Lifezone Metals Limited Q2 FY2026 earnings call

• Nickel Market Update

  • The global nickel market has undergone a fundamental reversal since late 2025, driven by higher royalty rates, Indonesia's adjusted nickel ore benchmark pricing, and year-on-year declines in Indonesian ore supply. The new base case projects a market deficit in 2026.
  • Long-term, global nickel supply is increasingly concentrated in Indonesia, which is projected to account for 75% of global supply by 2030, with peak Chinese investment in Indonesia now in the past. Demand growth remains strong from EV batteries and stainless steel.

• Strategic Project Development (Flagship Kabanga Nickel Project, Tanzania)

  • After acquiring BHP's stake last year, the company secured a $60 million bridge facility from Taurus to fund pre-FID activities, which have been fully deployed to maintain project momentum.
  • A competitive process for strategic project equity investment concluded with management recommending a preferred partner to the board, and final negotiations are ongoing; the equity investment will run parallel to project finance managed by SockJet, with an announcement expected in the near term.
  • Approximately $850 million in construction work packages have been issued for tender, including bulk earthworks and core construction functions. Camp upgrades, permitting, and geotechnical drilling for box cuts are all underway, and investor site visits will be scheduled in the future.
  • The 100% resettlement compensation program for local communities is complete, with ongoing community engagement led by an experienced new team.
  • The Tanzanian government has committed funding for required rail extension and national grid infrastructure, which is scheduled to be completed before production start; Tanzania is a net power exporter, so power supply is secured.

• Growth & Other Projects

  • The company has entered a commercial agreement with the government of Burundi and Cobalt Metals for the large Musangaki laterite nickel deposit, located adjacent to Kabanga on the Burundi border. The company is conducting technical studies to evaluate synergies from shared infrastructure between the two projects to create a large regional Western-aligned nickel supply hub, with 14 months of exclusivity for development work.
  • The Glencore joint venture automotive catalyst recycling project in the U.S. has completed pilot testing, with additional pilot work and site identification ongoing. The project will demonstrate the company's patented hydrometallurgical technology, and the company is applying for U.S. Department of Energy grants to support domestic platinum group metal refining, aligned with current U.S. policy priorities. The goal is to reach FID and build the first domestic AutoCat hydromet recycling facility in the U.S.
  • The Simulus technology division currently has ~30 active internal and client projects focused on developing alternative processing and refining solutions to address global supply chain choke points, creating a pipeline of future opportunities.

The company is pre-FID (pre- Final Investment Decision) for its main Kabanga nickel project, with all current activity focused on pre-construction development, so there is no full production segment revenue reporting. The only active revenue-generating segment is the Simulus engineering/processing division: it generated $1.3 million more revenue in H1 2026 than the comparative prior year period, driven by new external client contracts. As of the end of June 2026, the company held $37.3 million in cash, with total liquidity of $56 million (including $18.3 million in undrawn facility capacity). Net loss before tax for H1 2026 was $7 million, translating to an $0.08 per share loss, which included $3 million in one-off interest payments related to the existing convertible facility.

Management confirmed that all required processes are on track to complete the strategic equity investment and the amended framework agreement with the government of Tanzania in 2026, with a simultaneous closing of both transactions targeted. No specific 2026/2027 production or revenue guidance was provided, as the company remains in pre-FID development for its main production projects. Management reaffirmed plans to commence full-scale construction of the Kabanga mine immediately after funding and framework agreement closing.

• Near-term nickel market uncertainty persists from the ongoing war in the Middle East, including risks of prolonged shipping disruptions through the Strait of Hormuz and geographic expansion of hostilities.
  • China's total ban on sulfuric acid exports is expected to remain in place through the end of 2026, which creates operational risk for nickel leaching operations across the Asia-Pacific region.
  • All pre-development and financing activities are interdependent: closing of the amended Tanzanian framework agreement is tied to finalization of the strategic equity consortium structure, which has extended the negotiation timeline beyond initial projections.
  • The Musangaki project is in early-stage evaluation, with significant technical and geological work still required to confirm project economics and realize expected synergies with Kabanga.

Q: What remaining issues block the amended Tanzanian framework agreement, and do you expect to sign it in 2026?

A: Management confirms signing is expected in 2026. The framework agreement is tied directly to finalization of the strategic equity consortium structure. The final outstanding step is completing the last joint financial model schedule, aligned with the finalized investment structure and negotiated tax incentives. All core discussions with the Tanzanian government are complete, and the agreement is now in the final government approval phase, with a simultaneous closing of the equity investment and framework agreement targeted.

Q: Are all required infrastructure elements in place to start Kabanga construction once funding is secured?

A: All core infrastructure is committed and on track. The Tanzanian government has secured funding for the required rail extension to the project's siding, which is scheduled to be complete before production starts. A large nearby hydroelectric dam has been commissioned, leaving Tanzania as a net power exporter with sufficient capacity for the project, and a grid connection line is planned. All necessary infrastructure is in place to commence full construction immediately after funding closes.

Q: What is the timeline and expected capital spend for the Musangaki project under its 14-month exclusivity agreement?

A: Musangaki is a highly complementary adjacent asset that would create a large regional Western-aligned nickel supply base replacing concentrated Indonesian supply. The near-term plan focuses on low-capital technical work: additional drilling to test for sulfide ore below the known laterite deposit, and flow sheet engineering to evaluate potential cost reductions and synergies from shared infrastructure with Kabanga. The project will progress in careful small steps, with no large near-term capital commitments planned while technical work confirms project value.

Q: What is the status of U.S. government support for the company's projects?

A: Bilateral relations between the U.S. and Burundi are improving, and the company expects potential support for Musangaki from U.S. development institutions. For Kabanga, all due diligence for political risk insurance from the U.S. Development Finance Corporation has been completed, with further updates expected in the near term. For the U.S. recycling project, the company's DOE grant application aligns with U.S. policy goals for domestic critical metal refining, so strong government support is expected.