North American Base Metals Q1 2026 Recap:

Research evidence excerpt

North American Base Metals Q1 2026 Recap:

Addressing the elephant in the room

The ongoing Middle East conflict is impacting each producer differently and the table below sets out which companies are most

susceptible to rising cost pressures from higher diesel and sulphuric acid prices. In our view, Ivanhoe is the clear beneficiary

through the sale of acid at Kamoa Kakula. Meanwhile, Capstone’s cash costs are most susceptible to the rising acid price (although

we note that locally sourced acid alongside fixed contracts provides insulation). On fuel, producers generally expect a 5-10%

increase in cash costs, but only Freeport increased their cost guidance higher.

Exhibit 1 - How each company responded to the impacts of higher fuel and acid costs

Company Diesel / Fuel Sulphuric Acid Q2 Cost Risk Guidance Impact Key Quote

Net positive - sold

107,700t @ avg "If the current prices for high strength

Secured 5 months of

$467/t in Q1; new sulphuric acid and diesel remain at the

supply; curtailing Maintained $2.60-

contract at $725/t. ~5% higher C1 if current levels for the remainder of the

IVN backup generator use; $3.00/lb C1; ~5%

Flagged by current prices persist year, Ivanhoe estimates that cash cost

60 MW solar coming upside risk flagged

management to now (C1) will be 5% higher than initially

Q3

be generating ~$1M estimated."

per day.

"The Company has assessed the impact

of the current macroeconomic

Marginal Q1 impact

environment and its subsequent effect on

(prices rose late

Monitoring; not key input costs including diesel, sulphuric

March); 1 month Not material at this Reaffirmed $1.90-

LUN expected to be acid, and ocean freight. While these input

supply secured at time $2.10/lb

material costs have increased, the increases are

Candelaria &