Aurelia Metals Limited

Good morning, everyone, and thanks for your time this morning. I have Ian Poole and Peter Trout with me today, and we will, off the back of the quarterly report released this morning, refer to the presentation that accompanied it, titled September Quarterly Update and Outlook. Just before we get going, I just want to take a bit of a step back, because in recent weeks, we released a lot of detailed information to the market covering Federation feasibility study, funding requirement off the back of that study, our mineral resource and all reserve statement for the year, FY23 guidance and an update on the operations. I recognise there's been a lot for shareholders and investors to absorb in that period of time. So this morning, myself and the team want to focus on what we believe are the key issues that are coming out of the back of that information and with that I'll just move to slide three and those key issues as we see them is the operating performance across the three assets. Federation funding and progress in particular and also the outlook for the business against what was a difficult quarter four in FY22. So just moving on to slide three. We're fully aware that operational performance and financial outcomes, particularly for Q4 and into the early stages of this year with Q1 of this financial year, weren't good enough. And we take that responsibility to fix those. And I just want shareholders to have confidence that we've actually taken those steps and starting to see the results of those actions taken. Just focus on performance recovery, particularly for peak performance. During the quarter and in response to our performance and also external conditions within the sector, we resized and scaled back peak operation, focusing on high-value wool but with less resourcing across the business for the scale and size of the operation that we want to get to this year. The end result of that has been quite a significant cost reduction and opening up the margin on every tonne produced at peak. At HERA, it's been about tonnes, tonnes and nothing but tonnes. We were heavily impacted, particularly in Q4 during the year, but with the improvements that we've made since, we've seen particularly during September, in comparison to June, July and August, a 60% improvement on mined tonnes and therefore metal outputs for the operation going into this new quarter. The DAGs, the physicals have actually been inline and solid. We're all aware of the grade issue at that asset and what we're focusing on now is what we can do with that asset to offset partially or as best we can offset that lower grade with an increased capacity through a new approval for the operation. With project development, it is all about federation. I'll reinforce some of the financial metrics and progress in a minute. But along with the operational recovery I've just talked about, the funding and recommencement of Federation Project is our highest priority. Utilising, as we talked in the release of the feasibility, making the decision to utilise existing infrastructure, it's our highest grade and correspondingly lowest cost strategy. or body within the group. So it will get priority to any of those mills in terms of capacity. It's low risk and really importantly for us, even whilst we have taken a pause on the decline to organise the funding of which Ian will talk through progress on that in a minute, the state government approvals for the asset have not been affected by our decision to pause the decline and they are progressing well and through the process. Just moving on to the next slide. September quarter and our outlook is aligned to these recovery plans and we're forecasting for the year and estimating for the year 87,000 ounces at $1,900 an ounce. There's a key question here straight up that I'll cut straight to. The question would be if we started the year at 2,600 for the September quarter all in sustaining costs How is it that we're going to get to $1,900 average for the year? I just want to go back a year and talk to a parallel here. In FY22, we finished the year at $2,800 an ounce in the June quarter and achieved across the full year $1,700. This year, we're starting at $2,600 an ounce, but we will trend down and through that $1,900 to average $1,900 for the year. So you can clearly see It's an achievable outcome for the business, all very focused on, obviously, metal output, particularly base metals, as we see the gold grades, particularly at peak and here are starting to decline. So with that, I'm just going to hand over to Peter to talk through the specifics of each of the operations.

Thanks, Peter. Thanks, Dan. And just to reiterate Dan's comment there, at a group level, the September quarter's results were an improvement on the prior quarter, but by no means are where they want them to be. The details of each of the sites' performance are provided in the presentation deck, so I'll instead focus on the operational priorities we have at each of the three sites. Turning to slide five of the presentation deck, at peak, the key change over the quarter was implementation of a new operating plan, which helped us deliver stronger production results from the site. As part of that plan, we've scaled production rates to prioritise the cash margin on the ore that's treated, and also made the transition to majority owner mining. As part of this plan, the ore processing team has moved from a continuous to a weekday operation. So instead of running seven days a week, we're running five days a week to match the mine production. And that's reduced a portion of our fixed costs at the site. In September, we commenced demobilisation of most of our contract mining employees and their mobile plant. And those cost benefits will flow through into the December quarter as our employed workforce and fleet take over the work. We also saw an immediate productivity and cost benefit in late July when all hoisting at the south mine resumed after replacement of the damaged pallets and that did away with a large volume of truck haulage to the surface. I guess it's also pleasing to see that the underground mine is operating more reliably now that we're seeing improved planning through our own team and greater control over the mining activities at the site. So with those initiatives in place, we've got a great platform there to drive further productivity and cost initiatives across the site. Moving on to slide six of the presentation deck, which talks to HERA, there's a really disappointing performance at HERA over the quarter with quarterly metal production dropping as we had some stope extraction issues early in the period that delayed ore delivery to the plant. And we also continue to see ore graze trend lower as the mine life draws closer, draws to an end. The operational imperative at HERA is about delivering ore to the process plant. And the performance improvement plan initiated in the last quarter started to deliver results in September, when 32,000 tonnes of ore was mined. And month to date, in October at HERA, we're on track to exceed that mine production. Some of the things we've done to lift the mine production, we're starting stoking from the upper hay zone, we've pushed development harder to establish three separate independent stoking areas and we've also seen the benefits of changes made to the ground support regime that have reduced the time consuming and costly rehabilitation work into remnant mining areas other options we're looking at relate to mine planning and timing of all delivery particularly higher marginal that currently sits in the second half of the financial year and a series of efficiency and cost initiatives to sustain profitable ore production at Herra. Moving to Dargs, which is on slide seven of the presentation deck, we saw scheduled lower gold grades and also a negative reconciliation in one of the mining areas that contributed to lower metal production for the quarter. However, mining and processing volumes were consistent with those achieved over the second half of FY22. Our site management team continues to focus on delivering the planned gold grades, and they're the main value driver at Dargs. So ongoing work relates to building greater predictability into the mine plan, and our underground infill drilling program is helping provide greater confidence in where the ore zones lie and the grades. We're also working to refine our stope designs to reduce ore loss and dilution, and also looking to commence extraction of some high-grade remnant areas in the mine. Other cost and productivity initiatives underway at DARGS include optimizing our stope backfill placement, looking there to reduce the cement consumption and also the time required to fill a stope, so we can cycle through the stopes quicker, and also the application to modify the site's development consent, which, if approved, will allow for higher annualised or processing rates at DAGs. I might hand back over to Dan at this point.

Thanks, Peter. Moving on to slide eight and switching gears into the Federation project, we released the feasibility three-odd weeks ago now, and I won't dwell on it, but I certainly do want to reinforce some of its metrics, particularly from a value perspective and priority for where it sits with our business. Utilising the existing infrastructure has significantly lowered the risk, we believe, in the development of this project. As I mentioned earlier, Its grade and cost structure really sets us up to be able to withstand impacts from the cyclic nature of the commodities as well as the industry. So from our perspective, it is the highest value all body within the group. It remains open. And even at the 4 million tonne production target at the moment, we're still seeing, pending the price deck of choice between Spot or Bloomberg or whichever price deck people want to utilise, NPVs of between $200 and $400 million and IRRs of between 40% and 70%. Those figures certainly support the priority of the asset in our group. Just moving over to slides 9 and 10, just to outline progress in particular of the bills, albeit we have paused and I'll come to that in a minute. Progress certainly continued through Q3, Q4 and into the September quarter. As we're speaking now, we are 90 metres underground and all the surface supporting infrastructure in the majority of cases is all in. Although we have stopped and that is about funding of the asset. We drew that to market's attention clearly three or four weeks ago. So I think for us it becomes now, as I've mentioned, about... the dual prime approach of operating, recovery and stability of the business and making sure that we find the optimal solution for funding so we can kick away the construction operation. So with that, Ian, you might take over on the funding issues, please.