Stanmore Resources Limited

Thank you for standing by and welcome to the Stanmore Resources Limited June 2026 quarterly activities report investor briefing. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you'll need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Marcelo Matos, Chief Executive Officer and Executive Director. Please go ahead.

Thank you. Good morning, everyone.

Thanks for joining us as we take you through our second quarterly activities report for 2026. With me today is Shane, our Chief Financial Officer. Overall, this has been an excellent quarter. Operations recovered well to deliver a rebound in ROM production following a weather-affected first quarter. And most importantly, this was achieved safely. This has supported year-to-date saleable production of 6.5 million tons, which is tracking comfortably within our REIA firm's two-year saleable production guidance. At this point in time, we are aiming to conclude the year at the upper end of the saleable production range, with a second-half production profile supported by healthy opening run stockpiles of more than 1.2 million tons and a significant Pre-Preparation Works completed over the second quarter. On the project side, we submitted the Environmental Impact Statement for the Isaac Downs Extension Project during the month of June to the Queensland Commonwealth Government in line with our expected timeline. I will let Shane discuss in more detail, but we have also been busy on the corporate side with the completion of a refinance of our Senior Corporate Debt Facility. The successful transaction received an overwhelming level of support that enhances the debt profile during a period of business and operational stability. I'll now move on to a summary of our safety and operational performance. I'm pleased to report no serious accidents were recorded during the quarter, with the serious accidents frequency rate remaining steady at 0.5, which remains below the industry average for open cuts. We remain laser-focused on maintaining this strong and consistent safety performance as we enter the second half, supported by our principal hazard management plans, which have been recently updated in line with Queensland legislation changes. All three assets delivered a strong operational performance in the Florida, rebounding strongly from the wet weather disruption earlier in the year. At South Walker Creek, Despite the 14-day routine shutdown of the CHPP in June and routine maintenance of one drag line, ROM and saleable production remain relatively stable quarter-on-quarter. Moreover, the mine sequence at South Walker Creek has been set up such that the second quarter is likely to end up being the highest level of quarterly stripping and pit preparation activity for the year. With that in mind, and together with healthy closing round stocks as of 30 June, we are confident that South Walker Creek is positioned for a strong second half performance. Port Reals delivered another exceptional performance with round volumes of 2.1 million tons, an increase of 16% over the average of the last two quarters. A deferral of the CHCT shutdown from June to July meant that consistent wash plant feed was maintained, supporting a step-up in saleable production to 1.3 million tons, with the year-to-date saleable production of 2.5 million tons tracking ahead of our annual guidance run rate. Isaac Plant Complex also saw the benefits of mine planning and improved weather management from the prior year, with run volumes recovering to 800,000 tons and saleable production steady quarter on quarter. As we move into the second half, STEMO is taking on direct control of key mining activities at Isaac Downs. The operating model is transitioning from a full contract mining services scope into an equipment dry hire arrangement with STEMO assuming operating responsibility as we await the transition to the Isaac Downs extension. As highlighted earlier, the EIS for the Isaac Downs extension was submitted in June in line with our planned schedule. Recent feedback from regulators on the submitted EIS has been positive, with the relevant department determining that the EIS can proceed to public notification stage. This means the EIS will be published for public consultation two months ahead of our ambitious schedule. Meanwhile, we have been keeping up the pace on the Eagle Downs and Lance Woods project. The Eagle Downs development studies are progressing well and on track for completion within the first quarter of 2027. At Lancewood, we have received encouraging results from detailed interpretation of our 2025 3D seismic program.

Turning now onto the coal markets.

During the quarter, we saw premium hard-cooking coal prices trade between 230 and 245 US dollars per ton. This was largely driven by ongoing supply constraints from Australia producers, while domestic metalwork coal availability in China was also tightened following a major mine accident and subsequent mine closures and safety inspections, which remain ongoing. The latter is rumored to have impacted production for this year by around 20 million tons domestically in China and has contributed to keeping domestic coal prices stronger and very close to seaborne prices once adjusted to a net back FOB Australia basis. This is meaningful in the context of the overall size of the metallurgical market, particularly as it relates to the seaborne market, which is a smaller subset of the total net coal mine. Overall, steel market conditions remained competitive through the quarter, with Chinese steel exports picking up pace despite the expansion of pace guard measures in India, as well as black furnace restart news and potential protectionist measures being implemented in Europe. For stainless specifically, we achieved an average sales price of $154 per ton over the quarter, and $163 per ton across the first half. When benchmarked against the simple average of the PLV index over the first half, this reflects an average realization of approximately 65%. This is lower than the first half of 2025 and has been influenced by the slightly higher weighting towards PCI sales compared to last year, as well as lower relativities of the PCI index against the PLV index. However, a straight comparison with a simple average of the indices in the quarter is not necessarily the correct way to estimate actual relativity, given the backward-looking nature of our sales contracts with respect to index pricing and quotation periods for specific shipments in a given period. meaning that price changes can take a little time to flow into our average sales price. With that, I'll now hand over to Shane to update you on our financial position, guidance, and the refinance.

Thanks, Marcelo. Looking at the balance sheet, Stanmore concluded the quarter with a consolidated cash balance of US$138 million, translating to net debt of US$72 million. Our net debt position improved slightly on the March quarter, which, as Marcelo mentioned, is primarily a factor of the investment we've made into additional stripping during the second quarter, while our sales volumes and realisation of cash receipts continue to catch up from the weather impacts earlier in the year. Furthermore, key non-operational cash flow items included capital expenditure of US$27 million, an increase on Q1 as we start to move into the typically drier months in Central Queensland, as well as our semi-annual debt repayments, including $35 million in scheduled principal repayments and $10 million in interest. Total liquidity remains very strong at more than $400 million, including the renewal of our unsecured working capital facility from GEER prior to the end of the half. Regarding guidance, we have reaffirmed our full-year failable production range and have no other changes to public guidance at this time. As per usual, we will provide a more fulsome update with our half-year results in August, including the release of actual year-to-date FOB costs and overall financial performance. Nonetheless, we are encouraged by the resilience shown by our operations in the first half and remind investors that our current 2026 cost guidance already incorporates a degree of anticipated macroeconomic cost impacts from a stronger Australian dollar and higher fuel costs. Finally, we are very pleased to have announced today the successful and oversubscribed refinance of our term loan and revolving credit facility subsequent to the end of June. The refinance encompasses an upsizing of the term loan from $210 million to $250 million with a restructure to remove the $35 million semi-annual amortization and replace it with a bullet repayment due only at maturity in June 2029. Furthermore, we have extended the tenure of our $200 million revolving credit facility from Q3 2027 to Q1 2029 just prior to the maturity of the term loan. The interest rate margin on both facilities has been reduced by 100 basis points or 1% which reflects our operational track record, strong balance sheet and an improving lender appetite for pure play metallurgical coal producers of which Stanmore is one of the very few such companies in the industry. Furthermore, this transaction significantly enhances our short-term cash flow, which comes during a period of operational stability, following a period of elevated capital expenditure and organic reimbursement, and as we continue to advance key development projects. That concludes the prepared remarks for today's call. I'll now hand over to the moderator so we can take your questions.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Brett McKay with Petra Capital. Please go ahead.

Good morning, gents. Thanks for the time this morning. Just a few questions from me, if I might. Just on the guidance side of things, and I thought you mentioned there that you likely track into the upper end of the guidance, but obviously with the numbers then for the half so far, very little to do to get to that upper end. What would you need to see to upgrade your production guidance and is that something you want to consider doing?

At this stage, we are not considering an upgrade.

As you see from the numbers, South Walker will have a stronger second half. We did have a 14-day shot in June. And that explains mostly, let's say, the performance of South Walker in the first half, given South Walker is doing just under, in average for the year, just under 600,000 pounds per month, which means a two-day shot is approximately around 300,000, which means South Walker will need to be, as we always explained in previous discussions, South Walker is is limited mostly by the wash plant capacity, which means we're going to be running salt rocket full throttle during the second half. ISAC this year is a bit of a different reality. I think ISAC is not CHPP constraint. It's going to be a ROM constraint going forward, right, given we are getting close to the economic limits of the asset. We did reduce the number of fleets. So in the second half, we're going to be running Isaac as a, let's say, the most steady state set up going forward, okay, with the drag line being the main enclosuring piece of gear. And we're down to a single fleet and a swing digger. So it's not very likely that we're going to see, let's say, upside in lump of organs going forward in Isaac Plains, where Port Royal is already running at a, let's say close to the top end or is likely above the top end of guidance on an annualized base. So if anything, I think performance in the second half portrayal will be a steady half on half performance. South Walker will be pretty much in line with guidance as we always say, constrained mostly by the CHPP with Isaac running pretty much in line with guidance. So all in all, that means I think we're still expecting to be within guidance, but as I said, around the top end of that upper range.

That makes sense. Thanks, Moshe. Just quickly on the capex side of things, just to clarify that 27 million noted of expenditure in the period, does that include any of the free shipping or kit development work that you did do at South Walker in the period, or is that outside and captioned on the cost side of things, the off-ex side of things?

It's a bit of... catching up on first half, in general, given the very wet first quarter. It wasn't very surprising to see that. But if anything, what I can say is the dewatering and demining of the GMFs in Southwark are progressing extremely well. They are ahead of of TAN, which is great, because as I said before, as part of that strategy of maximizing, accelerating mining in the MRHC area, that's an important, it's important progress. The earlier we conclude demining and rewatching, the more we save with that project as well, right? Because, I mean, TAN is mining in activities like that, and I think it's going to set ourselves up well for for 2027. But other than that, no major deviations to plan other than catching up with you on first half pace of projects.

Okay.

Just to clarify, do you know if much of that or is any of that using CapEx number, however? Or is more an OpEx charge for the period?

Yeah, there will be a little bit of

but that'll mainly come into the second half and then beyond. So we haven't had too much of an impact in the first half as a result of what we're doing there on the de-mudding.

Thanks. And finally, a bit of a... maybe not a schmooze, but a little bit more information on some of the organic growth projects in the portfolio with the addition of Lancewood. now just some commentary on that. Can you just remind us what the plan is there going forward in terms of the near and maybe the medium term as to how we should be thinking about that as a project and how to fit into the pipeline at this point and so on? Thanks.

Well, last week, if you recall, maybe rewind two or three years, at that time we wanted to investigate the potential for us starting a small open cut ahead of any, let's say, any more meaningful future underground development. We ruled out that option given, you know, the size, the life size of a box cut that would be required. It would be a terrace fit. So a large sweep ratio small open cut didn't prove and we just pivoted the work to try to understand the potential for, let's say, a larger development underground with the first step of the work being ruling out any potential fatal flaws around structure, okay, which is faulting. That would, let's say, compromise the ability for us to have high-productive long-haul mining. This 3D-sized campaign was quite successful, as in it didn't identify any new significant structure relatively to the ones that were already identified, which is a great, let's say, it's great news. I think we will be advancing work in Lancewood. I think differently from other grounds, Lancewood, I think what would make a difference in a potential future development is access, because I think we wouldn't need to do a significant drift development for Ashwood. We would be able to access close-in from a development standpoint from a box cut, which makes initial capital attractive, but on the other hand, for example, different to the Eagle Downs, it wouldn't have surface infrastructure. It would be a greenfield development from a surface standpoint. It doesn't have approvals, so a big part of the work streams going forward will be doing a lot of the ecology and groundwater work in parallel to us. I think we do intend to put the JORC reserves in the assets, so we're going to be doing work going forward to validate JORC reserves and complete a TSS, a three-phase study, and advancing approvals in parallel. There's a lot of work that is needed to acquire data to support approvals and submission of an EIS. So, given the need for approvals, we are not, I mean, we are looking at something around three to four or five years, at least, before we can see, let's say, any meaningful potential investment decision involving LandSource. So, I think it's great potential in terms of core quality, probably the best we have in our portfolio, okay, even relatively to Eagle Downs, but given the need to progress a lot of this work, Yeah, I think it sits a bit in the back of the schedule standpoint, but with a lot of focus and intention to progress that work as best as you can.

Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone. The next question comes from Glenn Wilcock with Byron Joey. Please go ahead.

Oh, good morning, Marcelo. Marcelo, could you maybe just help us a little bit on the cost? I know you said update guidance next month, but generally you always give us in this production report just how the quarter's gone. You know, three months ago you lifted the cost guidance by about $5 to $6 a ton. You made comments about Singapore gasoline oil futures curve. Now, if I look at where that is, it's probably tracking 20% above what you were thinking. So does that sort of maybe help you just think about the pushes and pulls on your cost base at the moment? How did the second quarter unfold? And, you know, is the assumption you've got now maybe a little bit dated with what's now re-emerging in the Middle East? Thanks.

Hey, Glenn. Things are on track, as much as I can say for now, given I don't want to anticipate the release of the actual financials here in a few weeks. But we provided revised guidance. What I can say looking back to the first half, I think we are comfortable. We are not seeing any need to do any further revision to what we've done before. If you look at the things we can control, I think we are, everything is on track with FX and diesel being probably the main uncontrollables going forward. If you just rewind two or three weeks ago, I probably think things were very comfortable as far as diesel plants are concerned. Obviously, we need to watch. I think the things are very volatile again. The spot price has been a lot higher. We did not have any effect of QP, okay, quality premiums in June, for example. It is a lagging process with our suppliers, so I think that those things are actually, they have a one-month lag on how post-priced materialized in our costs, including potential quotations, sorry, quality premiums. So, a little more at a glance. For the moment, we are not seeing any need to blame any for revisions, and I think we are comfortable with what we've provided before as a range.

I think I'll be okay. We will race as we get closer to the end of August. A lot of things are moving very quickly, as you know, in this space, but I've already said, but not as much as it stands.

Yeah, but I mean, I guess your assumption was 120. If I look at the SGO today, it's probably more like 140 or 150. Is that right?

Yeah, it's in that sort of range. I mean, months ago it was about 110. So it is moving around quite a lot. I think even looking at the forward curve, we do have the benefit of some hedging kicking in in the second half, which sees us... comfortable with the range that we have to be able to tolerate that adjustment that we keep an eye on it.

And Shane, any change to the $0.70 to $0.80 a tonne for every $10 a barrel? Is that still for the whole? Is what you're seeing closer?

Yeah, it may be a touch lower if we look at a full year average. I'm just a benefit of the first half actually having gone through that, so... Yeah, it's maybe close to sort of 50, 60 cents US, $30 per barrel.

Okay, great. And then, Marcelo, obviously the angle of opportunity has now come and gone. Is there anything else out there corporately that you can look at now? Is there anything underway or is it now just a complete, like it's internal now for the business? How are you thinking about looking forward?

I always look at what's out there, Glenn, Yeah, I think there's a lot of work now that we need to do in the next couple of years on delivering on the IDExpense project. I think, fortunately, we are so far all very positive. The EIS is going for public consultation without the need for an adequacy review, which is probably unheard of in Queensland, which is a pretty good deal. I think it's a testament for the good work that the team put but also good relationship with working with the government departments here. Eagle Downs, lots of work going to finalize that goal stream by first quarter next year. Lancewood, as I said, some promising deals, although just because of the approvals, timetable, quite a lot to do in that space. So, obviously, those are the things we can control. I think we do have good projects and and good options organically. I think if something inorganic pops up that proves to be value-accurate and complementary to the portfolio, we're always going to be active and exploring. I don't think there's anything out there now that is concrete happening, at least not that I'm aware of. Nothing major. As you know, we've done a lot of Organic type of M&A, I'd like to say, in the past few years, with the likes of Eagle Downs, the Isaac Expansion, which are small M&As that bolt onto our portfolio and complement what we have. They are not major transformations on M&A, but things like that, they are always there, and I think we're always going to be very active in exploring those.

Well, I'm going to go see them before I see them, I'm sure. Thanks, Marcelo. No worries.

Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone. We'll now pause a moment for any final questions. We have a follow-up question from Brett McKay with Petro Capital. Please go ahead.

Thank you. Sorry, I got put off a moment ago. Just following up on that Ransom question there, Marcelo, can you just give us a quick indication or rough indication, I should say, of the timing of that PFS that you noted there?

Sorry, I think I missed that. An indication of timing of what?

Of the PFS. He mentioned in the commentary there that you were working on a PFS for Land Food. Can you give us a rough idea of when you might release that?

Look, we need to put... We want to finalize and conclude draft reserves for the assets, so there's a bit of work to do in that space. development options, including surface and infrastructure. So, I think they're looking forward at all in all, probably around the 18 months to a couple years of work ahead of us. Yeah, and approval is happening parallel.

Okay, that's right. Thank you.

Thank you. Your next question comes from Tim Elder with Ordnance. Please go ahead.

Yeah, good morning, my fellow Shane. Thanks for taking my question. Just a quick one on kind of the debt refinance piece. I'm interested to understand more of the rationale around like the timing and then obviously you've moved from a P&I repayment schedule to a bullet repayment. What's the plan with that extra $70 million in amortization savings?

Yeah, hi, Tim. It's Shane here. Yeah, look, I think we're

by council with the level of debt that W has and had at the beginning of this year as well. So it took an opportunity with market sentiment improving, particularly for eligible coal producers, to look at a refi, part of what we call a mini-refi at this stage where we're able to remove amortization, reduce our cost of debt, and get a little bit more runway on the revolver. I think what that does for us is it puts us into what we would say is a very comfortable capital structure for the business going forward. So we have, obviously, some projects on the horizon. We have the Ike Downs extension project coming up that will require a little bit of CapEx investment. And so this just gives us flexibility in considering funding options for that project.

Thank you.

Thank you. There are no further questions at this time.

I'm going to hand back to Mr. Nettles for closing remarks.

Thank you for your questions and for joining today's call. I also extend my sincere thanks to our employees and contractors whose hard work and commitment made these results possible. Look forward to speaking with you next month when we share more on our 2026 plus high performance in late August. Thanks all. Good day.

Thank you. That does conclude our conference for today. Thank you for participating.

You may now disconnect.