ACG Metals Ltd (LSE:ACG, OTC:ACGAF) earlier this week reported strong progress across its operations in Turkey, supported by improved margins and lower costs during the first quarter of 2025.
The company said it generated $76 million in EBITDA from the Gediktepe mine in 2024 and has since achieved significant cost reductions.
In Q1 2025, C1 costs were reduced by 37%, and all-in sustaining costs fell by 13%, despite a high-inflation environment.
ACG highlighted that sales in the quarter reached 16,000oz, representing half of its full-year guidance.
CEO Artem Volynets joined the Proactive studio to tell us more about it.
Proactive: I'm joined by ACG Metals chairman and CEO Artem Volynets, as well as CFO Patrick Henze. Artem, Patrick, very good to speak with you this morning.
So you were out with a first quarter update as well as your full year 2024 results Artem, and it looks like the road that you've travelled over the past year has really set you up very strongly for the first quarter.
Could you take us through some of the highlights?
Artem Volynets: Essentially, ACG Metals is a new company that's been in existence from the beginning of September last year, when we completed the acquisition of the first operating assets.
It has been a transformational journey, which has shown the excellence of our team in all areas.
We have spent the last four months of last year, and the first three months of this year, on building the base business case.
In doing so, we demonstrated that we can do M&A very well, we completed the acquisition of the Gediktepe producing mine in Turkey, which generated $76 million in EBITDA last year.
We showed we can also do financing, we raised $200 million in bonds. We've proactively managed our capital structure, taking out 70% of the warrants.
We've shown we can run the business well and continue to generate strong cash flows.
Patrick will talk about the numbers, but the key highlights include our ability to manage and even reduce costs: C1 cost was down 37% in the first quarter, and all-in sustaining costs were down by 13%.
I challenge you to find another mining company that reduced costs this much, especially in a high inflation environment like Turkey.
We’ve done well on the ESG front, continuing our incident-free streak at the mine.
And we've shown we can build projects on time and on budget, the sulfide project construction is proceeding as scheduled.
This is all possible because we have an excellent team. For example, at the project level, we have Graeme Rapley, who has built 12 similar projects globally, all on time and on budget.
That’s what we expect for the Gediktepe sulfide project as well, with commissioning at the beginning of next year.
We've also brought Michael Pompeo, the former Secretary of State of the United States, onto our board. The rest of the team is equally excellent.
Proactive: Well, Patrick, let’s bring you in here. Take us through some of the specifics of the quarter and how last year has positioned you for the very strong performance.
Patrick Henze: Yeah, thanks, Stephen, and thanks for having us here. I think the key point is that since the acquisition, Artem and I have gone through a journey to get to where we are.
It was an acquisition at very strong multiples, with a strong partner joining us, and a strong team on site that we inherited from the previous owners.
We guided to around 55,000oz in sales last year, we actually delivered 57,000oz.
On top of that, the team found additional ore in the lower parts of the pit, allowing us to stockpile sufficient ore in front of the plant.
That led to Q1 results that were significantly better than expected.
Currently, the site has gone 724 days without a lost-time injury, probably the best in Turkey.
In Q1, we had 16,000oz of equivalent sales. When we did our bond presentation in late 2024, we guided for 32,000–33,000oz for the year. We’ve already achieved about half of that. Also, prices have moved in our favour.
In Q1, the average gold price was about $2,800. Now we’re seeing prices of $3,300–$3,500, which supports Q2.
As Artem said, we're proud of keeping cost discipline despite inflation.
Huge thanks to the team at Gediktepe. Everyone sees the long-term picture. We need to be disciplined to enable a smooth transition to the copper phase.
That’s a major achievement we’re proud of.
Lastly, on operations, the sulfide expansion project is still on track for Q1 2026 commissioning.
That’s a big milestone and remains on time and on budget.
Proactive: Artem, Patrick talked about the long picture. Could you take us through that long picture and how you expect to achieve it?
Artem Volynets: We set up ACG Metals as a vehicle to consolidate the corporate sector globally. But it’s also about taking practical steps to achieve tangible milestones.
The Gediktepe operations and sulfide project are examples of what we can do.
We’re already operating at a 73% operating margin, probably higher now with current gold prices.
Our ability to keep costs down enables very strong cash flow generation and a robust financial position. We also have significant cash on the balance sheet from our bond proceeds.
We’re on time and on budget to commission the sulfide project early next year, which will produce approximately 25,000 tonnes of copper equivalent annually for several years.
That’s a key focus for us. Yes, more M&A will follow, but it’s important to understand that ACG Metals is already generating significant cash flow.
Our market cap is effectively trading at about 14 months of free cash flow.
It’s an exciting story and a good indication of what we can do with mining businesses globally.
Proactive: And so I hope you'll keep us posted on any progress.