Namib Minerals Q2 FY2026 earnings call

• Production and Mill Expansion: Howe Mine produced 11,373 ounces in H1 2026. The expanded milling plant installation is substantially complete, with commissioning expected in mid-October 2026. A six-to-eight-week ramp-up period is anticipated, with full capacity expected by late December 2026. Once at full rate, the mine can annualize over 30,000 ounces.
• Red Wing Mine Restart: Dewatering at Red Wing Mine was completed ahead of schedule on September 21, 2026. To comply with Zimbabwe’s new mining policy requiring foreign operators to meet production thresholds by January 1, 2027, Namib Minerals is bringing forward the restart of Red Wing. Initial production is targeted for January 2027 using existing infrastructure and developed areas, funded internally without equity issuance. This restart does not replace the ongoing Definitive Feasibility Study (DFS).
• Cost Discipline and Efficiency: Absolute production costs fell 3% to $17.9 million despite a 15% rise in power tariffs. Administrative expenses were $13.7 million, including $3.2 million in one-time restructuring costs; underlying run rates are expected to decrease post-restructuring. Royalties increased 70% to $3.1 million due to higher gold prices triggering a higher royalty rate effective January 1, 2026.
• Governance and Leadership: Siphesihle Mchunu was appointed CFO and General Counsel. Wendy Luhabe joined the board as Lead Independent Director, bringing extensive experience in African development finance and mining projects.

The company reported a single operating segment, Howe Mine, which is the principal source of production. In the first half of 2026, revenue reached $50.8 million, representing a 40% increase from the prior year period. Gross profit doubled to $27 million, achieving a margin of 53%. Adjusted EBITDA increased by 76% to $19 million. Production volume was 11,373 ounces, an 11% decrease year-over-year due to lower head grades (1.7 g/t vs 1.9 g/t) despite stable tonnage milled (233,000 tons). The financial performance was primarily driven by a stronger gold price environment rather than volume growth.

• Production Guidance Revised Downward: Full-year 2026 production guidance for Howe Mine is revised to 26,500–27,000 ounces, down from the previous range of 28,000–31,500 ounces. This revision reflects the delayed mill commissioning (mid-October) and subsequent ramp-up period. The revised range assumes head grades between 1.7 and 1.9 grams per tonne.
• C1 Cash Costs Maintained: The full-year C1 cash cost guidance remains unchanged at $1,400–$1,650 per ounce. Management expects unit costs to improve in the second half as volumes increase and fixed costs are spread over more ounces.
• All-In Sustaining Costs (AISC) Revised Upward: The full-year group AISC guidance is revised to $2,650–$2,850 per ounce, up from the previous range of $2,400–$2,700 per ounce. This adjustment accounts for fewer ounces absorbing fixed corporate overheads and care-and-maintenance costs for Red Wing and Mazowe. A significant improvement is expected in the second half as restructuring savings materialize and throughput increases.
• Future Outlook: Formal 2027 production and cost guidance, including contributions from Red Wing, will be provided in the first quarter of 2027.

• Operational Delays: The expansion of the Howe Mine milling plant is behind original guidance, with commissioning delayed until mid-October instead of earlier in the year, impacting 2026 production volumes.
• Regulatory Compliance: Zimbabwe’s Ministry of Mines has introduced a policy framework requiring foreign-owned operators to meet prescribed production and capital investment thresholds by January 1, 2027. Failure to meet these specifications could result in penalties or operational restrictions for mines like Red Wing and Mazowe.
• Financial Liabilities and Share Price Sensitivity: Non-cash fair value losses on earn-out liabilities and warrants ($11.3 million in H1) are sensitive to share price fluctuations. Higher share prices may lead to further non-cash losses, while lower prices could generate gains, though these do not affect cash flow.
• Working Capital Deficit: The company reported a working capital deficit of $42.9 million at June 30, 2026, although management asserts that ring-fenced assets and improved liquidity facilities mitigate near-term cash claims.
• Grade Variability: Production was constrained by lower-than-expected head grades (1.7 g/t), highlighting the risk of geological variability affecting output when mill capacity is fully utilized.

Q: How does the company plan to address the Zimbabwe Ministry of Mines' new policy framework regarding production and investment thresholds for foreign operators by January 2027? / A: Tulani Sikwila explained that Namib Minerals is proactively aligning with the new regulations. While Howe Mine already exceeds the required thresholds, Red Wing and Mazowe were previously in care and maintenance. To ensure compliance, the company is accelerating the restart of Red Wing Mine, targeting initial production in January 2027. This approach utilizes existing developed areas and infrastructure, funded through internal cash flows, thereby meeting the regulatory requirements without waiting for the completion of the Definitive Feasibility Study (DFS). The DFS continues as a separate workstream to define larger-scale development potential.

Q: Is the previously discussed aggregate development capital range of approximately $300-400 million for Red Wing and Mazowe still relevant, and how is the initial Red Wing restart funded? / A: Tulani Sikwila clarified that the $300-400 million figure was an early indication subject to validation through the DFS. The capital deployment is staged, not upfront. The initial Red Wing restart is distinct from the larger-scale development; it uses existing infrastructure and is funded entirely by internally generated cash flows, avoiding new equity issuance. Decisions regarding the larger capital investment will only be made after the DFS concludes, ensuring that each stage has its own decision point and funding mechanism, currently relying on bank debt rather than dilutive equity.