Coronado Global Resources Inc.

Thank you for standing by and welcome to the Coronado Global Resources Q1 Investor 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 one on your telephone keypad. I would now hand the conference over to Mr. Andrew Mooney, VP, Investor Relations and Communications. Please go ahead.

Thank you everyone for joining Coronado's first quarter investor call for 2024. Today we released our quarterly report to the ASX and SEC outlining our production and sales statistics as well as other information related to safety, coal markets and financials. A more detailed outline of our financial position and results will be released to the market on the 7th of May with our Form 10Q earnings release. Today I'm joined by our Managing Director and CEO Douglas Thompson and our group CFO Gerhard Ziens. Within our report, you'll see our notice regarding forward-looking statements and reconciliations of non-US GAAP financial measures. We encourage all listeners to review these statements in conjunction with our other filings with the ASX and SEC. We also remind everyone Coronado quotes all numbers in US dollars and metric tons unless otherwise stated. With that, over to you, Douglas.

Thanks very much, Andrew, and thank you, everybody, for joining. I'm pleased to report that the Coronado team continues to deliver according to our plan. In the first quarter, our safety results are ahead of plan. Our investment in productivity improvements at Buchanan and Currah are on track and delivering according to our plan. All our cost reduction actions identified in our plan for the first quarter have been actioned. Our sustainability plan is on track and our growth projects are on plan and budget. We have successfully pivoted our mine plans at Currah South and Currah North mines early in the quarter to mitigate the full year impact of the heavy rain in late December, which was followed by two cyclones in the quarter. We did this by pulling forward annual maintenance in our two processing plants at Currah. We took advantage of having two processing plants by running one while we maintained the other in February and March. Thereby, the full year's resultant impact is reduced. as we have now completed maintenance that was planned in later quarters. And we're starting to see the benefit in April. We will gain time and productivity in the quarters to come. We've also been working on our strategic plans, and we've delivered several strategic milestones in the first quarter. To list a few, we reported previously that we commenced mining operations in our newly developed southern section at Buchanan in this quarter. Our development sections are ahead of plan in the northern district. And once complete, this will offer more mining flexibility and productivity in H2 of this year as we balance operations between the north and south. And once the second set of skips are operational in H1 2025, we will draw full benefit from the productivity gains and increased volumes we can hoist to surface. In the quarter, we also commenced high wall mining at our Logan operations, which will provide incremental tons. And we successfully demobilized four contractor fleets from the Currah complex in late March, according to our plans again. And our dragline product productivities are improving. At Currah, in accordance with our plans following the investment in 2023 made on strike length improvements and pit geometries. During the quarter we also continue to invest simultaneously in organic growth and emission reduction projects without the need to raise additional capital. Our organic growth investments are unlocking substantial value found within our 100% owned 838 million tonne reserve base, a substantial reserve base that we're tapping into. into our newly named mammoth underground and our Buchanan expansion projects are at multiple substantially lower than the recent market opportunities and demonstrates the cheapest and best use of our capital, which we expect will create significant value for our shareholders over time. Before I elaborate on our operational results, I'll turn my focus to safety and give you an overview. I'm pleased to advise that the reportable rates in Australia and the US remain at well below relevant industry rates. Looking at Australia, the 12 month rolling average rate being the total recordable incident frequency rate as at the 30th March was 1.63 compared to 3.18 same time last year, which is a 49% improvement year on year and actually is the lowest safety rate since May 2018 in Australia. In the US, the 12-month railing average of the total recordable incident rate as at the 30th of March was 2.12 compared to 2.83 the prior year. That's a 25% improvement year-on-year. So looking at the group level, the total recordable incident rate is 1.01 compared to 1.36 this time last year. That's a 26% improvement year-on-year. In addition to these strong results, I'd like to take the opportunity to congratulate our Logan Complex for achieving several safety rewards for their performance in 2023. All of Logan's surface and underground operations achieved the West Virginia Joseph A. Holmes Safety Association Award, and three of these operations also received the Mountaineer Garden Award. Turning to our operations, Coronado completed the March quarter with group ROM coal production of 6 million tonnes and sellable production of 3.4 million tonnes and sales volumes of 3.6. In Australia, ROM coal production from the Curragh complex was 2.7 million tonnes and sellable production was 2.2 million tonnes. Coal production rates were lower during the quarter, primarily due to the impact of heavy rain in late December, which was followed by the two cyclones, as reported in the quarter. To mitigate the impact of the significant weather in late December, which reduced the mine's start-of-year planned ROM coal inventories, we brought forward the maintenance of our processing plants. As a result, both CHPPs of Cairo have completed their annual shutdowns with no further maintenance planned for the rest of the year. Cairo is also exceeding plan in total waste movements and drill meters during the quarter. This will set pits up for enhanced coal availability in subsequent quarters. At the end of March, the mine has successfully completed historic pre-strip. And this was a deficit in the past. And as a result, we've managed to demobilize four contractor fleets from site. The removal of these fleets, followed by the pit rectifications on the one current plan, reflects a significant milestone for the mine. A consolidation of contractors has also been undertaken with a reduction on resources proportionate to the fleets reduced and consequently the required maintenance thereof. As a result of these actions from April, Currah Complex expects to see material reduction in the cost per tonne. In addition, as a return on investment, Currah's dragline fleets have achieved planned productivity improvements with ratios of waste moved by drag lines versus truck and excavator increasing to 44% up from 37%. This is according to our plan and demonstrates that the investment in the plan is working. In addition, in late March, we introduced a new PC7000 excavator, which will further increase productivity rates of our excavator fleets. All these actions are in accordance with our plan to drive productivities and improve margins in a sustained manner. Currah finished the quarter well, with strong performance with elevated stockpiles and had a strong momentum that has continued into April. The mine is on track to deliver 1 million tonnes of saleable production in this month. Turning to our US operations, ROM production for the month of March quarter was 3.3 million tonnes and saleable production was 1.2 million tonnes. A strong quarter ROM production. which was 20% higher than the December quarter. This was achieved as the Buchanan Mine commenced mining in the newly developed Southern District. The close proximity of the hoist and the underground bunker to the Southern District has contributed to the higher ROM delivery in the quarter, and is something that we can expect in future reporting cycles as we mine these new panels. During the quarter, we conducted maintenance on the hoist, which was planned to be done later in the year. We will gain from this works for the balance of the year. Our skip counts are trending to their best rates in the last two years, and our conveyor system downtime is at record lows. Saddleable production levels mirrored December quarter during the temporary lowering of yields of the Southern District. This is according to our plan, and it is expected that the yields will increase in the June quarter to more normalized levels. Production from Loban Complex was on plan. In the quarter, as I mentioned earlier, high-wall mining commenced in late March, and we also re-entered the Pelton Underground mine in April. Looking ahead to the June quarter, April performance from Coronado's operations has been strong, with improved coal mining and lower cost per tonne being realised at Currah, and we're realising improving yields at Buchanan in April, and solid incremental tons have been achieved at Logan. So as a result, we reaffirm our previously noted 2024 market guidance. I'll now hand over to Gero to talk through our finance and market outlook.

Thank you, Douglas, and good day from Beckley in West Virginia today. Our March quarter group revenue was $668 million, down 2%. compared to the December quarter, mainly due to lower sales volumes quarter on quarter. 95.1% of all coal sales revenues in Q1 came from metallurgical coal sales. The group realized met coal price for the quarter was $204 per ton, which is a mixture of FOB, FOR, and US domestic pricing contracts, which is reflecting a 3% increase over the prior December quarter. March quarter cash flows for the group were negatively impacted by the additional payment in March to the Queensland Revenue Office of US$52 million, which equates to US$79 million, relating to Coronado's acquisition of the Carra mine in March 2018. This payment, which we flagged in our full-year results release, was made prior to the company officially lodging its appeal to the Supreme Court of Queensland on 11 March this year against the QRO's assessment of the stamp duty payment. And the balance to the cash outflows relates to working capital as we missed a few customer payments worth more than $46 million US dollars that were officially due just on Good Friday, the last day almost in March, And we received that money in the first week of April. So there's a significant impact from working capital. If you add it both up, then it's about $100 million of cash, the stamp duty and the late customer payments. So as of 31st March, 24, we had a net debt position, therefore, of 18 million. So if you add back the 46 that I just mentioned, it would be 28 million net cash. And then that's consisting of a closing cash balance of 225 million, 242 million senior secured notes outstanding. And we maintain available liquidity of 375 million U.S. dollars comprised of available cash and then the short-term deposits and undrawn borrowings under the ABA. In relation to our costs, the Q1 period, Average mining costs per ton sold for the group were $125.6 per ton. The higher mining costs per ton were due to the impacts on production from the wet weather events early in the quarter and the temporary lower yields being realized at Buchanan, as Douglas highlighted. However, as Douglas mentioned before, we are expecting to see a meaningful reduction in costs per ton in the second quarter following the demop of four contractor fleets at Carra. and following the completion of the pre-strip deficit works and higher yields at Buchanan and improved productivity is being realized across Coronado. On coal markets, both the Australian and U.S. Metcoil index prices decreased in the first quarter. The benchmark Aussie premium lower hardcorking coal FOB average index price was $308 per ton, down 8% compared to the December quarter of $333 per ton. And the benchmark average index price was $256 per ton, down 3% compared to the prior December quarter. Average price was $264 per ton. The benchmark declined from about $307 per ton in early March to $245 at the end of the month. with increased supply coming from Queensland and also combined then with weaker spot demand from China and India. That's, of course, impacting prices. Seabourn supply of Australian Metco increased during March from drier conditions following the heavy rainfall experienced across the Bourne Basin earlier in the quarter. March shipments from the Queensland industry increased 20% relative to January and February average weekly shipments. The stronger supply position along with ongoing reduced global steel demand ultimately has led to additional spot market availability and the drop in prices in March and also in April. The global economic environment and weak short-term steel demand outlook continues to put pressure on steel margins with steel makers continuing to manage lower demand through lower hot metal production and reducing demand for raw materials. However, I anticipate that the June quarter prices will stabilize at current levels as India imports will increase on the back of strong demand for pre-monsoon restocking that usually happens in May and June. And the latest data from the SGX forward curve, the latest data from today, is projecting the benchmark index to be 277 US dollars per ton throughout this calendar year. These pricing projections continue to signal we are really in an environment of higher pricing for longer, and the pricing environment expected to be well above the long-term average of $198 per ton. And before I hand back to Douglas to discuss the status of our growth projects, I would like to mention that we recently welcomed representatives from one of our largest customers, JFE Steel Corporation, to celebrate 40 years of continuous supply of high-quality, reliable MED-Coil from our CARA complex to the Japanese steel industry. As we commemorate this milestone, we affirm our commitment to deliver great products to all of our customers on five continents and continue to look forward to shaping a good future together. I hand back now to Douglas. Douglas?

Thanks, Gerard, and yeah, great relationship and longstanding and a good future together. So now I'll turn my attention to look over the horizon to some of our strategic growth projects that I mentioned earlier. So in the first quarter, our business continued to invest simultaneously into organic growth projects and our emission reduction projects, demonstrating significant progress in both without the need to raise additional debt or equity. And as I mentioned earlier, the investments into Mammoth Underground And in our Buchanan expansion projects, odd multiples substantially lower than recent market opportunities, which we expect will create significant value for our shareholders into the future. Turning to the underground project, which is now officially named the Mammoth Underground, remains on budget and on schedule. And this is subject to environmental approvals, as we've mentioned previously. Power readiness is on track for completion and handover to the underground teams in the June quarter. During the March quarter, progress continued on the critical path requirements of the environmental approvals. Mammoth Underground Mine offers Curragh Complex several strategic improvement opportunities, namely, it'll give us diversified coal production. The underground mine will not be exposed to wet weather production interruptions, so we'll de-risk production continuity. Reduced cost per tonne, Our cost projections for Mammoth Underground is forecasted to be in the second quarter, which will reduce the overall cost per tonne for the complex. And then quality products, which are in demand. Mammoth Mine has substantial, high-quality met coal, a resource base of 41 million ROM tonnes, and a coal quality expected to mirror the existing Currah North open cut. And it offers us increased production capacity, Once fully operational, the project is expected to produce 1.5 to 2 million tonnes of saline production in the first phase. This is subject to the environmental approvals and our forecast is to have first coal produced from Mammoth Mine in the month of December of 2024. Organic growth plans in the US also remain on budget and on target. Good progress has been made in the construction of our second set of skips in this quarter. As at the 31st of March, 95% of the shaft excavation works and concrete lining works are complete, with a balance expected to be completed by mid-June. And the construction of the new surface raw coal storage areas to increase the mine's storage capacity is progressing to plan, with excavation works to be complete in the June quarter. And the surface infrastructure and production hoists are also progressing to plan. Full completion of both projects is on track to be complete in early 2025. Ultimately, the hoisting capacity and storage area will reduce the risk of bottlenecks, allowing the northern district and the southern district longwalls to run at higher capacity and improve productivities. Turning to our emission reduction projects, we continue to make progress on our gas pilot project at Currah. This project is targeting to capture and beneficial use the open-cut waste mined coal gas from our operations, with primary downstream cases being power generation and the use as a diesel substitute in our fleets. I can report that production from Europa 1 and 2 wells commenced in March, with dewatering leading to gas flows from both wells. As we continue to dewater the wells, gas flow is steadily increasing and mirroring our modelling for this reserve. We plan to monitor gas flows in the near term and build upon our monitoring of the reservoir, understand each well's performance and resultantly the optimal use of this waste gas going forward. And in the June quarter, we'll also be running a new trial on an updated conversion of the gas truck to test the feasibility of converting more trucks to this dual fuel solution. Turning to the US, given the proven success of the ventilation air methane unit at Buchanan Vanshaft 16 in reducing our emissions, the business commenced the installation of a second van unit at Vanshaft 18. Coronado considers itself to be an industry leader in the implementation of VAM emissions reduction technology, and we continue to share our learnings with industry. We made substantial progress on construction works during the quarter, with construction now complete on the second VAM unit. The VAM unit is now undergoing testing procedures and is scheduled to be online and operational in May, which is actually slightly ahead of our schedule. The establishment of the second VAM unit is expected to further reduce our mission as a business. and forms a key building block to our aspirations of a 30% emissions reduction by 2030. I'll now hand over to the operator to take your questions.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Paul Young with Goldman Sachs.

Yeah, good morning, Doug and Gerhard. Hope you're both well. First question is on the realised pricing achieved at Acara in the quarter. I think it was 73% or so of the hard coke and coal price, the FOB price in the period. It was an improvement on the last quarter, but I still thought it should have been a little bit higher. Was that due to, you know, mix not improving or a mix issue between, you know, semi-soft PC on hard coking or is it just the timing around shipments and... Do you expect some sort of benefit to sort of be achieved or flow through in the June quarter?

Yeah, Paul, hi. Good morning. Gerhard here. Look, I think, first of all, it's profoundly better than December quarter simply also because prices fell and we benefit from the higher prices in the December quarter. That's why it's higher. It's in line with what we have seen in the past, to be quite honest, 70%, 73%. The reason why it might be lower than you expected is we had very low relativities of PCI, particularly PCI, to the benchmark. So that was hitting just above 50%, you know. It's back to above 60%, so it has improved. And therefore, we expect some positive effects of that flowing through into the following quarter.

Okay, thanks, Scott. So it doesn't sound like anything around timing of shipments on hard card and call.

No, it's predominantly really the PCI relativity that dropped to a low of 50% in that quarter.

Yeah, okay, thanks. And then maybe on Currah, and a question for Doug around, good to see the four fleets being taken out of Currah. Doug, I think four of the 16 fleets, truck and shovel fleets, that is. Just on a question on the consolidation of the contractors, can you talk... bit more about this and any you know what are the benefits of consolidating the contractors from in terms of the contract structure or any way we should think about the cost benefit there?

G'day Paul there's a number of things you know firstly we're trying to execute all of this according to a plan so there's a systemic way in which we're working through to address some of the past and I'm pleased to say that the one colour plan has served its purpose it's now coming to the end with that deficit catch up where we mobilise additional fleets to catch up deficits. But likewise, in that period with additional maintenance, I think we've spoken through some of the work we've done in the prep plants and the overland conveyor to get the performance of that up. And then likewise with running these extra fleets. As we take that out, we look at all of our other contracting and support base and reduce costs proportionately. taking headcount is one of the best ways out of the business to reduce cost because it has second-order costs into the business as well. So we've got a plan that we've been executing to that, and we're constantly measuring our reductions that flow as a result.

Okay, thanks, Doug.

And then maybe just turning to the US and Buchanan, and now you've commenced mining in the Southern District and completed that... brought forward that schedule maintenance on the hoists. What sort of benefit do you expect to see on production at Buchanan in the June quarter? And should I say, what run rate should we expect from Buchanan between now and the end of the year before the new skips are commissioned?

Paul, I don't want to give guidance before it's appropriate. We'll talk about June at the end of June. But what we're seeing in the month of April is improved performance. We're starting to see improved over the last two years, trending above the performance in the last two years on skipping, and then also our conveyor belts. Likewise, out of Buchanan is in this period, we modelled and knew that we'd have a yield reduction. So albeit we've enjoyed good ROM flows, The yield has been down. That yield has now improved through April, and we expect it to continue to improve through the rest of the June quarter. The work that we did in the shafts was primarily driven by a set of ropes that needed a change out. It's routine inspection that we do on it. When we saw a change out was due, it was earlier than what we anticipated. So we took the opportunity to do other maintenance as well, which we're benefiting from now. And what we're trying to flag is because we've done that maintenance, we'll win the time back in quarters to come where the shaft won't go down as per our original schedule and we'll get the time back. Likewise at Currah, because we had low cold flows at the start of the year because of the December extreme wet in that last week and a half, we just didn't have the ROM stock that we anticipated and face positions and then the two cyclones. We managed to pivot pretty quickly and do the maintenance in those low coal flows, which means in the second quarter, the June quarter and later, we don't have to do the prep lock maintenance. And once again, you get that time back, but we also enjoy the productivity improvements for the rest of the year that we would only start enjoying later in the year. And we could have seen that in April as well. So that's how that preventative maintenance pulling forward will benefit us for the rest of the year.

Yeah, thanks, Doug. And just as wash plant maintenance at Curra, what was the duration on that schedule of maintenance for each plant?

Oh, I'd want to come back and give you exact numbers, but we're talking probably two weeks, I think 10 days for the one and just over two weeks for the second one. They were two both large annual shutdowns.

Yeah, OK, great.

That's helpful. That's it for me. Thanks, guys.

Your next question comes from Chen Jiang with Bank of America.

Good morning, Doug and Geha. Thanks for taking my questions. Two questions from me, please. Firstly, just a follow-up on your price visualization. So for the PCI discount to the POV, hard-cooking coal, that has improved in the, I would say, in the recent weeks. I'm just wondering if you can provide any color on that narrowing discount. Is that primarily driven by declining POV, hard cooking coal price, or is there anything changed in the Sabon PCI market, such as decreasing supply of Sabon PCI coal or better PCI demand? Any color in the Sabon market? Appreciate it. Thank you. I have another one after this. Okay.

Yeah, let me respond to that first. Look, in the end, it's because the benchmark, the premium global Australian FOB benchmark came down from the, you know, 300s and the above 300s down to 245. As I think I indicated that in prior quarterly updates, you know, I fear now that these indices have decoupled in a way. The premium global benchmark was essentially just driven by low supply in the premium mid-world segment and high demand out of India in that premium mid-world segment. So that actually caused this index to be so high, whereas the PCI product didn't see these dynamics whatsoever. So PCI at these high prices was sitting at 50% as the benchmark for the premium lower Aussie index came down to 245, nearly $100 less than last month or last quarter. the relativity has gone up now to today 64%. So essentially, these relativities have decoupled, I would call it, at this point. And that might continue.

Sure. Thanks, Geha. So you think that the decoupling of PCI and the premium hard-cooking code will continue? So are you saying the discount... will stay at current level?

Well, I mean, no, simply because it's not that dynamic anymore. The PCI price is probably more stable than the premium low oil benchmark. As the premium low oil benchmark will most likely go up as India restocks for pre-monsoon restocking reasons, I think that relativity can drop again, you know, to below 60%.

Sure, sure, I understand.

So I guess... The PCI market is not as dynamic as the benchmark for the premium global.

Sure, sure, great. So I guess from CARA price visualization perspective, any change in the product mix that you can achieve higher price from here for the rest of the year?

Yeah, look, we have done some good work. I don't want to be specific, CARA, but In the U.S. and Canada, we have done some work to mitigate these impacts of lower relativities. But yeah, so essentially what we have seen here in March is a good indicator. You know, 73% for the Metco price is probably pretty good. Mind you, it's also impacted by prices falling in that quarter. You know, there's an element of that in there. but we are pretty confident we can hold the long-term average for Medco price realization.

Sure, sure. Thanks for that, Dihad. I have another one for your OPEX reported this quarter. So by comparing your quarter OPEX, it's 27% above your upper end of the FY24 OPEX guidance. Well, then if I compare your first quarter OPEX with BHP's FR24 guidance for BMA, it seems like at the upper end of BHP's BMA medical guidance. Do you think your guidance for FR24 is too low or too conservative? Yes. Well, I understand that you mentioned a few things to drive the productivity, et cetera, but do you think your cost guidance and basically what gives you confidence you can achieve the cost guidance? Thank you.

Yeah, that's a good question. So look, I mean, essentially to break that down, what this means is that over the next three quarters, we need to see a cost of about $90 per ton, right? That's what you're saying. So at the moment, it's like, what was it, $125 or something like this, you know? Yeah, you have to go back to the volume, you know. So when we look at the first quarter, we lost a lot of volume because of the wash plant maintenance we brought forward and then the wet weather issues. So as we have now digested particularly the wash plant issues, in our own forecast, we are within guidance. So we don't see any issues there at this point. If there's a major rain event and we have problems We have budgeted and forecasted for rain events. But if there's anything extraordinary, outstanding in the fourth quarter, you know, that might impact cost as well as it impacts volume. But at the same time, you know, we are doing a lot of good things that Douglas already highlighted. You know, pulling out the four fleets out of CARA will yield into cost savings that will ensure that we are within guidance. And to be quite honest, we're looking at further productivity improvements. And these are major, major productivity improvement programs. If you pull fleets out of an operation like Kawa, that is massive, three fleets or four fleets. That is a big undertaking. And we continue to look at further productivity improvements. So that will ensure that we are within guidance for the rest of the year. And that's what our internal forecasts are showing at the moment.

Ed? Look, just building on what you said, and it's exactly right. We've got a plan. We do everything according to plan, and we're diligently executing against it. The team has done everything in the first quarter that we expected within our plan. Some of it was actually delivered a little bit ahead of time in reducing costs and driving productivity, and driving productivity is a true lever here. We've got to get costs out that are wasteful. We've done that hard work. We will continue to focus on it, like the contractor rationalisation work, but the productivity gains. The four fleets, you can do the maths on it. It's substantial. A dragline productivity gain that you're moving 44% of the waste versus 37% of the historic with the draglines is according to our plan. And that also flows into substantial cost reductions. And as Gerard says, If those play off as we intend, there's further opportunities for us to rationalize our installed capacity at site that will reduce costs again. And then in the U.S., it's been a volume game that's impacted the quarter from a cost perspective.

All right. Thank you, Doug and Geha. Thanks for that. I'll pass it on. Thank you.

Your next question comes from Glenn Lockock with Barangelli.

Morning, Doug Gerhard. Maybe just to take that one step further, I mean, we're obviously now all the way through April. Are we actually operating in a free cash flow positive environment now and operating within the guidance that you stated of whatever it was, 95 to 99 then, as we sit here today?

Well, you referred obviously then to April, you know, so we don't really give outlook on April performance. But yes, when I look at our internal reports, then in forecasts, and there's nothing more honest than that, we operate within guidance.

Okay, so all the benefits are flowing through. So, you know, as you said, if you can deliver the next nine months, three quarters at guidance, you'll drag that first quarter cost down and there's nothing you've seen in April to suggest that you aren't achieving that. And you're free cash flow positive as well now.

Yeah, yeah.

And then just a second question, if I can, just on the stamp duty to Queensland, is that something you could claw back? Is that something that you can debate with the government or is that money spent and we won't see it back?

Absolutely. No, no. I hand over to Douglas now, but As I said, we submitted a claim against the Queensland Royalty Office and made an appeal to the Supreme Court of Queensland on 11 March. When you look at the stamp duty that we paid here, in addition to what we paid last year, we are disputing a large chunk of this. Essentially, we just expected... as we had in our balance sheet provided for, expected about $43 million Australian dollars to pay for the stamp duty. And in total, we paid now about 103.

103 Aussie?

Yeah, Aussie, yeah. So we expected to pay 43 million Aussie, and we paid in total 103. So so there's a good reason we went into a peer at the Supreme Court of Queensland on 11 March.

And the way it works is you have to pay it all up front, including the interest, and then you can only appeal. So we've evaluated it and we've decided that's the prudent approach from a shareholder's perspective.

Yeah, no, that makes sense. I mean, even worse than paying half your tax up front and trying to debate that. But Is there a timeline, Doug, at all to resolve this, or is it sort of how long is a piece of string?

Unfortunately, the setting of dates in the Supreme Court is not up to us. We've been given indicative dates that it may still be this year, and then it's how quick it works through the system. So not entirely in our control, unfortunately.

Yeah, understood. Thanks very much.

Your next question comes from George Eadie with UBS.

G'day Douglas and Gerhard. Question first on Currah. Could we please quantify the elevated stockpiles you mentioned? How much are we talking in volume and where is it? Is it in-pit, uncovered, accessible coal? Is it at the ROM or the TLO or a combination?

We don't give... because the problem is if we start, then we start reporting down to the minutiae that's not helpful for you or us. But what I will indicate is we've got good coal inventories exposed because of the elevated and on-plan waste movements and drill and blast in the quarter. So it's input at hand. We've also got decent ROM stockpiles and we've got decent product stockpiles, partially because there was a railage outage during the month of April where the rail line did some maintenance. So there's a decent combination of product in all three areas.

Okay, now that's helpful. And maybe just a second one. You mentioned the dragline fleet's now moving 44% of waste up from 37%. And maybe just a comment on re-handle assumptions for the dragline system going forward. I guess my question is, if more dirt has been allocated to draglines from pre-strip, it might lower unit costs, but does this risk coal recovery and stress the plant or make the dragline the bottleneck going forward?

No, and we're talking prime in those numbers. So part of the challenge was pit orientation and strike length. We were spending a fair amount of time moving our drag lines off primary dig and relocating back into getting on blocks because the strike length wasn't invested in the past. So late 22 and in 23 we did all the box cuts and then set up the pre-strip to be in balance so the pit geometry was set up for optimal drag line performance. And we started to see that in the last quarter of last year and then this quarter again, that the return on the four drag lines are performing that optimal configuration. We will continue to drive where we've got geological advantage to drive the prime percentage up with drag lines, because that's our primary fleet. We engineer everything around that and then back from that and clearly then do a business case rebalance on the productivities. Holding that point while you've raised it, the PC7000 we've introduced is replacing some of the less productive contractor fleet. It's a bigger piece of equipment than what was deployed, so we've now got to out-shovel a PC7000 and an 800-tonne digger doing the upper alluvial material so we can sprint ahead of production of the drag lines in the most productive way and reduce the cost per BCM, obviously, in the process, in the balance.

Okay, no, that's very helpful. So more prime going to dragons, that makes sense. Just following up on that, how is re-handle trending over the next two to three years versus the last couple maybe?

Re-handle at this stage in our plan is the same, albeit we see opportunities to improve that. At this stage in the model, it's the same and probably the best place to stay before the two of us start doing engineering on the call.

Yeah, that was all for me. Thanks, guys. Thanks, Douglas. Cheers.

There are no further questions at this time. I'll now hand back to Mr. Thompson for closing remarks.

Okay. Well, everybody, thank you very much for taking the time. We obviously know it's incredibly busy out in the market at the moment. I'd like to point out that we've been communicating for a while now. We have a plan. We're executing our operations in the US and Australia according to the plan for the near term, and we started to see return on investments in the past. in productivity and performance and taking care of some of the legacy items and put them behind ourselves. And we're investing in a substantially attractive future out of our primary operations in the US and Australia. And that'll draw value for all shareholders into the future. And we'll continue to report to you against our plans for the year and now improvements and into the future improvements as well. If you do have any follow-up questions, please don't hesitate to contact our investor relations team, and particularly Andrew Mooney. Thank you.