SMM May 28 update: The minor metal sector strengthened on May 28. As of the close on May 28, the minor metal sector rose 3.44%. In terms of individual stocks: Sino-Platinum Metals, Yunnan Germanium Industry, and China Molybdenum hit the daily limit, while China Minmetals Rare Earth, China Tungsten And Hightech, China Northern Rare Earth, and China Rare Earth led the gains. On the news front: According to authoritative local media in Zimbabwe and Xinhua News Agency, the Zimbabwean government recently issued the Mineral Classification and Declaration, explicitly listing lithium and other high-value minerals as "critical minerals" subject to equity and export controls. The critical minerals involved include 14 types: lithium, nickel, cobalt, graphite, copper, rare earth elements, chromium, platinum group metals (PGMs), manganese, antimony, uranium, ruthenium, tungsten, and niobium. The market is focused on the impact of tightening resource-country policies on global supply chains, with sentiment warming for minor metal varieties such as antimony and tungsten. Spot market Tungsten According to SMM pricing, on May 28, the average price of wolframite concentrates (≥65%) was 415,500 yuan/standard tonne (65%WO3 basis), up 1.22% from the previous trading day. Notably, after wolframite concentrates previously experienced a 61.88% decline over more than two months, driven by increased purchasing demand in the tungsten market, tungsten prices saw a rebound over two trading days. Currently, transactions in the tungsten concentrates market have improved, suppliers are bullish and hold back from selling, high-grade ore sees an upward shift in transaction center, while medium and low-grade ore circulates more but price increases appear lackluster. Downstream APT industry operating rates have slightly improved, but with limited new orders in the industry, smelters are cautious in restocking, with only small volumes of spot orders and large orders transacted in the market. Regarding the tungsten outlook, in the short term, driven by orderly inventory destocking, the return of downstream rigid demand, and the formation of pricing consensus among industry leaders, the tungsten market has overall entered a consolidation-at-lows and recovery phase. Going forward, key attention should be paid to the execution of long-term contracts and the pace of end-use demand recovery. According to SMM surveys, downstream cemented carbide alloy enterprises have seen inventory drop to low levels, with expectations of rigid restocking demand, but influenced by the market not yet being fully stabilized, enterprises remain cautious in procurement, generally adopting a small-order purchasing model. If upstream raw material inventory continues to be cleared and supply-demand imbalances are alleviated, tungsten prices are expected to enter a stabilization and consolidation phase in June-July. In the medium and long-term, the gap in Q3 mining quota transitions may lead to a contraction in market supply, coupled with expectations of the traditional September-October peak season, the industrial supply-demand structure will continue to optimize, thereby providing bullish support for tungsten prices. Rare Earths After the rally on May 27, the average price of Pr-Nd oxide on May 28 fell 1.79% from the previous trading day, and inquiries in the rare earth oxide market were sluggish on the 28th. Affected by futures price fluctuations combined with periodic restocking by some major producers, Pr-Nd oxide prices fluctuated frequently this week. Upstream and downstream players continued their stalemate, with suppliers maintaining relatively firm offers overall, while downstream metal producers maintained a strong wait-and-see sentiment and showed low purchase willingness at high prices. Absent other news-driven factors, Pr-Nd oxide is expected to remain in the doldrums in the short term before any significant change in the supply-demand relationship. Institutional Views Huafu Securities noted in its research report dated May 24, when commenting on other minor metals: rare earths performed weakly, while tantalum pentoxide surged during the week. In the rare earth market, end-use demand from downstream magnetic material sectors remained weak, with no large-scale concentrated restocking observed — only sporadic rigid-demand small orders were transacted, and the demand side consistently failed to provide effective support for the market. Market sentiment fluctuated significantly, with frequent tug-of-war between longs and shorts. Overall industry confidence was insufficient, with a notable stalemate between upstream and downstream on offer and bid prices, and significant divergence within the industry regarding the outlook for subsequent market trends. On Friday, the market maintained a wait-and-see attitude, awaiting changes in the magnetic material restocking pace and a recovery in downstream demand. Individual stocks: for antimony, Hunan Gold, Huaxi Nonferrous, and Huayu Mining are recommended; for molybdenum, China Moly, China Gold, and CMOC; for tungsten, Jiaxin International Resources, China Tungsten High-Tech, Xiamen Tungsten, and Zhangyuan Tungsten; for rare earths, China Rare Earth, China Northern Rare Earth, JL MAG Rare-Earth, and Xiamen Tungsten. Kaiyuan Securities' mid-year 2026 investment strategy for the metals sector indicated: Copper: Supply side, most ex-China miners continued to face declining ore grades and recovery rates, with disruption factors persisting (Ivanhoe's Kamoa-Kakula copper mine, Codelco's El Teniente copper mine). Although China's domestic enterprises added incremental capacity, the overall increase was limited. Under optimistic assumptions, global supply growth from 2026 to 2027 may fall below 2%. Demand side, power demand in both China and the U.S. maintained high growth rates in H1, which is expected to contribute marginal incremental copper demand. Kaiyuan Securities believes that the supply-demand structural imbalance for copper will become more pronounced in 2026, supporting a rise in the copper price center. Lithium: Supply side, capital expenditure in the lithium industry contracted and supply discipline gradually took shape. Combined with frequent disruptions, supply elasticity in the lithium industry has declined notably compared to before. Meanwhile, energy storage demand sustained high prosperity, driving gradual improvement in the lithium demand structure and marginal easing of inventory pressure. Lithium prices are expected to see a phased recovery. Lithium enterprises with resource security, low-cost advantages, and integrated layouts are expected to see earnings recovery elasticity outperforming the industry average. Lithium mine and lithium chemicals companies with high resource self-sufficiency rates and strong cost control capabilities are worth watching. Tungsten: As a strategic metal where China holds a dominant position, tungsten ore supply is constrained by resource depletion, environmental protection, and other factors. Combined with the government's total volume control on tungsten ore mining, tungsten ore production release remains limited. Demand side, emerging sectors are boosting tungsten demand, which is expected to provide long-term support for tungsten prices. According to a CITIC Securities research report, the current metals sector valuation remains at a reasonable level, with aluminum, copper, nickel-cobalt-tin-antimony, and gold valuations at relatively low levels, and a valuation rebound is still anticipated. Sector dividends have pulled back slightly, but the projected dividend yields of some individual stocks still exceed 5%. Looking ahead to 2026, liquidity shocks are expected to ease, supply disruptions are expected to occur frequently, and certain downstream sectors are expected to sustain relatively high prosperity. It is recommended to maintain a focus on allocation opportunities in lithium, copper, rare earths, strategic metals, aluminum, and gold sectors. Recommended Reading:

Benefiting from both rising gold prices and increasing volumes, Zijin Mining delivered a stellar report card. In Q1, the company achieved revenue of 98.5 billion yuan, up 24.79% YoY; net profit attributable to shareholders of the publicly listed firm reached 20.1 billion yuan, surging 97.50% YoY, nearly doubling; total profit soared 115% YoY to 31.6 billion yuan, with all core financial metrics hitting record highs across the board. The underlying logic behind the accelerating profitability was clearly identifiable: the historic breakthrough in gold prices served as the most direct catalyst. The unit price of gold ingots jumped from 661.83 yuan/g in the same period last year to 1,089.04 yuan/g, a gain of over 64%, and the gross margin of mine-produced gold expanded from 52.91% to 69.60%; silver prices also surged in tandem, soaring from 5.50 yuan/g to 15.33 yuan/g, with the gross margin of mine-produced silver leaping to a remarkable 85.59%. The company's overall mine enterprise gross margin rose from 59.94% to 71.01%, and the comprehensive gross margin also climbed from 22.89% to 36.33%, with the price dividend fully realized. Meanwhile, the rise of the lithium segment was reshaping the company's profit structure. Lithium carbonate equivalent production reached 16,229 mt in Q1, compared to only 1,376 mt in the same period last year, up over 10 times YoY, with an average selling price of 101,456 yuan/mt and a gross margin as high as 61.44%. The company expects full-year 2026 lithium carbonate production to reach 120,000 mt, and plans to increase it to 270,000–320,000 mt by 2028, at which point it will rank among the world's largest lithium ore producers. The lithium business is evolving from a marginal increment to a core profit engine. Gold Prices Exceeded Expectations, with the Gold Segment Contributing Core Profits Gold was the largest engine of profit growth this quarter. The company's mines produced 23,497 kg of gold, up 23% YoY, benefiting not only from volume growth but also from a price tailwind. The average price of gold ingots reached 1,089.04 yuan/g, and the average price of gold concentrates reached 1,010.55 yuan/g, up approximately 65% and 64% YoY, respectively. The sources of incremental growth also warranted attention. Zijin Gold International's newly acquired Akyem Gold Mine in Ghana and Ridgold Polymetallic Mine in Kazakhstan, acquired in 2025, had begun contributing production, with the benefits of external M&A gradually being released. Under the resonance of high gold prices and volume growth, the gross margin of mine-produced gold business surged significantly: the gold ingot gross margin rose from 52.91% to 69.60%, and the gold concentrates gross margin climbed from 71.05% to 80.89%, delivering a notable boost to overall profits. Copper: Kamoa-Kakula Production Cuts Dragged Down Output, While Other Mines Advanced Steadily The copper segment produced 259,214 mt of mine-produced copper in Q1, down from 287,571 mt in the same period last year, primarily due to a sharp decline in equity production at the Kamoa-Kakula copper mine — plunging from 59,163 mt in the same period last year to 27,361 mt, a drop of over 50%. Excluding this disruption, the company's other copper mines all advanced in an orderly manner as planned. Of particular note was the Julong Copper Mine Phase II, which was officially commissioned in late January 2026 and contributed 60,000 mt of mine-produced copper in Q1. The capacity was still in the ramp-up stage, with further incremental output expected going forward. Rising copper prices also effectively offset the volume pressure. The average price of copper concentrates rose from 60,179 yuan/mt to 81,543 yuan/mt, with the gross margin further improving from 65.05% to 70.84%; the gross margins of electrodeposition copper and copper cathode also expanded to 61.61% and 56.20%, respectively. The smelting copper business had a gross margin of only 0.32% due to thin processing profits, but scale effects still enabled it to contribute a considerable absolute profit amount. Lithium Segment: A Leap from Zero to One, Targeting the World's Largest by 2028 The lithium business was the segment with the most dramatic changes in this quarterly report. Lithium carbonate equivalent production reached 16,229 mt (with Q1 sales of 13,329 mt), achieving an order-of-magnitude expansion from the base of 1,376 mt in the same period last year, driven by the capacity ramp-up following the successive commissioning of multiple projects including the 3Q Salt Lake lithium mine, the Lagocuo Salt Lake lithium mine, and the Xiangyuan hard-rock lithium mine. Profitability was equally impressive — lithium carbonate had an average selling price of 101,456 yuan/mt and a gross margin of 61.44%, second only to silver and ranking as the second highest among all products, reflecting the inherent cost advantages of salt lake lithium resources. In stark contrast, the lithium carbonate gross margin in Q4 last year was only 24.59%, surging nearly 37 percentage points within just one quarter, benefiting from both improved product mix and a cyclical recovery in lithium prices. Of greater strategic significance was the long-term plan: the main mining and processing workflow of the Manono lithium mine northeast project had been fully connected, and is expected to be completed and commissioned in June this year; the company plans to achieve lithium carbonate equivalent production of 270,000–320,000 mt by 2028, at which point it will become one of the world's largest lithium ore producers. Management has explicitly positioned the lithium segment as the "third pillar" core profit source after copper and gold. Cash Flow and Balance Sheet: Ample Ammunition, Strong Foundation for Expansion Financial structure side, total assets reached 549.9 billion yuan at the end of Q1, up 7.41% from the beginning of the year; the cash and bank balance was 99.4 billion yuan, a significant increase of 33.8 billion yuan from 65.6 billion yuan at the beginning of the year, with cash and cash equivalents reaching 90.3 billion yuan at period-end. The ample cash reserves provided sufficient ammunition for the company to pursue global mine M&A opportunities and fund capital expenditures on projects under construction. Net assets side, equity attributable to shareholders of the publicly listed firm reached 200.4 billion yuan, up 8.02% from the beginning of the year; the weighted average return on equity (ROE) reached 10.35%, up 3.23 percentage points from 7.12% in the same period last year, with capital return efficiency continuing to improve. The liability side saw some expansion, with short-term borrowings increasing from 32.3 billion yuan to 41.2 billion yuan, bonds payable rising from 47.4 billion yuan to 56.3 billion yuan, and total liabilities amounting to 282.5 billion yuan, an increase of approximately 21.5 billion yuan from the beginning of the year, primarily to support project construction and capacity expansion. Although the absolute scale of debt rose, the company's debt-servicing capacity was not under pressure given the significant improvement in operating cash flow, with the asset-liability ratio at approximately 51.4%, remaining well under control overall.

According to an announcement by Ivanhoe Mines, the Kamoa-Kakula project aims to achieve copper production of 380,000 to 420,000 tonnes in 2026 and 500,000 to 540,000 tonnes in 2027, with the medium-term copper production target maintained at 550,000 tonnes. In terms of recent progress, the dewatering efforts at the Kakula mine are proceeding smoothly (70% completion on the west side and 60% on the east side), laying the groundwork for resuming production. As dewatering advances, mining in the higher-grade (3.5%–4.0%) central area will commence in mid-December, which is expected to drive overall output and profitability. At the Kakula mine, approximately 6 million tonnes of ore are planned to be mined in 2026, primarily from the west side, with production increasing to 7–8 million tonnes in 2027. At the Kamoa mine, the focus will shift from supplying primarily the Phase I and II concentrators to prioritizing supply for the Phase III concentrator, while also supplementing Phase I and II. Mining output is expected to rise from the current 6.5 million tonnes per year to over 10 million tonnes per year by 2027. The total processing capacity of the Phase I, II, and III concentrators will reach 17 million tonnes per year starting in 2027. Additionally, following the announcement of the commissioning of the Kamoa-Kakula copper smelter on December 1, 2025, copper sales in 2026 are projected to exceed copper production, as on-site inventories of unsold copper concentrate are expected

SMM Morning Meeting Summary: Overnight, LME copper opened at $9,686.5/mt, rose initially and hit a high of $9,713/mt, then fluctuated downward and touched a low of $9,647.5/mt. It rebounded slightly at the end of the session and closed at $9,670/mt, down 0.26%. Trading volume reached 13,000 lots, and open interest reached 293,000 lots. Overnight, the most-traded SHFE copper 2507 contract opened at 78,600 yuan/mt, hit a high of 78,690 yuan/mt at the beginning of the session, then fluctuated downward and touched a low of 78,360 yuan/mt during the session. It rebounded all the way at the end of the session and closed at 78,560 yuan/mt, up 0.04%. Trading volume reached 20,000 lots, and open interest reached 182,000 lots.

According to a report by Mining.com, Ivanhoe Mines announced that its Kakula West copper mine in the Democratic Republic of Congo (DRC) has resumed production after a temporary suspension lasting one month. This underground mine is part of the company's Kamoa-Kakula copper joint venture. On May 18, the mine was forced to suspend production due to severe water inflow caused by seismic activity in the region. The Kamoa-Kakula joint venture is Africa's largest copper mine, with Ivanhoe holding a 39.6% stake. Analysts believe that once the necessary pumping and repair work is completed, the mine should be able to resume production. Mining activities in the eastern section are also expected to commence immediately, with a focus on advancing from existing stopes to new areas. In a statement, Robert Friedland, the company's Executive Chairman, said, "We are grateful and thankful to our team for their rapid response in stabilizing the water table at Kakula and resuming mining on the west side." "The team quickly secured the critical equipment needed to remove water from the entire mine, while also preparing to mine a high-grade area in the east." With the resumption of production at the Kakula copper mine, Ivanhoe has set new production targets for the Kamoa-Kakula joint venture in 2025: 370,000 to 420,000 mt of copper concentrates. Based on the midpoint, this projection represents a 28% decrease from the previous production target set in January (520,000 to 580,000 mt). Ivanhoe stated that the downward revision in production expectations takes into account the potential impact of recent seismic activity and related disruptions at the Kakula mine. Several risk factors, such as further seismic activity and infrastructure damage, were also highlighted as considerations. Additionally, the company's management has withdrawn the production target of approximately 600,000 mt for 2026, pending further evaluation. Friedland emphasized, "Although it is premature to establish production plans for 2026 and 2027, the future of the Kamoa-Kakula joint venture remains bright." As previously disclosed, the Phase 1 and Phase 2 beneficiation plants at Kakula are still operating at half of their capacity, processing surface ore inventory. The beneficiation plants are expected to restore their capacity for the remainder of the year as mining volumes increase in the western section of the mine, according to Ivanhoe. Meanwhile, the Kamoa underground mine, as well as the adjacent Phase 3 beneficiation plant, are operating well. With the necessary copper concentrate supply in place, the on-site smelter is expected to commence operations in September, with the first products to be produced in October 2025.

According to foreign media reports, Ivanhoe Mines announced that it had resumed production at the western part of the Kakula copper mine in the Democratic Republic of Congo (DRC). The underground mine is part of the Kamoa-Kakula copper mine complex. On May 18, the mine was forced to suspend production due to severe water inflow caused by seismic activity in the region. The Kamoa-Kakula copper mine complex is the largest copper mine in Africa, and Ivanhoe holds a 39.6% stake in the mine.

[SMM Analysis: When It Rains, It Pours - Global Copper Concentrates Supply-Demand Balance After the Earthquake at KK Mine] At the end of May, Chinese smelters and Antofagasta commenced mid-year negotiations. In the first round of negotiations this year, miners had already offered a midpoint price of -US$15 to the smelters. This figure was significantly lower than the US$0/dmt that had circulated in the market in late April. According to SMM, many raw material procurement teams from leading smelters in the CSPT group indicated that the negotiations were fraught with difficulties, and it was exceptionally challenging to secure a favorable figure.

According to Ivanhoe Mines: Robert Friedland, Executive Co-Chairman of Ivanhoe Mines (TSX: IVN; OTCQX: IVPAF), Weibao Hao, Co-Chairman, and Marna Cloete, President and Chief Executive Officer, announced today the latest operational updates for the Kamoa-Kakula copper mine project, as well as the preliminary findings of the geotechnical investigation following the seismic event at the Kakula mine announced on May 20, 2025. Mining operations in the western section of the Kakula mine were safely and prudently restarted on June 7, 2025, with equipment and mining crews returning underground to resume production. The short-term mining plan for the western section of the Kakula mine has been updated to incorporate the recommendations summarized in the preliminary investigation report. It is expected that mining operations in the far eastern section of the Kakula mine will also resume as soon as possible, with a focus on development work to open up access to new mining areas east of the existing mining zones. The development work in the new mining areas of the far eastern section of the Kakula mine will be carried out in a spatially isolated manner from the pumping work areas and is expected to be completed in the second quarter of 2026. On June 2, 2025, the company announced that additional pumping equipment had been installed at the Kakula mine to maintain stable water levels. Since the initial announcement on May 18, 2025, the frequency of seismic events has also decreased. Pumping operations are expected to commence in the eastern section of the Kakula mine in August 2025 and be completed in the fourth quarter. The recommendations made by world-class geotechnical experts based on the preliminary investigation findings have been incorporated into the short-term mining plan for the Kakula mine to ensure the safe restart of mining operations. Meanwhile, the management and technical advisors of Kamoa-Kakula are developing and reviewing the medium- and long-term mining plans for the mine. The Phase 1 and Phase 2 beneficiation plants continue to operate at approximately 50% of their combined capacity, processing ore from surface stockpiles. With the resumption of mining operations in the western section of the Kakula mine, ore supply to the beneficiation plants will increase, and the Phase 1 and Phase 2 beneficiation plants will gradually ramp up production over the remainder of 2025, with ore supply supplemented by ore mined from the western section of Kakula. Mining activities at the Kamoa underground mine and the adjacent Phase 3 beneficiation plant continue to operate normally without any disruptions. It is expected that the smelter located on the mine site will commence operations in September 2025 and produce its first copper anodes in October, once copper concentrate production and inventory levels meet the required conditions. Robert Friedland, Executive Co-Chairman of Ivanhoe Mines, commented, "We are grateful and deeply appreciate the swift response of the on-site team in stabilizing the groundwater levels at the Kakula mine and resuming mining operations in the western section. Critical dewatering equipment required to ensure the safety of the entire mine was rapidly deployed, while preparations were actively underway to advance as quickly as possible into the Kakula Far East zone to open up new high-grade mining areas." "Although it is still too early to outline detailed plans for 2026 and 2027, the prospects for the Kamoa-Kakula copper mine and the adjacent Western Foreland exploration project remain bright. Kamoa-Kakula is, and will continue to be, a world-class mine, maintaining its leading position among the world's copper producers for decades to come." President and CEO, Mark Cutifani, commented: "We are working tirelessly to safely and methodically restore full operations at the Kakula mine, with safety as our top priority! We would like to express our sincere gratitude to the mining team, engineering team, and our many long-standing contractors for their outstanding contributions in restoring dewatering capacity and restarting mining operations, all without any lost-time incidents." "The resilience and operational strength demonstrated by our team underscore the extraordinary nature of this world-class copper district – and the bright future it will create for generations to come." Note: Existing underground development as of May 2025. The above figure, based on the 2023 Kamoa-Kakula Integrated Development Plan, shows the average grade estimates (calculated using a cut-off grade of total copper >3%) for vertical blocks in different zones, with a minimum thickness of 3 meters. The groundwater level at the Kakula mine has stabilized; underground mining operations have resumed in the western section of the Kakula mine. Following the seismic event, although the inflow of water into the Kakula mine's underground workings gradually increased, it has now stabilized at approximately 4,000 liters per second. Due to the impact of the seismic event on existing underground dewatering facilities, additional underground dewatering capacity totaling approximately 4,400 liters per second has been installed, helping to stabilize the groundwater level. The new pumping stations are connected to the existing central dewatering infrastructure and then discharge water to the surface through four locations near the bottom of the northern and southern twin declines, as shown in Figure 2. With the stabilization of the water level, mining operations have resumed on the western side of the Kakula mine. Mobile equipment and mining crews, which were evacuated from underground on May 18, 2025, have now returned to the underground workings and conducted their first blast on June 7, 2025. The short-term mining plan has been updated to incorporate recommendations from the preliminary geotechnical investigation report. Based on underground conditions, Kamoa-Kakula's mining crews plan to increase mining volumes on the western side of the Kakula mine to approximately 300,000 mt per month (or 3.6 million mt per year on an annualized basis) in H2 2025. In Q3, mining operations will ramp up the mining capacity in the Kakula West Zone to 3.6 million mt/year, with further adjustments to be made based on underground conditions. In H2 2025, the underground mining team will focus on implementing three major projects: ramping up the mining capacity in the Kakula West Zone, constructing a new mining area in the Far East Zone of the Kakula Mine, and ramping up the mining capacity in the Kamoa Mining Area. Additional operational personnel have been deployed to the Kamoa Mine, located approximately 10 kilometers north of the Kakula Mine, to assist the existing mining team in underground excavation works, as well as in the construction of newly designed box-cut and ramp development at the Kansoko Mine. The new ramp will help increase the mining capacity at Kansoko and further supplement the ore supply required by the Phase 1 and Phase 2 beneficiation plants. Construction of the new mining area in the Far East Zone of the Kakula Mine will be concentrated, with development works set to commence soon, spatially separated from the pumping work area. The Far East Zone of the Kakula Mine will adopt a new mining plan, focusing on development works further east of the existing mining area. The new mining area and the existing mining area will be separated by a safety pillar to prevent the rock mechanics instability in the existing mining area from propagating to the new mining area. The mining team is expected to soon commence construction of two new main access tunnels. The two main tunnels will be constructed simultaneously, advancing eastward from the existing underground infrastructure (see Figure 2). The construction of the new mining area will involve the extraction of ore and waste rock, and is expected to be completed by Q2 2026. The new access tunnels will be isolated from the mining faces currently being dewatered, and dewatering operations will also be conducted separately and independently. Upon completion of dewatering in the East Zone of the Kakula Mine, in-situ geotechnical observations will be conducted in the existing mining area, followed by a comprehensive evaluation by geotechnical experts. The evaluation results will determine the future scope of production resumptions in the existing mining area. Underground water inflow is mainly concentrated in the deepest part of the East Zone of the mine (see Figure 2). The Kamoa-Kakula engineering team has developed a phased plan for dewatering the Kakula Mine. Phase 1 : Install temporary pumping facilities underground to maintain the existing water level stable. Phase 1 was completed on June 2, 2025. Phase 2 : Install large-power pumps and a permanent pumping system that can be operated from the surface to conduct comprehensive dewatering operations throughout the Kakula Mine. Kamoa Copper has ordered five large-power pumping units, each with a dewatering capacity of 650 liters per second. The long-term plan also includes the procurement of additional pumping units, which will be deployed in pairs in the existing shafts to the bottom of the Kakula Mine (see Figure 2). Dewatering is expected to commence in August 2025. As water levels gradually decline, the engineering team will begin repairing the underground pumping, ventilation, and other systems, and complete the geotechnical engineering assessment. It is expected that the dewatering work in the eastern section of the Kakula Mine will be completed in Q4. Preliminary findings from the recent geotechnical investigation into the mine seismicity Following the first mine seismic event on May 18, 2025, the company promptly engaged two renowned and independent geotechnical consulting firms, Beck Engineering from Australia and Open House Management Solutions (hereinafter referred to as "Open House") from South Africa, to conduct an investigation at the Kamoa-Kakula Mine. With the support of Ivanhoe Mines, the two consulting firms worked closely with the Kamoa-Kakula engineering team. The preliminary investigation results indicate that the mine seismicity originated from areas in the eastern section of the Kakula Mine with high ore extraction rates. It is currently believed that the secondary stope, originally planned for Step-2 mining, experienced subsidence-induced yielding deformation, leading to stress redistribution and transmission to the pillars in the area. This, in turn, caused the pillars to yield and deform due to excessive bearing stress. Although backfilling of the mined-out areas could not prevent stress redistribution to the regional pillars, it may have mitigated the effects in some cases. Meanwhile, it cannot be ruled out that adverse geological factors within the area exacerbated the yielding deformation of the pillars. Pillars are unmined ore or rock left in place to support the roof of underground voids; mined-out areas refer to spaces underground where mining has been completed. Backfilling is the operation of filling mined-out areas with a mixture of tailings and cement, which, after consolidation, can achieve the target strength. The geotechnical evaluation has not yet been completed and will be further detailed in the eastern section of the Kakula Mine after the dewatering operations are finished. The preliminary investigation results recommend changes to the short-term mining plan to increase the width of the pillars, thereby providing stronger structural support. The results also suggest adjusting the mining sequence to improve stress distribution and overall stability. Additionally, an enhanced rock mechanics monitoring system will be installed throughout the mine. The management of Kamoa-Kakula, along with Beck Engineering, Open House, and other technical consultants, are making revisions to the short-term, medium-term, and long-term mining plans based on the geotechnical investigation findings. Prior to the mine seismicity, the company was in the process of updating the comprehensive mine life-of-mine development plan, which has now been suspended until Ivanhoe Mines' engineering team and its panel of technical experts complete their review and agree to the relevant changes. After the update work resumes, Ivanhoe Mines will provide updates on the progress of the revised comprehensive development plan. The Phase I and II beneficiation plants are operating at reduced capacities, and production ramp-up will be advanced following the resumption of mining operations in the western section of the Kakula Mine; the Phase III beneficiation plant continues to perform exceptionally well. On June 7, 2025, mining operations in the western section of Kakula were safely and prudently resumed. It is planned to increase the underground mining capacity to 3.6 million mt per year in Q3. Combined with ore from surface stockpiles and supplementary ore from the northern Kamoa Mine, this will be sufficient to support over 80% of the combined designed capacity (9.2 million mt per year) of the Phase I and II beneficiation plants. It is expected that in the second half of the year (H2), the copper grade of raw ore in the Kakula West section will range between 3.0% and 4.0%. Since the suspension of underground operations on May 18, 2025, the Phase I and Phase II beneficiation plants have been operating at approximately 50% of their combined capacity, processing ore from surface stockpiles. The Phase III beneficiation plant adjacent to the Kamoa mine (see Figure 3) has maintained excellent operational performance since the beginning of this year. The plant's current average ore processing capacity is equivalent to an annualized capacity of 6 million mt, which is 30% higher than the designed capacity of 5 million mt per year. As of 2025, the average copper grade of ore processed by the Phase III beneficiation plant has been 2.84%. The mining output from the Kamoa and Kansoko mines has increased over the past two months, exceeding an annualized production of 6.8 million mt. The short-term mining plans for the Kamoa and Kansoko mines have been updated to incorporate recommendations from preliminary geotechnical investigations. The long-term mining plans will be reviewed in conjunction with the overall review of the Kakula mine. 2025 Production Guidance Revision The updated 2025 production guidance for Kamoa-Kakula is based on assumptions and estimates as of June 10, 2025, and involves estimates of known and unknown risks, uncertainties, and other factors that may differ significantly from actual results. The revision of the 2025 production guidance has taken into account the potential impacts of recent seismic events and the resulting disruptions to mining operations at the Kakula mine. Although mining operations have resumed in the Kakula West section, it is currently impossible to accurately predict potential further seismic events, the resulting disruptions, the integrity of underground infrastructure, the ability to ramp up production in underground operations, the ability to complete dewatering work, and the timing of the commissioning of new mining areas in the Far East section. The updated 2025 production guidance is based on the aforementioned factors, and the company's management believes these considerations and assumptions are reasonable given all currently available information. Figure 4 provides detailed information on the revision of the production guidance. All figures are stated on a 100% project equity basis. The reported metal content in concentrate does not account for losses or deductions under smelting agreements. Upon further review, the 2026 copper production target of approximately 600,000 mt has been withdrawn. Ivanhoe Mines will provide further updates on the 2026 production target as more information becomes available. Ivanhoe Mines will provide an update on the 2025 C1 cash cost guidance in its Q2 2025 financial report. The one-step copper smelter at the mine site will commence operations in Q3 Senior management at Kamoa-Kakula has confirmed that the one-step copper smelter at the mine site will begin operations in early September 2025, with the first copper anodes expected to be produced in October. Smelters can operate at a minimum of 50% capacity, which is equivalent to an annualized copper production of approximately 250,000 mt. As of May 31, 2025, there were 33,000 mt of copper in copper concentrates onsite at the mine that had not been sold. It is expected that the first batch of concentrates will be fed into the process approximately four to six weeks after production starts, and it is estimated that there will be a total of approximately 35,000 mt of copper in concentrates in inventory pending sale at that time. In addition, the senior management of Kamoa-Kakula expects that the Inga II hydropower station's Unit 5 turbine (with a designed power of 178 MW) will be commissioned in October 2025, further increasing the hydropower capacity available to the Kamoa-Kakula copper mine through the domestic power grid.

[SMM Analysis:When it rains, it pours: Global copper concentrate supply-demand balance results after KK Mine earthquake ] At the end of May, Chinese smelters started mid-year negotiations with Antofagasta. In the first round of negotiations this year, mining companies have offered smelters a quotation with -$15 , which is far lower than the $0 leaked by the market in late April. According to SMM, many raw material procurement teams from leading smelters in the CSPT group stated that this negotiation is extremely difficult, and it is arduous to strive for a favorable figure.

On the macro front, as China and the US reached a substantive consensus on easing economic and trade tensions in Geneva, the trajectory of the US's trade policies toward major economies has once again fluctuated. Despite the US Secretary of Commerce expressing the intention to finalize agreements with major trading partners before summer, President Trump recently reiterated the possibility of imposing a 50% tariff on the EU, leading to heightened market risk aversion and putting pressure on the US dollar index. The 90-day negotiation window briefly reopened between the US and the EU still faces significant uncertainty. Trump's tax reform bill narrowly passed the House of Representatives, proposing a substantial increase of $4 trillion in the debt ceiling. It is expected that the scale of US debt will expand by an additional $3.3 trillion over the next decade, with the federal debt ratio potentially surging to 125% of GDP, indicating an increasingly aggressive path of fiscal expansion. In terms of monetary policy, although some Fed officials, such as Waller, lean toward initiating interest rate cuts in H2 if tariffs decline, given the frequent changes in trade policies and the potential impact of tariffs on supply chains, the market believes that the Fed is unlikely to take substantive action before July, and the pace of interest rate cuts may be delayed. This week, copper prices fluctuated rangebound as expected, with LME copper trading around $9,550-9,650/mt and SHFE copper trading around 77,700-78,500 yuan/mt. On the fundamental front, Antofagasta conducted negotiations for mid-2025 long-term contracts in Japan last week, with the initial TC offer at -$15/mt. According to market sources, the Japanese side showed low acceptance of this offer, and no specific figures were released during the first round of negotiations in China this week. Mid-week, the incident at the Kamoa-Kakula copper mine in the DRC gradually escalated, with both major shareholders issuing statements announcing the suspension of underground mining operations, with the total impact yet to be assessed. For copper cathode, spot premiums both domestically and internationally declined this week, with no pre-holiday stocking demand evident and social inventory remaining flat overall. The SHFE backwardation structure narrowed for consecutive months, while the LME backwardation structure expanded significantly. Looking ahead to next week, macroeconomic data for May from various countries is set to be released. Affected by tariffs, it is expected that economic data for April-May will show little marginal growth overall, and copper prices are anticipated to remain flat. It is expected that LME copper will fluctuate rangebound between $9,350-9,550/mt next week, while SHFE copper will fluctuate between 77,000-78,000 yuan/mt. On the spot front, as the country gradually enters the off-season for consumption, downstream demand remains weak amid high copper prices. However, the supply of imported copper is also tight, leading to a state of weak balance with both supply and demand decreasing domestically. It is expected that spot premiums will stabilize after a slight drop. Spot prices against the SHFE copper 2506 contract are expected to range from a premium of 80-150 yuan/mt.