ACG Acquisition H1 Earnings Call Highlights

Key Points

• Gediktepe’s outlook improved significantly: the updated technical report raised estimated net present value to $1.2 billion at consensus prices and $1.4 billion at spot prices, while increasing projected five-year average production to more than 36,000 metric tons of copper equivalent annually.
• Expansion projects are advancing: ACG expects the sulphide plant to reach commercial production by year-end, plans to start its $60 million SART facility in the third quarter of 2027, and could extend heap-leach operations by six to seven years through a nearby oxide-feed license.
• Financial performance and funding remain key priorities: first-half 2026 revenue was $90 million, EBITDA was about $50 million and cash flow was $30 million, while management is targeting a lower-cost refinancing of its $200 million Nordic bond as construction spending increases net debt.

ACG Acquisition LON: ACG said its updated technical report for the Gediktepe mining operation in Türkiye increased the project’s estimated net present value and lifted expected copper-equivalent production over the next five years.

Artem, the company’s chair and chief executive officer, said Gediktepe’s net present value was estimated at $1.2 billion using consensus commodity prices and $1.4 billion using spot prices. He said the company’s estimated net asset value per share was about £34 at consensus pricing and approximately £43 using spot prices.

The company acquired Gediktepe for $120 million in September 2024 and is investing a further $200 million in the asset, according to Artem. Of that amount, $146 million has been invested, including construction of a flotation plant, while about $60 million is being allocated to develop a sulphidization, acidification, recycling and thickening, or SART, plant.

Production Outlook and Processing Expansion

ACG said it has raised its expected average production over the next five years to more than 36,000 metric tons of copper equivalent annually, compared with an original plan of roughly 20,000 metric tons. Artem said the forecast is based on reserves and a limited amount of enriched and stockpiled ore, and does not include production from recently acquired oxide ore feed.

Patrick Henze, chief financial officer of ACG Metals, said the site will have three processing facilities, providing operational flexibility across sulphide and oxide material. The sulphide plant is expected to produce copper concentrate and zinc concentrate, with the copper concentrate containing gold and silver. The SART plant is planned to produce copper and zinc concentrates as well as doré, while the oxide operation will also produce doré.

Henze said copper is expected to be the dominant contributor to the commodity mix, followed by gold, with zinc and silver serving as byproducts. At consensus prices, the company expects average annual revenue of about $450 million over the next five years, compared with roughly $130 million in recent years.

The technical report outlines an initial mine life of 11 years. Henze said measured resources remain materially higher than reserves and that future mine-life extensions could be supported by infill drilling within the existing pits.

The SART plant is scheduled to begin production in the third quarter of 2027. The company initially considered developing the plant in two phases but changed the design to recover gold, silver, copper and zinc from the outset. Henze said the change delayed startup but brought copper and zinc production forward by roughly two years. ACG expects the $60 million program to generate approximately $360 million of net present value, according to Henze.

Oxide Feed and Technology Plans

ACG recently announced an agreement to acquire a license about 70 kilometers from Gediktepe for just under $8 million, payable in two tranches. The company said the acquisition could extend heap-leach production by six to seven years.

Henze said the initial mine plan includes about 300,000 tons of material grading 0.9 grams of gold per ton. After mining, trucking and processing costs, the company expects the material to generate $15 million to $20 million in profit. ACG also sees exploration potential of 5 million to 10 million tons at the license area, although that potential remains subject to further work.

The company expects to process residual oxide material this year, flush and turn the heap leach during the first half of 2027, and begin processing third-party ore around mid-2027, subject to receipt of the full license and environmental approvals.

Henze also highlighted a processing technology developed by the company’s chief metallurgist, Yaya, which ACG said improved recoveries from less than 75% to more than 85%. The technology is intended to reduce cyanide consumption and costs. ACG has patented the technology in Türkiye and is pursuing patents in 35 additional countries, primarily in Europe and Central Asia.

First-Half Financial Results and Financing

For the first half of 2026, ACG reported $90 million in revenue, about $50 million in EBITDA and $30 million in cash flow. Henze said higher gold prices and cost discipline supported the result. The company held approximately $60 million in cash at the end of the first half.

Henze said net debt has increased following construction spending, but management expects cash generation to improve as the sulphide plant enters production. The company is ramping up the plant and is targeting full commercial production, defined by management as 70% of nameplate capacity, by the end of the year. It expects to reach nameplate capacity next year.

ACG has a $200 million Nordic bond outstanding. Henze said the company began with a 14.7% coupon and believes it can refinance at a lower rate. Management said it may refinance at the first call date in January or potentially earlier.

The company also discussed non-cash IFRS fair-value adjustments related to outstanding warrants and a deferred copper-price-linked payment to Lidya due in 2028 and 2029. Henze said these adjustments affected reported earnings but did not affect operating cash flow.

Near-Term Priorities

• Ramp the sulphide plant to commercial production by year-end and nameplate capacity next year.
• Complete the SART plant for targeted third-quarter 2027 production.
• Begin processing oxide ore from the newly acquired license around mid-2027, subject to approvals.
• Refinance the company’s outstanding bond to reduce interest costs.
• Continue evaluating acquisitions, while management said it would avoid transactions that do not create shareholder value.

Management said it plans to provide formal 2027 production guidance at the beginning of the year. The company also said it will begin drilling next year at an exploration license located about 200 kilometers from Gediktepe, which Artem described as appearing to host large porphyry-style mineralization, while cautioning that it is too early to draw conclusions.

About ACG Acquisition (LON:ACG)

ACG Metals is a company with a vision to build a global, high-margin, copper-focused producer with safe, efficient, and sustainable operations. 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 39.2koz of AuEq in 2025. ACG's team has extensive M&A experience built through decades spent at blue-chip multinationals in the sector.

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