Aurelia Metals Limited

Now I'd like to hand the conference over to Mr. Brian Quinn, Managing Director and CEO. Please go ahead.

Thanks for joining September quarterly update today. I'm joined with Martin Cummins, Chief Financial Officer, Andrew Graham, the Chief Technical and Business Development Officer, and Angus Wiley, the Cobar Regional General Manager. Through the meeting, we're going to run through the slides, so you can follow the slides that have been put out as part of the release. And we would appreciate questions at the back end of our presentation, which we'll hand over to the adjudicator to set up for us. Just to start with, on slide three, I just want to call out, you know, effectively we've had a strong cash balance that's been maintained with our operations, again, funding our growth. And to sort of highlight some of the key points here. For the quarter, it's important that obviously PEAK has been continuing to deliver in line with our guidance. I'll talk to some slides soon on that. But effectively, the operation has set up with a bit of a softer quarter as part of our targets, very much in line with our four-year guidance, and we're still getting some very good operational performance coming out of PEAK, and it's obviously generating the cash that is actually supporting our growth aspirations. In terms of our Federation, really exciting quarter for us. We had our first O4 fired and taken to the surface. We also had our official opening, supported very well by the Minister's Office for the Honourable Courtney Eusis. And we had council members from the region. We had community members from the consultative committees. We also had landowners and some other general managers from the region attend the session for our Federation Grand Opening. Really fantastic day. It really supports our focus that we have a Tier 1 jurisdiction with good support from the region to really see us forward with our growth aspirations. We also had DAGs come to a conclusion in this last quarter. Obviously, we set out some aspirations to safely maximise cash for DAGs As you see from some of the results today, we've delivered against that. We've obviously ensured that we've done the right thing with our people and we've maximized cash as a real highlight for this quarter. And lastly, the COBRA optimization scoping stone has been finalized. We've been discussing that at previous quarters, giving some concepts of where we're going with that. And today we'll discuss a bit more detail as per the release that came out today also. All of these sort of current activities in terms of operations, projects, studies, and even closing down DARS has been a credit to the management team. Lots of activity going on in a small organization, but really showing that we have sort of got some stability and we're really taking the organization forward. I'll move on to slides. Four, just to talk about some of the group production costs. As you can sort of see, some lower costs in the first quarter relative to the previous quarter. Some of these costs include DARS costs for the last quarter. Those costs are obviously reducing and they'll drop off going forward or be far less. And all of the same costs at 2, 3, 2, 1, very much in line with our expectations for quarter one. And obviously, we are guiding against it this year. But effectively, our focus right now is we're transitioning our business to a base metals producer in FY25. And so we'll obviously keep reporting metrics we've got on the table and we set up the guidance above. In terms of what we've produced, very much all those metrics there for quarter 1 FY25 are pretty much in line with our expectations and just to do with the configuration and sequencing for the rest of the year, that's very much on target for us. In terms of slide 5, in terms of the sustainability, our focus is obviously preventing injuries and protecting the environment and it definitely remains a priority for us. as does working with the community and being a good neighbour, as does making sure the health of our people every day is to the highest standard. We've actually had some improvement in our safety performance. We're still having slips, trips and hand injuries. And obviously there's a big focus at management right now to really be out in the field, leading our people, really looking at controls and hazards and sort of helping our people, coach our people to be ahead of the game and ensuring that we can prevent these from occurring. And as you can sort of see from the environmental graph, we had a couple of environmental incidents that we reported under our recordable environmental incident frequency rate. One was to do with some substance at Dargs to do with some old workings in the top of the mine that we've actually rectified and the second one was to do with a water leak at Federation which was rectified and stayed on the roadway actually inside the lease but once again we did report it. So nothing serious but still obviously we're very focused on ensuring we can get both of these metrics in control and improve our results accordingly. On the positive side, we're definitely seeing improved reporting quarter on quarter as we want people to raise their awareness and report incidents, both safety, health and environmental and community related incidents so we can actually obviously put controls in place to prevent them from reoccurring. We had a recent survey completed by employees And we're really seeing also a step up in people calling out or speaking up about things in the organisation, which is excellent, and we want to see the organisation go as well so that our teams are engaged in a sustainable way and really sort of being part of and owning our organisation going forward on these various metrics and also performance. So if I move on to slide five, sorry, slide six for PICC, Look, in terms of where we are at the first quarter, we're definitely still delivering in line with our guidance. It's been a very consecutive quarter on quarter on development performance. Looking forward, we do see that ramping up with additional equipment and setup we've put in place, especially with some of the equipment coming from Dargs. Production drill and jumbo have been taken to peak mine and setting up for additional operational areas so really you sort of see that we've been consistent which is what we want to be and now going forward we'll have some increased targets and we'll be also going after that consistency of the high number as well. All mines, like I said, a little bit softer than previous quarter but effectively that was part of our sequence in our mine plan and it will definitely be moving in the right direction along with our guidance for the remaining quarter's The cost per tonne has an impact on the number of tonnes we mine, but obviously we're okay with that based on our four-year numbers as well. What I've actually put in the graph for this quarter is some information on our recoveries. I guess it's really worth highlighting that we've really been maximising plant recoveries quarter on quarter. That's really a big focus for our operational team at the moment. Effectively, as we bring on Federation Ore this quarter into the peak processing facility, we obviously want to have our recoveries working and performing at a very high level. And so the focus has been to keep pushing all of those various commodities. And these two graphs are just on lead and zinc, which are very fundamental to the ore coming from Federation Ore. So that one little blip that you can see that we've put a box around was the quarter where we had the online analyzer go down for more than half a month and obviously that actually impacted the recoveries for that quarter. But as you can sort of see, definitely some continuous improvement coming in quarter on quarter on those recoveries. We've still got definitely a big focus on our development to get ahead of our stoping. And like I said, definitely on target for the guidance for our ore mining to feed our processing facility as well. I'll just move on to the next slide on Federation. Obviously progress is continuing quite nicely in line with de-risking our future for Federation and de-risking our volumes coming into the peak processing facility. The first stove ore has actually been fired and very successful and the mine was opened as I said initially. What's important about that in terms of having really the right support from the government both at a local, state level and even local community members involved, it really sort of supports our organisation that we're going to grow in this region and we've got the right support behind us and it's fundamental to any organisation to have that licence to operate. So both those two things were a big celebration for us in this last quarter. In terms of development, obviously that's a core value driver for us right now. Our development actually is ahead of our budget leading into this quarter and continues to be moving very, very well. As is infill drilling. Infill drilling obviously is important for us to set up platforms, get down, drill out to design our future stoves and sort of prepare ourselves for the future design as we progress down into the mine being a So those two things are going well, especially after the period where we had rain affected in the last quarter of FY24. Another exciting bit of news was we actually signed up a new three-year mining contract with Redpath. That's been an excellent result for us. We've had a really good partnership with them. They've basically been by our side dealing with some of these water issues and being very proactive around helping us set up for success. That new term and agreement is very much in line with the economics from our feasibility study, so we're very pleased that we've got a good deal and a good relationship and contract with Redpath going forward. Most of the surface works have now been completed for the ROM stockpile, preparation for the paste plant, the haulage road, the various dams located around the surface. of Federation have been completed and demobilisation has pretty much been completed also for Stage 2 surface works and the water management infrastructure has been operational and has been put in place to really deal with the heavy rainfalls. There's a couple of small activities still to be done around lining some of the dam areas but ultimately I'd have to say we really do risk the surface works now and the focus is on really underground development and infill drilling to set the mine up for the future as we continue to sort of get ourselves set up for ramping up our operation for the rest of FY25. In terms of dards, like I mentioned earlier, it's a massive milestone to really have operations completed and really maximise the cash and do it safely coming to the end of dards. It's a real attribute that I think the team has done in a very positive way to look after the people make sure that we've sort of either redeployed them out to the Cobar region, kept some people on care remains slash closure, and then obviously we've let go of the remaining people, both the contracting partners and employees, in a very positive way. And I said I was lucky enough to attend their farewell. It was very positive and very emotional by the people, but effectively I think we've done the right thing shutting the operation down at this point and come home very strong in cash as we committed. We're ongoing with the sale of the plant and equipment. We've had an auction recently that we'll report obviously next quarter, at the end of this quarter, on the results of that, and we're in the final throes of setting up contracts with some of the other larger bits of equipment as well. We'll report that at the end of this quarter on the results of those things and how those sales revenues will go towards paying the future bills. And obviously the focus right now is online closure, so with a small Care Remains team and a group of consultants working through the closure activities, really looking at how we plan that ahead and make sure that's set up for success so we can do that over the coming years and then ramp down that process as we come to a conclusion in the next several years. Before I hand it over to Andrew to talk through the optimisation study, I just want to reinforce one quick point. Like I said, it's exciting news. We talk about this KBAR Basin optimisation study, the conclusions of the study, but it's also the right timing for us. It's important to reflect that we've delivered the last 18 months of results in a consistent way in terms of the performance of operations generating cash, preserving cash and having a strong balance sheet. We've definitely sort of focused heavily on getting our development and our operations at peak in control, ramping down DAWs in a controlled way, maximising cash, while also building federation in a controlled way, irrespective of some of the headwinds with rainfall that were unexpected. So this sort of delivery of this project is good timing for us. We believe the organisation is in the right state of mind and the right sort of control to be able to go forward with this. So we have the infrastructure to be able to leverage off this. We have the geological prospectivity in front of us and we've now got some great talent that we're bringing to our teams to really set us up for success in the Kovar region. So I'll hand over to Andrew and he'll talk through, maybe just touch on a bit of the exploration and also talk about the study before handing over to Martin. Thanks, Andrew.

Thanks, Brian. As Brian talked about, I normally provide an exploration slide at this time. I didn't today because I wanted to really focus on that COBAR optimisation study, which I'm sure you all do as well. But before we get to that, just to touch on exploration, it's been a busy quarter. Some drilling on the surface, albeit we did retender our surface drilling contracts. which is not drilling in the early part of the quarter. Deepcore was awarded that contract for the rest of this year and they have mobilised at the back end of the quarter. Importantly, they mobilised a rig to Nimigi, which we're drilling at the moment. I'll get to that in a little while as well. and also a rig to Chesney to focus on infill in the Chesney East Goldlands. We have kept underground drilling working throughout at peak targeting, Hercules, Kairos deeps, Jubilee North and New Cobar deeps. There is information on that in the quarterly release and we will provide results, obviously, once we have them together. We've also done a bunch of soil work, soils at Nimigi, or Nimigi region, and it's all part of the development of the programs that we've talked about previously, stepping through those stages of exploration. Moving, though, to the COBRA optimization study, which is on slide nine of the pack for those following along. Through the study, look, we have identified a pathway that really delivers significant additional value for shareholders, and it does so while de-risking our business and creating a real option for step change in production. So let's step through that. The recall that we previously outlined a plan where we preferentially fed Federation mine ore to the peak processing plant. And once the peak processing plant was full, we restart HERA and put the rest of the lower grade ore from Federation through HERA. At the time when we released that, it was quite a change from building a new plant It was also important to have a base plan that we could finance, which we were doing at that stage. It was achievable, it was permitted, it was using plants that already existed. But as you also know, we always thought we could do better than that. And that's why we embarked on this Cobar Basin Optimisation Study. And the plan for the study was to determine what the optimum configuration was for mines and plants within that Cobar Basin. And he has study identified and key piece quantified significant latent capacity within the peak processing plant. And you've got to recall we batch feed peak, lead zinc ore or copper ore, and the latent capacity and the constraint changes depending on what we're feeding. So when we're feeding lead zinc ore, we're constrained at the back end, so particularly in flotation. When we're feeding copper ore, we're constrained at the front end in grinding. When we delved into that, it was a much cheaper exercise to relieve that constraint on grinding, so on copper ore. So we very quickly through the study moved towards how do we get more copper ore through the plant, use that latent capacity within the plant to process at a higher rate, and in doing so allow us to process all of the federation ore through that peak plant as well. So the study determined that the key plant upgrades required were quite minimal. So in effect, crushing and bit of materials handling ahead of the existing feeders and the existing sag mill, as well as a ball mill to give us additional grinding capacity. And when we delved into it, the lowest capital, most efficient way to do that, and also very fit for purpose, was relocating the DARS ball mill to peak and installing that in a kind of a tertiary grinding capacity after the existing ball mill that we have at peak. So with that, really a capital efficient opportunity to expand throughput because we're using that latent capacity that already exists within the plant. And at around $20 million, it's about the same capital as would be required to restart and reconfigure ARR and get the tailing stand lift done, all those sorts of things. I mentioned it created a fair bit of value. We're saying in the range of $40 to $60 million of additional value. So you can see from that a very capital-efficient project, which really comes from using that latent capacity that already exists. The value really comes from a few things. Certainly a higher net revenue that we get from making a lead product and a separate zinc product from the Federation ores in the peak processing plants. rather than a bulk con that we would have made out of error. Importantly, we also get paid for gold and silver, which we wouldn't do in a bulk con out of error. And you'll recall that the Peak plant is quite unique in that it has a whole CIL plant on the back end. So we do get excellent recoveries on precious metals. The other thing is we'd be paid for copper at Peak, and particularly copper. Copper from the Federation was. It would report to the lead concentrate. We wouldn't get paid for that copper in a bulk pond out of Herra. Operating costs, substantially lower. Quite simply, we're running one plant instead of two. So we remove all those fixed costs associated with running Herra. And peak's also on grid. So the power cost is substantially less than off-grid at Herra. Let's not forget HERA. If we expand PEAK, what it does for us is create a very valuable option in the HERA processing infrastructure. And the challenge for me and for the team is to think about, well, how do we restart HERA and feed that plant with water ores? And there's a range of alternatives. One option is backhauling PEAK ore. And that relies on us being able to bring on things like grey cobar and expanding that output. And Imogy, I mentioned that earlier in exploration, is very near to the aeroprocessing plant, and certainly having that processing infrastructure gives us a much better chance if we're able to prove up resource at Imogy to bring that through a processing plant. It's a very prospective regional package, which we talked about a lot in the past, and certainly any discovery is made much more valuable for having processing infrastructure. And we'd also consider third-party feeds One thing which is in the release is the study also identified a compelling opportunity to improve float performance through process water management changes, and we're looking to move ahead with that very quickly. So on next steps, certainly be assured that work is up and going. We haven't waited for this release to progress those things as a tender process, which is nearing its finish on getting engineering support to take us to that next stage of study. And the critical path to expanding throughput at peak is around permitting, and the study work required to support any permit changes is certainly very active at the moment. We'll keep you abreast as things progress on that over the quarters to come. Overall, the study is a real credit to the technical team. They've thought about the business differently, challenged the status quo, and really delivered a path that enhances value to shareholders. So we're certainly pleased with where we've landed. Passing now over to Martin, who is the other strength, I suppose, of our balance sheet. Oh, here's Martin.