Boss Energy Limited

Thank you for standing by and welcome to the Boss Energy Investor Conference Call December quarter 2024. All participants are in listen-only mode. There will be a presentation followed by a 30-minute question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. In the interest of time, participants are requested to limit the number of questions to two per term. If you have additional questions, you are welcome to rejoin the queue and we'll be able to ask further questions if time permits. If we run out of time and you do not have time for your question, we ask that you please call our office on 0862634494 or email boss at bossenergy.com and speak to our team. I would now like to hand the conference over to Mr. Duncan Krebs, Managing Director. Please go ahead.

Good morning, everyone. Thank you for taking the time to dial into our first quarterly call, which we expect to become a regular occurrence now that we are in production. And today really is a milestone event for the company, declaring commercial production and publishing our first cost guidance. On the call joining me today is Justin Laird, our CFO, and Matt Doocy, our COO. And on today's call, we will walk you through the key achievements of the December quarter and as well as providing cost guidance for the second half of this financial year 2025. At the end of the call, we will take questions and to our analysts, Justin and I will be in touch in coming days to invite you on a honeymoon site tour in March. Given construction activities are largely complete and the site is safe, we'll be hosting regular site visits going forward. So turning to the presentation, the highlights, looking at the three key categories, Our key ramp-up milestones delivered during the quarter, well, we remain on track to deliver our 850,000 pounds of uranium per our production guidance for 2025. It's another strong quarter of growth as we continue to ramp up production, our honeymoon operation in South Australia, as well as at the Alta Mesa operation in South Texas. Some of the key highlights, which we'll expand upon during the call, include 137,000 pounds of uranium being drummed during the quarter, and that's up 53% since the September quarter, and 215,000 pounds of iron exchange production, which is up 96% from the previous quarter. Our NIM6 column three was commissioned and currently ramping up. Columns one and two, I'm pleased to report, are continuing to operate at nameplate capacity. The final installation and commissioning of Kiln 2 was also completed and is now operating. Commercial production effectively was then declared effective from 1 January 2025. Financially, we're also in a strong position. We retain and remain with sort of $252 million in cash and liquid assets on our balance sheet. Funnily enough, it's a growth of $7 million from the previous quarter and we still have zero debt. During the quarter, we sold 200,000 pounds of uranium at a realized price of US 77.5 per pound, which is roughly around 125 Australian dollars per pound. So in light of the quarter's strong performance, we're pleased to publish our maiden C1 cost guidance for Honeymoon of between Australian dollars 37 to 41 per pound, which equivalent in US dollars, an exchange rate of 0.62, equates to about 23 to 25 US per pound. And that's for the six months forecast to 30 June 2025. We believe this is a very strong outcome by any measure and is in line with the forecast in the feasibility study released in June 2021, which simply adjusted for inflation. And finally, for the further ramp up and growth initiatives that are underway, while we continue to de-risk honeymoons processing and operations, We're also progressing growth initiatives such as infill drilling on our satellite deposits of Jason's and Gould's Dam and also ramping up and supporting our joint venture with Encore's Ultimisa. Looking at our production results, as stated, during the quarter we produced 137,000 pounds of uranium drummed, which was up 53%. from the previous quarter and 215,000 pounds of product from the iron exchange columns, which is nearly double to the previous quarter. The difference between IX production and drummed yellow cake is really due to slight time delays in commissioning and tuning of our second kiln, kiln two. That issue has now been resolved. We also achieved a number of other key milestones, which will help provide step changes in our production profile. These include installation and commissioning of column three, final installation and commissioning of kiln two, and completion of the pump installation on wellfield three. In terms of production ramp up, we remain confident that we'll achieve our 2025 guidance. Iron Exchange production is already achieving a run rate consistent to delivering 850,000 pounds of uranium by June 25. Kiln 2, as mentioned, has been commissioned and became operational in mid-January. So if we look at the past two weeks or 14 days, we've recorded an average of 3,900 pounds per day production of uranium. This is a great achievement and not only highlights the production run rate, but also validates our adoption of ion exchange technology, which has increased production throughput and reduced the cost of production. And that's what we set out to achieve all those years ago, five, six years ago. In fact, in the past 24 hours, according to our daily production sheet I just received, we're killing 7,000 pounds, which implies both the front end and the back end of the processing plant have achieved nameplate capacity for six columns. However, only just two columns were actually operating. Having said that, we are still in a commissioning phase and the focus is now on consistency and reliability of production as we ramp up. In terms of timing of our next milestones, we expect columns four to six to be completed by June 2025. We'll continue to implement optimisation initiatives to improve the availability of the drying and packing area. As mentioned, Wellfield 3 is also available for use, and we will turn that on when required. In terms of growth, when we look at our exploration, We've got the satellite deposits as mentioned, Jason's and Gould's Dam prospects. They really have the potential to drive growth as well as enable us to leverage our existing infrastructure at the Honeymoon Processing Plant and further capitalise on opportunity presenting by growing global demand for uranium from tier one locations such as South Australia and South Texas. Our key activities for the quarter included completing the infill drill program, for Goulds Dam and Jason's deposits, which did include a number of significant intercepts, including 3.25 metres at a grade of around 3,873, which was measured by a PROM fission neutron tool. We also have engaged AMC consultants to produce a mineral resource update for the Goulds Dam and Jason's deposit, and we're advised that we will receive that in the quarter three of 2025. And with our new chief geologist, Andy Wild, we've now been looking at other growth prospects around the uranium mine, including the Cummins Dam prospect, which is next to East Kalkaroo. And that's to find a zone of mineralisation of approximately one kilometre by one kilometre, which remains open. In terms of further upcoming exploration activities, we'll continue drilling on that Cummins Dam prospect. And we'll also continue to generate new exploration targets around the honeymoon operation identified for high priority targets that could represent additional undiscovered resources. For Alta Mesa, we're really content with our business relationship with Encore Energy and the Alta Mesa operation. We've had many touch points with the Encore team during the course of my career, our chairman Wyatt Buck and Sashi Davies, our marketing and strategic representative. Our chairman, Wyatt, and I had the fortune of attending Altamesa's grand opening ceremony or celebration in early October with George W. Bush, the 43rd president of the United States leading proceedings. A few weeks afterwards, Encore announced Altamesa's production ramp up had passed another important milestone with the first of three ion exchange circuits nearing flow capacity. Altamisa's first iron exchange circuit was commissioned in June 2024, and the second iron exchange circuit is planned to commence operation this current quarter, with the third iron exchange circuit planned to be online by the end of 2025. They're making good progress. And during the quarter, Encore also announced more strong-grade results, which we announced to the market. The operation also observed increased wellfield recoveries as ramp-up continues. The solution head grades at Altamisa peaked at about 140 milligram per litre and averaged approximately 65 milligram per litre. Altamisa is ramping up to an annualised production rate of 1.5 million pounds per annum. And our share of that production is 30 percent. Just quickly looking at the market, just a sort of quick overview. I'm sure most are up to speed. But really, when we cast our eyes back in the past year, 2024, fundamentals improved significantly. On the demand side, international energy agencies' 2023 World Energy Outlook projected more than a doubling of global nuclear capacity from 417 gigawatts, increasing by 916 gigawatts by 2050. The industry also saw unprecedented interest in developing nuclear capacity to support data centre growth. In 2024, several prominent companies, including Amazon, Microsoft, Meta and Google, announced MOUs with nuclear utilities to develop nuclear capacity aimed at supporting these data centres. And this phenomenon wasn't really even contemplated some year or two ago. It highlights a strategic shift towards sustainable and reliable energy sources to power the growing demands of data infrastructure. This was further complemented by last week's Stargate project announced by President Trump, a 500 billion AI infrastructure venture. Growing demand for electricity generation has also driven nuclear capacity upgrades, life extensions and recommissioning of shutdown reactors such as Daipei Canyon, Palisades, Three Mile Island and Duane Arnold. Nuclear capacity demand and associated uranium demand is expected to more than double by 2050. And while demand expectations are increasing, the risks on the supply side cannot be ignored. Geopolitical concerns continue to dominate worldwide. These include potential import bans, sanctions, transport issues, potential tariffs and counter tariffs. It's making headlines daily, all of which will continue to create uncertainty in the market regarding the availability of supply now and in the future. When we now move to financials, as mentioned at the opening, Boss Energy remains in a very strong financial position with a robust balance sheet that is supported by $252 million in cash and liquid assets on hand as at 31st of December 2024, which was a $7 million increase on the September quarter. This is a strong financial position which will support Boss Energy during ramp-up with no requirement for external capital or debt. During the quarter, we also sold, as mentioned, 200,000 pounds at a realized price of 77.5 US per pound. We've been very disciplined with our marketing strategy, and the price was consistent with the prevailing market price at the time of sale, which represents our strong exposure to potential further increases in the uranium price. Now, importantly, on to cost guidance, but before Justin goes into details on the numbers, it is worth reiterating that the background for the second half of 2025 guidance provided. Overall, BUS is in the early stages of ramp up. And so what we are providing is a forecast based on actuals that we have seen to date combined with planned production. Over to you, Justin.

Thanks, Duncan. So as Duncan mentioned, the C1 cost guidance for the second half of FY25 is estimated to be between Australian dollars 37 to $41 per pound, equivalent to US dollars 23 to $25 per pound. We expect that the cost per pound will come down as we ramp up production and the fixed cost is fractionalised. The increase in C1 costs since the EFS essentially represents an increase in line with inflation The composition of the key drivers of C1 costs, such as labour, reagents and power that were set out in the EFS have not materially changed since. The definitions of each cost are also consistent with the EFS, but nonetheless, we've included a summary of the definitions in the appendix of this presentation. Capital costs for the second half of FY25 are estimated to be between $38 million and $43 million. which comprises capex for the wellfields, projects and other sustaining capital. Wellfields capex of 17 million to 20 million mainly reflects infrastructural costs of drilling, casing and screening, as well as the new wellhouses. It also includes the spider lines to connect the wellhouses to the wells and the main trunk line costs, which are used to bring a group of wellfields into production. We are seeing that Wellfields CapEx has gone up approximately in line with C1 costs since the EFS. A small cost of circa $2 million, which wasn't included in the EFS, was the first fill cost for Wellfields, which reflects the initial reagent usage required to charge the circuit and establish the chemical conditions needed to leach the uranium. Studies are currently underway to investigate how much of this investment in reagents can be recovered by pumping the reagent out of used wellfields and then into new wellfields. For Project CAPEX, the remaining cost for the second half of FY25 will be between $19 million to $21 million, which almost entirely represents the cost to complete the project. This is a bit over a third higher than what was estimated in the EFS in terms of the total cost to complete the project. Essentially, the main reason for the increase in project capex is an increase in labour cost and inflation since the EFS was published. That concludes the financial guidance section. I'll now hand back over to Duncan.

Thanks, Justin. So we can now turn to questions from listeners. those joining the call. Thank you.

Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Mark Wiseman with Macquarie.

Hi, Duncan and team. Congratulations on the ramp-up. It really looks like it's going well. I just want to ask on the cash costs. If we extrapolate those fixed costs across the plateau volume, the 2.45 million pounds, it's sort of implying $33 to $36 a pound Aussie cash cost. Is that appropriate? Is that the right way to think about the way you're presenting this? Or are there some other issues to consider?

Yeah, I can give you a call afterwards, Mark, just to check your maths there. I think you're coming at a cost that's higher than what would be implied by the fixed and variable cost that we've published. But I can give you a call afterwards to go through that maths.

Okay, all right, thank you. And if I could just ask about the reusing of reagents in future well fields, how much of a benefit would that have on overall costs and how long would it take before you would start to implement that?

Yeah, so the first fuel cost of reagents, that's a new cost as compared to the EFS. In terms of what proportion of that we expect to be able to recover, We're still working through the technical studies for that. We should be able to come out with the results from those studies the next time that we provide updated guidance.

Okay, great. Thank you.

Your next question comes from Cameron Taylor with Bank of America.

Yeah, hi, Duncan and Justin. Well done on the result, and thanks for hosting the call. It must be pleasing to see the IX columns coming online after many years of hard work. But just on the sales, so you've sold more pounds than you've produced. I assume the difference is from the strategic stockpile. My question is whether this was opportunistic or was it used to meet the contracts? And do you anticipate any further drawdown on that strategic stockpile over the next six to 12 months?

No, thanks, Cam. We did see it was a bit opportunistic. We actually saw the price that we sold it was higher than the average for the quarter at that 78.5 US a pound. So we took advantage. I think from our intents and purposes, strategic inventory has now blended into being just inventory. And as we're ramping up production effectively, we're going to top up that inventory again. The question remains at the moment, and we're just working through what level of strategic inventory should we hold on hand going forward. It's not necessary probably to hold the 1.25, so we might whittle that down a bit. But, yeah, we're working that out in terms of our working capital requirements. But the key thing with BOSS is that we really didn't want to overcommit our sales contracting going into startup of production. We've been here before. And in a rising market, one really wants exposure to take advantage of an increasing uranium price rather than lock in contracts. So that's where we're sitting and we're retaining that sort of large stockpile at the moment, getting ready for higher prices.

Okay, makes sense. Thanks, Duncan. And also just on the printed result, you had 3.9 thousand pounds of uranium produced daily. You mentioned, obviously, the last 24 hours of 7,000 pounds. This should come down... Should this come down as those tenors sort of decline as you flush the new production through? And also the confidence you have of meeting that, you know, 850,000 pounds for FY25, does that account for sort of contingency around unplanned outages or any maintenance tasks? Or is that, you know, 100% of production at full rate?

No, no, it does take into account sort of planned shutdowns and any potential disruption. So personally, I feel really confident that we're going to hit our guidance of £850,000 by June 25. The results of like £7,000 over the past 24 hours is indicative of how well the plant can operate. And in fact, the last two weeks at just shy of £4,000 per day is another indication. So Our job now from an operating perspective is making sure we get consistency in production throughput. Your question as to, you know, what will happen in terms of production with regard to tenors and wellfields, the plant's been designed as a low-grade plant. So, in fact, what we're achieving now, say the 4,000-pound daily production or yesterday's 27,000 pounds, sorry, 7,000, is just running off two columns. So the additional columns are really to take into account some of the lower grade that we may encounter from other wellfields. But where we stand now, the wellfields are performing above expectations.

Fantastic. Thanks, Duncan.

Thank you.

Your next question comes from James Bowen with Canaccord.

Good morning, gentlemen. Congrats on the result, right on a production perspective and particularly on a cost control perspective. You've got a 3.3 million pound export license. Could you just provide us with a bit of a reminder around what it would take to bring those satellite developments in, the sizing of the back end of the plant in particular? And once you've got that updated resource study, how quickly could you move on those satellites?

Thanks, James. Essentially, yeah, so we've designed a plant as is to produce 2.45 million pounds per annum. That's the current design and what's been built. So if the satellite deposits prove to be economically viable and we have the right tenors coming through, essentially what one can do is grow the capacity of the processing circuit. So by that, you take the current six columns. You could add two more columns. You could almost duplicate the precipitation circuit. and you'd look to include or add another kiln to the back end of the processing plant. So that would give you the required throughput to meet that 3.3 million pounds as endorsed by the federal government. So I guess it's a question now in terms of timing. Right now, the next step, as mentioned, is for the consultants to come out with a mineral resource upgrade. We've already, as meant, well, for those who don't know, we self-performed our mine build which means we've got our own engineers, designers, et cetera. So rather than an EPCM, we took that on board ourselves. So we've retained that knowledge, which I think is quite a differentiation in the market. And with that sort of team, we can sort of employ those resources onto looking at the feasibility study of bringing in those satellite deposits. Timing's difficult to estimate because it's really a function of getting government approvals. In Australia, that is getting increasingly challenging, particularly for uranium, which is one of the most heavily regulated sort of forms of mining in Australia. But the good news is we've got a plant that's now back in operation and we've got flora and fauna studies for the past 10 years. So we're in good stead to sort of try and fast track the process. But estimating, I'd say two, possibly three years.

Understand. Thank you, Duncan. And I hear what you're saying around wanting to have maximum exposure to a rising price, but at the moment we've got terms sitting at about $80 a pound. We've got spot volatile sitting there at $69 a pound. Are you tempted to come into some short-term contracts?

Yes, we are. I mean, essentially the 200,000 pounds that we sold during the quarter, December quarter, was sold at spot. So we're able to affect that sale within a I think it was a seven-day period for contract and two weeks to actually do the book transfer of the product. So, no, that's one of the other advantages that we have with Sashi Davies. We've got a trader in our team that's recognised as one of the leading world uranium traders and doing a terrific job. So we've got the flexibility, sell on spot or sell into contract. But at the moment, we're retaining our exposure to the spot price.

Understand. Thank you, Duncan.

Thanks.

Our next question comes from George Ross with Argonaut.

Hey, guys. Congratulations on the result. That's excellent. Most of my questions have been answered. Just to double-check here, so with that second kiln calciner now installed, basically the back end of the plant is in bottlenecks?

Yeah, that's right. I mean, you know, we sort of experienced delays in that final installation and commissioning of the second kiln, where we were taking a thickened uranium peroxide product and converting that to U308 through calcination. So unlike other sections of the plant, like the ion exchange columns, for example, where commissioning of each column can be done independently, almost in batches to the other columns without any impact to operations. the back end of the processing plant is more integrated where it's a continuous circuit and that can sort of impact production. So during December we lost approximately two weeks at the back end of the plant for this reason and that was really related to the final installation and integration of kiln two ventilation issues and some of the back house or dust collection issues. So The pleasing aspect is all of those issues have been resolved. And as mentioned in the last two weeks, we averaged about 3,900 pounds kilned of year 308. Interestingly, we had a few issues similar with kiln one that was reported, I think it was in the January quarterly, sorry, the March quarterly. But yeah, that's really now under control. So the next step for drying and packing areas is is to really focus on optimisation and if there is any other de-bottlenecking to achieve that 2.45 million pound run rate.

No worries. So that 3,900 pounds that you're producing at the moment, that's pretty much maximum drawdown that you can now pull out at the back end of the plant?

No, no, we can produce more. I mean, so, for example, the past 24 hours, we did 7,000 pounds out that back end of the plant.

Yeah, okay, so there's plenty of capacity there. Just any idea when we might get a bit more visibility on Altamasa performance?

We're told, and we need more detailed information there, but we're told by their March quarter, or it may evolve into the June quarter, but it's imminent. And that's to do with their new listing requirements being on NASDAQ. So They're going through quite a disciplined process and arduous task of sort of being in compliance with Sarbanes, Oxley, et cetera, new reporting requirements. So the reporting requirements with NASDAQ are more stringent than what they've been experiencing on the TSX. But we all look forward to receiving that information more regularly.

Understood. Understood. Thanks very much, guys, and congrats again.

Thanks, George.

Your next question comes from Regan Burrows with Bell Potter.

Hi, Duncan and the team. Congratulations. I'm sure you're feeling quite happy with the results this morning, both on production and cost. Just a couple of questions from me. Firstly, and it may be a little bit of a dumb question, but obviously the gap between production through the IX columns and then drum production that was impacted by the kiln being connected It looks like you've got spare capacity now in that back end of the plant. Is that sort of, are we inferring that, I guess, that gap can be caught up over this coming quarter and we have sort of a situation where drum production is greater than production going through the iron exchange columns this quarter, just to sort of catch up to that gap?

Regan, I'm going to hand this over to Matt Doocy, our COO, to respond. Yeah, hi, Regan.

So, you know, like Duncan said, we've been working through that this quarter. So this quarter was really important because we'll see a step change in product and ultimately that will be driven by the additional IX columns and also the bringing on a kiln too. So then that was being demonstrated by the last 14 days of production in January where we're running around about that 3,900 and with instantaneous daily rates of up to 7,000. So we're feeling comfortable from a de-bottlenecking perspective on the processing plan as we achieve the 1.5 and work towards the 2.25 as part of that process. For that quarter, we lost 15 days in production associated with the kiln, and we also had production challenges with power, but we feel very comfortable in this coming quarter that we'll achieve those production rates.

Okay, and I guess if you take that PLS, sorry, Tano that came through as materially higher than the previous quarters, obviously, whatever's coming out of Wellfield 2 is considerably better, I guess, is the inference from that. I mean, you're in a good position to beat Guidance on those numbers. I mean, 3,900 pounds per day gets you a little over 700 for the second half, and I think you need, what, 625 to meet Guidance. I mean... you're obviously very, very confident that everything's going well.

Yeah, so what we now have with column three coming in line is a little bit of flexibility to either pull down the tenor and start pushing volumes through. So there's flexibility there, also flexibility if we're having any challenges on reliability, et cetera, that we can increase tenor. The trick for us now going into this quarter is all about just working through reliability rather than de-bottlenecking. So feel comfortable from an instantaneous run rate or instantaneous flow that we can achieve what we need to do. Now it's just about providing a little bit of stability to the operating plan.

Great. And I guess if I could just squeeze one more in, you mentioned obviously IX four to six to be connected sort of Q3 and Q4 calendar year. This year got five and six going in the last quarter. I mean, is that correct? Are you comfortable with getting two columns connected in one quarter?

We are, Regan. We've learnt a lot from the first column, of course, and the second column was quicker to install and integrate into the processing circuit. Third column was even quicker. So we are, we've actually incurred the capital costs for the equipment in terms of the steel required. The remaining three columns are laying down in our yards on site at Honeymoon. So, yes, we are content with that. So, really, when I look at it, it's that by the end of Q4, 25 columns, four and five construction with commissioning in Q1 2025. So, column six will be ready in Q1 2026. Great.

I'll leave it there. Congratulations, guys.

Yeah, and Regan, congratulations to you too with your newborn. Thank you.

Your next question comes from Brad Seward with Yorah's Heartleaf.

Good day, Duncan and team. Thanks very much for the opportunity and congratulations on a really strong quarter. Just a quick question for me on the CapEx over the remainder of the calendar year. Given you guys have already incurred the capital costs of columns four, five and six, are we expecting to see any material to capital projects moving past this financial year? And then the way I sort of read the point that you made on four, five and six being put into production, are we assuming that we should get full production rates by early calendar year 26 or are we sort of assuming that's a little bit later?

No, it will be a bit later. So our guidance, which we haven't officially come out with yet, but we're sticking with the feasibility study that, By the second year, or call it our financial year 2026, we're aiming for 1.6 million pounds to be produced in that period. So it's really just sequentially bringing these columns into production. And that's largely dependent, of course, on the wellfields that we're also bringing online. So effectively, once the plant's up and running effectively, which it is, we're now going to focus on wellfield construction and bringing new wellfields online. A bit of, yeah, a bit of sort of new adoption there. But, you know, just again, that sort of I picked up in your question a bit on the capital costs and why it's gone a bit over budget. But, you know, really it's largely due to labour. So our federal government's restrictions on renewing work visas came into effect at the beginning of 2024. And many of our highly experienced sort of foreign nationals that took part of the civils under Australian leadership sort of didn't have their visas renewed. So there has been a bit of an increase in labour costs, etc. And that's really the part of construction that one keeps a very close eye to that can sort of, you know, sort of increase. So the fortunate thing is really CapEx is largely completed. The next three columns are now a focus. But as mentioned, they're also integrated in a batch process. So Columns 1 to 3 can continue operating as columns 4 to 6 are installed.

Thanks very much, Duncan. Really appreciate the opportunity there and looking forward to having you at the ROTNESS conference. Thanks, Brad.

Your next question comes from Dear Ari Asongi with UBS.

Thanks, guys. Congratulations on the results and thanks for the call today. I look forward to many more. Maybe this first question just on the CAPEX, if you could just help me understand it because it is a bit different from what we're used to. Is there any way you can tell me in simple terms like what that sustaining CAPEX looks like and whether we can infer what it could look like for future years, I guess, post all these capital additions?

Hi, Dim. Thanks for your question. So in terms of capex, so project capex, as we said, that represents the cost to complete. So then it's just well-filled capex as the other component for the all-in sustaining cost. So we haven't provided an explicit updated all-in sustaining cost, but what we have done is provided you the components. So we've got the fixed and variable cost for C1. And then in terms of comparing well-filled capex to the EFS, we have noted that the well-filled capex has gone up approximately in line with the C1 cost. So... We're not seeing any new material well-filled capex since the EFS was completed. So we expect that all-in sustaining cost to increase more or less in line with the increase in C1 cost.

Okay. Okay, cool. Thanks. Might have to come back with a couple of line with that. And then maybe just a second one. just trying to get a better gauge on sales versus production going forward. Can you remind us what you've said on that working capital build? Like, am I right to assume like maybe four months of 2.5 million pounds as a starting point? Yeah.

Oh, Tim, I think that's fair. So typically, well, for uranium operations, basically the uranium producer retains ownership and responsibility for the drummed uranium from when it leaves the production site until it arrives at the conversion facility. So to take into account, for example, shipping, potential shipping delays or logistical requirements, I think it's fair to assume three to four months of working capital should be kept at any side. So When you sell a product under contract to a fuel buyer, essentially they initially give you a six-month sort of indication of when they would like the product, and then three months before they are definite about the timing for that product, they give you further notice. So we're always aware well in advance of when we have to deliver the material to the fuel buyer. But having that three-month window or four months is fair for working capital requirements. And you'll notice a lot of producers sort of keep that up their sleeve. What you don't want to occur is being put into a position where suddenly you don't have the material, call it in the US or France, and suddenly you then have to go to the market and buy off the market at the prevailing price. So, yeah. keeping three months is probably sensible, and that would equate to a minimum of, say, 800,000 pounds.

Yeah, yeah. Okay, cool. Thank you. I'll pass it on, and congratulations again.

Thanks very much, Tim.

Your next question comes from Guy Keller with Tribeca.

G'day, guys. I don't really feel the need to congratulate you, given that I always had faith in and your abilities to deliver. Can you just give us a little bit of an expected timeline as to when your future guidance may come out?

In terms of all in sustaining costs, our future guidance will come out in the June quarter, really, as to when we'll confirm our production guidance for that year as well. So June quarter.

And that'll be for fiscal 26.

Correct.

Yeah. And just a question for Justin. I mean, some of the feedback from the early analyst responses has been just on that CapEx side as well, where they seem to be unders on that, which is hardly surprising given that they're all way too high on costs as well. But Do you, in sort of having conversations with these guys, is it just the inflation side of the CapEx that you think they've got wrong and that they've undercooked that? Or is it something that the consensus has missed with respect to what you guys have put out?

Yeah, I mean, really, as I said, so what we have seen is an increase in well-filled CapEx in line with, what we've seen with C1 costs, to the extent that well-filled capex is higher in this half is just a timing thing. So what we are doing is trying to pull forward that well-filled capex to de-risk future production. So to the extent that well-filled capex for the half is higher than expectations, that's mainly due to a pull forward of capex to de-risk future production. But actual costs we're seeing for well-filled capex are in line with the increase in C1 costs that we've seen.

And, and also just, have you got any sort of, I guess, metric on the learning efficiencies that you guys have, have you mentioned before that, you know, putting column one, column three was cheaper and quicker and you learned a lot. Is there any sort of financial metric around that as to, how much potential savings on a percentage basis you've seen through that process and whether that can be in four, five and six?

Guy, we haven't analysed it, but really if we sort of dived into the numbers, it would be a saving on labour costs and more efficiency in that regard. So like the first column, for example, it's, you know, checking like re-fibreglassing some of the look-in windows and connections and in terms of attaching the circuit boards, et cetera. So, yeah, it's a saving in labour costs, but I haven't actually distilled those numbers down. But we'll look into that.

Sorry, Guy, and the other component to that is our ability to bring those on. So it's also a timing thing. For commissioning, it becomes easier, getting it up to nameplate, recoveries, all of those also feed into that.

Okay. I think that's all I've got. And hopefully you get a lot of these guys out in sight in a few months' time and able to eyeball it and see exactly what you guys have done.

No, thanks, Guy. I mean, seeing's believing. So, and it's, yeah, we will conduct regular site visits going forward again. The site's safe. And look forward to hosting as many as we can, but particularly just to start with our analysts and supportive analysts. It's quite unique to have an ISR uranium operation in Australia. And given that we're one of three uranium operations in Australia, we're very happy to showcase our mine. So very much look forward to posting regular site visits. Thanks.

Yep. Your next question comes from Mitch Ryan with Jefferies.

Morning all. First question, just can you clarify, when you guide to 850,000 the 850,000 pounds produced. When I reconcile that to Table 2, am I looking at IX production or uranium drummed?

That's uranium drummed.

Perfect. Thank you. And then can you help me? It was one of the first questions here, but I'm just trying to look at the C1 costs from Table 5. If I look at the fixed costs and annualise that on a US dollar basis, take the top end of 15, annualise that, I get just under... I get $18.75 million of costs, and then I divide that by steady state run rate. That sort of all fractionalized that. That comes down to $7.65 per pound. And then I add the variable costs, take the top end of $10. I'm getting sort of $17.65 a pound of cash cost, which would actually be below your EFS. So, you know, it's actually going the other way. What am I missing here?

Yeah, I'll step you through the maths. Thanks, Mitch. I'll step you through the maths later. But essentially what it is is you take the fixed cost, multiply by the second half guidance, which is 625,000 pounds. That gets you to the total fixed cost for the second half. And then what you then do is kind of divide by kind of future run rate pounds produced for a half. and that then gets you a fixed cost per pound for the half, and then you add the variable cost per pound, and that will then get you the, I guess, a steady state C1 cost. So I can... Yeah, you must be going wrong somewhere in your math somewhere, Mitch. That's not what I'm getting, so I can walk you through it later.

Okay, perfect. And then just within that 6.25, can you give a bit of colour of the weighting of production in the second half? I assume as column three operates fully for the fourth quarter, it's going to be more fourth quarter weighted, but any colour on that would be much appreciated.

Yeah, it sort of just gradually creeps up. We'll just keep incrementally growing our production rates, but Yeah, at the moment, if we keep a run rate of excess of three and a half thousand pounds on a daily average, we'll comfortably make guidance. That's it for me. Thank you. Great. Thanks, Mitch.

There are no further questions at this time. I will now hand back to Mr Craig for closing remarks.

I'd just like to thank everyone for joining today's call and thank you very much for the questions. We very much look forward to hosting quarterly updates going forward. And once again, thanks to all our stakeholders and shareholders for the positive support and sticking with us. I'm really pleased to have shared today's results. And thank you too to Justin and Matt. Thank you.

That does conclude our conference for today. Thank you for participating. You may now disconnect.