Lifezone Metals H1 2026 Earnings Call Transcript

Lifezone Metals (NYSE: LZM ) reported quarterly financial results on Wednesday. The transcript from the company's quarterly earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Lifezone Metals discussed the significant changes in the nickel market, highlighting cost drivers such as higher royalty rates and changes in Indonesia's ore supply policies, leading to potential deficits in 2026. The company is finalizing a strategic equity investment, selecting a preferred partner from a competitive process, which is expected to be announced soon. Progress on the Kabanga project includes substantial site preparation activities, with $850 million in work packages out for tender, and a focus on engaging with the Tanzanian government for infrastructure support.

7 million drawdown from a Taurus facility, reporting improved operating cash flows compared to last year. Lifezone Metals is advancing sustainability initiatives, completing compensation payments for resettlement, and engaging deeply with local communities. S. S.

Full Transcript Katherine, Investor Relations Welcome to the Lifezone Metals webcast to discuss the H1 2026 Interim Financial Results and to provide an operational update. We'll finish today's event with a question and answer session. You can submit a question using the Q&A box at the top of the page. Please feel free to contact us directly for any questions not addressed in this webcast.

Before we begin, I would like to remind everyone that today's event will contain forward-looking statements that involve risks and uncertainties that can cause actual results to differ materially from those in the forward-looking statements. Details of the forward-looking statements are contained in our July 29th news release on our website at Please see additional disclaimers, which I'd encourage you to read in your own time. Joining me today is Lifezone Metals Chief Executive Officer Chris Showalter and Chief Financial Officer Ingo Hofmeier. Without any further ado, I would like to turn things over to Ingo for the presentation.

Ingo Hofmeier, CFO Thank you, Katherine, and thank you everyone for joining us for our H1 2026 Interim news release. As in the last webcast, we would like to speak a little bit about the nickel market. The nickel market has undergone a noticeable fundamental reversal since late 2025. This fundamental shift is still intact with the new base case.

The main reasons for the shift are, number one, primary cost drivers: firstly higher royalty rates, and secondly, in April this year Indonesia adjusted the nickel ore benchmark price for Malaba including caramel products; and secondly there are supply factors, and this is Indonesia restricting their RKABs and flipping the ore supply outlook from a significant growth to likely year-on-year decline. On the price chart on the right you also see that there was some uncertainty in the last couple of weeks about how big this reduction actually is, but it becomes increasingly clear that there is in fact a reduction in these ore quotas.

All of this means that the market is shifting towards a potential 2026 deficit. So that's the new base case. Further near-term uncertainty is added by the war in the Middle East where negotiations seem to progress constructively at least at times. There's also risk of prolonged production traffic through the Strait of Hormuz and even geographical expansion of hostilities combined with a total China sulfuric acid ban, which is likely to last until the end of 2026, which is a risk to any nickel leaching operations in the Asia Tech region.

In the long run, Chinese sentiment in Indonesia has turned negative, which is likely a sign of peak China's investment in Indonesia being a thing of the past. Still, we expect and we concede that consumers remain concerned about the increasing concentration of supply in Indonesia. Given that we still see more supply in Indonesia, non-Indonesian investments, that could mean that Indonesia, from I believe 65% number, goes up to 75% of world supply by the end of 2030. And that at the backdrop with still very sound demand growth in the nickel space from EV batteries as well as stainless steel.

With this I would like to hand over to Chris to give us more an update on the strategic funding and framework agreement discussions. Chris Showalter, Chief Executive Officer Good morning everyone. Thanks for attending. So, importantly, I'll kick off here kind of updating our strategic initiatives and milestones, and I think if we kind of highlight where we've been focused, obviously with the acquisition of BHP stake last year, we have been engaged in a process really.

We started by securing the bridge facility with Taurus—that was very important. So that $60 million we secured allowed us to commence with all the important pre-FID activities. And we'll give an operational update on where that money is being deployed right now. But really important for us to keep momentum and show that project is marching forward.

Now, importantly, regarding Standard Chartered process, we have disclosed previously that we have had a very competitive process. We have had multiple binding offers that we have been evaluating. And what I'd like to do, importantly, on this call today is really give some clarity as to where we are. So right now, as management, we have presented a recommendation to our board of directors and the company has selected a preferred partner.

And these discussions are in the final phase. Now, this investment will involve a strategic equity investment into the project. And that's going to be in parallel to the project finance processes being run by SocGen. Now, this new equity investment is going to be a combination of both public and private.

And we are at a point now as a company where we are very excited and we expect to make an announcement in the very near term. So, as I said, this has been a very competitive process. It has taken time. But this is all running in parallel with negotiations with the government of Tanzania.

I think if we go back to some of the social media we had put out over the past month, you would have seen meetings with the President of Tanzania, President Hassan. It's important to read through that meeting because those meetings, those high-level engagements with the President, are more of a courtesy call to inform the President of what we've agreed in terms of this investment consortium, the investment structure and how that ties into all our final negotiations with the government. So all these multiple discussions, meetings, are all very much linked. So that is the announcement we're going to be making in the very near term.

So very close. It's been a long process, but I think when the market sees the caliber and the credentials of the investment group that we are going to be bringing in, I think everyone's going to be very impressed. So really looking forward to getting this news out there. Okay, next.

Okay. So, as I mentioned, the most important focus of the company right now, outside of the strategic initiative of the funding, is really deploying the capital from the Taurus facility to maintain momentum and progress the project. Our Chief Operating Officer, Eric Luton, has been incredibly busy building out a really phenomenal owners' team. I think with his experience historically with Ivanhoe, he's been able to assemble a team of people that have tremendous experience in this part of the world.

And so a lot of those new organizational readiness workstreams and everything are fully underway. A big part of what we're doing right now is the expression of interest for all the work packages. That involves a lot of engagement with the Mining Commission. But approximately $850 million work packages have been out for tender and those are the core functions for the construction process that's going to be commencing.

So really the bulk earthworks, EPCM, all those are in the market right now. A lot of the stuff on site, working very closely with TANESCO and the railway. The camp is being upgraded to accommodate all the construction personnel that are going to be on site, and then all the permitting activities, and then all the geotechnical drilling as we prepare the box cut. So a lot of activity on site, and this is something we're going to want to get out a little bit more frequently so people can see the progress on site.

And we will be putting forward some investor visits so people can visit the site, and we'll communicate that through our website. Okay, next. Okay. In terms of our, really our sustainability initiatives, I always emphasize the amount of time and effort we put into engaging the local community.

This is really paramount to how we conduct ourselves. The amount of time focused on the resettlement program, engaging with the local community, and really demonstrating that we are, you know, that social contract with us and the local people is critically important. So a lot of this activity has been underway, the resettlement program. The important part to update there is we are pretty much 100% complete for all the compensation payments.

And we have brought in a new team led by Michelle Raftis, who has a lot of experience. We work with FERRY PHP so that workstream is underway. And then really this is an ongoing engagement with the community, but I can't emphasize how important this is. So a lot of time and effort has gone into this and we'll continue to do so.

Another highlight I want to emphasize: we announced earlier this year that we have engaged with the government of Burundi. S. State Department. S.

companies. S. and KoBold Metals jointly engaging with commercial agreements with the Burundi government. The Musongati deposit was discovered at the same time as Kabanga.

So this is a very large laterite deposit in Burundi. And remember, we are right on the border of Burundi essentially with the Kabanga project. So we are looking at the opportunity to really scale up a long-term nickel region by linking Musongati and Kabanga. We have identified a number of synergies where the shared infrastructure between the two projects could unlock a larger project like Musongati.

And so right now we're working on technical studies. We're engaged with the government of Burundi and the Mines Minister there looking at work programs and studies that we're going to be commencing in the near term. So really a lot of future upside optionality if we can demonstrate that we can link Musongati and Kabanga through a synergistic proposal. This is just additional blue sky for Lifezone Metals to be able to unlock such a large nickel region.

Okay, next, and then in parallel we have our team working on the recycling project with Glencore. This, we have, we've gotten through all the piloting—locked up the piloting and testing. And so where we are right now is going into the, you know, connecting towards FID. There is additional piloting work that's underway right now.

There's also site identification. But this is, you know, I've emphasized this before, that this is a very, very exciting project for us. We have a very strong relationship with Glencore. We've worked with them to identify a site.

We'll be announcing that in the near term. And this is something that really is going to be the core first demonstration of our hydrometallurgical technical capabilities. This does include our patented know-how in terms of the hydromet. S.

government. S. S. policy right now in the current administration.

So this is something that is going to get a lot of support from the government and it's something that we are progressing with Glencore. It fits very well in Glencore strategy specifically on recycling. And so this is again a very exciting project. It's commencing and once we identify a site and finalize the next piloting, we're going to be progressing to FID with the goal of really building the first PGM recycling facility for autocats in the United States.

So a lot of progress on this front. Okay. I don't want to touch base on the Simulus Group. A lot of what we focus on is the flagship project of Kabanga.

But the Simulus Group, I mean, this is really the heart of the whole organization where a lot of projects are being studied. And I think we probably don't emphasize enough how much activity takes place at Simulus. I mean, there's about 30 different projects and contracts underway right now where, when you look at the supply chain security initiatives of a lot of countries, there has to be a strong emphasis on the downstream. So a lot of the processing and refining is where a lot of these choke points exist.

And so what we're doing with Simulus is really identifying and studying all sorts of alternative flowsheets, engineering to look at different ways we can provide solutions not only to our projects, but to other projects. So again, a tremendous amount of work going on here right now. And the way we work with Simulus is we have the opportunity to really prioritize our projects. But the amount of projects we see produces a pipeline of additional projects that we can also look at.

So we can decide to work with various clients if we have a strong view of one of the projects. So it's a really important part of our organization and a lot of really important work is going on there right now. Okay, I'm going to turn it back over to Ingo. Ingo Hofmeier, CFO Thank you, Chris.

In terms of our H1 2026 financial results, this year will be characterized by pre-FID activities around the Kabanga nickel project, and Q2 was very much a continuation of Q1. 1 million in December last year. 3 million of undrawn amounts from Taurus. As you saw yesterday, we have extended the availability period by three months until November 29th.

In terms of operating cash flows, two things really. Number one, they are significantly better than last year in the comparative period, and there's two reasons for this. As Chris just mentioned, there is a stronger focus on Simulus. They've done fantastic work for external clients and have a strong pipeline.

3 million more in revenues. And then as we announced last year, we have streamlined our corporate function. This has resulted in reduction in overhead costs. In terms of investing cash flows, they have gone up quite significantly and this is characterized by an increase in the owner's team, increase of workers on site, and there is more geotech and hydrotech investigations including drilling work.

And that's what you see in these numbers here. 4 million, which is a higher number, is actually around 400,000 of interest received in investing cash flows. The strengthening of the cash balance was achieved by two activities. 7 million out of the 60 million that we had agreed with Taurus around this year.

Last year the loss before tax was 7 million and this includes high interest charges. Also we had significant interest expense payments and they relate to the convertible. But we had, I would call it, one-off expenses at the end of March because for the first two years of this four-year facility we PIKed two thirds of the interest and that became payable after two years, and that was the end of March this year. So there were more than 3 million that went out for that.

And now it's kind of normalized. Every quarter they pay, so for plus 4% in cash. The team size has gone up, and this includes a significant amount of contractors in Tanzania, now 268. The large, large majority of course work in Tanzania.

With a loss of around 7 million, this translates into around a US 8 cent per share loss for the first half. Next page please. We would just like to highlight a group of entries that are non-cash and these are fair value changes. There are now various fair-valued instruments on our balance sheet.

On the one side it's the embedded derivative which by definition needs to be fair valued every time; it reports a fair value gain on warrants and then again on remeasurement of the deferred consideration. The deferred consideration is, Chris mentioned this before, we bought BHP out which was a deferred consideration. 10 million is payable 12 months after FID and then indexed to the share price is 28 million 12 months after commercial as well as commercial production.

When the share price—there's various assumptions, but the biggest influencer for all of them is the share price—unfortunately, the share price reduced and that then ultimately means over the period from start of the year until 30th of June.