Bathurst Resources Limited

Hi, I'm Richard Dager, CEO of Bathurst Resources. Welcome to the quarter one FY26 result webcast. We'll move on through this. So Bathurst is an operating company. All its operations are based in New Zealand, but we've also got two projects in British Columbia in Canada. So we've got four operating lines, Takatimu, Stockton, Rotowara, Marlborough, Uh, getting two in the North Island. We'll show you a map in a minute. Uh, one on the West coast and one on the deep South, the bullet project, which is right next door to Stockton. We'll talk about more as we go through, uh, to NASA's in Northern BC and, uh, crown mountain is a joint venture with Jamison, which is in the Eastern BC. Look, I suppose the key thing on this page really is that we've got a very low enterprise value. We've got cash in the bank and we've got significant earnings generation going on and particularly in the future. So really just moving on to strategy, we've got existing operations that are making money. The key there is to maintain those operations in a safe and efficient way, not doing any damage to the environment and also making money. And out of those then build on the organic growth opportunities within those existing projects or right next door to them, utilizing existing infrastructure. And then more importantly, looking at some new areas, and in our case, British Columbia, to then build and add to our coking coal capability in terms of export tonnage. So that was the set of the intention with the Crown Mountain Project, which we got into in 2018 as a place to learn with our partners, Jamieson. and then onto the 100% owned TANAS project. And ultimately, we're looking to generate capital returns that we can then flow back to our long-suffering shareholders. You know, we've built a successful business in New Zealand over the last eight years or so, and we look forward to actually taking you through that journey a bit further with the Buller project in New Zealand and with the TANAS project. So New Zealand, we've got two mines in the North Island, Mamaroa and Rotowaro, principally supplying... steel production, but also recently announced in the last quarter that we have got a tonnage going into the thermal power station in Hutley as well over the next two years. Stockton is 100% export. It's a high-quality coking coal going into the international market, principally supplying customers in India, South Korea, Japan, and a little bit into China. So we've got the Buller project next door to that, which we'll talk about more as we go through. We've got offices in Wellington, regional office in Christchurch, and then we've got the Takatibi mine down south, which supplies process heat coal into the value-added New Zealand primary production. So all the mines have got relatively short lives, but they've also all got expansion opportunities. Maramaura, at the present time, we're going through a further consent for what we call the M2 block, which will give us another couple, three years of production. Stockton's got about three years left where we are now. And again, we've got a growth project that'll take that further forward as part of the overall Buller project, 15 plus years. And then Takatimu, as we previously announced, we're working our way through the last reserves within the existing holding. We're probably a little bit more cold now than what we thought we had when we'll have production going further forward into FY27 than what we originally anticipated. reasonable quarter pretty much in line with what we did last year probably the major thing was we didn't have the impact on our export business with the typhoid tunnel being up for nearly six months which obviously heavily affected the quarter one fy 25 but we have also seen quite a weakening in the export coal pricing so increased tonnage for this quarter out of the export but also a lower cost or lower price received per ton cash though has grown and profits are slightly higher again because we haven't got the impact of the Typhoid tunnel. So just look at each of the segments individually. As I've said, we've got a little bit more overburden coming out of Stockton, which has impacted some of the costs, lowered a little bit the EBITDA. We haven't got the impact of the tunnel, so we've increased the sales back up to where they were the year before, but we have got a lower sale price, so our revenue has been affected. Rotorua, we are still in the major cutback for the Waipana West extension pit. That's going to drop off early next year, and then we'll be into a sort of a more steady state overburden in line with then the remainder of the coal coming out into sales, into steel production, and also into the power station. All right. Malmoroa, again, we're in cutback for M1. That's moving along quite nicely. We've had an increase, though, in the amount of overburden, which obviously has affected some of the costs as well. And we are looking forward to getting this M2 block that will then consolidate the remaining reserve and let us move on for the next few years. Takatimu, overburden removal is lower because we're on a lower sales base now. We are in the sort of the semi rehab phase with Takatimu. We're doing sort of rehab at the same time that we're mining the last of the coal out of there and into sales. And as I said, we are looking at an increase in the overall reserve. We've had positive reconciliations against the geologic model in the remaining area. And we are looking to actually have some sales going into FY27. as long as concluding the rehab during that period of time. So in terms of our overall stats, in terms of the New Zealand economy, we've got about 700 employees. We've probably got another couple hundred full-time contractors on top of that with some mining going on with contractors at Rotowara and at Stockton. Wages... are similar levels as what they were back in 25, I suppose, around just under $90 million. The taxes, royalties and government fees are a little bit lower this year because of obviously a lower profit year last year affected by things like the tunnel. We're expecting those as the coal price increases again. Those returns back to the government will also increase. And then the amount we're paying to suppliers is reasonably consistent as well as it has been over the last couple of years. Our commitment to safety is unerring. We are seeing a nice consistent drop off in our negative performance indicators. This is on the back of a lot of hard work by our employees, by our supervisors, by our management. We're interested in things like the learning management system where we can a lot better handle on our training requirements and also training compliance, as well as risk management skills across the whole company. So we're anticipating that we're going to be somewhere around $45 million EBITDA for the full year, full financial year ending June 2026. With some ups and unders and overs around for the export, North Island including corporate and South Island including corporate. We've had an increase obviously in costs at Telco or Tanas as we move forward into the environmental application phase, and we are looking forward to sort of moving that project forward as we as we speak. So we've got a good, consistent export business that obviously is highly impacted by the export coking coal price, but our underpinning and sort of supporting for the whole business is the domestic business. Obviously, we're seeing a little bit lower returns there over the last four or five years, but we will see a return to particularly the North Island business. to consistent EBITDA numbers that we had when we first took over the business as we get some of these major cutbacks completed and we move into the final stages of their development. Coventry Gold price has been reasonably flat, like it's been probably low compared to what it has been over the last few years. We got as low as around the 170s, but we are seeing a little bit of improvement and pretty much the What we're seeing that was in the forward curve is what was anticipated about six months ago. So a slow increase back up to around $200 US a tonne. And as you know from our past presentations, our export business gets about 80% of that benchmark across the full gambit of product range. So this is probably the exciting part of the news coming out of particularly our New Zealand business, but also to us. So we've just released the PFS for the Buller project. We are looking at sort of, well, if you look at the picture on the right-hand side, obviously the Stockton mine with the infrastructure, we're looking to construct a haul road to join those together, Mount Fred South. is an area that's jointly owned between the joint venture BT Mining and Bathurst, and then the 100% owned escarpment extension on the Denniston Plateau. The intention is that, you know, as we stage this, we'll start some development in the Buller project and the Denniston, and also then start the road construction from both ends, from Cypress South heading south and from the Denniston Plateau heading north, and then as soon as possible get access up into Mount Fred South and commence some of the early works for there. So I'll be a little bit further in front on the Denison side of it. And this will allow also for the remaining coal within Stockton to be blended and bring it to the market. So, you know, just some of the sort of stats around that overall project. So this is not just the Bathurst part. This is the Bathurst BT with the three major components, Mount Fred South, Escarpment Estated and Stockton. So we're looking at a total spend of around $105 million. Cash costs are going to be reasonably high because of the high strip rates, particularly on the Denison plateau. But we've got a good healthy NPV of around $223 million. And that's based around a coke and cold price that starts off around where we are now. And then it ends up on a pretty flat curve out in the 10-year plus timeframe of around $300 US, which is probably the lower end of the consensus pricing that we've been analyzing as part of the PFS. So the next stage here is obviously to complete the application for FastTrack. That's taking a little bit more time than what we anticipated because we really, really want to get this into a form where it can be as easily as possible consented by a panel. So, you know, we're getting a lot of learnings out of some of the other projects that are going through FastTrack and we're putting those learnings into our own project as we speak. So the intention here is to build a business that's going to maintain about 1.2 million tonnes of export into the international market as described before, but changing really the mix of where those products are coming from. So Stockton, it's probably got three years where it's going to be around the existing sort of tonnages coming out of Stockton. Some of that tonnage will then be dropping off and being replaced by the Denison part of the Buller project and then underpinning by the Mount Fred South as we move forward. into the development cycle, but again, maintaining around that 1.2 million tonnes out past 2041. So anticipating putting in an application early in 2026, quarter three of this financial year, and then being out of that process by the end of 2026. As I said, we've just released the PFS results in an announcement on Friday, and we're now working on the DFS, or we continue to work on the DFS You know, our goal here is to get really some pre-work done once we actually get a good nod on the access into the Denison Plateau in particular, and as we move further forward into the end of the fast track process. So with TANAS, again, we've just released the update to the DFS, and the last time the DFS was updated was pre-COVID 2019. So obviously we've had a significant movement in costs during that period of time, both OPEX and CAPEX, but we've also had a significant uplift in the longer-term Coca-Cola pricing. So taking the learnings we've had over the last couple of years and then putting those into that upgrade has led to some quite significant updates to the project. So anyone that's not familiar with it, this project is really directly north of Vancouver. It's about 300 kilometres from Prince Rupert, so it makes it really the closest coal to a coal port in the whole of British Columbia. And we've been into it since 2022. So look, some of the sort of key aspects of it, you know, start-up capital of around $140 million U.S., operating costs in the lower range at around $81 U.S., We've looked at an increased price received. It'll be up around $175 US over the life of the project. And we've got a positive NPV of $270 million US. So like all good projects in mining, the key thing here is getting these environmental assessments and the mining permit, and that allows us then to get going. All of the IR submissions have been completed now. We're working again to finalise the environmental assessments and looking to get those submitted very soon. That will then allow the effects assessment process to be completed by the EIO. We're working very closely with First Nations groups in British Columbia, particularly the principal landowners of the area that we're going to be mining in. and we look forward to taking that project forward. The next key milestone will be the submission for a mining permit and that permit approval sometime during calendar year 27. So just looking at where we are. I mean, we've got cash in the bank. We've got $155 million at Consolidator level. Just as importantly to everyone that understands some of the complexities of the joint venture, we've got $34 million sitting in the Bathurst accounts. So we're well and truly funded for the development work at this stage in the Buller project and also in the Tenas project. We've got no debt on the balance sheet apart from some small lease finance associated with Takatimu. As we've shown, we've got good earnings capacity, $35 to $45 million over this next financial year. And, you know, we've got a good asset backing. But our share price is sitting even a lower level today. This was at the end of September. This was at 76 cents. I think it was, you know, 65 cents this morning. So we've got a cash backing of 59 cents Australian. So we're good value. So just to wrap up, profitable operations both within the joint venture and 100% owned Takatimu. You know, we've got that cash in the bank. We've got a fast track process that is available to us and that application is fastly getting completed and we'll be out of that by the end of next year. The PFS has been completed for the bullet project. DFS is now and moving on quickly as well. We have got the New Zealand fast track we can utilise, but also the New Zealand government has recognised metallurgical coal in the New Zealand critical minerals list. This counts a lot, particularly when we get into processes with some of the regulators. You know, it makes it a lot easier for them to be looking at this project favourably if it is backed by the government in that way. And in terms of TANAS, you know, we've got a positive DFS and confirmation of reserves that were completed at the end of October. And again, we look forward to getting the environmental certificate process finalised for the TANAS project. So thanks very much. That was a very quick, I know, update to our Bathurst business, but we look forward to really updating you as we move forward, particularly with the application for the fast track. So thanks very much.