ACG Acquisition LON: ACG used its latest investor presentation to review what management described as a strong set of annual results and to outline a transition year in which production is expected to shift from gold and silver doré toward copper and zinc concentrates as a new sulfide flotation plant comes online.
Chair and CEO Artem and Chief Financial Officer Patrick Henze said the company, which Artem described as “an 18-month-old company,” generated “quite significant cash flows” and ended the period with what management considers a manageable debt position while funding a major expansion project at its Gediktepe Mine in Turkey.
2025 results: $136 million revenue and $76 million adjusted EBITDA
Henze reported 2025 revenue of $136 million and adjusted EBITDA of $76 million, which he said equated to a 56% EBITDA margin. Operating cash flow was $65 million, which Henze framed against the company’s leverage by noting that the business “generated more operating cash flow than it had net debt” while still in a construction phase for the sulfide project.
Artem said the company has $200 million in bonds outstanding and cited net debt of $55 million. Henze attributed the lower-than-expected net debt position to three main factors: better commodity prices than assumed in earlier financing materials, cost discipline, and “very efficient” cash management in Turkey.
Operationally, Henze said the company exceeded its production guidance over the course of the year. He recapped an initial guidance range of 30,000–34,000 gold-equivalent ounces, an upgrade in the third quarter to 36,000–38,000 ounces, and a final result of 39,000 gold-equivalent ounces.
On costs, Henze said C1 costs were reduced by 18% and that all-in sustaining costs were about $1,250 per ounce, which he said contributed to attractive margins as gold prices increased, particularly in the fourth quarter. He added that the company’s cost discipline helped support a “healthy net debt position” by year-end.
Non-cash accounting adjustments tied to warrants and copper-linked payments
Henze also discussed items in the income statement that he emphasized were non-cash. He said the company recorded fair value adjustments of about -$82 million driven largely by the rise in the company’s warrant prices. Artem said the company had reduced outstanding warrants by 70% during the year and pointed to strong performance across securities, including a share price increase he described as 250% over the last year, warrants up 800%, and bonds trading at 109%.
Henze said the company also revalued a copper price-linked “bonus payment” that dates back to the acquisition period. He described it as equal to about 10% of incremental cash flow if certain copper price hurdles are met, requiring additional fair value adjustments as copper prices increased. He reiterated that these were “non-cash” and “pure accounting” measures.
Sulfide project on track for mid-year start; 2026 seen as ramp-up year
Management positioned 2026 as a ramp-up year following delivery of key construction milestones in 2026’s first half. Artem said the company is producing gold and silver doré in the first half of the year and expects to begin producing copper and zinc concentrates “from the middle of the year” as it completes a flotation plant for the sulfide portion of the Gediktepe deposit.
Artem said the sulfide project remains the company’s “number one priority” and that the company is on track and on budget, aiming for a July start. He later reiterated that the sulfide expansion is a $146 million project and said the “majority of that money has already been spent,” with the final months focused on assembly, commissioning, and start-up.
Henze said that detailed engineering is completed and equipment purchases are done, adding that the plant design and flowsheet are finalized and have been optimized over more than two years before the final design. He said further optimization is expected once the plant is in full production.
2026 production mix: oxide doré first, sulfide concentrates from July
Artem provided guidance for the transitional year, describing a mix of oxide and sulfide output:
- Oxide: about 17,500 gold-equivalent ounces in the first half of the year, which Artem said translates to 4,600–5,000 tons of copper equivalent. He emphasized the oxide material was mined last year, meaning “no mining cost for that part of the business this year,” which he said should support higher margins.
- Sulfide: starting in July, the company aims to produce 15,000–17,000 ounces of copper-equivalent production from the flotation facility.
Artem said cost guidance remains unchanged at $2.4–$2.6, describing it as “pretty good” given the transitional nature of the year.
He also highlighted upcoming catalysts, including a quarterly operating update cadence and the expected publication of first-quarter operating results “next week” and “in the middle of this month,” depending on where he referenced timing during the Q&A. Management said the company also distributes monthly construction updates via a mailing list.
Capital allocation, bond refinancing, and M&A approach
During the Q&A, Artem said capital allocation decisions are driven by maximizing shareholder returns. He said the company is fully funded for its existing projects and does not need additional capital “on the basis” of current plans. He also said the company intends to look at refinancing its Nordic bond next year and, once refinanced, plans to pay dividends and establish a dividend policy “in line or better versus our London-listed peers.”
On M&A, Artem said management is disciplined on valuation and “never going to overpay.” He referenced a decision not to proceed with an acquisition of Anglo Asian after months of discussions, citing relative valuation considerations. He said the company is working on multiple potential transactions but prefers to focus commentary on the value upside from existing operations until deals are completed.
Artem said the company is currently only looking at “producing or near producing assets,” arguing that such targets can support significant debt financing—potentially 70% to 80% or more of purchase price—while adding that each transaction must stand on its own financially and that the company will remain conservative on leverage.
Henze also addressed index inclusion, noting the company’s inclusion in an MSCI micro-cap index as a sign of improving liquidity. He said the “logical next step” would be the FTSE All-Share, and that eligibility for the FTSE 250 would come at a higher market capitalization threshold, which he described as around $750 million (or £500 million–£600 million).
Separately, Henze said the company has evaluated potential impacts from the “current situation in Iran” and emphasized that the company does not expect significant operational disruption, citing a fixed-term mining contractor arrangement, grid power at the site, and Turkey’s status as a net exporter of sulfur and sulfuric acid, which he said are relevant inputs for flotation operations. Artem also said the company is in discussions regarding potential sources of additional nearby oxide ore to feed its existing heap leach and Merrill-Crowe facilities after its own oxide ore is mined out, telling investors to “watch this space.”
About ACG Acquisition LON: ACG
ACG Metals is a company with a vision to consolidate the copper industry through a series of roll-up acquisitions, with best-in-class ESG and carbon footprint characteristics.
In September 2024, ACG successfully completed the acquisition of the Gediktepe Mine which is expected to transition to primary copper and zinc production from 2026 and will target annual steady-state copper equivalent production of 20-25 kt. Gediktepe produced 55koz of AuEq in 2024.
ACG's team has extensive M&A experience built through decades spent at blue-chip multinationals in the sector.
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