Aurelia Metals Limited

Thank you for standing by, and welcome to the Aurelia Meadows Limited FY26 Half-Year Financial Results Call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Brian Quinn, Managing Director and Chief Executive Officer. Please go ahead.

Thank you for joining us to hear about the Early Metals FY26 half year results. I am joined by Chief Financial Officer Martin Cummings today and obviously I'll pass it over to Martin in certain sections of the presentation. While I'm on just slide one, this has been another great year, half year both operationally and financially for Early Metals. A strong delivery on metal production and project delivery supported by strong commodity prices. has delivered a robust balance sheet and strong operating cash flow for the period. We continue to deliver strong results against our strategy, and we can see the benefits of this strategy playing out already. We are delivering consistent metal results from more reliable operations, but we also have our mills working at new capacity at the current main plate capacity, which has been a clear strategic deliverable over the past couple of years. During this period, we've also rolled out our mine operating system, our MOSC, to really ensure that we're focusing on delivering our plan with the commitments of the team on a daily, shiftly, weekly, monthly basis, which is important for our future sustainability of the business. This has been a deliberate approach to ramping up Federation Mine at the right mining rate and long-term value of getting our ore from peak mine over this period of time. That delivers our 40,000 copper equivalent tonnes in FY28. And our focus on our strategy is really about delivering superior value to our shareholders through a combination of future copper at 50% and future lead zinc at 50% coming out of the great cobalt mines and the Federation mine in the coming years. This is going to continue to position really, really well as we utilise the gold prices of today to invest in our business to achieve much higher prices in the future hopefully from copper and other commodities. In the meantime, we'll also be focusing on the exploration team. I'm looking to build our strong pipeline options organically for both copper, base metals and precious metals while expanding our PIG facility in the future. In today's results, Martin and myself will share how we're setting up Aurelia to continue to deliver value for our shareholders through our operations performance while we continue to de-risk our balance sheet and create significant cash much quicker than our peers in the future. to slide two which is our forward looking statement. On slide three, our operations have continued to deliver strong financial returns against again raising the bar from previous halves and results with underlying EBITDA up 41% and our underlying NPAT up 60% and there's still a lot more to come as we ramp up our high grade federation line and complete expanding our processing capacity from the 800,000 tonnes capacity to 1.1 to 1.2 million tonnes in the near future. We'll talk about that in a few slides. The great news for Aurelia is that the current nameplate capacity product expansion and we're actually really focusing on building stocks in front of the mill coming up in a couple of months. And I'd like to call out we've achieved record recoveries for some of our commodities as we've been ramping up these tons from our processing plant, which is a great result. The Federation oil body and mine has been ramping up in line with our plan, actually a bit ahead of our plan for the year. and has been providing very encouraging grades, and the high-quality ore remains well on track to improve month on month as we go forward. We have our Great Cobar project, which will be accessing the future high-grade copper and gold deposits for FY28 and beyond, and that's on track and on schedule at the moment with our development. It is progressing quite well. And many of the other aspects of the project are delivering in line with the infrastructure works, the pipelines, and also the surface facilities that are being set up ready for execution. over the coming 12 months. So the project's in really good shape and we're really happy how it's progressing. In line with our other projects we have, and we'll talk in more detail soon, other growth projects around the expansion of our plant. They're all on schedule at the moment and we'll see some results of those coming up in the coming quarter, quarter four, and obviously quarter one of FY27, which is exciting. It will deliver some really strong cash flows going into FY27 with this expansion of our plant and business. And importantly, we actually have been able to really maintain a robust balance sheet, which is funding all of our growth from our balance sheet, which is something that we're really proud of and setting us up for success also. And lastly, from our results in the half, it's important to call out the MRO results. We achieved a significant uplift in resources by 12% and reserve by 17%. This continues to show our ability to really find, explore, and actually develop our businesses into the future with this strong organic pipeline we've actually developed and will continue to develop. Importantly, during the half, we had several of our workforce did suffer hand and slip trip injuries across the business, and as a result, our leadership have introduced behavioural-based safety programs and tightened up our induction and training programs on site to really ensure that our people, when they come to work, wherever they're working, they just really think about hazards use the tools and processes we have and ensure that they go home safely at the end of every day. That's an improvement we're working on every day to ensure that people all go home safely and that's for the benefit of everyone. I'm just going to pass on to Martin now to talk around the highlights and the balance sheet of the year, Martin.

Thanks, Brian. So just moving on to slide four, and I'll just take you through some of the highlights, but obviously in the Appendix 2, you'll find more detail on the financial results. I'll just point out when we're comparing on this slide, we're comparing to the first half of financial year 25. So starting with revenue, which was up 27%, and that was driven both by our strong production performance in the first half, but undoubtedly also from strong commodity prices. We did have significantly more zinc production and revenue in this quarter as volumes from Federation ramping up, but gold revenue did remain our dominant source with around 53% of revenue coming from gold, about another 2% from silver. Our underlying EBITDA also benefited from the strong revenues and we expect this to improve in the periods to come with the ramp-up of Federation revenues. So as you know, this half we booked the first commercial production from Federation, so commencing 1 July, and that production did come at a lower EBITDA margin initially, and as volumes ramp up, that EBITDA margin will expand. So as we increase our volumes into the second half and beyond, we expect our EBITDA margin to trend up accordingly. Our NPAT has been consistently growing, and we did again this year, underlying NPAT up 60% on that comparison period. Just within the NPAT, just some comments on depreciation. So that was slightly higher for the period, and that's driven by the first depreciation recognised from Federation. The prior period did have a little bit of depreciation in it relating to the last production from DARCS. So that depreciation will ramp up with the majority of the Federation assets depreciated on a units of use basis. As those volumes ramp up, we expect the depreciation to pick up a bit as well. Obviously, we're calling out operating cash on that slide, but I'll flip over to slide five with the balance sheet. And what we're showing here is our regular chart for the six-month period. And that operating cash flow from the Cobar region really is to stand out with $51.2 million. That was up 37% on the prior period. Importantly, though, that does include all of the sustaining capital for both Peak and Federation. So that is a real cash flow generation before growth capital. Federation, as I said, is in that number, and as those volumes ramp up, that number is expected to increase with a higher contribution from Federation. I talked a bit about growth capital in the December quarterly call. We spent $21.4 million on growth capital for the half. And I do expect to see that increase in the second half. Within that, the plant expansion capital was only $4.3 million. So as we move further towards commissioning in those projects, the spend will ramp up. The Great Cobar spend of $11.2 for the first half is largely in line with the ranges that we gave for FY26 for Great Cobar. And there was a bit of spend for decline investment at Federation. I also talked in December about the tax bill, so we finalised our tax return and made a final tax payment for FY25 of $12.2 million, and that's shown in the waterfall. But I guess the change I'm showing on this slide relates to restricted cash, so I just want to give you an update on where we're at with the refinance. The process is progressing really well. We are on track to agree to terms in this quarter. And I am targeting a financial close either within this quarter or early in the next quarter. Just to recap on what I'm looking for in the refinance is primarily an upsized performance bond facility. As you've been following, we've been cash backing bonds over and above the existing facility that we have. And we have $27.8 million at December sitting in restricted cash. That number is a bit higher today with the amounts that we had during February. And really, the key there is to refinance that facility and add that cash back to the balance sheet. So I'm just showing you on that chart what cash could have looked like or will look like once that refinance is complete. So all in all, I'll leave it there, but it's another great half delivered by our ops team and really has meant that our balance sheet remains strong and able to fund all of our growth comfortably. So I'd just like to call out our Aurelia and some young teams somewhere on the call today just for their efforts in getting these releases finalised. It's been another smooth process, so thank you from me. And I'll just hand it back to you now, Brian.