Earnings call transcript: Gruvaktiebolaget Viscaria stock rises 3.63% after Q2 2025 call

Gruvaktiebolaget Viscaria reported its Q2 2025 earnings, revealing a challenging financial performance with a net loss of SEK 22 million. Despite these results, the company’s stock rose by 3.63% to SEK 16, reflecting investor optimism about its strategic initiatives and future prospects. According to InvestingPro data, the company holds more cash than debt on its balance sheet, providing financial flexibility as it advances its multi-commodity copper and iron project, with several key infrastructure developments underway.

Key Takeaways

• Gruvaktiebolaget Viscaria reported a net loss of SEK 22 million for Q2 2025.
• Stock price increased by 3.63% to SEK 16, indicating positive market sentiment.
• The company is progressing with its copper and iron project, with major construction milestones reached.
• The global copper demand-supply gap presents a strategic opportunity for Viscaria.

Company Performance

Gruvaktiebolaget Viscaria’s Q2 2025 performance highlighted significant operational activities despite financial losses. The company is focusing on expanding its resource base and infrastructure development to position itself as a key player in the European copper market. The ongoing construction of a water treatment plant and tailings dam, along with the commencement of a rail yard, underscores its commitment to advancing its projects.

Financial Highlights

• Operating Profit: -SEK 17 million
• Net Profit: -SEK 22 million
• Cash Flow: -SEK 42 million
• Shareholder Loan Drawdown: SEK 140 million
• Cash and Cash Equivalents: SEK 340 million

Market Reaction

Following the earnings call, Gruvaktiebolaget Viscaria’s stock price rose by 3.63%, closing at SEK 16. This increase reflects investor confidence in the company’s strategic direction and future growth potential, despite current financial challenges. InvestingPro analysis indicates the stock is currently trading near its 52-week low, with a relatively low beta of 0.36, suggesting lower volatility compared to the market. Based on InvestingPro’s Fair Value analysis, the stock appears slightly undervalued at current levels. For deeper insights into valuation opportunities, investors can explore the Most Undervalued Stocks list on InvestingPro.

Outlook & Guidance

Gruvaktiebolaget Viscaria is targeting a resource expansion to 140-160 million tonnes and aims to commence production by 2027. The company is also in discussions for project financing, with expectations of achieving 50-60% leverage. The strategic location in Kiruna and the high-grade copper deposit (0.9%) position Viscaria favorably in the European market.

Executive Commentary

"We are moving from planning to full execution and implementation of this industrial site," stated Jurgen, CEO of Gruvaktiebolaget Viscaria. This sentiment was echoed by Ross, Head of Geology, who noted, "We’ve managed to add 28 million tonnes of inferred resources in just one year."

Risks and Challenges

• Financial losses and negative cash flow could impact future project financing.
• The global decline in copper grades may affect long-term profitability.
• Delays in project execution could push back the production timeline.
• Market volatility and economic uncertainties pose risks to investor sentiment.

Gruvaktiebolaget Viscaria’s Q2 2025 earnings call highlights both the challenges and opportunities facing the company. With strategic initiatives underway and strong investor interest, the company is poised to capitalize on the growing demand for copper, despite current financial setbacks.

Full transcript - Gruvaktiebolaget Viscaria (VISC) Q2 2025:

Jurgen, CEO, Viscaria: In Kjerna. It’s here where everything starts. Every day, new drill cores come up here. We drill 20 fourseven and have done so since May 2020 and have today an impressive amount of more than 200,000 meters drilled, a unique number for a company of our sight in the international mining industry. This has indeed been a milestone quarter for Viscaria.

Of course, the main cornerstone was with all permits gaining full legal force on April 16. Follow-up by that we released our first reserve statement and also a resource upgrade on May 8, where we confirmed higher copper grades, increased tonnage and an impressive growth potential. We have now gone from planning to full implementation. The organization continues to grow, and we have also had impressive new additions to our Board in the form of Lars Herr Garo and Mark Johnson. And even if Mark has been introduced to you before, I think it’s well noted to remind you that he is Chief Operating Officer of one of the world’s largest copper mines, Grasberg, in Indonesia.

And with more than forty years of experience within the copper mining industry, he has, of course, have brought a wealth of experience and network and competence to our company, which is hugely beneficial for us. Other milestones during the second quarter is that we have signed a 45 megawatt grid agreement with Wattenfal. Our water treatment plant is close to be completed, and the pumps will start on October 1, and we can do the dewatering. We have also started with construction of the new tailings dam and the rail yard and also with the groundworks for the concentration plant. All this means that there’s a huge amount of activities out on-site with more than 150 subcontractors working on-site, more than 40 heavy machines and excavators and mobile crushers, and we are crushing approximately 50,000 tonnes of material every month.

We’re moving more than 220,000 tonnes of material every month. That means approximately two thirty dump belows or 40 tonnes every day. So it is indeed an extreme activity out on-site. And in parallel with this, as I told you initially, we continue with our drilling exploration drilling. Four rigs are drilling now, and Ras will tell you much more about the result later on.

And lastly, but not least, if it not was enough with this solid and impressive deposit that we have. It’s worth to reiterate the solid investor base that we have and that is so supportive to us. And that example of Jan Stolbe and Thomas von Koch that lended another million as shareholder loan with the intention to convert that into shares in upcoming share issue. Before we go on, it’s worth to be noted that we have since then we are permanently in the legal force, been seen much more in the press, which we think is fun. So our brand name gets more and more noted by both the Swedish and the international community.

With me today as presenters, I will have, of course, Frieda Keskotalo, our CFO and Ross, our Head of Geology. Both of them you met before. But new today is our moderator, Jay Ashfield from the International Metals and Mining Investment Bank, Hannem and Partners. It will be a pleasure to have Jay on board later in the presentation. We have talked about the demand and supply gap of copper quite a few quarters during this project.

This time, I’ve chosen to choose some new pictures. On this picture, on the green line, you see the average mill head grade from nineteen fifty in all the copper mines in the world. And today, we have approximately seven zero seven copper mines in the entire world. So the average grade has gone from 1.5%. It was a bit high in the 60s, close to 1.7%.

And the average grade in the copper mines are today 0.55%, going down towards 0.4%. In the lower curve there, you see the average grade of new discoveries, which in 1950 were around 1%. And with the exception of the Kamoa mine in Africa, the average grade now from new discoveries is down to below 0.4%. This means that all easy copper is mined out. New copper is to be found very high up, some new copper resources even at 3,800 meters or very deep down.

We are blessed of having a deposit like ours with easy accessible copper and maybe in the world’s most renowned, mine town Kirna. These subcontractors here tell them ask them what they don’t know about mining. We have them here. They don’t need to establish themselves when we ask them. They’ve been here.

They’ve been mining here for one hundred and twenty years. And we have a site just adjacent to the iron ore line and to the European way. We are really spoiled with fantastic opportunities to mine in a city like Kjerne. The next picture is as dramatic as the previous one. Here you can see on the lower chart how much money all the copper mines is spending on exploration over a five year period, so from 2004 to 2023.

So you can see on average for each five year period, all mines are spending approximately US11 billion dollars in exploration. And on the top hand, you see the amounts of new copper found. And you can see that these are quite dramatic numbers. We are going into an increasing copper demand supply gap. We really have a thrilling metal.

I talked about our order activities. We are now so going from planning to actual implementation. On the top hand, you see the water treatment plant that is now almost completed with all the pumps and pipes. And again, October 1, we will start to dewater the mine. And to the right, you see the main parking entrance, entrance parking.

It’s almost completed. Down to the right, we’ve started the groundworks for our own rail yard. And to the left of the rail yard, we’ve still not built the offices for all the subcontractors, but that work has started. And to the left of that, the white building is our office. That is, of course, installed and up.

And then the stores and the lay down areas further under the rail yard is well underway, and a huge part of the Leydon area is already built and constructed with the storage tents as well. And the power station will be built by Wattenfal, and the groundworks are started there as well. And to the left, have the processing plant and the groundworks are starting off now this autumn as well. So it’s a lot of activities going on. Yeah, some pictures just of everything from the we’re extending the clarification pond, so we have a larger capacity in the clarification pond.

We are building the new tailings dam behind the old tailings dam. And as a reminder, we are saving the old tailing stem for future processing or remining, but we will not start with that. Since we have values there, we are saving that for the future, but a huge amount of work. The water treatment plan in itself is an impressive project. This is a project investment cost for more than SEK500 million.

It’s a complex project with a lot of subcontractors involved. And we’re still we’re executing that on time. This will be a role model for how we will continue to do the construction on this site. And it’s a pleasure. It’s impressive to see the progress every week in this.

And we so much look forward to October 1. With that, I know that many of you are waiting for the thrilling continued exploration updates. And of course, you will hear many thrilling things from Ross here. So with that, Ross, please take the table.

Ross, Head of Geology, Viscaria: Thank you very much, Jurgen, and good morning everybody. For Viscaria’s geology team Q2 twenty twenty five was a big one. On May 8, we released our new mineral resource estimate, which was a really huge milestone for us, the first resource update since November 2022. And here, the numbers spoke for themselves, where we saw a significant increase in both the tonnage and grade of the deposit and that followed on from a really successful exploration drilling campaign. But the exploration has not stopped there.

We’ve really continued this going forward in the second quarter and ramped up our Grand Viscaria exploration strategy which combines both the near mine and district scale exploration ultimately aiming for the expansion of our inferred resources and also the development of new copper discoveries in the region. Not only that, today we have exciting drill results to share from the D Zone, continued exploration there. Here we have six new drill results which in every hole we hit mineralization proving extension to the D Zone mineralization. And that’s of course super exciting for us. You’re going to hear more about this on the following slides.

We’ll basically run through these main highlight areas first starting with a recap on the mineral resource estimate. So where do we stand today? The total mineral resources for the Viscaria deposit stand at 108,000,000 tonnes with an average copper grade of 0.9%. That means that we now have a contained copper amount of 970,000 tons, which positions us very well, particularly within the European context. So, this is really positive change across all key metrics in the resource update.

We’re unlocking higher grades. If we compare it to November 22, our last resource update, there we had an average copper grade of 0.88%, whereas to date, we’ve increased this to 0.9%. And it’s not just grade, we’re also increasing the scale of the deposit and of the opportunity here. Over the same timeframe, the total mineral resources have increased by 16% and the total contained copper by 18%. And for us, this is a really encouraging and positive signal because, you know, we’re not just adding tonnage for the sake of adding tonnage, we’re really increasing the size of the resource and the quality of the resource at the same time.

It’s worth noting as well that Viscaria is a multi commodity project, so copper and iron. We see here on the right hand side of the slide a cross section of the Viscaria deposit. And in all of these mineralized zones, the A Zone, Abba Zone, the B Zone and the D Zone. In all of these we do find magnetite, but it’s only in the D Zone that the magnetite occurs with economic concentrations. So it’s from here that in addition to the copper concentrate we plan to recover an iron concentrate as well.

So the magnetite content in the D zone provides added value to the resource giving Viscarias mineral resources a copper equivalent value of 0.97%, which can be compared directly with the pure copper grade of 0.9%. And finally, our last key takeaway from the resource update is the hugely successful exploration campaign which really underpins all of the numbers, all of the growth that we’re talking about today. In just one year and with less than 20,000 meters of drilling, we managed to define an additional 28,000,000 tonnes of inferred resources. That’s over a quarter of a million tonnes of contained copper into the metal inventory, which really that’s just a huge return for a one year exploration campaign and a huge testament to the hard and diligent work of the geology team. Some of whom you can

Working behind As mentioned though we really wanted to keep momentum after this major milestone so we’ve really ramped up and scaled up our Gran Viscaria exploration strategy. If you don’t know, Grand Viscaria consists of both near mine and district scale exploration, a combined approach which in parallel aims to extend the life of mine in Viscaria, but also to increase the feed, the long term feed to our processing plant through time. In the near mine we are focused on expanding and increasing the inferred resources, prioritizing high grades because we really want to add tonnes that we believe have a really good chance of being incorporated into the future mine plan. While on the district scale, this is long term and generative exploration. So, here we’re really looking at finding new copper deposits, developing economic satellite deposits in order to supplement the long term metal inventory of the company.

But of course, it takes a long time to take something from discovery into production, you know, on the order of ten to fifteen years. So for us it’s really imperative that we get started with that work today. It’s not something that can wait until tomorrow. But so far in 2025 we’ve drilled a total of 22,000 meters of which 3,500 can be attributed to deep directional drilling in the D Zone. And it’s here that we have six new Assi results to share with you today.

Really exciting and we’ll cover that in the slides to come. But we’ve also been branching out from the Viscaria mining area and doing a lot of work diamond drilling, geophysical surveys in several of our other exploration permits here. And although we’re still awaiting the full assay results, these are still pending. But what we can say is that the initial observations from the drill court confirmed the presence of copper mineralization across the entire district. And so of course this really emphasizes the scale of the mineral system that we’re dealing with here.

For now though, let’s turn our attention to those new exploration results from the D Zone. So in short six new drill holes and six new hits. All of the step out drilling which has been designed to step out from the new mineral resource boundary has all confirmed extensions to the mineralization in the D zone. This is super thrilling for us because not only does it show that the mineralization extends further to depth and significantly along strike, but these results will also help to constrain this new thick and high grade ore chute that we’ve discovered at depth. And this will allow us to guide the further drilling and also to make sure that we develop the resource by following the most economic parts.

We see on the right hand side of the slide here a longitudinal section of the D Zone with the mineral resource outlined here. And the resource model has been color contoured according to the copper grade multiplied by the thickness. So in the warm colors, the reds, pinks and purples, here we see basically the most economic parts of the mineralization. Where the grades are highest and where the mineralization is thickest. And you can see that these thick ore shoots they follow a certain orientation plunging towards the Southwest.

You can also see on this section why we are so excited about this new discovery at depth in this area here, which of course you can see from the grade thickness perspective looks extremely attractive. So the full assay results and details on the drill holes you can find that on our company website where we published the accompanying Table one this morning. But here we have the highlights shown on the slide. For example, Drill Hole 24006 D which was located here had an intersection of eight meters at 1.8% copper or 2.3% copper equivalent if you take into account the added value of the magnetite. Similarly, in Hole 25002, which intersected the mineralization here, we have an intersection of eight meters at 1.3% copper or 1.6% copper equivalent.

So some really encouraging grades on display here. Furthermore, if we move along Strike towards the Northeast, we have Drill Holes 129 And 129 B, which had respective intersections of four meters at 1.8% copper equivalent and another four meters at 2% copper equivalent. So shorter intervals, but what’s really important here is that the high grade persists. And it’s also worth noting that these shorter intervals were hosted by a wider intersection of massive magnetite which is over 50 meters thick in intersection. So to summarize we’re super thrilled with these results.

It’s an amazing result for the first round of drilling that follows our resource update. Six holes that prove further extensions to the mineralization and on top of that we have two ongoing drill holes located here and here which will be completed soon and we of course hope that these will both prove further extensions to the mineralization. The D Zone remains open at depth and we’re excited to keep drilling here and showing just how big the resource can grow. And finally, for me, I’ll keep the spotlight on the D Zone but with a slight change of topic. What I want to discuss here is the company’s plans for the conversion drilling at depth in the D Zone.

So as part of the last resource update and following on from our previous successful exploration, we managed to add a significant amount of tonnage to the D Zone resource at depth. And this inferred tonnage was incorporated into the extended mine plan for the feasibility study. And this mine plan you can see on the slide is shown in cross section here as well as longitudinal section. The inferred tonnage which constitutes 18% of the mined ore in the FS production plan. Of course, this needs to be infill drilled before we actually go down and do the mining.

And we plan to do this from underground starting in 2028 from the development between the A Zone and the D Zone. Here this development will be ready in 2028 so we can start the drilling then several years in advance of the planned production. And to illustrate why we want to do this drilling from underground rather than from the surface, you can see here that if we do the drilling from designated drill base on this ramp towards the D Zone then the infill drill holes will have an average length of around 600 meters. Whereas in contrast if we start that drilling today from the surface the same drill hole would have to be twice as long 1,200 meters. And as summarized in this table here, to do this infill drilling, to do this conversion with indicated level drill hole spacing, from underground this would require 15,000 meters whereas from the surface this would require 30,000 meters of drilling.

And in terms of cost, there is a huge difference as well. To put it simply, it’s bloody expensive to drill these deep long holes. So, from underground it would require just 30,000,000 krona to do this drilling whereas from the surface it would require an investment of 120,000,000 krona to get the same job done. And it’s not just cost but also time. Takes a long, long time to drill long holes when you start to get beyond 800, 900 meters.

So, terms of the time to do the drilling with two rigs, to do this conversion drilling with two rigs from underground it would require just five months. Whereas the same two rigs if they were drilling from the surface it would take thirty months. So it’s a staggering difference in time six times longer. So for us when you compare the two options it’s really a no brainer. Viscariat plans to do this conversion drilling of the deep inferred tonnage in the D Zone starting in 2028 when the development is prepared.

And from here we can do the drilling in a time efficient, cost efficient and practical manner several years in advance of the planned production. And on that note, I will hand the word over to Frieda.

Frieda Keskotalo, CFO, Viscaria: Thank you for that, Ross. So I will make a brief financial summary for the quarter two twenty twenty five. And if you start with capitalized expenses related to exploration and evaluation assets, it’s SEK65 million on the quarter. It’s a bit lower than the same period previous year and that’s mainly due to that we in quarter two twenty twenty four has this large drilling campaign ongoing and we also had a lot of work related to permitting process at that time. We actually now see that we are shifting from mostly make investments in these exploration assets to now entering this construction phase where our investments are more of tangible assets.

If you look at this operating profit minus SEK17 million and net profit minus SEK22 million for the quarter, we see that it’s a bit higher negative profit than previous period And that’s mainly due to the fact that we have some higher level of operating costs that not related to concession and therefore not being capitalized. But of course, we also included some interest expenses in net profit that’s related to the shareholder loan which we didn’t have last year. If you look at the cash flow for the period minus SEK42 million. During this quarter SEK140 million from the shareholder loan was drawdown and other essential items impact the cash flow is related to investment activities. If we then look at the balance sheet, we have exploration and evaluation assets of SEK1.5 billion.

We have this in progress construction almost SEK400 million at the June. Cash and cash equivalent is SEK $340,000,000 and equity is SEK 1,600,000,000.0. And here we have two diagrams showing the development for capitalized expenses related to exploration and evaluation assets in the first one. And in the lower one, you see the in progress construction on a quarterly basis for the same period. Here you also see this shifting when we actually see that this intangible assets decreasing during this quarter and we are scaling up the investments for construction.

And that’s a natural phase in our process right now when we’re actually in this construction phase now. If we then look at this exploration and evaluation assets, that’s mostly consist of drilling, analysis and some other works related to the geological area. But we also have some other operating expenses related to the preparation of the startup for the mine. If we then look a bit more into this in progress construction, we of course has this water treatment plant that we are up and building and we’re well ahead on schedule to meet the target to be in operations in October. This quarter we also started the work with our tailings and also the clarification pond.

We have initiated investment for secure power capacity on-site, and an important milestone there is, of course, the agreement with Vattenfall during the quarter. We’ve also started up some other site investments such as new roads on the area, parking spaces, also some security fences and gates and so on. And of course, we are also up and running with the detailed engineering and started some groundwork for our upcoming process plant. And that’s a short summarize for the quarter. And now I will handle over to again.

Jurgen, CEO, Viscaria: Thank you, Frieda, and thank you, Ross, as well for your presentations. So as you can hear, we are moving from planning to full execution and implementation of this industrial site. And we are continuing our drilling exploration program. And we have shown a strong support for our main owners. I will not say so many more words now, but I would like to start the Q and A session by first inviting our moderator, Jay Ashfield, from the investment bank firm Hanneman Partners.

Jay, please introduce yourself and your firm.

Jay Ashfield, Moderator, Hannem and Partners: Thank you very much, Jurgen. Delighted to be here in Corona, and it really is must be one of the best cities to start to mine in. Know, rich history of mining, developing and innovating mining services, technologies. Yes, really, really fantastic to be here again. Hanover and Partners, very quickly, leading independent investment bank based in London specializing in natural resources, provide financial advisory, M and A and fundraising across the capital structure, debt, equity, offtake, streaming, royalties, etcetera.

Over the years, the firm have supported and raised tens of billions of dollars for projects around the globe. And we’re excited to support Vescaria as financial adviser and raise the necessary funds to bring this really robust copper project back into production. So thank you for being here. Reminder for the online audience to use the chat function for any questions they may have. But I might as well kick off with my favorite topic, financing.

Where are we at to?

Jurgen, CEO, Viscaria: That is indeed a hot topic for not only us, but for all our investors. Well, everybody knows that the feasibility study and the reserve statement, that is the cornerstone. That is the starting point for discussions and negotiations with lending banks and but also credit guarantee bodies. So that work really commenced on May 8 and has then been undergone with the usage intense despite the summer and holiday periods, not at least supported by, among others, Hanneman Partners and your skilled expertise. So what we have done during the summer then, we have started so called market soundings with international banks.

And we have received a solid and positive reaction and interest to participate in our financing. And it’s worth noting some of the comments then during the summer why we received such a solid and positive response. The banks are impressed by our project execution capacity that we already have implemented so much of the infrastructure work and executed that. And they can see the result of all that work. And as I mentioned before in my presentation, there’s been a lot of interest around our water treatment project.

It’s a groundbreaking result of the water cleaning, as you know, and we are first in Sweden of doing that. And indeed, it’s a huge and complex project. And the way that we have executed that on time has been viewed, as I mentioned before, as a role model for the ongoing discussions. The banks furthermore, the comments that we have received is that they were impressed by the granularity in our geology model. And it’s rare to see again a company, a project of our size, having been drilled more than 200,000 meters and continue to drill as well.

So but you and your team has participated in many of these discussions as well. Maybe a short comment from you, Jay.

Jay Ashfield, Moderator, Hannem and Partners: Yes. No, absolutely. I mean it’s quite rare to have essentially all the right elements coming into a project financing, whether it be, you know, advanced copper project in Europe of a, you know, robust size and and grade. You know, it’s it’s it’s super advanced from the the study work that you’ve done from you’re in construction essentially from the tailings facility to the all the civils water treatment plant. And copper is is super hot right now, and the clean concentrates will be, you know, in in big demand, particularly in in Europe.

And I guess on that, you know, copper is a a critical mineral in the EU under CRMA. Can you expect some government support for some of the financing?

Jurgen, CEO, Viscaria: So copper then is indeed defined as a strategic material in the Critical Raw Materials Act. And that in itself, of course, has gained general support and interest of our project. We do, however, not expect any specific subsidies from the government or from EU, but that does the CRMA implementation that has supported a huge interest both from the European Investment Bank and the Nordic Investment Bank, which we also have conducted discussions with together with Hanneman Partners. It’s also the case that supports the interest from governmental export credit guarantee bodies like the Swedish EKN or Finnish Finvira or the German Oilermes, who is also participating in all these discussions. So not any direct subsidies, but a general support for a project like this, being one of the largest copper project in Europe and also one of the copper projects in Europe, which is closest to realization in 2027.

Jay Ashfield, Moderator, Hannem and Partners: And can you give an update on potential timing of some news on the financing?

Jurgen, CEO, Viscaria: I mean we will continuously inform the market during this autumn about both the equity and debt financing partners, so the process. So nothing specific today, but in a not too long distant future, we will update the market about that.

Jay Ashfield, Moderator, Hannem and Partners: That’s great. And you’ve previously indicated an expected leverage for the project between 50%, 60%. Is that still the case you’re comfortable with?

Jurgen, CEO, Viscaria: Yes. So during these market sounding processes, both within international banks and the credit guarantee bodies, we can confirm today that the leverage ratio is closer to 60% than 50% in the negotiations.

Jay Ashfield, Moderator, Hannem and Partners: When I’ve been gone for about five weeks since I was last year, seen some incredible progress at the water treatment plant. It is a major milestone for the company. Can you explain why?

Jurgen, CEO, Viscaria: I mean, the water treatment plant is actually one of the cornerstones in our project execution plan. It is 5x faster to go down in an existing ramp, including rehabilitation and rock enforcement and shock treating and so on, compared to do your own ramp development, 5x faster. And it’s you’re going down at the quarter of the cost if you do a main your own ramp development. So of course, to get down to do both the 150 meter ramp into the B zone and D zone and the four fifty meter deep ramp to the B and D zone, it’s extremely cost efficient and fast. So it means a lot to us.

It’s worth noting another important subject when you talk about that. Ramp development is the most costly feature when you develop the mine. To do a ramp development of one meter, it’s there you’re talking about the cost of more than SEK 40,000 per meter and that depends on the rock stability. This is a big and important topic that drives the cash cost for a mine company. In Kiruna, we have four companies that do ramp development, two of them based in Kiruna, two based in the surroundings.

It’s unique to have that support for that important and critical work at site. So we don’t need to fly in people. They don’t need to establish the teams. They know the rock since they’re working this rock here with our neighbor, and some of them have been working in the old Vescoria. So the water treatment plan is a cornerstone and it’s well.

So you’re dewatering an old mine. How can

Jay Ashfield, Moderator, Hannem and Partners: you be confident of the underground infrastructure, the rock conditions? Can you elaborate a bit on that?

Jurgen, CEO, Viscaria: Of course. No, it’s extremely important to have a predictable process and project execution in this. So here we go back to the amount of meters drilled. And you know that has listened to us before that the vast majority of the 200 and plus meters now is infill and rock mechanic, water delinument drilling, processing drilling and not exploration drilling. The exploration drill program commenced actually in a big size first last autumn.

So in those drilling, rock mechanics, for example, has been a huge part and other measurements have been done so that we are as sure as possible to know You rock

Jay Ashfield, Moderator, Hannem and Partners: mentioned quite a big number of meters being drilled. For you as CEO, how can you stay on top of it? How can you manage such a big program over a couple of years? How many rigs have you been running on an annual basis?

Jurgen, CEO, Viscaria: I mean, as I told you before, today we have four exploration rigs out on-site, both in the near mine and in the Grand Vescara outer areas. But at the most, we had nine rigs in place. And that means that every day, seven days a week, we receive some 600 to 900 meters of drill core here every morning. So you can just imagine the amount of people, external consultants we need to log, because if you don’t log, you lose some of the value when you’re doing your work because you need input for the next So shoot as well, so to this core shed has been really an intense workplace during these years.

Jay Ashfield, Moderator, Hannem and Partners: I bet. Thank you, Jurgen. I’d like to stay on that topic of drilling and geology, and welcome back, Ross. Ross?

Ross, Head of Geology, Viscaria: Thank you, Rasti.

Jay Ashfield, Moderator, Hannem and Partners: Ross, there’s been a lot of meters drilled as just described by Jurgen. It’s helped build quite a cornerstone asset resource over 100,000,000 tonnes, good grade 0.9% copper if you don’t include the magnetite. What’s your medium term target now with such an already sizable asset?

Ross, Head of Geology, Viscaria: It’s a good question. So on May 8, when we came out with our resource update and the feasibility study, we also set a midterm target for the resource of 140,000,000 to 160,000,000 tonnes. And that was based on the geological interpretation, also the supporting geophysics in our ongoing exploration areas. So the Deep D Zone, the Deep B Zone and the Abba Zone as well. And already these drill results which we showed today from the D Zone are already starting to reinforce that target.

Of course, there’s more drilling to do to get to that stage and more work to do the modeling down the line. But as we stepped out from the new resource, we’re finding continuations to the mineralization. So it’s super exciting for us.

Jay Ashfield, Moderator, Hannem and Partners: And I guess on today’s drill results from D Zone Deep, does that give you confidence, further confidence in the geological continuity of what you’re seeing here?

Ross, Head of Geology, Viscaria: Yeah, exactly that. I mean from drill hole to drill hole, there’s you know, it’s exploration so there’s still some significant spacing between each hole. But even then from drill hole to drill hole we’re finding pretty good continuity in the geology and in the grades that we’re seeing. So further down the line when we start to do the infill drilling, I don’t expect to have any major surprises. And historically speaking in the D Zone, we’ve done a lot of conversion drilling in the past in the upper part of the deposit.

So as Jorgen mentioned, 200,000 meters plus drilled since 2020.

Jay Ashfield, Moderator, Hannem and Partners: A lot

Ross, Head of Geology, Viscaria: of that was conversion drilling for the FS and the D Zone. And there the infill drilling to take things from inferred indicated measured went super well. And actually at depth we see that the mineralization is even better preserved. I could expect the conversion rates to be even better as we go deeper actually.

Jay Ashfield, Moderator, Hannem and Partners: So you mentioned you don’t expect any surprises. However, what has surprised you about this deposit so far?

Ross, Head of Geology, Viscaria: Well, I mean there’s a huge potential here of course. I think maybe this speed at which we’ve managed to increase the resources we always believed in something big here but in just one year to add 28,000,000 tonnes of inferred resources, within that 1,000,000 tonnes of contained copper, it’s really a huge return. And as Jorgen said, we’ve had help with logging but also really big push from all the geo team here as well. So, a really big testament. It’s no easy feat to add that much tonnage, that much contained metal within such a short space of time.

Jay Ashfield, Moderator, Hannem and Partners: No, absolutely. And I guess looking at our setting, geological setting, we have Al Kabi, enormous mining operation next door. This was a historical producing asset. What does that tell you and help guide you in terms of near mine exploration and your regional exploration thesis?

Ross, Head of Geology, Viscaria: Yes. That’s a very good question. The interpretation on the sort of genesis of the Viscari deposit has changed through time. Previously it was thought that the copper deposit Viscaria formed sometime before the iron oxide mineralization like Kirinavara. However, through all the drill core that we’ve seen, all the meters that we’ve been logging, we see evidence for the opposite actually that the copper came later in the paragenetic sequence, came after the iron, which is very interesting.

So, it potentially shows some genetic link between our IOCG type deposit and the coronavirus IOA deposits. This is something that we’re working on proving at the moment. It’s our working hypothesis. We have some ongoing academic research with LTU where we’re doing dating on the sulfide mineralization. So, we’re expecting to get results on that soon.

If we can prove that the copper mineralization is temporarily linked with the iron oxide mineralization, then of course this is hugely exciting. If there is a genetic link between our deposits, then you can really start to get I excited the think we started to touch upon the scale as well on this deep drilling in the last year. As we’re going deeper, we’re seeing thicker mineralization, we’re seeing better grades. And not only that, we’re finding new mineralized horizons, the Abbe zone, which we didn’t see near the surface, but it’s developing really well at depth. So hopefully more of those kind of surprises.

Jay Ashfield, Moderator, Hannem and Partners: I can’t wait. Just seeing if we have any questions from the chat. Yes, there’s a couple. So is the company surprised by recent findings, which suggest higher quantities of copper on-site? And are there any other mineral findings that are mine worthy?

Maybe Jurgen? Sure.

Jurgen, CEO, Viscaria: So we are focusing on the copper and our byproduct magnetite. As you can see historically in some of the drill results, we indeed see both gold and silver as well. But it is important for our credibility to state and calculate with what we are 100% sure of. To have minerals in the ground and to mine them economically is two different things. And this is also a discussion with our future smelters.

So even if we find other minerals, for example, gold and silver, we stay today with the calculation base with our copper and iron.

Jay Ashfield, Moderator, Hannem and Partners: Excellent. Well, gold and silver, exciting minerals to have in the portfolio in addition to

Jurgen, CEO, Viscaria: copper, of course indeed.

Jay Ashfield, Moderator, Hannem and Partners: Another question from the audience is when will you make the first blast?

Jurgen, CEO, Viscaria: Our commencing blast is planned to be around September, October next year. And I think we have mentioned that in the timeline before. So when we dewater enough and when done all the rehabilitation and investigations, so there would be a big feast up here in Kirna around September, October. And of course, as time passes, we will be much reporting closer about that date. But that will be a thrilling thing, of course, to do the commencing last.

Jay Ashfield, Moderator, Hannem and Partners: Yes, absolutely. I think we have time for one or two more. Here’s one. What is Viscaria’s key selling point to investors? And what has thus far been the most critical question you’ve received by investors?

I mean, Jorgen, you can maybe start off and I can elaborate more.

Jurgen, CEO, Viscaria: Yes. I mean, so I think I can just reiterate discussion from this market soundness with the lending banks, which are commencing with main comments from investors. I mean, the project execution capacity that we have shown already has been an important element both to attract interest and as proof of concept that we know what we’re doing and we can do that. Furthermore, there have been focus on the quality of our copper. We have a clean copper.

And in these discussions that we have commented this summer, of course, that has also included discussions with future potential customers. And we have also sent samples to some of those future potential customers, and we have received a huge interest there. So it’s quite self explanatory and clear that we will not have any problem whatsoever to find customers for our copper.

Jay Ashfield, Moderator, Hannem and Partners: Excellent. Well, I guess I can shed some light more from a natural resources perspective. And I think the key question to any company is execution capabilities. And I think given the setting where we are in Kourna with the people, the history and all the work that the company has done, really kind of ticks the boxes of executable project here and just how advanced you are and this copper will be delivered to the market in a pretty short while. One final question I think we have is how would you describe the investment climate in northern parts of Sweden after Northvolt went belly up?

Has this affected your possibilities to raise money?

Jurgen, CEO, Viscaria: It has indeed affected the climate as such. And of course, that in Sweden, we can see that in all articles on. Luckily, we don’t have much of those discussions when we’re talking to international banks since they were before. So to summarize there, we don’t see that, that has any direct impact on our financing possibilities. It’s a continued huge interest and very positive and solid reaction from the lending banks and also international equity investors that Hanneman Partners are introducing to us.

So we are progressing on plan with all those discussions.

Jay Ashfield, Moderator, Hannem and Partners: Fantastic.

Jurgen, CEO, Viscaria: Okay. So if no more questions, thanks a lot for joining us today here, Jay. We

Ross, Head of Geology, Viscaria: look forward

Jurgen, CEO, Viscaria: to have you again as moderator. With that, from the whole entire Disquire team, a big thank you for listening in, and we look forward to see you again early November for the report of our third quarter. Thank you very much.

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