ACG Metals Amends Gediktepe Royalty to Ease Transition to Copper Production

ACG Metals reshapes Gediktepe royalty to ease the shift from gold to copper

ACG Metals has agreed amended royalty terms with EMX Royalty covering the Gediktepe mine, designed to smooth the move from oxide (gold-dominant) to sulphide (copper and zinc) production from 2026. The deal simplifies the royalty structure, cuts the oxide take-rate sharply, trims near-term costs, and removes a US$ 6 million milestone payment that would have been due in 2026.

In plain English: less cash out the door in 2026 while the mine transitions, and a cleaner, flatter royalty on the other side. There is a modest increase to the sulphide royalty, but it looks manageable against the benefit of dropping the high oxide rate.

What exactly changed in the EMX royalty?

The Royalty Agreement, originally from July 2019 and amended on 30 September 2025, now does the following from 1 January 2026:

• Oxide net smelter return (NSR) royalty reduced from 10% to 2.25%.
• Sulphide NSR royalty increased from 2% to 2.25% on all sulphide production.
• US$ 6 million of milestone payments linked to the start of sulphide commercial production in 2026 have been released.

ACG says the changes were agreed consensually with EMX on mutually beneficial terms. That matters – it suggests the royalty partner is aligned with the mine’s long-term plan rather than squeezing the near-term transition.

Why this matters for cash flow in 2026

Two levers help ACG’s cash this coming year. First, the drop in the oxide royalty directly lowers cash costs on any remaining oxide ore processed in 2026, which ACG expects to feed through to a lower AISC (all-in sustaining cost). Second, the scrapped US$ 6 million milestone gives a clear one-off cash flow boost.

ACG highlights that these changes should strengthen short-term cash flows and allow the group to build a larger cash buffer while the transition completes. For investors, that means reduced funding pressure during a period that can often be bumpy for mines switching from oxide to sulphide circuits.

Impact on costs and the copper transition

On the downside, the sulphide royalty rises from 2% to 2.25% once copper and zinc are the primary outputs. That is a small increase, and the trade-off looks sensible given the sharp cut to the high-cost oxide royalty and the removal of milestone payments. A flat 2.25% NSR across both oxide and sulphide also simplifies planning and removes a big step-change in economics.

Looking beyond 2026, if Gediktepe secures a life-of-mine extension with further oxide material, that future oxide production would also carry a 2.25% royalty rather than 10%. That could enhance returns on any incremental oxide ounces discovered or accessed later in the mine life.

Key numbers at a glance

Item	Old terms	New terms	Effective
Oxide NSR royalty	10%	2.25%	1 January 2026
Sulphide NSR royalty	2%	2.25%	1 January 2026
Milestone payments to EMX	US$ 6 million (2026)	Released	2026
AISC impact on remaining oxide	Not disclosed	Expected to decrease	From 2026
Future oxide royalty on LOM extension	10%	2.25%	If applicable
Gediktepe 2024 production	55 koz AuEq	2024
Steady-state copper equivalent target	20-25 kt	From 2026

My take on the positives

• Immediate cost relief where it counts: slicing the oxide royalty from 10% to 2.25% should materially improve margins on any remaining oxide throughput in 2026.
• Cash buffer strengthened: the released US$ 6 million milestone is a clean cash-saving at a critical time.
• Simpler, predictable structure: a flat 2.25% across ore types from 2026 reduces complexity and aids forecasting.
• Optionality on future oxide: if the life-of-mine expands to include more oxide, the lower 2.25% rate boosts project economics versus the old 10%.

And the trade-offs to watch

• Higher sulphide royalty: moving from 2% to 2.25% modestly lifts the take on copper and zinc. That is a 12.5% relative increase in rate, albeit from a low base.
• One-off versus ongoing: the US$ 6 million milestone release is a 2026-only benefit. Beyond that, project performance needs to carry the economics.
• AISC not quantified: ACG expects AISC to fall for remaining oxide, but no numbers are provided. Investors will need to see the cost print once 2026 operations bed in.

Where this fits in ACG’s strategy

ACG’s strategy is to consolidate copper through roll-up acquisitions with a strong ESG focus. Gediktepe is central to that plan. The mine is expected to transition to primary copper and zinc from 2026, targeting 20-25 kt copper equivalent at steady state.

The amended royalty terms align with that pivot: near-term relief during the last innings of oxide mining, then a manageable, flat NSR rate in the copper-dominant phase. That is the kind of balance-sheet friendly tweak you want when moving from gold cash flow to base metals.

What’s not disclosed (yet)

• Exact 2026 production volumes split between oxide and sulphide – not disclosed.
• Updated AISC and unit cost guidance – not disclosed.
• Any changes to mine plan or capex schedule – not disclosed.

These are the numbers that will ultimately show how powerful the royalty reset is. For now, we have a cleaner framework and better near-term liquidity.

Jargon buster

• NSR royalty: a percentage of the value of metal sold, after smelting and refining costs. It comes off the top of revenue.
• Oxide vs sulphide ore: oxide ore is typically easier to process for gold; sulphide ore requires different circuits and is common for copper and zinc.
• AISC: all-in sustaining cost – a comprehensive cost measure including operating costs plus sustaining capital and other sustaining items.

Bottom line for investors

In my view, this amendment is net-positive. The substantial cut to the oxide royalty and the release of US$ 6 million in 2026 improve cash resilience through the transition. The 0.25 percentage point increase on sulphide is a fair price to pay for a simpler, more predictable structure.

What I’ll watch next: confirmation of the 2026 ramp to sulphide production, updated cost guidance, and evidence that the cash buffer builds as planned. Deliver those, and the royalty reset will look like a well-timed catalyst for ACG’s copper-first future.