Taca Taca - stake sale on the cards?

Research evidence excerpt

Taca Taca - stake sale on the cards?

UpdateMOur view - through a Rio Tinto lens: A potential transaction would present Rio

Tinto with a relatively low-risk opportunity to add copper exposure without the

premiums and execution risks typically associated with outright acquisitions or

transformative M&A. The asset’s scale would deliver a meaningful step-up in

attributable tonnes through a structure that allows risk and cost sharing on a multi-

billion-dollar, multi-year development, although the economics of any stake

purchase would remain price-dependent. This approach would also enable Rio Tinto

to leverage and expand its established Argentine platform, anchored by its lithium

assets, in a jurisdiction benefiting from pro-investment reforms. The existing La

Granja JV in Peru, where First Quantum acquired a 55% operating interest from Rio

Tinto in 2023, provides a proven blueprint for an effective partnership model in

which the latter contributes its balance sheet strength and regional expertise

alongside the former's mine-building capabilities. We note that Rio Tinto’s FY27

attributable EBITDA exposure to copper stands at ~31% – the lowest among major

peers – and these bolt-on opportunities can accelerate the portfolio mix shift

toward copper and reduce the urgency to pursue larger M&A transactions.

About Taca Taca: First Quantum's Taca Taca (100% owned) is a large-scale open-pit

copper-gold-molybdenum project located in Salta Province, Argentina, with an

estimated 35-year mine life and expected LoM average production of ~210ktpa. The

project is currently in advanced pre-development. First Quantum is working on

obtaining key approvals, including the Environmental and Social Impact Assessment

(ESIA), water permit and an application to Argentina's RIGI regime. See First