Stanmore Resources Limited

I would now like to hand the conference over to Mr. Marcelo Matos, Executive Director and CEO. Please go ahead.

Hi, all, and thank you for joining us today as we discuss our performance for the first quarter of 2025 following the release of the activities report this morning. It is no secret that it has not been an easy quarter in the Bowen Basin with rainfall of more than 470 millimeters from January to March. which is almost 80% of the annual average for the previous five years. This has understandably impacted operations and the whole logistics chains, whilst also coinciding subdued demand in the metallurgical coal markets, which has driven down the headline coal prices to a level not seen since mid-2021. Nonetheless, we are proud of the efforts from our side teams in managing these headwinds, to deliver saleable coal production of 3.3 million tons, although below our guidance on an analyzed basis. This result is above market consensus, given the expected weather impacts and in line with the prior quarter. Moreover, we are pleased to have kept full-year saleable production guidance unchanged, owing to the recovery plans being underway and the underlying resilience of our assets. In recognition of the market conditions, we have also announced a reduction in the guidance range for both FOB cash costs and capital expenditure, further solidifying our cost-competitive position. On a deeper note, we have maintained our focus on project development pipeline and are pleased to have announced the maiden JORC-compliant reserve statement for the combined Isaac Downs Extension project. Opening with safety. We are glad to report that no serious accidents occurred during the quarter, reducing our serious accident frequency rate to 0.15. This is a great start to 2025, and we are also pleased to have observed a significant reduction in our total recordable injury frequency rate, giving credibility to our proactive safety culture and the commitment of our site teams in identifying and managing risk. especially given the difficult weather-driven mining conditions we face within the quarter. Moving on to the operational update and starting with South Walker Creek. Overall, romco mining volumes recovered compared to the fourth quarter of 2024, supporting steady saleable production and a lower strip ratio. This is an impressive result in light of the challenging conditions demonstrating the underlying strength of the asset and adaptability that comes with a long strike length and multiple active fits, as well as the benefits of the asset being well capitalized in recent years. The drag lines, which are less impacted by the wet weather, recorded another impressive quarter with total material movement of 8.8 million BCMs compared to 8.1 million BCMs in the prior quarter. This sets a good baseline to execute on the recovery plan for the remainder of the year, which, as highlighted in the report, is expected to be weighted towards the second half as operations manage the flow-on effects from restricted cold recovery during the second quarter. On the project's front, the newly upgraded wash plant reached its main plate capacity of 1,200 tons per hour during the first quarter, and even above this throughput rate at times when consistent feed was achieved. The MRHC Creek diversion reached substantial completion, enabling clearing works to begin at the new E North pit. A Poitrail produced a standout quarter with stable coal mining volumes quarter on quarter, and the almost 850,000 tons of opening ROM core inventories providing the feed stability to support the increase in saleable production. With the North Queensland export terminal and the associated rail network adversely impacted by the extreme weather and flooding conditions in late January and early February in North Queensland, sales volumes were lower compared to saleable production. This has led to a modest build in product inventories, partially offsetting the drawdown in ROM inventory and positioning the asset well as weather recovery plans are actioned through the second quarter. The excellent operational performance out of portrayal has ultimately led to a slight increase in the full-year production guidance range for saleable production, enabling us to keep portfolio-level guidance steady. The Isaac Flames complex suffered the biggest impact from wet weather, with limited flexibility to manage the conditions from fewer active pits at Isaac Downs and lower opening ventures compared to other operations. Rum flow was 216,000 tons lower quarter-on-quarter, whilst saleable production was 240,000 tons lower and sales 140,000 tons lower, resulting in unexpected impact to strip ratios, which should improve in the coming quarters with increased cold flows. Dragline performance was a positive, recording strong productivity despite the headwinds, and supporting recovery efforts in the second quarter and for the remainder of the year. Nonetheless, considering the impacts in the first quarter and the expected recovery trajectory, We have lowered the full-year saleable production guidance range by 200,000 tons, with a commensurate impact to sales volumes expected. As highlighted earlier, we are currently expecting that this impact can be mostly offset by the higher volumes from portrayal, enabling us to maintain the total group guidance for saleable products. On the project's front, We have been accelerating our pace of activity for the Isaac Downs Extension Project, focusing on those items on the critical path for development and seasonally dependent activities. We are pressing ahead with the required studies and the works for the environmental impact statement, targeting submission in early 2026. As mentioned earlier, we are pleased to have announced today the made and reserved statement for the project. With a total reserve of 52 million tons, this release reiterates the underlying strength of this project as we press ahead towards an investment decision. On Eagle Downs, whilst this remains a core project and we are advancing work packages as part of moving towards achieving readiness to support a final investment decision, with the market conditions where they are, we have prudently notched our gear or two as part of the overall focus on cash preservation, meaning that we would not expect final investment decision readiness to take place in the first half of 2026. I'll now hand over to Shane to summarize our corporate activities and updates to guidance.

Thanks, Marcelo. Stanmore's balance sheet remains in a solid position despite the current industry conditions. with closing cash of 169 million US dollars, or around 260 million Australian dollars at current exchange rates, and total liquidity of almost 400 million US dollars. This positions net debt at 146 million US dollars compared to 26 million US at the start of 2024, at the end of 2024, sorry. The major cash items that are driving this movement include the $60 million dividend paid to shareholders in March and $17 million in capital expenditure, primarily related to the wrapping up of our key growth improvement projects at MRA2C and the South Walker Creek CHPP expansion. Furthermore, there has been a notable working capital build contributing to the increase in net debt as at March 31st. with our customer receivables balance having increased from the end of 2024, primarily due to timing differences in sales and cash receipts. Collections of those receivables has already seen the cash balance improve to approximately 224 million US or 350 million Australian dollars by the middle of April. In terms of guidance, as mentioned by Marcelo, we're pleased to have reaffirmed our saleable production guidance despite the weather-related headwinds in the first quarter. Hopefully it is self-evident in our quarterly report, but we do expect that our consolidated production and sales profile will be lower in the first half of 2025 compared to the second half, if considered in light of our full-year guidance, as we deal with the associated flow-on effects of the weather impacts from Q1 and enact recovery plans throughout the course of the second quarter. With respect to other guidance items, FOB cash costs are currently tracking below our previously stated guidance range of 89 to 94 US dollars per tonne. This is primarily due to lower input costs, as well as benefiting from a lower Aussie dollar exchange rate during the first quarter and into April. This, together with cost improvement initiatives being implemented for the remainder of the year, has supported a 4% reduction in FOB cash cost guidance to between $85 to $90 per tonne for the full year. Furthermore, we have taken a deep dive into our capital expenditures for the remainder of 2025, seeking to defer non-essential sustaining and improvement capital works into 2026 for reassessment depending on market conditions at that time. This, together with favourable effects in the first quarter, has supported a significant reduction in capital expenditure guidance, reducing the range by more than 20% to between 80 to 90 million US dollars. These changes add to Stanmore's already strong cost position in the industry, giving all stakeholders further confidence that the business is well placed to withstand volatility that is currently being experienced in commodity markets. I'll now hand back to Marcelo to conclude the call with a brief overview of market conditions.