supports Growth and Operational Flexibility

29Metals completed a fully underwritten equity raising during the quarter, securing gross proceeds of $150 million to fund growth projects, including the Gossan Valley development and exploration programs. This capital injection lifted group liquidity to $238 million at quarter-end, nearly doubling from $118 million in December 2025. Net cash improved to $48 million from a net debt position of $85 million six months prior.

The Gossan Valley project remains on track for first ore by the end of 2026, with $112 million in capital expenditures planned. This project is expected to provide a higher-grade, shallow mining front that could extend the Golden Grove mine life and offer operational flexibility as older ore bodies decline.

Exploration Drilling Highlights Resource Extension Potential

Exploration drilling results from the 2025 program reinforce potential for resource extensions at Golden Grove’s key deposits. High-grade intercepts at Tryall, Oizon, Hougoumont Extended, Cervantes, and Europa suggest opportunities to increase near-term mine plan flexibility and future growth options. Drilling highlights include intercepts of up to 42.2m at 9.5% zinc at Oizon and Hougoumont Extended, and significant copper grades at Europa exceeding 7% over substantial widths.

These results underpin the company’s decision to allocate $15-$20 million toward exploration in 2026, focusing on resource conversion and extensions at Golden Grove and Capricorn Copper. The next Mineral Resources and Ore Reserves update is anticipated in March 2027.

Operationally, 29Metals continues to navigate the challenges posed by Xantho Extended’s seismicity with a cautious approach that prioritises safety and production certainty. The deferral of mining there contrasts with the steady progress at Capricorn Copper, where water inventory management and regulatory engagement are advancing the restart timeline.

Amid these developments, the company’s strong liquidity position and recent capital raise provide a buffer to fund ongoing works and exploration, while strategic funding initiatives aim to minimise dilution risk. The interplay between these factors will be critical to watch as 29Metals seeks to balance near-term production stability with longer-term growth ambitions.

Given the revised zinc and precious metals guidance and the timing uncertainties around Xantho Extended’s full mining recommencement, investors will be keen to monitor quarterly updates for signs of operational normalisation and regulatory approvals at Capricorn Copper.

Meanwhile, the company’s exploration momentum and the Gossan Valley project progress offer potential offsets to near-term production headwinds, setting the stage for a pivotal 2026. This report builds on the company’s recent high-grade resource extensions and follows its latest profit and growth update, underscoring a complex but carefully managed operational landscape.