Mineral Resources Limited

Thank you for standing by and welcome to Mineral Resources Analyst Call, covering today's release of its March 2025 Exploration and Mining Activity Report. Your speakers today are Mark Wilson, Chief Financial Officer, and Chris Chong, General Manager, Investor Relations. A bit of admin before we kick off. This is a sell-side call, with analysts able to ask both text and live audio questions. To ask a text question, select the messaging icon. Type your question in the box towards the top of the screen and then press the send button. To ask a live audio question, press the request to speak button at the top of the broadcast window. The broadcast will be replaced by the audio question screen. Use the dial in number and access pin provided to ask your question via the phone. Alternatively, for those on a home or personal network, You can ask your question via the web by pressing Join Queue. If prompted, select Allow in the pop-up to grant access to your microphone. If you have any issues using the platform, dial-in details can be found on the homepage under Asking Audio Questions. Text questions can be submitted at any time and the audio queue is now open. This call is being recorded with a written transcript being uploaded to the MINRES website later today. I will now hand over to the MINRES team.

Thank you, Josh, and good morning, everyone. It's Mark Wilson, CFO here. Welcome to our March quarterly conference call. I have also with me Chris Chong from Investor Relations. I'll run through a few highlights first, and then I'll be happy to take questions at the end. I know it's a busy morning for everyone. I'd like to keep the call to an hour max so that you can move to your other calls. And I'm also very conscious that we've given you a lot of additional data this quarter. to help you understand where the business is at. So we'll try and step you through that as well. Just starting with my opening comments, starting with governance and regarding the board, I can confirm that the chair selection process is well advanced with the support of Korn Ferry. As you would expect, the short list of candidates has conducted extensive due diligence. We look forward to making an announcement before the end of the financial year as we've previously foreshadowed. In terms of the recent board resignations, you'll appreciate I'm not in a position to make any additional comments. What I can do is point you to the governance update that was released on 13 February a few months ago. And I'll note to the best of my knowledge, there have been no new matters identified since that update. I'll also note that other directors have attended the EGC meetings from time to time, and I'm told the EGC will continue to have a role going forward. Finally, work on strengthening processes, policies and controls continues with dedicated resources inside the business. Now I'll move on to highlighting a few points from the quarterly, starting with liquidity in the balance sheet. Liquidity remains strong. We had one and a quarter billion of liquidity available at 31 March, including a fully undrawn $800 million revolving credit facility. Onslow Iron continues to be cash flow positive. The carry loan at Onslow Iron, which to remind you is a receivable from our JV partners for funding them into the project, is now being repaid and sits at just below $800 million. As of 31 March, our net debt totaled $5.4 billion. CapEx was around $360,000, predominantly Onslow. And CapEx in the fourth quarter is expected to be a similar amount, consistent with guidance overall. There was a working capital outflow in the first, sorry, in the quarter reporting on of 50 million. And whilst a bit difficult to estimate the movement in volumes that we're expecting, we expect a similar movement in Q4. In terms of our bonds, they're trading a bit below par, reflective of a broader decline in the bond and credit markets. I'll just remind people that the interest rate on those bonds is fixed, and so there's no impact on our serviceability or our interest expense. Bondholders remain fully supportive of the min-risk credit and remain comfortable with our ability to refinance the group's debt maturities. The only variable, the only thing that has changed is the coupon that we might be exposed to in a refi. In early February, it was probably around 8%. If we were to try to refi today, it would be closer to 10% to 11%. But I want to emphasise we've got two years before the first bond maturity falls due, and that gives us a lot of flexibility. As we've said before, as the Onslow project ramps up, our EBITDA will continue to increase and our net debt to EBITDA will naturally decline. We have spoken at length previously about the levers that sit within the business if we need to pull the deleveraging. We have a $10-plus billion balance sheet with various assets that we can monetise if we need to. In terms of safety, TRIFA at 3.67. That increase is primarily due to the construction at Onslow. And as we see construction wind down, we expect that number will improve. In terms of guidance for lithium, Marianne, we've had strong volumes, as you will note, through the quarter. And so we're increasing our volume guidance to 185,000 to 200,000 tonnes, our shared C6 equivalent. And we're maintaining cost guidance. We're also maintaining volume and cost guidance. Ones low following the stoppage of haulage in March. We're now forecasting marginally lower volumes, 8.5 to 8.7, about attributable share, down from 8.8 to 9.3 previously. And we're maintaining our FOB guidance between $60 and $70 a tonne. Mining services volumes expected to be towards the bottom end of the guidance range. Just as I think the market understands, volumes will increase as on-flow iron ramps up. We are providing guidance in terms of the EBITDA for mining services for FY25 per production volume tonne. We expect that to sit between $2.10, $2.20 per tonne. In terms of mining services production in the quarter, volumes were at 62 million and they fell slightly due to Yule Garn and Bald Hill going into Cairn Maintenance. But we also had some external volume growth that partially offset those projects going into Cairn Maintenance. In terms of iron ore, total attributable production was 6 million tonnes, shipments in line with that. In terms of average realised price for the quarter across the operations was US$89, representing an 86% realisation. In terms of Onslow, I would describe it as a mixed quarter. We had a fourth-train shipper started in March with 19 vessels loaded through the quarter and 3.6 million tons shipped. As we've previously announced, the rear two trailers of a road train tipped on their side on the haul road on the 17th of March, and we paused operations there for five days with haulage resuming upon a consultation with the regulator with speed restrictions in place. As the haul road is upgraded, the average speeds resume back to plan. Mining activities at Cairns Boar as a result were shipped to development. and production reduced to 3.4 million tons in line with haulage. The main constraint at Onslow currently is haulage due to the upgrade works being undertaken on the haul road as previously discussed. That upgrade program remains scheduled for completion next quarter. To date, we've upgraded in Nashville to 43 kilometers of the road. Once fully upgraded, the haul road capacity will be significantly higher than 35 million tonnes as we can add more trucks. That's a question that comes to us from time to time. The constraint of the road is actually limited by truck load out and road train unloading capacity of over 60 million tonnes. April shipping, giving you a sense of that, we expect it to be between 1.3 and 1.4 million tonnes tied to the haulage. We are forecasting a significant increase in haulage by road trains through May and June, up to 2.7 to 2.9 million tonnes per month. We've given you the numbers in the quarterly to support that, significantly increased haulage fleet, up to 84 jumbo road train sets and moving contractor trucks that can travel down the highway up to 85 to 100 to support those numbers. And we've also given for the first time the average cycle times per day for each of those sets. In terms of the fifth and final transshipper, which we need to be able to deliver 35 million tonnes, that's scheduled to arrive at Onslow early in May. And then we'll move through a period of wet commissioning and we expect that to be operating early June. In terms of the Pilbara hub itself, we shipped a total of 2.3 million tonnes, which is another solid quarter. In terms of lithium, we had a good operational quarter for that business. Total spod production across Marion and Wajana, 133,000 tonnes. Diametric tons with shipments of 127,000 tons. The average realized price achieved across both Wojnar and Marion, this is an SC6 equivalent number, is US$844. At Marion, production was strong at 70,000 tons, up 21%. We had higher quality feed from the current pit and we had stronger recoveries. And as a result, we've increased As I said earlier, volume guidance for the year to 185,000 to 200,000 tonnes, up 20% from the previous midpoint. We've been saying for a while that the costs will come down across our lithium operations. The March Court has shown that. FOB at Marion, we saw cost reduction measures flowing through with costs on an SC6 basis at $708 a tonne. And we're maintaining guidance, as I said earlier. In terms of Wojano production, 63,000, up 17%, quarter on quarter. Again, significant increase in recoveries from plant improvements and the delivery of more fresh ore. And again, that in turn drove FOB costs down. FOB at Wojana was $775 a tonne on an SE6 equivalent basis. And again, as I said earlier, we're maintaining guidance for the full year. Finally, in terms of energy, we finished the drilling at Moriari Deep and Lockyer 6 during the quarter. We're continuing with the analysis of the results of that drill work and working with the Hancock team on that. And the first well for the Minres Hancock joint venture, Dandarragan Deep 1, commenced drilling in March and... we'll have a better understanding of where that's come in over the next month or so. I'll end my opening comments there and I'll now hand back to Josh to queue for questions. Thank you.

Thank you, Mark. If you have not yet submitted your text question or joined the live audio queue, please do so now. I will introduce each caller by name and ask you to go ahead. You will then hear a beep indicating your microphone is live. Our first question today comes from Paul Young from Goldman Sachs. Paul, please go ahead after the beep.