Mineral Resources Limited

Thank you for standing by and welcome to Mineral Resources Analyst Call covering today's release of its June 2025 Exploration and Mining Activity Report. Your speakers today are Mark Wilson, Chief Financial Officer, and Chris Chong, General Manager, Investor Relations. A little 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 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 network 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 also be found on the home page 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 MNRES website later today. I will now hand over to the MNRES team.

Effective from 1 July. We had a board meeting, a group board meeting at NIRES yesterday, and Mel's in the office this morning, so she's just sitting in on the call. As usual, I'll run through a few highlights first. We've tried again in this document to give you a little bit more information than historically we've given, just to try and progress transparency. That's been released to the Exchange this morning, and then take questions at the end. I'll start with the key highlights. Overall, pleased to advise that the business across all segments has delivered volume and cost guidance for FY25. I'd characterize it as a solid performance across all aspects of the business. We've made a lot of positive change on a number of fronts across the last three months, and there's this continued focus on execution within the business. You would have seen through various announcements that the board and governance refresh that we've been meeting for some time is well progressed and underway. As I said, Mel, effective as chair from the start of this new financial year, also joined by two non-executive directors in Ross Carroll and Laurie Tremayton. Both of them joined the meeting yesterday for the first time. So that change of the board is leading a significant governance refresh. and is one of the key priorities of the new chair, along with strengthening the balance sheet. Through this whole process, management's working with the board to continue to review levers available to it across all aspects of the business, and we're doing a refresh of our capital allocation framework under the guidance of the board. In terms of Onzo, pleased to confirm that it continues to be cash flow positive, both at mining services and at commodity level. We'll take you through them in a little bit more detail shortly. In June, we hit an annualised run rate of 32.4 million tonnes per annum at Onzo, which was a great performance, particularly as we only had our last fifth trans shipper there operating, really, for the last week or so of that month. In today's report, we've actually provided some guidance for shipped tons out of Onslow Iron. Our share, 17.1 to 18.8 million tons, equivalent to 30 to 33 million tons on a 100% basis. Roadworks are the reason why we're not hitting 35 million tons across the whole year. And again, I'll talk you through that in a little bit more detail as we get to Onslow. Completion of the whole road upgrade remains on track for completion through the end of this quarter, as is our move towards 35 million tonne per annum run rate, which we expect to hit at the end of September or thereabouts. As is, I think, generally well understood, seasonality impacts... for this operation, typically between November and March with cyclone season. Again, I'll talk you through that as I think about the numbers. In terms of safety, the tripper for the 12 months on a rolling basis was 3.84. It's a tick up. We had a few higher injury, sorry, higher recordable injury numbers in the first half. And then we've had significant reduction in hours over the course of the year with on-site construction coming off and also ball fill and yield gain operations stopping into Karen Maintenance. As corporate, very pleased with where we finished the year with liquidity. We finished with over 1.1 billion at 30 June. And as a result, we'll see net debt to EBITDA continuing to reduce. We kept a small balance on our revolving credit facility drawn at 30 June, but we had more than $500 million in cash, including that draw. Just so that everybody's clear, I expect to have full access to that RCA facility going forward, and that's consistent with what I've said from a number of quarters now. In terms of net debt, we finished at $5.3 billion for the year, In terms of the quarter, the key movements, we had a $200 million FX gain on the US unsecured bonds. We had a couple of hundred million dollars in interest payments in the quarter. We had a small working capital outflow, circa $50 million. We had a couple of hundred million dollars spent in CapEx. CapEx in FY19... Sorry, FY19. That's a long time ago. FY25. came out at $1.9 billion, which was below guidance of 2.1. Just to be clear, about $100 of that delta is a timing issue relating to Onzon and the timing of certain payments. That $100 will fall into FY26, and the other balance of $100 is represented by savings across the business. I'm just going to make a quick observation about FY26 CapEx. We're still working through with the board what that looks like. And as normal, we will provide more detail of the guidance, the more detail re-guidance of the FY25 result at the end of this month. But as I've said previously, we expect that CapEx number to come in just a little bit over half of the FY25 spend, so circa a billion or thereabouts. About half of that will be sustaining, and then we'll have some significant ongoing spend at Onslow, including the tranship as the completion of the road and the opening up of Upper Cane as a satellite deposit. And then we've also got some... exploration spending, athletics and energy. But again, I'll take you through all that in more detail in about a month's time. When we think in terms of capex, we've historically quoted net of asset finance. We've given a little bit more flavour in this material around what the gross figures look like, just to help in terms of numbers for FY26. we're thinking we'll have about $150 million of asset finance in both yellow goods and transshippers 6 and 7. And as we've talked about that before, those transshippers are important to take us above 35 million tonnes. In terms of leverage, again, consistent with what we've talked about, for a while EBITDA continues to increase month on month, and as a result, our net debt-to-EBITDA ratio continues to decline organically. In terms of the carry loan at Onslow, which is an important asset of the group, representing our receivable for funding our partners into the project, that's being repaid with interest. The current balance of 30 June was $766 million. and that's a net decrease of just over $20 million. That balance did actually go up through the quarter because as we bring construction to completion, we invoice that goes on the carry loan, so that $20 million is a net number. In terms of full-year statutory report, that will be released at the end of August. We've given... some indication of the potential adjustments that we've identified as we move towards year end. Obviously, that's all subject to audit and so on, but trying to give you an advanced look at some of that material. Turning to the business, just step through this quickly so we can get to questions. The mining services performance was very strong. We've come in just at the bottom end of guidance range in terms of volumes, but our EBITDA performance per tonne margin is expected to be at the higher end of the guidance range of $2.10 to $2.20. We recorded a record 83 million tonnes in the quarter, which is up 21 million tonnes in the prior quarter, and that's driven by the ramp-up of Onslow mine. And I should also add the mining services, the external facing... Sorry, I'm going to say external facing... The crushing and haulage businesses have done incredibly well over the past year, the last six months in particular. In terms of iron ore, iron ore total attributable production was 8.9 million tonnes, shipments of 8.3. We realise US$79 on average across both hubs, and that's about an 80% realisation, would have been 82% with our prior period adjustments. As you would have all seen, the iron ore prices moved back over 100 in recent times. The forward curve actually had quite an interesting shape to it. It was quite flat, so we've taken the opportunity to just start to hedge some of our volumes over the next six months to lock in some of that price gain. In terms of Onslow in particular, very pleased with the progress over the last quarter. As I said, the fifth train shipper really started towards the tail end of June. We loaded 30 vessels and 5.8 million tonnes shipped. We had 147 trucks operating across the quarter, 83 of them ours and 64 contractors on average. 31,008 road train trips completed over that road that a number of people were able to see through the quarter. And this is a statistic that always amazes me. We travelled an aggregate of almost 10 million kilometres on that road through that period. In terms of where we are at the moment, we have 120 min-res, in fact, over 120 min-res trucks commissioned on site, heading towards the 140 that we need. And our plan continues to be to transition contracted trucks out following road completion at the end of this quarter. In terms of FY25 shipments for Onslow, 14 million tonnes on a 100% basis, 8 million tonnes of our 57% share, and FOB costs were $57 a tonne in the quarter, full year at 63. Pilbara Hub, we shipped a total of 2.5 million, another strong quarter. That took full year shipments to a touch under 10 at 9.7 million tonnes. FOB costs were $76 a tonne, at the low end of guidance. And as we've announced separately, we completed in the quarter the sale of the Yorgan to an unrelated third party, which was a good outcome for the group and for the state of WA. In terms of lithium, you know, I think, again, this quarter's highlighted the quality of these two assets, Wojena and Marion. We've continued to work to bring flexibility into the operations wherever we can. The average realised price across both sites was US$6.42, dry metric tonne on an SE6 equivalent basis. Malmarion numbers were impacted as shipments were weighted heavily to June in the quarter, and it also has a discount applied to it for the lower road portion of its tonnes. So the average prices were about 8% below average indices. The price in lithium, and I'm sure you guys want to ask me a few questions about this, but the market's been up and down a bit. Prices were back towards $600, just over $600 in early June, and then since then we've seen prices bounce back strongly to $800 to $900. In terms of spot production, Marion and Warden have generated 145,000 tonnes and shipped 135,000, and the relationship with both of the JV partners, Elven Island Gang, continue to be very, very positive. In terms of Marion specifically, the FY25 shipments were 203,000 tonnes on an SE6 equivalent basis, above the high end of the guidance. And four-year costs, again, on SC6 basis, FOD costs were at $900. June quarter FOD costs, however, were $717. And that's in line with the prior quarter. And that shows the benefit of higher feed and continued plant improvements. And again, I can talk to this in more detail in the questions, but we've tried to bring more flexibility into the operations at Marion, recognising it's a DMS operation. What we're trying to do is, and you would have seen this in the quarterly results, targeted higher grades and focused on recovery than just pure volume. That does, depending on what we do with some of those flexible options, have the potential to increase costs a little bit next year or this new year, but we'll talk about that a bit later. In terms of, and as I said, we'll give more guidance before you result, but very, very happy with the way Mount Marion is shaping up. And one of the opportunities we see for the new year is to continue to pull the third strip out of it. In terms of Wojnar, another fantastic performance, production 32% up. better quality feed. We've talked about the importance of that feed for some time and the direct relationship through to recoveries. Costs on an SE64 basis down into 641 at Wojnar. Significant reduction over the course of a year. That's driven by continued laser focus on cost management and continue to improve recoveries. We've talked in the quarterly a little bit about some of the changes to the plant we're doing to give us a little bit more flexibility again in operation, and we're expecting to see recovery rates tip up above 65% through FY26. Just to give you a little bit of background of the costs, we're right through stage two now in terms of the all-body development there. That all-body's gotten better as we get deeper through that stage. FY26, we're just starting to open up stage three. Tend to see a few more stringers and narrow veins at the top, and then we expect to get better quality as we go deeper. So just bear that in mind as we think about costs for next year. Again, we'll provide explicit guidance in the result in a month's time. And just finishing finally with energy, we received just a day or so ago independent certification in relation to Moriari Deep, which came in at 27 BCF on a 2C contingent resource basis, which is just below the minimum threshold that we needed for a contingent payment on that asset. Lockyer 6, the arrangement there doesn't have a minimum threshold. That's going through the same certification process and we'll expect to find the outcome of that this quarter. So just in summary, very pleased with the quarter, both in terms of the operations, the continued performance of Onslow, the setting up of the business as we move into FY26, and the integration with the new board and chair. So business is set up very well going into 26. There's great energy in the business and a very strong focus on continuing to take it forward and strengthen it. With all that, conscious I've been talking for a bit, I'll now hand back to David for questions. Thanks.

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. And our first caller today comes from Paul Young. Please go ahead.