This article first appeared on GuruFocus .
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Revenue:$145.5 million, up 46% from $99.5 million in H1 2025.
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EBITDA:$75.5 million, up 89% from $39.9 million, with a margin of 52%.
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Adjusted Free Cash Flow:$46.8 million, a 189% increase from $16.2 million in the prior-year period.
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Dividend:Announced an interim dividend of 8p per share, representing 40% of adjusted free cash flow.
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Cash Position:$97.2 million in cash at the end of the period.
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Earnings Per Share (EPS):Up 330% period-over-period.
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Kounrad EBITDA:Increased 78% period-on-period.
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SASA EBITDA:Increased 62% to $19.3 million.
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Kounrad EBITDA Margin:84%.
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SASA EBITDA Margin:Back into the 30% range.
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Group CapEx:$9.5 million for H1 2026, with full-year guidance reiterated at $14.5 million to $17.5 million.
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Copper Production (Kounrad):Up 1% period-on-period, on track for full-year guidance of 12,000 to 13,000 tonnes.
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Zinc Production (SASA):Up 5% period-on-period.
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Lead Production (SASA):Up 6% period-on-period.
Release Date: August 26, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue increased 46% to $145.5 million, with EBITDA up 89% to $75.5 million, driven by higher copper and zinc prices.
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Strong cash generation of $46.8 million, leading to an interim dividend of 8p per share, within the 30%-50% payout policy.
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Improved production at SASA with zinc output up 5% and lead up 6%, reflecting successful operational improvement initiatives.
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Kounrad maintained industry-leading EBITDA margins of 84%, supported by record copper prices and stable production.
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Exploration portfolio advanced with maiden drilling at two Kazakh projects and the proposed Cygnus acquisition adding near-term growth potential.
Negative Points
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Two lost time injuries (LTIs) occurred during the period, highlighting ongoing health and safety challenges.
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Weaker US dollar against operating currencies increased local costs, impacting both Kounrad and SASA.
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Higher cost of sales, including increased silver purchase costs and depreciation, partially offset revenue gains.
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Tax charges rose significantly due to higher profits and an increased Kazakh withholding tax rate from 10% to 15%.
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Unrealized hedge losses of $1.5 million on zinc and FX contracts reduced reported profitability.
Q & A Highlights
Q: How should we think about the H2 payout ratio and the capital allocation framework post the Cygnus transaction close, and what is the expected CapEx profile at the group level over the next 12 to 24 months? A: Gavin Ferrar (CEO) stated that the Board's decision to get the dividend back into policy provides flexibility to finance both capital returns and growth ambitions. The interim dividend of 8p is at the midpoint of the 30%-50% policy range. If commodity prices remain strong, the dividend could trend toward the mid-to-upper end of the range, though the larger shareholder base post-Cygnus will cause some per-share dilution. Regarding Chibougamau, development CapEx will be modest for the first year, focused on completing drilling and the PEA. Significant development expenditure is expected to ramp up in the latter half of 2027 and into 2028 as the project moves toward a DFS.
Q: Is there much more cost cutting to be undertaken at SASA, or is it more about optimizing underlying performance? How should we think about per-ton mining costs in the second half? A: Gavin Ferrar (CEO) explained that the company is continuing its improvement program, but a conservative approach would be to keep costs flat through the year. The focus is on operational efficiencies, particularly around planning and grade control, which were identified as areas of weakness. While the company is fighting inflationary pressures, it is introducing initiatives and savings to offset them. The next step is to further analyze the asset to see if the mine life can be extended beyond 2034, but the benefits of current initiatives are already reflected in the improved H1 results.
Q: Assuming the Chibougamau transaction closes on time, what is the expected timing and budget for the PEA? A: Gavin Ferrar (CEO) stated that the PEA is expected to be published around Q2 or Q3 of next year, following additional drilling and trade-off studies. Louise Wrathall (CFO) added that the budget for 2027, at least the first half, is "millions rather than tens of millions," covering two to three drill rigs, G&A, and study work. The company is working with the Canadian management team to hit the ground running and may incorporate some changes to the approach based on their own analysis.
Q: With Chibougamau being a longer-dated asset, how should we view the possibility of additional near-term producing transactions? A: Gavin Ferrar (CEO) indicated that if the Cygnus transaction closes, the focus for the next 12 months will be on integrating the asset and advancing it toward a feasibility study and production. While the company maintains a pipeline of opportunities, he does not foresee any other significant transactions in the next 12 months. However, the strong balance sheet provides flexibility, and the company would consider opportunities if they made sense for shareholders, but it is not actively seeking a new operating asset in the near term.
Q: Should we expect any significant working capital movements in the second half of the year? A: Louise Wrathall (CFO) outlined three key areas: (1) Continued focus on reducing inventory at SASA, where a system has been implemented to better analyze needs and turnover; (2) A receivable from Kazakh VAT has been partially recovered since June 30; (3) On the payable side, the company will pay corporate income tax in Kazakhstan based on last year's higher profits, with payments spread in equal installments from August to December, which will normalize the balance sheet by year-end.
Q: Can you provide more detail on the exploration results and plans for the Kazakhstan portfolio? A: Gavin Ferrar (CEO) detailed progress across the portfolio. At CAML XD, an option was secured over an additional project in the Tengiz Basin, with 4,600 meters of drilling planned for H2 2026 and into 2027. At CAML X, maiden drilling at Otyar and Yuzhnoe intersected mineralization, including visible sphalerite and galena at Otyar and copper-molybdenum mineralization over a 1.2-kilometer strike at Yuzhnoe. Assay results are expected in Q3 and will guide future exploration. At Shaindy, a geophysical survey is being interpreted to generate drill targets for H2.
Q: What is the status of the Cygnus transaction and the key upcoming dates? A: Gavin Ferrar (CEO) confirmed the scheme booklet was published on August 13 and the UK circular on August 14. The all-share transaction values Cygnus at around AUD22 million, with completion targeted for October. Key dates are the CAML shareholder vote on September 4 (votes due by September 2) and the Cygnus scheme meeting on September 18. Both boards recommend voting in favor, and proxy advisers have also suggested support. The company is also awaiting conditional approval from the TSX for a listing, which is expected in time for closing.
Q: Can you elaborate on the financial performance drivers, particularly the impact of commodity prices and treatment charges? A: Louise Wrathall (CFO) noted that revenue increased 46% to $145.5 million, driven by significantly higher copper (up 39%) and zinc (up 26%) prices, as well as higher silver prices (up 128%), which affect revenue and costs. Treatment charges were $2.2 million lower, supported by negative lead treatment charges locked in through April 2027. These factors, combined with strong production and higher sales volumes, drove EBITDA up 89% to $75.5 million. The weaker US dollar against operating currencies and elevated inflation in Kazakhstan were noted as headwinds.
Q: What were the key drivers of the cost performance at both Kounrad and SASA? A: At Kounrad, costs were up $0.12, with over half related to the strengthening of the tenge. Power costs were slightly lower, but a tariff increase from $0.06 to $0.07 per kWh will impact H2. The EBITDA margin was 84%. At SASA, site-based costs were flat, with mining costs lower by $0.7 million due to headcount reductions and savings, offset by higher tailings disposal costs. The C1 cost base fell from $32.1 million to $30.8 million, helped by lower treatment charges, and the EBITDA margin improved to 30%.
Q: Can you provide an update on the health and safety performance and sustainability initiatives? A:
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
