Coronado Global Resources Inc.

Thank you, Raoul, for joining Coronado's September call for 2025. Today we released our quarterly report to the ASX and filed with the SEC. Our quarterly financials are expected to be released to the market on the 11th of November with our Form 10Q. Today I am joined by our CEO, Douglas Thompson, and Chief Financial Officer, Barry Vandermeer. Within our report, you will see a notice regarding forward-looking statements and reconciliations of certain non-US GAAP financial measures. I also remind everyone that Coronado quotes all numbers in US dollars and metric tons unless otherwise stated. May I hand over the call to Douglas?

Thank you, Chantal, and thank you, everybody, for making the time to be with us again today. Overall, we continue to see positive progress in our plan, and this quarter's results reflect this. After ending June on a six-year record for ROM production, we concluded September quarter with growth across all production and sales metrics. Production was the highest on record since quarter one, 2021. Investments are delivering. Quarter on quarter, we saw a 3.2 million ton annualized step change in production. We expect to deliver material volume increases again in quarter four. As our high return mammoth and Buchanan growth projects are both progressing towards steady state. Both are currently between 60 and 70% of expected run rate. We expect the annualized incremental tonnage of approximately 3 million tons per annum to show in 26 and beyond as these projects ramp up to full capacity. Our cost reductions also continue to progress to plan. Our costs have reduced again this quarter and continue to be below guidance levels. Despite the step change in performance, earnings remain challenged in the sustained low coal price environment. We announced a transaction with Stanwell, a strategic partnership that is intended to add near-term liquidity to our business via a new structured ABL over the 2026 rebate and offer ongoing financial support when liquidity is below $250 million, effectively resetting legacy agreements. Turning to metrics, the key metrics achieved in quarter three were the group ROM production, 7.4 million tonnes, an increase of 6%, saleable production, 4.5 million tonnes, an increase of 21%, and sales volumes, 4 million tonnes, an increase of 9%. At a group level, our total recordable injury rate was 1.16, well below industry averages in both Australia and the United States. If I turn to our group performance, as I've said, the quarter delivered good production results, 21% improvement on salable production, a four-year record of 4.5 million tons. And we built an additional circa 600,000 tons of product inventory again this quarter, which will support our improved production volumes in quarter four. The total inventory at the end of the quarter was approximately 1.7 million tonnes. Despite the material improvements in operations, sales volumes were marginally below what we had planned for the quarter. The few short-term equipment outages, combined with port and vessel delays in both Australia and the United States in the last week of the quarter, which put pressure on our planned railing and shipping. But the major expansion project is now complete. Quarter three proves the value and future potential created by these business improvements. Return to the Australian business unit. Improved in all areas. We increased ROM production, sellable production, and sales volumes in the quarter. The third continuous miner commenced production in late June as planned, and Mammoth now has three production panels in operation. Mammoth is expected to deliver planned run rates in quarter four, up to an additional 2 million tonnes of incremental production delivered per annum from 26 and beyond. Cost reductions continue to be realised, with average mining costs per tonne sold in quarter three below both forecast and budget, and well below the low end of our guidance levels. Moving on to the US business unit. Our operations focused on firstly commissioning and then ramping up with the Buchanan expansion project after first production from the new shaft was also delivered to plan in late quarter two. The US delivered higher ROM production and saleable production with sales volumes slightly below what we had planned due to a delayed vessel in the last week in September. Together with the dual long walls at Buchanan, we expect the US business unit to exceed 7 million tons per annum in the future. the additional capacity that has now been created via the projects. It's great to see the successful volume uplift post the completion of these two major projects, and we look forward to enjoying further incremental tonnages that these projects will deliver for the business into the future. With that, I'll hand over to Barry, who will talk to our financial position for the quarter.

Thank you, Douglas, and good morning, everyone. Our continuous improvement in production and unit costs continued in the September quarter. The unit cost was under the bottom end of guidance at $89.70 per tonne and September months was $80.10 per tonne with 2.7 million tonnes of wrong mined. As I outlined in the half one results presentation, the correlation between strong wrong performance and unit costs is well established. Cash capital expenditure reduced as expected and was $59 million for the quarter and We were paying some of the last bills associated with expansions. This is $16 million less than the June quarter, and we expect the cash capex to be at the bottom end of guidance of $230 million for the full year. You can therefore deduce that the last quarter spent will be about $20 million. Despite the rail availability and shipping delays that Douglas spoke about that we had at the end of September, We still had a 560,000 ton build as product inventory. That will be sold in the December quarter. It will contribute towards cash. But despite all of that, our sales volumes were up 329,000 tons, which is 9% higher than the June quarter. And a lot of this was driven by strong thermal coal production at Currah. EBITDA before the Stanwell rebate that's currently deferred was $4 million positive. The working capital outflows that I outlined in the first half results presentation did materialize as we expected. The outflow of this working capital and the cash we spent to increase the product inventory was offset by other working capital levers that we pulled at the end of September. We didn't use the ABL as was envisaged when we did the half one results presentation. The other cash outflows that we had in the quarter was the capital expenditure of $59 million. We paid interest of $26 million, which was mainly the coupon on the high-yield notes. That's payable in quarter one and quarter three. And then we had to cash back a further $29 million in guarantees, only relating to the U.S. workers' compensation obligations. As I said earlier, next quarter we expect CapEx to be $20 million, plus-minus, The cash backing of $29 million will not recur, and interest will be less. It will be around $15 million for the quarter. The quarter end cash balance was $172 million, and $16 million was available on the ABL facility with Oak Tree, and that ABL was still only $75 million drawn, as was the case at the end of the June quarter. The earnings adversely impacted by a PLV index that remained flat on the first half of the year, the build-up of the product inventory, as well as lower realized prices due to the sales mix. We did get a preemptive covenant waiver from Oak Tree during September, and at the end of September, this facility remains available, subject to the borrowing base. The recently announced transaction with Stanwell addresses both Coronado's near and longer-term funding needs in a depressed metallurgical coal market. Subject to completion of due diligence, long-form agreements and approvals, financial close is expected towards the end of November, with the proposed ABL facility adding approximately $165 million to available liquidity after settling the outstanding amount to O3. The waiver of the remaining rebate under the amended coal supply agreement, the AXA, and the prepayment mechanism when Coronado's liquidity is under $250 million could add up to a further $250 million in cash flow over the course of FY26 at current market prices, noting that the amount does depend on Stanwell's nominated tonnages. It's also important to understand under this arrangement The cash flows occur monthly and not upfront at the start of the year. As our recently commissioned expansion projects ramp up and reach nameplate performance, this will further contribute to lower unit costs and improve cash generation. While the arrangement with Stanwell provides immediate liquidity relief and longer-term support, we will continue to evaluate other available options to ensure that the capital structure improves and adequate liquidity is available in the current low-price environment. Coronado will release its quarterly financial statements for the September quarter to the market on 11 November 2025. And I'll hand you back to Douglas now for a market overview and conclusion. Thank you.

Thanks, Barry. As Barry mentioned, coal prices remain stable throughout the September quarter. Look at the Australian benchmark. It averaged $184 a tonne, which is unchanged from the June quarter. And the US East Coast benchmark averaged $175 a tonne, which is slightly lower than the previous quarter at $178 a tonne. If we look ahead to the September quarter, we expect prices to remain supported for a few key factors. Firstly, in India, the post-monsoon restocking cycle is expected to lift the mark. And this may be further supported by the Indian government's recent anti-dumping investigation into coke imports, which could benefit domestic coke producers. Secondly, the CFR China price continues to hold a premium over seaborne benchmarks. And this reflects ongoing domestic supply constraint, which will also lift import demand. And third, we've seen continued rationalization of high-cost supply as producers respond to margin pressures and elevated royalty burdens in Australia. While the macroeconomic uncertainties and cautious buyer sentiment may keep short-term pricing contained, the market remains very volatile to geopolitical developments, trade policy changes and weather-related disruptions. Any of these could have upward potential on price volatility in the months to come. We remain of the view that the long-term outlook for seaborne coal is very positive. The results delivered by our team in Q3 speak volumes. Operational performance has lifted, now reaching historic heights. There is solid execution across our investments, which is supporting this uplift. The market remains subdued, and it has been so for a prolonged period of time, presenting a challenge to producers, and is impacting the industry as a whole. With that, I'll hand over to Rocco and we'll take your questions.

Thank you. If you would 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 are on a speakerphone, please pick up the handset to ask your question. We'll pause for a moment to assemble our roster. And our first question today comes from Glenn Lockhock with Bear & Joey. Please go ahead.

Good morning, Douglas and Barry. Just firstly, a lot of moving parts in the quarter. Could you maybe just sort of simplify a little bit? I mean, if it hadn't been for the one-offs and the build in product at the port, do you think the business is free cash flow positive in the quarter? And what about now, if we look at the current settings you'd expect for Q4? Is the business now on a stable free cash flow position?

Yeah, so Glenn, it's a good one to expand a bit. So I'll step through the quarter first, and then I'll talk about kind of how it moves going forward. So if you look at how the bank balance moved for the quarter, it was down $90 million. Now within that, we paid $60 million of capex, $30 million of interest, and we cashed back $30 million of guarantees. So if I look at quarter four, we'll spend about $20 million on CapEx, $15 on interest, and we won't have the cash backing. So everything else stays the same, and that's before working capital. I'd say kind of underlying, you're probably burning $40 to $50 million in the fourth quarter. Then you need to overlay the expansions keep on going up, So you need to take a view on what cash that will give you. And then you need to get into working capital. Now, for quarter three, the quarter was really working capital neutral. So whatever levers we pulled at the end of Q3, end of Q2, we pulled again at the end of Q3. So that's a wash. As we move into quarter four, obviously at some point we need to reinvest in the working capital. It's mainly debtors and accounts payable because inventory are dealt with separately. So you'll have to invest some in working capital. I think the way to think about that is you'll fund that from the new AVL that comes into the business and then also the inventory you'll sell down, the product inventory you'll have. So what I'm saying is if you look at that whole pot of kind of working capital, there's a working capital outflow net coming and you'll fund it with the ABL that comes in. Underlying business, I'd say like-for-like basis. Current prices burn about $40 million to $50 million, but offset by whatever the expansion gives you in addition. And then the last point, which was very topical in Queensland over the last couple of days, you need to go and look at the BOM website and kind of take a view on kind of together at current. A little bit of a long one, but I hope the long one simplified it a bit into buckets.

Yeah, and obviously pricing's $10 a tonne better off today versus the Q3 at the moment. Correct. Exactly. Correct. And then maybe just on pricing, just US domestic price settlement for coming up for next year, any update on that you can provide?

Glenn, at this stage, no negotiations are ongoing within the market yet. but unfortunately not.

All right, great. Thanks very much.

Thank you. And once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. We'll pause for just a moment to assemble our roster. That concludes the question. I do apologize. It looks like we have a follow-up from Glenn at Baron Joey. Please go ahead.

Sorry, Douglas. I think there's quite a lot of competing calls on, in particular, Linus, which is probably keeping everyone at bay. Just given the half a million ton inventory build and the issues at ports, do you think you can catch that up and ship the increased production you hope to deliver in Q4 as well? Or is there going to be potential for bottlenecks, etc. Just thinking of your allocations. Thanks.

We've got capacity. Our team is looking at the moment to what we can pull forward before the end of the year with shipping and particularly its rail access. In the US, as you know, they don't have at-port storage capacity, so what you put in a train set needs to be offloaded directly into a ship. There's very little latent time. So that is rail pipe constraint. The other one is in Australia is getting rail lines. Now, part of it we did in Q3 was we caught up on some of the thermal contract deliveries through to Stanwell. So that was also what pushed some of the thermal up in the quarter. In quarter four, the power station will obviously see additional burn and they're calling on, can we give them some additional? And that'll free up lines domestically that won't have to go to port. So the team are working through those catch-up options. And what I'm trying to signal is there's a number of them open to us that we're working through at the moment.

Okay. That's great. Thanks very much. Pleasure.

Thank you. And our next question today comes from Daniel Roden at Jefferies. Please go ahead.

Thanks, Douglas and Barry. Thanks for taking my question. I just wondered, you mentioned that you're 65% of capacity at Mammoth. I was wondering if you could give us a bit more color on how that's going. And I guess from today, you've got your three continuous miners on site. They've been there for a couple of months now. What Like, how do you see the, like, what are the stage gates and what are the, I guess, outstanding elements in terms of that ramp-up profile to get from, you know, 65% up to that, you know, 100% capacity of the 2 million tonne pram? And probably just, Caveting and noting that, you know, in previous, I guess, commentary around that, it was a, you know, 1.5 to 2 million tonne per annum kind of project and you seem to have settled around that too. You know, is there any risk that we kind of fall back into that range or are you still pretty confident at that 2 million tonne per annum?

It's a great question. The milestones, let me just talk through the technical milestones first. You know, we, as we built the mine out from December, you know, You start with one obviously continuous minor fleet. You have to then build the mine, build the infrastructure around it, create the space for a production panel. And that includes conveyor belt systems so that when you're in the production panel and your shuttle cars are running back, they can load onto your spine conveyor and bring it out to surface. So that's why we've been staging them one after the other as we've built that infrastructure. And that's why it's important to call out we now have three production panels. We've built out all of that infrastructure. The other was getting the permanent ventilation system designed and built because you need to underground once again build the crossovers as the mine gets expanded, get your vent flow, fresh air in and exhaust air out through the system and that needs infrastructure both underground. So that's been going for the first six months and that is now all established and put in place for the mine and the three panels operational. Into how is the ramp-up going at 60%, as you design a mine of this nature, you do all your geological research and guess, and most of that is playing out how we modelled and expected. But until you really cut the first coal, the teams then learn how they're going. And one of the things that we have learnt in the ramp-up is the bolter configuration that we bought, so what puts in the support infrastructure as you're building the underground mine, we've had to do some modifications. Those modifications are occurring now. It's proven successful, so we're getting the bolt rate we need, and that will continue into quarter four, and we'll put that behind us. So we've changed some of the way in which method of work gets done to cope with the geology and the bolting rate, the ramp-up profile. At the last part of your question, the 2 million tonnes, It will be situational. The system we've built and technically is performing when it gets to full run rate that it can do that 2 million tonnes per annum. So hit the upper end of what we've got planning and that's what we'll plan from 26 and beyond. But we may flex it as we go into different areas within the mine. And I don't want to get over my skis here, but as we consider Mammoth 2, into the future. There might be an opportunity that we build out a fourth panel and during late 26, maybe early 27, we'll bring another production unit online at Mammoth that will give us some more upside capacity out of the mine that will benefit for when Mammoth 2 gets built out into the future. I hope that gives us some cover on our plan.

Well, that's very clear. Thank you. Thanks, Doug. And maybe, you know, I think I've done my own checks and I'm pretty comfortable with it, but maybe just an opportunity to talk through, you know, there's some media around the Buchanan issues and maybe just a little bit of life around how that's going, what impacts are you seeing, and do you expect, you know, some impacts to continue into Q4?

Thank you for the question. I'll say this. We don't get drawn into speculation. We don't comment on stuff. We've got a plan. We just stick to what we're doing, and we try and keep the market informed as we appropriately have. People are going to speculate. We've had to come out and clarify what is factually incorrect. Recently, a comment was also made that we went to Oak Tree and tried to get more funding, and we were declined. Well, that's factually incorrect as well. So unfortunately, the journalistic effort that goes into these articles are limited, and I'll have a kick at this. When you write about an underground mine and put a picture of an open-cut mine adjacent to it, you really don't know what you're talking about. But stepping off that, what occurred at Buchanan is we had a fall of ground in our north mine at an intersection well away from the working area, so it had nothing to do with the coal seam. but it impacted our conveyor system from that long wall coming out. We worked with Inspector of Mines and put a plan in place to secure that. We put it back into production. The impact of that was not material because we had the second long wall that was still in operations at that time. But we felt we needed to come out and clarify when that incorrect article was written. The speculation more recently around the Stanwell deal, I write off to... Look, we've put out a limited release on what the detail is around the deal. We've done that because we're still respectfully working through with Stan while on the deal, and I'll say we've got a very detailed term sheet agreed with him, but we're working through due diligence, and once that long forms are done, then we'll announce it to the market. Now, Q10 will obviously give a lot more colour on it, but speculation will stay speculation, and I... won't talk about it much more than that because that's the credence it deserves.

Yeah, again, very quick, but thank you for that. And maybe just the last one for me, and maybe I can read you in the queue if there's no other questions, but I guess your sales mix for the quarter and I guess in outlook as well, but you've made comments about, you know, I guess the market's not paying for premium quality met calls. Is there anything on that front you can do, I guess, on a forward-looking basis to change You know, and I guess optimize your, you know, your product mix for sales to the market that sits outside of your, you know, contractual obligations to, you know, I guess, help improve, you know, earnings on a quarterly basis, you know, into 26. Is that like how much flexibility would you have around doing things like that?

Danny, we do have some flexibility, and your mind's gone to all the key doors that you've got to step through. One is we are contracted and people really want our product. We haven't had any of our clients not take product that they want or that is under contract. So then it's what can you build within your flex of what's not contracted. Part of what we did in the quarter in the product mix, and you would have seen it in the results, we did do more thermal, and that was a catch-up with Stanwell. The power demand in Australia now is heading towards its peak at the end of the year as it heats up and everybody fires up air conditioners. There's a couple of other power stations within the state that are having difficulty getting to their performance rates. So our clients asked us if we can provide more, and we could. And as you say, on some of those premium products, the pricing isn't just there. It's a very narrow trade there that sets the rest of the market and secondary products So we've been looking at, well, where can we get a yield advantage as we produce the product and pricing? And that's why you're seeing a little bit more of thermal going into the export market through this quarter as well, where our sales and marketing have been able to pick up some good pricing through that. And we've got a yield advantage as well. So we're pushing all of the avenues we can. But we are fairly well contracted, so the options we have are limited in the near term, what we can do in that regard. But we've done what we could.

Yeah, I understood. And, um, maybe I'm not, I'm not just upon more than I'll hand it over. Um, but, um, you know, you've mentioned, um, uh, in this, um, release in, in previously that you're, you know, you're exploring, um, you know, potential avenues around minority asset sales or, um, you know, other transactions in the business. Um, you know, have you got any updates or commentary that you can provide any color around any of that or, um, I imagine pretty limited, but, um, yeah, I'd really appreciate just a quick comment.

Daniel, we've been applying our minds to all options that create value for shareholders as we're going through this difficult period of time. And we've been finishing off these major projects that create long-term value in the assets, which included, as we said, we've had a number of approaches because people can see we've got great assets. They're now well de-risked because of the capital projects are now tucked away. and starting to deliver, and they're fully permitted in their long life, and they're products that clearly meet long-term market needs. But nothing out of that has come to the point that it is a firm offer and that it's people putting overtures to us. And then on the minority sale process, that's still a process that's afoot, so I won't comment on that at this stage, but strong interest in it.

Yeah, I thought US assets given the current geopolitical environment would be very interesting. But no, I appreciate the color and commentary. Thanks for the question. Thanks, Barry. I'll hand it over. Thank you.

Thank you. And our next question comes from Shen Zhang with Bank of America. Please go ahead.

Morning, Zach and Barry. Thank you for taking my question. My question is in regards to your the financial support transaction announced on Tuesday. So just to clarify, the previous liability or the agreement signed with Stonewall in June, there's no change for that one from pricing or repayment perspective. But the new one you are going to sign with Stonewall is just an extension of the legacy contract from 2037 to 2043. But how should I think about the thermocode price? Because, you know, the legacy contract thermocode price, I think from the memory was like US $30, whereas your new contract signed with them in June was, I think, market price. So that's my first question. And also second question is the prepayment from Stanwell. because I guess the waiver, sorry, the rebate for 26 will be waived. So there's no more Stan Will rebate, I guess, going forward. That contract going to expire end of FY26 anyway. So how should I think about the prepayment Stan Will, especially from P&L and accounting perspective? Thank you.

Jen, the... So on the first part of your question, just confirming that the rebate waiver, that's a full waiver and the rebate ends, as you say. So come the end of this year, the rebate ends. For the next quarter, we still have the deferral of the rebate that we agreed earlier this year. So that's the position on the rebate. In terms of the coal sales agreement, called the AXA, the amended coal sales agreement, that expires at the end of 2016. Early 2027, that position is unchanged, but the rebate goes away now. I think the dollar per ton that you've got associated with that is quite accurate. So you can continue looking at that. Now, I'll just talk about that immediate prepayment part first. So what the agreement with Stanwell says is they will give us a prepayment up to a maximum of the discount that they will have received. So the way to think about it for next year is if our liquidity is under $250 million, the maximum repayment that we can get is the coal market price, less port and rail, obviously. Next year, less the $30 that you quoted times the tons they nominate. so and i actually when you go and look at my script i gave you an an estimate there of what i think it will be you know so it can probably be up to 150 million why we say up to 150 million we'll get more detail on this in the 10 q and beyond that but as the liquidity goes down from 250 million, that prepayment increases. The closer you get to 250 million, the less the prepayment is. So that's the concept. So that's the first part, how the rebate works, how the coal sales agreement works. Then on the extension of the NCSA, the new coal supply agreement from 2037 to 2043, the easiest way to to look at that is earlier this week, we put out some material we used to cleanse our note holders from a transaction we were discussing with them. On page 17 of that release, there's a slide that's got quite a bit of detail about how the pre-existing Stanwell arrangement works, and there's some data there that'll give you what you need. The principle is that NCSA, When we extend it, the term stays the same as what it is today. So there's not changes to the price of that contract. The only change is that Stanwell can nominate a wider range of tons. Instead of 1.8 to 2.2, they can now nominate 1.2 to 2.2 million tons. But that doesn't only apply to the 2037 portion. That applies from 2027. So that applies... across the 15 years of the life of that agreement. The last thing I'll just say for clarity for everyone is the transaction we did earlier this year with Stanwell, the 150 million, which was a rebate deferral for nine months and a prepayment, 800,000 tons associated with that transaction, nothing changes. That stays unchanged and as is.

Thanks for that, Pari. Also, another follow-up, I mean, in a few years' time, say, when the industry turns around and your profitability improves in a few years' time, what is the change for your dividend policy over the long term? Because from Tuesday's release, it says the dividend payment, there are some certain requirements, I guess, you have to pay Stanwell. Am I correct? If you want to declare dividend to shareholders, then you probably need some sort of consent from Stanwell or any payment to Stanwell. I'm just wondering what kind of payment you need to pay Stanwell if you want to declare a dividend. Thank you.

So when you look at the announcement we made earlier this week, in the last paragraph, we've provided some details on that. So we don't need any consent from anyone to declare dividends. Dividends is at the discretion of the board and the board will take into account business circumstances, et cetera, market out to call those things when they declare a dividend. I think importantly, the board will take into account the capital structure of the company as well. Even as we stand today, there's quite a bit of gearing in the company, and so that is something we look at seriously before declaring dividends. And you can imagine that, and it's only fair that Stanwell would want some level of deleveraging to occur when we declare a dividend. So the arrangement with them isn't saying you can't declare a dividend, and it can't say that. We can still make distributions as we get profitable, but this prepayment bucket that we've agreed with Stanwell that gets us through the tough times, that has to be repaid as we declare dividends. It's similar to the arrangement we've got with our note holders where if we declare dividends, we need to make a prepayment offer to them as well. Whether they accept it or not is up to them, but they had a similar requirement, so it's no different If in future we do owe them contingent monies in their concession bucket, then if we declare a dividend, they need to get an equal amount or potentially a higher amount, depending on how much money sits in that contingent repayment bucket. Principle is, the more they help us, the more we need to repay them first in relation to dividends. So they need to get more money. and shareholders if we owe them a lot. Again, those details as to where's the thresholds, what's the amounts, that'll be forthcoming in due course.

Sure. Thank you so much, Barry and Doug. Thank you. I'll pass on.

Thank you. And our next question comes from Rob Stein at Macquarie. Please go ahead.

Hi, Shane. Thank you very much for the opportunity. This might have been gone over, but I just wanted to double check. In terms of waste levels and stripping and the like, what were the activity levels like in the quarter versus the quarter prior? Just noting the average mining cost per tonne sold, just trying to comp that to sort of understand the quarter on quarter difference and what's happening there. you know, at the waste level to sort of understand the unit costs, mining movements?

Yeah, so, Rob, the balance of things is the volumes getting moved is improving. So we haven't cut back on waste movement to... And I think what you're trying to ask is, have we high-graded the mines over the period of time? And no, we haven't. And the benefit that we're drawing upon is our four dragline fleets that we've been talking about that was part of the $100-odd million that we took out of Currah through the course of last year where we pivoted away from truck and shovel as we got our mine set up to be a more productive dragline mine. That has continued on. I think we spoke about it in the last quarter where one of our draglines is now performing at world benchmark levels and the other three will get in there as we build the capacity around them. So the drag lines are now getting to position that they are moving a lion's share of it, and I say drag lines, drag line systems, so that includes dozer push and cast blast, which is the cheapest form of moving waste, and then truck and excavate. So we rationalise truck and excavate at the mine, and we've kept that installed capacity through our own fleets and contractor fleets at the same level through quarter two into quarter three. So That volume is sitting consistent with our mine plans and liberation of coal.

Okay. And so even considering the fact that MAMIS coming up, you know, 65% of capacity, you know, hopefully pushing up in the subsequent quarters, that... additional volume you know one helps dilute your costs i would assume and two um also replaces probably a little bit of high cost marginal tons with um with low cost underground tons is that the way to sort of think about your unit cost evolution going forward

That's correct. I think the strategic drive, and we stepped back and looked at the business a couple of years ago and put this plan in place that I keep on referring to, was one is Buchanan needed to be de-bottlenecked. We had two long walls, they had great capacity, but we had one shaft to get it to the surface. So we identified the engineering fix there was using an old vent shaft and doing it as cost-effectively as we could, which the team has now delivered, that we'd de-bottleneck those and we can get the incremental turn out of the U.S. In Australia, we were ideally looking for an incremental ton that could dilute higher costs as stripping ratios go up, but then also de-risk because our two open cuts in Australia are in reasonably close proximity. So weather systems that moved over the mine generally impacted our cash flow from both mines. And we could see that there is real potential for underground mines. So we went about designing it, and that's what we've managed to get approved and built. So it offers... Not only what you've described as cheaper tons, and over the life of the asset, as stripping ratios get higher, as they naturally will, we'll build the capacity within our business to bring underground mining skill from the US to Australia as we're building out. And then we'll be able to exploit the resource for longer through that skill set, building mammoth one, two, and three, and twinkle in my eye as potentially another underground in the future in the south, but it's a twinkle in the eye down the line. And that'll ensure that stripping ratio doesn't beat out the economics. So yes, dilute it there. And then the other is de-risk. It gives you a better quality margin because in periods of wet weather when ultimately you're running mammoth one and two, you've got a sufficient capacity coming out of the underground that you don't have to build large working capital in wrong production to ride through weather system impact. You can produce it as you go. and that'll help improve margin of the mine and quality of margin over time. So that's really been the key drivers behind building this underground mine, as you've described. In time, it offers other options that you reconsider how you run the undergrounds versus open cuts and change your production profiles and the like, and that'll be largely market-driven.

Thank you. That's really good colour. So if I take a step back, And I mean, there's been a lot of noise, I guess, around the finance structure of the company, which is primarily driven by Curra. But if I just take it back to an engineering stance or an operational stance, how happy are you with the current status of, one, your growth plans, two, your productivity agenda overall? And three, metrics such as safety and operational health, has that been altered in this recent volatile period in the sense that prices haven't really gone your way, but similarly, the finance structure of the company hasn't been stable?

This is public, so my team will call the proverbial out of me if I'm not honest. I'm never happy in that regard because I can always see more in an engineering solution to be more productive. And frankly, that's your best cost out. You know, you can save yourself to a point, but you really need to drive productivity in a business to get cost out and find engineered solution or technical advancements. So we will always drive. I'm very pleased with what the team has delivered with our drag line systems but now we're operating those drag lines in a far better performance. There's more that we can get out of them. We're designing, as you build strike length out in the north, that we can run a figure of eight type engineered solution on two of our drag lines at least, which will drive cost down further. The team have restructured the dumping strategies, so our haulage profiles are a lot shorter than what they used to be historically, so we've taken a lot of cost out of the businesses. by dropping hall strings on trucking lengths. And we're really simplifying the mining systems at Currah, where it was a very complicated, convoluted, far too many hands on the tillers of the two mines because we had contractors who were highly integrated into it. We diligently, through what we had, the one Currah plan, took control back of the mine plans across the mines, Now I've broken it down into three mines with appropriate leadership teams and technical skill to run those three mines, and I include the underground mine in that. So they're a lot more focused, simpler to operate, and we're really driving the mines down to unit cost focus. So I'm pleased where we're going, but I know there's more within the system and the plan that we can squeeze out of it over time and MF is a large contributor to liberating those options that we have. Canada has always been a very reliable, good performer. You just look at our ability to move a long wall compared to industry's performance. With what we've done there with the optionality of the old shaft and the new shaft and capacity between the two long walls, it'll help us to be able to run the mine a lot more efficiently and in both systems in Australia and in the United States, We've effectively taken the engineering, because your question is engineering length, and pulled the bottleneck out from underground or in the operating systems and put them at both prep plants. And managing a bottleneck in your processing plants is generally the easiest to solve technically because it's on surface and you can drive improvements in those. And both of them are now, the system's proving the bottleneck is there. So I think once we've solved those, there's further upside that can come out of the system. So I'm quite excited out of it. The last place to pivot to was your question around, well, under this pressurized period, have we pivoted away from our plan in regards to safety and the way in which we're executing? The underlying plan, the discipline has been held to very tightly because we all invested really strongly after COVID. When coal prices were really high, told our board allow us to execute this plan and catch up on old stripping ratio deficits to set the drag lines up so we haven't compromised on that have we pulled sensible levers in stripping ratio and truck and shovel in the short term for coal pricing yes we have but we haven't damaged the underlying quite intentionally and then from a safety perspective I really take my hat off to the team that have driven safety the culture and the business in the US has always been very strong from a safety perspective And at Curra, we went on the last four years of really simplifying safety, driving a solid safety culture. And you can look at the graphs that we've put out. The lag indicators are performing really well, well below industry average. But I'm excited on the lead indicators on how the team are applying themselves to learn from incidents, set new systems in place, and engineering controls. And the one that stands out the strongest is the drag line systems that now we've designed a system that's first to industry that has proximity detection of people and equipment coming to drag lines. And our team designed that with partnership and have gifted it to industry and I think have offered the industry a change. The regulators and alike have looked at it and we've received due recognition from industry and then also industry awards from it. So the mine has really come up a curve of maturity around safety as well. I can confidently say no compromise, but you can never take your eye off the ball with regard to safety. You have to stay on it constantly.

Thank you very much for that. Pass it on.

Thank you. That concludes the question and answer section of today's call. I'll now hand back over to Douglas for his remarks.

Thanks, Jocko. Thank you to everybody for making the time for joining us today. If you've got any further questions, please don't hesitate. Chantelle and the team will respond to those, as she always does, very punctually. Thank you.

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