Cobre Achieves Positive Cash Flow and Expands Sierra Atacama Copper Footprint

Sierra Atacama Turns the Corner with Positive Cash Flow

Cobre Limited (ASX:CBE) has marked a pivotal quarter at its Sierra Atacama Copper Project in Chile, reporting its first consecutive months of positive operating cash flow since assuming operational control in late March 2026. The operation generated US$1.618 million in positive cash flow over the quarter, with monthly figures of US$644,000 in April, US$601,000 in May, and US$373,000 in June, according to unaudited management accounts.

This milestone underscores a rapid turnaround, achieved within weeks of Cobre’s takeover, driven by a focused production stabilisation plan targeting 400 tonnes per month and aiming for a ramp-up to 500–700 tonnes by December 2026. Copper cathode production for the quarter totaled 879 tonnes, supported by a metallurgical recovery improvement to 76% in June; the highest level recorded this year; thanks to optimised leach-pad design and finer crush sizing.

Balance Sheet Reset and Supplier Relations Strengthened

Behind the operational gains, Cobre has aggressively tackled legacy financial burdens, reducing financing liabilities by approximately US$9.4 million since taking management control. The company renegotiated terms with key suppliers, locking in new contracts that lower operating costs and enhance supply certainty, effectively de-risking the production plan. Notably, structured debt of around US$18 million remains the primary focus, with scheduled monthly repayments of US$600,000 comfortably covered by operating cash flow.

Smaller trade creditors have been methodically settled or placed on agreed repayment schedules, removing prior balance-sheet overhangs. Discussions continue with the largest creditors to secure further savings, positioning the company for a cleaner financial footing as it advances production and exploration.

Expanding the District-Scale Copper Footprint

Cobre is not resting on its laurels. The company secured a binding option over 25 adjacent mining exploration concessions covering 6,820 hectares, expanding its Sierra Atacama district-scale footprint to more than 22,000 hectares. These concessions lie along extensions of the Atacama Fault System, promising new exploration opportunities beyond the current producing asset.

To underpin resource growth, a substantial 40,000-metre drilling program is underway, combining surface diamond, reverse circulation, and underground drilling. This program aims to validate historical data, convert the current NI 43-101 foreign resource estimate of 734,000 tonnes of contained copper into a JORC-compliant Mineral Resource, and test high-grade sulphide zones that could significantly extend mine life and scale.

Corporate Moves and Capital Raising to Accelerate Growth

On the corporate front, Cobre appointed Kaveen Bachoo, an executive with over 20 years’ experience at Glencore and BHP Billiton, as Chief Financial Officer to steer the company through its operational and financial transformation. The establishment of a new Santiago office further supports the Chilean operations.

Post quarter-end, Cobre announced a two-tranche A$90 million capital raise, with the first tranche of A$72.4 million completed and cornerstoned by Tribeca Investment Partners and Strata Investment Holdings. The funds are earmarked to fast-track production ramp-up, exploration programs, and increase ownership in Sierra Atacama from 45% to a targeted 75% stake, with a clear pathway to full ownership.

Botswana Projects Progress with Partner Funding

Beyond Chile, Cobre’s Botswana portfolio continues to develop. The 100%-owned Ngami Copper Project has entered a collaboration with Equinor to optimise in-situ copper recovery, with commissioning of the ISCR well field underway. Drilling at the Cosmos Target confirmed continuous copper-silver mineralisation over an 800-metre strike, including higher-grade zones above 1% copper.

Partner-funded exploration advanced at the Okavango Copper Project with Sinomine and at Kitlanya East and West with BHP, including completion of seismic surveys to define drill targets. These activities preserve Cobre’s capital while maintaining exposure to promising Tier-1 copper belts.

What Lies Ahead for Cobre

Cobre’s immediate focus is consolidating the operational turnaround at Sierra Atacama, aiming to ramp monthly copper cathode production toward 500–700 tonnes by year-end and eventually reach the plant’s nameplate capacity of 20,000 tonnes per annum. Exploration results from the ongoing drilling program and progress on converting resource estimates to JORC compliance will be critical milestones. Meanwhile, the company’s capital raise and ownership increase strategy set the stage for accelerated growth.

In Botswana, advancing the ISCR demonstration and partner-funded drilling programs will test the potential of these emerging copper projects, while the company leverages external funding to prioritise Sierra Atacama’s development.