Metro Mining Limited

Thanks very much for joining this. I really appreciate the time and effort you take to follow the company. So please be assured that we don't underestimate that. So thank you very much for spending the time. As Peter said, Earlier this week, we released our quarterly report for the October, November, December months for 2024. I'll share the screen so that those of you who don't have it to hand can see it. So we can then sort of go through the document as we move forward. So all in all, you know, a strong quarter, very solid set of outcomes. we achieved so look the main aspect of it as we've been talking about all year has been the ramp up of our expansion and we continued to push through and deliver record shipments through this last quarter of the year again over and above the record shipments that we've had in all of the previous quarters. So the record Q4 this year was just under 2.1 million wet metric tons. So that's about 22% up year on year. And look, that's taken us to a total for the year of 5.7 million wet metric tons. So again, 24% up year on year from last year's uh, total. And, and I think, you know, from a, from a volume perspective, you know, we've, uh, we were a bit late getting, getting off the mark with the condition with the commissioning in Q2 this year. So really the ramp up only started at the end of that quarter. And so in the last six months, we've managed to, to pull the production levels up and there's a chart. Um, we've been showing this chart sort of quite regularly through the, uh, through the year, which sort of shows the ramp up through the year. And again, you can see through October and November, we actually achieved at times, not just on single days, but with this three-day rolling average, you can see there in October and in November, we had weeks where we had significantly above the 27, 28,000 tonne per day target that we had set. previously in the year. So we've demonstrated that the system can push through to the 30,000 ton level. And I think what's interesting is as we start to optimize the process, what we see is the bottleneck sort of move uh, through, through that, through the year as we, as we push through those, those expansion elements and we improve. And so we, you know, we, we saw particularly in this last quarter improvements in the, uh, tug and barging, uh, aspects of the business and also in the transshipment side of things. And so the bottleneck was really then, you know, has pushed back to, um, the barge loading facility, which is obviously fed by, by our screens, uh, and, and, but is, uh, You know, it's the place where we load the barges. And so we had expanded that in 2023. We put a fair bit of effort into speeding that up, widening belts, putting motors in, et cetera. And so that impacted. We hadn't done really much work in 2024 on the barge loader. And that will be then now, you know, an ongoing focus of incremental expansion and debottlenecking. you know, from here on. I guess of note, you know, we also still had a couple of days of downtime during October. We sort of had some weather events and maintenance events that occurred October and November. And then in about the middle, we had a belt failure in the beginning of December on Ecamba, ramped back up to to our plan. But then about around the middle of December, we saw the first sort of serious weather, the weather impacts into the operation. That mainly consisted of a bit of rain, but the main issues were wave heights and wind. And we saw about sort of, I guess, 10 to 12 days of production being affected during that period. But pleasingly, we were able to see The ACUMBA, so our offshore floating terminal, operate for significantly more time during that period than the floating crane, the single floating crane was able to do safely. So we're seeing some of that investment in larger, more resilient pieces of kit come to fruition in that period. And so that bodes well. And indeed, we continue to operate into January past the end of this chart. Because the weather remained reasonable, we shut down on the 6th of January to then go into our maintenance shut. And that was preordained pretty much because of a bunch of commitments that we had with respect to some of our transshipment assets like the tugs and the barges and also in terms of our barge loading facility being taken down for maintenance. And so we've completely disassembled our barge loading facility. So the stacker and the stinger, so the extendable conveyor at the end of the stacker have been completely disassembled and removed from the pontoon. The pontoon is going through a bunch of inspections and maintenance. And we have mobilized the stacker to weeper where we are going through a sort of a a full um breakdown and rebuild of that um and replacing the the whole of the extendable stinger unit is going to be replaced with a uh with a new a new unit so and again all the motors belts uh rollers etc all getting uh getting a full uh full birthday so that that's already uh already done and down in operation in weeper uh with our contracting partners there And we should have that back in the beginning of March. The other notable, look, in terms of outcomes then, in terms of financials, we saw pricing improve from Q3 by about 16%. I haven't gone back to Q, you know, to 2021. three on that, but obviously a strongly increasing price from 2023 as well. And that resulted in site EBITDA margins of just over $17 per ton. So we were guiding, I think, through the year that the back end of this year, we were looking to try and achieve around that $15 per ton for the second half, and we were a bit under that. for last quarter, but a bit over that for this quarter. And I might ask Nathan in a minute to just talk you through some of the financials. But before I do that, I will just cover the market side of things. So that pricing is a result of continued growth in demand from the Asia Pacific in particular. So we're seeing incremental gains out of the Middle East, out of India. But the main market, as you all know, is in China. And so we've seen continued growth, as you can see in that top line. So that's the total demand for bauxite consumption. And that's been growing steadily over the last few years. And you can see the difference between imports are still increasing share. So you can see now that imports are taking over 80% of the sharing consumption of bauxite in China. And that's still being driven by increased demand from aluminium, increased onshore production in the value chain there, and increasingly improved the consumption occurring at the coast is driving that imported demand for bauxite. which we're benefiting from. So we did just about get the calendar year results for this year. So a total of 159 million tons of imported bauxite into China. That's another successive record. Last year was a 13% increase on you know, 2020 through 22. And this year has been another 12% increase in 24 over, over 2023. So, you know, double digit, double digit growth in the main market. And we're seeing that, that broadly continue certainly over the next sort of 12 to 12 to 24 months, nothing to say that's, that's going to stop the, the market for Lumina. So our customers, our book site goes into a, alumina refineries, and you can see at the back end of last year, that price started to rise, you know, through the end of 2023. And then all the way through 2024, we saw sort of, you know, steadily increasing pricing. And then in that sort of last quarter of the year, we started to see even more tightness. Some of that was demand driven, but also there was some supply issues in that, both from Australian companies aluminum refineries from Brazilian aluminum refinery and also domestic tightness in China due to bauxite constraints in China. So you saw quite rapidly the price for bauxite, sorry, for aluminum rise. So when our customer's price rises, then the demand for bauxite, that marginal ton of bauxite becomes even more valuable to produce a very profitable ton of alumina. So you saw record prices for alumina in that sort of last quarter of last year. That then, you know, as I said, that does drive the marginal ton of bauxite in terms of its demands of the spot. This is the spot price, so the single cargo pricing from the CM group for bauxite through since the beginning of 2023. And you can see, you know, steady rises through 2023 and through the bulk of 2024. And then again, in that last quarter, so in that sort of October, November period for and into December, sharp rises for both the Guinea prices, which makes up a large amount of that spot, but also there were some price rises for the Australian cargoes as well, going up towards that sort of $100 per tonne. So this chart extends pretty much up until the current, sort of I think this last week's price. And so we're seeing Guinea price at about, you know, 110 to 120 and the Aussie price at about 90 to 95 US dollars per tonne delivered. So that is the spot. That's the spot price. Now, the Q4 price that's in our quarterly wasn't negotiated when these prices were around. So they were negotiated just before these prices came into effect. And so that was the result that you saw broadly flowing through into our Q4 pricing. I think that shows, obviously, the contract prices are lower when we're dealing with larger customers over quarterly periods, but it does suggest where the trend is going. It has come off a bit, as you can see, a little bit. Those prices rose very sharply and have just come off a little bit in the last month or so. We'll be entering into the market to negotiate the Q2 2025 price in about a month's time. So we'll be looking at these indicator pricing, aluminum price, aluminum demand, bauxite price, caustic soda price, logistics cost, et cetera. These all factor into the negotiation for open volume. And this year we've got about, we're targeting 6.5 to 7, million tons of sales this year in production. So about five and a half to six, depending on the volume, five and a half to six of that is open, depending on what our total volume looks like. So that's where we're at at the moment. We did also, during the quarter, announce a number of new contract partners as part of or extended or new contracts and new partners. So Lube Chemical signed an additional contract. Chalco, the largest aluminium and alumina producer in the world, has also become a substantial customer. And EGA, the Emirates Global Aluminium, who has a large refinery in Abu Dhabi, has also signed contracts. a contract for us for a number of cargo. So that's a really, I think, good indication of customers' risk assessment of Metro and our ability to supply and the quality of our product and also our financial strength, which has sort of obviously grown significantly over the last couple of years. So very, very pleased to have those very strong customers. And that's also in addition to our baseload customers, Jinfa, have been an amazing support to us over the last few years as we've been going through this turnaround and the expansion. So I might hand over to Nathan just to sort of talk us through the financial side of the business.

Yeah, sure thing. Thanks, Simon. So obviously, as you've just seen from some of the market information that Simon's just provided, We're very pleased to have seen that flow through to the site EBITDA margin, which, as mentioned, is a record for metro mining, so that's been very pleasing. I mean, aside from the margin, which we're obviously great beneficiaries of, with the price increase, really the focus for us has continued to be on the site costs to ensure that, from a flow sheet perspective, we're realising all of the gains as part of the economies of scale. That was the original thesis. So, pleasingly, although... Although what we saw was an incremental increase over Q3 2024, within the individual months during this period, we're very pleased to see site costs of getting as close down to $20 a tonne. If not for some reduced loading in December after being cruel by the weather, I'm confident that we would have seen an improvement on Q3 2024. So that's going to continue to be the focus and will be very much a big focus for 2025 is as we better understand our flow sheet and get greater consistency and ultimately reduce the variability in the operation, which is, as you can imagine, you know, far more expensive than versus a sort of more consistent throughput. We're very confident that we're gonna see even greater economies of scale come through in 2025 as we get a little bit more disciplined, a little bit more consistent and get a greater understanding of the flow sheet overall. Just while I've got the floor, I might just touch on some of the other corporate elements. So we were pleased to finish the year in a strong position in terms of cash flow. Obviously, one of the things that we've spoken about before was around the senior debt refinance. So, very pleased to have gotten that done before the end of the year and very pleased with the restructuring in our continuing relationship with the BARI. The other key highlight for us that we're very pleased with is the final junior debt repayment for the year. So, that's a bit of a seminal moment for Metro Mining and one that we're very pleased to have accomplished. during this period and and very very pleased to um beyond that with the repayment um have ingot artists and lamb hill there's they still continue to be very strong supporters of the business and we're very pleased to have them remaining on as um significant shareholders great thanks thanks nathan um i guess what we've both touched on a little bit is uh look we we can review

Q4, and I guess it's right to do so, but it's gone. It's in the past. And look, what I'm very pleased about, you know, in Q4 particularly was these elements that we've used, we've put in place now that really set Metro up. It's about, yes, you know, we've got to deliver on sort of short-term outcomes. And, you know, there's always room for improvement there. But really, this last six months has been really about setting ourselves up again for next year. So, you know, from a top line perspective, you know, the market will be what the market will be. But, you know, we've got in place now a very, very strong customer portfolio. So, you know, we will need to... negotiate prices around what the, the, the sort of contract market looks like, but that, that is a first class, um, offtake portfolio for us, uh, diversified different, different types of companies, different sizes of companies, different companies that operate in different parts of the value chain. So, so really, really, really a good diverse and strong customer portfolio. The, look, the, the production chain, um, all the elements are in place. I'm very pleased to announce that our own tug, Mandung, finally arrived. I mean, that's been a little bit of a difficult project, the refurbishment of that tug, which we purchased, you know, beginning of last year. It hasn't quite gone according to plan, and also means that we didn't see the cost benefits of having that in our operation and had to hire you know, hire an additional tug for the fleet, which has gone towards some of this cost, this cost inflation. But, you know, we've seen that now. We've got our marine fleet in a very, very good position to take on, you know, the next year, the expansion of the upstream part. So all of our prime movers and trucks and trailers are all in place. They're the two 992, the big wheel loaders, They're demonstrated operating the screening plants, you know, really, really seeing, you know, really, really showing what they were, what they were there. So, so look, I think we've, you know, all of that now has been demonstrated up to that 30,000 ton per day operating rate, which is exactly where we want it to be by, by the end of the year. Balance sheet again, you know, credit to Nathan and his team, you know, running a good process, a competitive process there. And, you know, we've seen, you know, cost of funds come down significantly, which is great. And put ourselves in a good position, again, from a cash perspective for this wet season to be able to go and do the things that we need to do. So still, you know, we're focusing on that reliability, on that reducing the variability and being ready to, to to try and hit that sort of seven million ton rate for the whole for the whole of next year so you know extremely pleased that you know all of that has been set up and over and above that you know freight contracts for our delivered freight so we're now moving into a new phase of our contract book for for those uh freight contracts and that you know that will also deliver cost savings to us from a delivered price perspective. So that'll also flow through to that. The differential between SIF and FOB next year will be several dollars better than what we've seen through 2023 and 2024. So these are all the things that really put a lot of effort into. You don't see the immediate benefits. And as we go down, as we start to see those economies of scale, as Nathan said, you know, we will be heading down towards that sort of $20 per tonne sort of FOB site cost. And, you know, that really does place us at the bottom of the cost curve and in a great position to withstand pretty much anything that this market can throw at us. So, yes, you know, very solid, good result for quarter four, but a lot of activity has gone into repositioning us for 2025 and beyond. So Peter, I'm happy to, as always, take some questions. We can stay on a little bit longer after the nominated time to cover as many as we can.