Whitehaven Coal Limited

Good morning, everybody, and thanks very much for taking the time to join us today for White Hand Coal's full year results call and presentation for FY24. As usual, I'm joined by Kevin, our CFO, Ian, our COO, and our IR team with Kylie and Karen. Kevin and I will go through the presentation as usual, and then we'll move into the Q&A session as quickly as we can. Moving on, firstly, first and foremost, our safety guidelines. Our safety and environmental performance, just want to focus on that. These are very, very encouraging results from our perspective. And I say that because it's made them more pleasing because of the level of distractions that have been going on in the business from the non-routine activities that we have in a normal year. So to be able to land on safety and environmental performances that we have has been particularly pleasing. New South Wales business, of course, historically has been on a very good trend. It's nice to see that it continued that this year with our TRIFA down to 3.3 for the year, which is a great change and 30% improvement. Our new assets in Queensland have landed with a TRIFA of 6.6 for the quarter. And we are working very closely on integrating our business together to ensure that we've got wide-ranging safety management systems rolled across Queensland and we continue to drive the performance that we've been experiencing from a safety improvement perspective. For the second year running, we've had no environmental enforcement actions, which has been terrific. And certainly Queensland also emulated that type of performance with the quarter that we've got in our results here today. I'll go over to FY24's highlights. And of course, this has been a transformational year for us with the acquisition of the Queensland Metallurgical Coal Assets. We have successfully transitioned into ownership, obviously, to Whitehaven, and we've delivered successful and safe production outcomes for that first quarter, being Q4 of the FY24 year. Overall, the New South Wales business has performed well, and the highlights of that is the overcuts performing nicely, And certainly Narrabri has certainly turned the corner and performed better in Q4. Looking at the financial highlights, we delivered 3.8 billion of revenue and underlying EBITDA of 1.4 billion and an underlying NPAT of 740 million for the year. This includes Q4 revenue contribution from the Queensland assets of 869 million and 272 million of underlying EBITDA contributed. The statutory impact for the group at $355 million is after non-recurring items primarily related to the acquisition. Kevin will go through that shortly for you. These good results have underpinned the financial stability of the business and allowed us to declare a final dividend of $0.13 per share to be paid on the 17th of September, taking the total for the year to $0.20 for the year fully franked. From a TSR perspective, across the year, we delivered a 23% return across the 12 months, which is a pretty positive result, which ranks us about 30th in the ASX 100, hitting above our weight, given that we've been hovering between the 80 and the 70 range across the course of the year. From an operational perspective, we delivered 24.5 million tonnes of Brom. New South Wales realised a price of $217 Aussie for FY24, the Queensland for the quarter of June, $271 Aussie, good results both there. New South Wales unit costs ended just above the top of our guidance at $114 over, reflecting lower than planned volumes from our narrow road production. And then, of course, taking one quarter and integrating that into our results gave us an overall result of $120 Aussie per tonne for the group. The Queensland component of that being $147. But before we get on to the financial results too far, I did want to just pause for a moment and talk about the other important announcement that we put out this morning. And that is that obviously we've announced this morning that we've now signed binding agreements to sell to Nippon Steel and JFE a combined 30% equity stake in the Blackwater mine, which has been a fantastic end to a process which has been done not just cooperatively and with a fantastic spirit of goodwill, but a very competitive process and a very expeditious timeline, I have to say. We do feel like we have formed, you know, essentially the gold standard of joint ventures in metallurgical coal assets, I have to say. And this marks the completion of step two, a two-step process, which sets up Whitehaven for the future. When the transaction completes, Nibon Steel will have 20, JFE will have 10% of the joint venture, and we are to receive a consideration in aggregate of 1.08 billion US upon the completion of these transactions. It is a strategic initiative that we've been chasing here and it includes long-term offtake arrangements for both parties and validates Whitehaven's acquisition of these important assets and the ongoing importance of Blackwater Coal to the Met Coal asset, the Met Coal coal market. Whitehaven will manage the joint venture and our partners are supportive of the strategic direction we want to take Blackwater in and we're at our drive to continue to unlock value from this important asset over time. The return metrics for our retained position in Blackwater are enhanced by this joint venture arrangement and not just obviously selling it at a compelling price per percentage point of equity in the Blackwater mine, but we also keep the 100% of the free cash flow of course from the time that we bought the asset, the 2nd of April, right through to say an estimated closure period that we estimate at the back end of the year. So for the nine months that we hold the asset, we take all the cash flows. And in addition to that, we have a $2 US per tonne management fee as the operator of the mine, which will kick in, will be indexed, of course, but will kick in and cover all the sales tonnes for the operation. So very positive enhancements to our overall terms of the metric. And of course, taking the money off the table, de-risking the balance sheet has certainly enhanced the return metrics for our retained position. The cash proceeds obviously fortify the balance sheet very quickly and should take away any concerns about gyrations in coal prices from time to time and our ability to meet all the various commitments we have associated with the original purchase. The buyback remains on hold for two years, as we've said, and dividends will flow from the New South Wales business as you've seen is declared today But I think with, obviously, with the strengthened balance sheet and by the time the proceeds for this transaction materialise in the bank account, which is likely to be Q1 of calendar 25, the board will have the opportunity to review the payout ratio for the final dividend for FY25. Whitehaven remains the obliged or on the hook for the contingent and deferred payments, but obviously the price that we're we've negotiated with the two joint venture partners includes the upfront payment of their share of those payments as well. And so we'll keep that money aside and make sure that we've got all those obligations covered nice and tidy. And as I say, our balance sheet is certainly in very good shape. From our perspective, this is a tremendous conclusion to a two-year acquisition process and assuming the transformation of the company into a metallurgical coal producer and now on a very solid financial footing. Moving across to our business, our markets, obviously Whitehaven is transformed into metallurgical coal producer, but maintains a fantastic position in the high CV thermal coal market. Obviously that thermal coal market, Japan, Korea, Taiwan and Malaysia are now complemented by our metallurgical coal customers. And it's nice to see many of the most familiar customers to us, but it is a much expanded portfolio in that sense. So FY24 sales revenues, 50% of it came from Japan, Taiwan was next at 14, Malaysia at 10, South Korea at 7 for total revenues. India was at 6%, but that will increase, as we know, with the greater proportion of the Queensland production in this New Year's numbers. Beyond the top five countries, 13% of the revenue comes from Europe, Vietnam, Indonesia, Chile, New Caledonia, a range of good jurisdictions to be selling into. As we commented at the time of the quarter, the revenue split between MET to thermal at the quarter, Q4 was 69 to 41. We expect that to gravitate to the 70 to 30 over a full year, given, as we said, there was a lower proportion of sales out of Dornier and we spoke a little bit later in the presentation. I know these next slides, I'm over on page nine, you've seen these before, but it's worth highlighting that we are now strategically exposed to structural supply shortages on both sides of our business. to pick that well. Commodity Insights is the source of this data, and we can see that looking at their analysis here, the high CV end of the market, you can see demand is expected to grow by 20% between 2024 and 2040, but supply is expected to fall by 33%, so that's going to do good things for our prices. Metallurgical coal represents a similar sort of dynamic here, and you can see that metallurgical demand is expected to grow 22% over the same period, and suppliers expected to fall by 8% at the same period. So that's going to cause compression, which is going to underpin very good pricing for the future. It's not just commodity insights, obviously, forming these views. Woodmax views also consistent on the metallurgical coal market side of things. And as you can see here, this is obviously the market itself looks pretty consistent along the time, although growth occurs. But obviously the big driver here is India, with India's With India's demand expected to grow 110% out to 2050, Asia is going to grow about 29% through that same period. Dawn and Blackwater are obviously important resources playing in this market. And as you've seen with the formation of the joint venture, the validation of Blackwater's role in the military coal market, I think, is strongly endorsed by these important T1 joint ventures wanting to secure their supply of these valuable products. Looking to the external market quickly, you can see there's a range of factors which we caught out here playing into the external market dynamic. Demand for hard coke has been strong. India's demand grew, although in the current dynamics it is a little bit softer based on the weather playing out there at the moment. Thermal markets have remained resilient through the whole market and wood pricing has been a familiar backdrop for the year as a whole, which is very positive. Supply dynamics on both sides have been a little better in Australia, so good weather has allowed producers to do well in this period. And external pricing, we've seen the POV hard-coking price average for the year at $2.87, which is very positive. Flat semi-soft was about 60% of that number, which is lower than historical yields, but we've talked about that many times, so I understand that. GCNUGA across the year at $1.36 was a good number. Obviously, it's a little stronger at the moment with about $150 per tonne, which is very good. Now, of course, it's not all about just good pricing and so on. The cost side of things has been buffeted by significant inflation, as everybody understands. And we can talk about that a little bit more when we get to the cost side of our things. And whilst we've talked that labour is more accessible for us, the labour costs are still high. And then we're calling out here, of course, the obvious regulatory impost in terms of the inflationary impacts on our business. And I'll just name a couple. Clearly, the safeguard mechanism is part of it. Same job, same pay. New South Wales coal reservation policy, thankfully, finished at 30 June. And then higher royalties across Queensland and now New South Wales as of the 1st of July. All that places inflationary pressures on our business. So our task is to make sure that we can combat that through cost reductions and productivity across the business. The operational results, I'm not going to dwell on too much because you saw them in the quarter, so I'll skirt through these relatively quickly. RON production, 24.5, as I mentioned before, is 34% up, 26% being Queensland, of course, and 8% increase in New South Wales. Managed sales volumes increased by 22% year-on-year. I'll just move across and talk to the various segments of our business now separately. New South Wales, 19.7 year-on-year, did well. The open cuts have performed strongly. Narrabri in total was less than what we want, but there was very positive turnaround in the recovery in Q4. Warehouse Creek obviously finished up production and has transitioned into a rehabilitation site. And we saw the first tons come out late in the year on time budget for Vickery. So a small contribution in FY24, and you'll see that ramp up in the new year. And just quickly on the sites, malls exceeded its guidance, did well. We did turn off AHS there, obviously. It did exceed its guidance, which was very positive. Mining has finished in the southwest area now, so we are 100% in pit dumping there. Narrabri, as I mentioned before, a tough year, but certainly a good turnaround in Q4, and that continues into this year, which is very positive. Tarrawonga exceeded its wrong. Next year it is, or this year it is, moving into that hill section in Tarrawonga, so we are entering a higher strip ratio area, so that does affect the amount of tonnes that will come out of it in this particular year. Whereas, as I say, it exceeded its guidance, but has closed and now moved into rehabilitation. I'll just focus very quickly just on Hickory. As you can see, there's a real mine there in the picture in the slides there now. So that's been very positive. So a small contribution, i.e. 100,000 tonnes, obviously in Q4. But this year we're expecting to be a replacement essentially for Werris Creek tonnes in this year. The construction went very well on time, on budget and safely. So we're very pleased with that. And we have all all the approvals in place to continue on with this and the board's consideration can look at when is the right time to bring that on. But as we've said, that has been off the table for, will be two years from the time of the transaction. Focusing on Queensland, we've added in the historic numbers for you, which may help for context, and then called out obviously the period of our ownership here in the Boulder, that has been previous BMA numbers. But we had a safe and stable transition into our ownership, which is very pleasing. And the quarter, the first quarter under our control was fantastic, actually. So we had very good results from Dornier at 1.3 million tonnes and Blackwater at 3.6. Performance looks pretty good, trending into this new year as well. So we're very pleased with that. So the quarter did actually, from a Blackwater perspective, saw a couple of production records hit. And we saw actually quite a few productivity improvements at Dornier as well, which is very encouraging and lays a good foundation for this transition into the new year. focus. It does need a bolstered leadership framework to be able to manage this adequately. So we have made some changes, and I'll just call this out briefly. Ian's role has been restructured and changed, and he's taken on the role of our COO, which is very pleasing. And we put in place a regional general manager role, which Dan Iliff has taken on the responsibility for both Queensland sites and also the ROC, the remote operating centre in our Brisbane office. Reporting into Dan, you've got two general managers here now. Todd Matthews taking on Blackwater. Sean Milford taking on Dornier. Two very seasoned and experienced Bowen Basin operatives. So got plenty of experience across all forms of mining in Queensland. And we're looking forward to seeing the benefit of their leadership on the sites. And very well known to many of the people in the Queensland market, being experienced people. So I think that This team coming together will assist us in driving changes across the business. Obviously, there's significant opportunities for realignment of this business, and we are transitioning the Queensland operations to a simpler, more Whitehaven-style operating model. And you would have seen already last week or so, we've started that process with some changes to workforce with some 200 roles affected by that. But that job will continue and the team is very engaged in making sure that these sites are rebased in an appropriate way and at all times ensuring safe and reliable production. We are focusing on top another $100 million worth of initiatives which we're working independently of the guidance range that we're giving. We'll speak to that a little bit later, but that's across a whole range of initiatives which we think there's very good opportunities here in Queensland to make sure we rebase the business as quickly as we can. And with that, I'll hand over to Kim for the financial advice.

Yeah, thanks, Paul. FY24 is probably one of the more noisy sets of numbers that Whitehead & Coal has produced in the last decade, I'd say. So let's take a little bit of time to go through it. We reported $1.4 billion of underlying EBITDA. And you can see it in the top line there. Transaction, transition costs, and some other things related to Werris Creek, accounted for about $601 million of non-recurring costs. A large part of that was stamp duty, so that's about $360 million that we expect to pay in the first half of FY25. And there was $73 million of other transaction costs and about $125 million of transition costs, which included building an IT system to replicate BMAs so that we could pick these assets up and start them on the 2nd of April. And we had a Queensland... integration team that was involved in that as well. So outside of stamp duty, the transaction and transition costs totaled about $200 million on a pre-tax basis. In the remainder of the business, we had about $31 million of non-recurring costs in relation to an inventory valuation uplift. So what that means is accounting standards require us to bring the inventory in at fair value, and that means the normal margin that you would expect to see from those tons doesn't emerge in the P&L. That's why I that adjustment is made. And finally, when we closed Warris Creek, we had about $11 million in one-off closure costs around redundancies and putting the rehabilitation provision to the right place. After these significant items, EBITDA was 798. So that's the statutory number. The DD&A was about 319. And I think the brokers and the analysts of the world will want at some point further guidance on how DD&A and interest works. So Kyle has attached that in the back of this process, and we'll be happy to take people through that. It is one of the bigger differences between people, pretty easy to get to either da, but the NPAT becomes a little bit murky with all these transactions that are taking place in the next few years. We reported a statutory NPAT of 355, but if you add back the significant items, the underlying NPAT was 740. And as usual, the tax rate was about 30% on that. So you should continue to use that rate in your model. Come over the page, I think on financial history and it's, 2024 was a very good result of 1.4 billion, but 2022 and 2023 were excellent results. And they were the years that pushed this business into the position to be able to provide increased returns to shareholders and diversify. So very good two years. But if you go back 10 years, Whitehaven's three highest years of underlying earnings before the contribution Queensland had been, 22, 23, 24. FY18 and 19 were both very solid years, but they were about 1.04 billion. And the next strongest year in 19, the underlying impact was 565 compared with 740 and 24. So what am I trying to say about you two? I think structurally what we're telling you and what we see in the markets is that these coal prices that we've been seeing for a number of years between that US 120 and 150 for thermals, seem to be sticky. So, and if you look at FY24, you can see the potential of the contribution from Queensland. We are excited by those two mines and very happy to see them in the stable. Segment financial results. On a revenue basis, Queensland, as Paul said, contributed $869 million in Q4 to the total of $3.8 billion of revenue and an underlying EBITDA of $272 to the $1.4 billion total. It's a good start. There's plenty to do in Queensland and there's plenty to do with it. So we look forward to that. Come over the page to sales mix and realisations. New South Wales reported equity coal sales for the year of $13.2 million with an average price of $217 a tonne. Queensland reported 3.2 million tonnes of coal sales for the quarter, which, as you know, was below expectation due to the transition-related rail path issues of Dornier and it achieved an average realised price of $271. I think you're going to need to see a few quarters of this play out to see the traditional run rates of product qualities and product mix. So just bear with us on that. Nevertheless, in Q4, hard coking coal and semi-hard coking coal sales achieved a price relative to the prime road oil hard coking coal index of 81%. But the semi-soft and PCI volumes were lower because of the Russian influence in the market. On a group basis for Q4, revenues were 59% from met coal and 41% from thermal. And without the rail-related issues of Dornier, we would have expected to have seen higher met coal revenues. Come over the page on the margins. It's healthy margins. At a group level, we realise an average price of $2.28 and a unit cost, including Queensland, of about $1.20 before an average royalty of about $24 a tonne. So you can see the margins that are coming out of this business With the addition of Queensland Ops in the last quarter, that unit cost increased. But the Queensland unit cost of production in Q4 was about $147 a tonne. And the first quarter of our ownership, the royalty rate in Queensland was about 15%. While in New South Wales, the royalty rate was 8%, but has increased to about 10.6% from July. So the government's benefiting from the coal industry quite well. EBITDA margins, a little bit, you can see the FY23 margin, which was outstanding at 303, not to be repeated as coal prices softened, but a very healthy margin of $84 a tonne in FY24. And I'll be happy with margins that run around the 50% with a coal price on a normal basis, on a normalised basis. So let's go to the Iberdar Bridge. No surprises, almost $4 billion in Iberdar and FY23. And as the coal price came off its highs, that took about $2.7 billion off the Iberdar. And you can see the $138 million change in cost was really around $12.7 at about $10 or $11 a tonne. 12.7 million tonnes of sales at about $11 a tonne. Queensland contributed $272, and this is how we get to $1.4. I draw your attention to the fact that we pretty much are washing all of Maulstreet, Tarawonga and Vickery, and that is helping to support costs, but it's also driving the revenue outcome that you see, which is a GCNU plus outcome. Come over the page to cash flows. You'll recall we held about $2.7 billion of cash, but we knew we had to pay about $800 million to $900 million of tax. So really there was about one point $1.8 million there that was unaccounted for. We generated $1.3 billion in the period. And as I said, we paid the tax $880 from the previous year and about $140 for the current year. We spent $496 million on expenditures and other acquisitions. We returned almost $400 million to shareholders. And those were payments and others were just lease payments before we spent $3.3 billion buying Dornier and Blackwater. Now, clearly, As Paul said, we expect in the first quarter of calendar year 25 to be receiving US $1.080 billion, and that's about $1.6 billion Aussie. So we're expecting that that net investment there is going to be very attractive. So we finished the year with net debt at about 1.3, and as I said, we'll look forward to the collection of the proceeds, the sales proceeds from Nippon Steel and JFE. Net debt and liquidity, we've got plenty of liquidity. If you look at this, we have $556 million of liquidity at 30 June 24. We've established a couple of other facilities post that period to add to that liquidity, and we're generating cash flow from the business every month. So that strategic joint venture with Nippon Steel and JFE and the $1.08 billion there, US, that will be... that will effectively turn us into a net cash position before we settle the US 500, the first US 500 with a billion may on April next year. So I'd say balance sheet in excellent shape. Turn over the page. I think our capital allocation framework has delivered really solid outcomes to shareholders and to the business. You know, it's served us well. It's a disciplined process that says we keep the business going well, we put the balance sheet in great shape, and there's real tension between where do we deploy capital and provide returns to shareholders. For now, the buyback remains paused. Dividends are being determined based on the earnings from the New South Wales business. We've said in light of the acquisition that cash flows from the acquired business will be directed to retiring vendor finance first. and the decisions around major development expenditure will be on hold until the deferred payments are paid down. When we receive the $1.08 billion, the board will have the opportunity to review this capital allocation priorities and timing. And as Paul said, we'll look to the full year FY25 dividend to see where that goes. But overall, A final dividend of 13 cents fully franked takes the full year FY24 dividend to 20 cents, which is pretty easy to remember. And that's about 22% of group underlying impact. So we expect to continue a significant, we expect a significant step up in capital returns when the deferred payments are made and surplus capital emerges from these expanded assets. So I'll hand it back to Paul and go from there.

Thanks, Guy. Turning over to the full year guidance. In FY25, of course, everybody will understand that we're focused on continuing to integrate the Queensland assets and setting up a robust base against which we can deliver strong results and sustainable outcomes. We have deliberately taken a measured approach to guidance with these new assets, as you would imagine, being the first year of our ownership and having had them now for nearly five months. I think we all want to ensure that this year ends well. And to that end, you will understand that we've taken a level of conservatism and that has been prudently applied in the construct of our guidance for this year. We expect to produce 35 to 39.5 million tonnes of ROM production for the year and to deliver a range of 28 to 31.5 million tonnes of managed coal sales. We believe this is very achievable. Queensland ROM production reflects a focus on increasing the blasted at the inventories and pre-strip inventories to optimise operations and a set of base for improved performance of Blackwater and deliver ongoing AHS productivity at Dornier. New South Wales wrong production reflects the closure of Werris, of course, and the ramp up of Vickery. Mining it up, there is a higher strip ratio area. We're heading through the hill there at Tarrawonga, as many people have observed. And we have allocated an eight-week long wall move for now by informing our guidance for this year. That'll be in January 2022. January 25. The reason why it's eight weeks longer than normal is we do have some shocks that we want to bring to service. The maintenance can't be done downstairs, so we will bring them up onto the surface so that we can get up to some of that important work. We expect hot costs to be in the range on a group basis from 140 to 155 Aussie dollars per tonne. Certainly reflects the underlying labour cost increases as continuing as BBAs are rolled out across the business. The Queensland cost base obviously represents lots of opportunities to improve. You'll see us attack some of that already. You will see us continue to do that as we move through the course of this year. The capital guidance there at $450 million to $550 million, I think it's pretty judiciously configured. We have pulled out the microscope and had a good look at that across the business. And so I think given the scale and change of the business, that is a pretty responsible way to configure our first year of ownership of the broader business. Queensland, we're accounting for about 40% of that. New South Wales, 60% of the capex for FY25. And in closing, just coming to our focus for the year, predictably, as we described, we want this year, obviously, the first year of the expanded business to go well. So we're very much focused on sustainable operational performance year to year and improved cost management across the entire business. In New South Wales, our efforts will be directed to consistent and reliable operations at Narrabri, as well as our open cut operations and ramping up early mining at Vickery. In Queensland, We want to set a strong foundation in FY25. And we know we can deliver significant value, not just in this year, but in years to come. And it's all about setting that up for the future. So further alignment of Dornier and Blackwater will be the focus to Whitehaven's simplified operating model. And as I mentioned just briefly, rebuilding blasted inventories and pre-strip at Blackwater will certainly be a point of focus, as will be further productivity gains at Dornier with the AHS system. And of course, overall, as I mentioned earlier, there's a $100 million bucket of costs and issues that we're looking at in Queensland. And our target is to rebase the run rate of costs at the end of the year by that measure. So just to be clear, not delivered within the year in terms of those saves, but rebase the run rate of costs by the time we get to 30 June. And of course, we want to see the terrific trajectory of safety performance going across the entire business and also the environmental compliance that you've seen in more recent years. At a group level, we obviously will be focused on completing the sell-down, a very exciting transaction as that is, and as we've said, we expect that to complete. They are two separate transactions, so they can complete at different times. We hope that it's at and around the same time. But we think that will be in the first quarter of calendar 25 when the completion occurs and the cash will be in the bank. Terrific result as that is. And to that end, I'd like to thank all our people who've worked tirelessly during the last year or two, actually, to transform the business into what it is today and to our board for the steadfast support to be able to navigate our way through this transitional two-year period. It's very satisfying to see the business on a steady footing and de-risked as we chart out boards into the future. So I thank you all for your support, and I'll particularly thank our shareholders for their ongoing support during this period of change for us. So with that, I'll hand over to the operator, and we'll get the Q&A going. Thank you.

Thank you, Southside Analyst. 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're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Raoul Anand with Morgan Stanley. Please go ahead.

Hi, Paul, Kevin, and Ian. Congratulations on the deal. Look, my first question is perhaps focused a bit on the unit cost going into next year. If I look at FY24 and I back out what Queensland did in terms of your actuals, I arrive at about $164 or $165 Aussie per tonne. And if I look at FY25 and I try to hold Queensland at about that level, it would imply that your NSW costs have gone higher to about $130 a tonne from about $115. So I guess what I'm trying to get at is, is there a mixed shift here in your NSW production guidance numbers? Is it more coming from malls versus Narrabri? I mean, what's driving this cost increase into next year? Or has Queensland cost actually gone up significantly into next year? So that's the first one. And I'll come back with a second. Thanks.

Yeah. Thanks, Raoul. I'm going to try to answer some of that. I'll hand over to Kevin for a little bit of this as well. A couple of the numbers that you've implied there, not quite sure how numbers equate to what your RO, but thematically, I think that's a reasonable proposition. We've certainly got lower volumes in New South Wales than we would otherwise like. We're taking a relatively conservative position there. Of course, we're going to have a little less out of Tarrawong as we go through this high strip zone. So that's less than last year. Whereas Creek, obviously, is broadly replaced by Vickery. So that's relatively neat. Malls, no particular change there, volumetrically from there. But as I say, we're continuing to work through the inflationary impacts that our business, so we've got that rolling through. But lower volumes overall in New South Wales does lead to a higher cost per tonne as a result of take-all pay absorption across the tonnes that actually are produced and then washed and sold. Queensland, we have taken a conservative position there. I think that definitely influences this. You know, we've only had the business now for five months and we had to scramble pretty quickly to put a budget together, which I think the team's done an admirable job on. And given that, you know, I suspect that budgetary processes occurred at various levels above the mine site level, whereas obviously our approach is to do that from the mine site level forward. So we have taken a conservative position there. We want to make sure this all goes well. We think there's upside, as I say, in the costs. We have given a relatively wide range on costs, as you note. So a $15 spread across that is wide. But again, it's really just the fact that we want to take a relatively prudent course in this first year of ownership and make sure that goes well. Obviously, we called out separately on top of that the $100 million initiative on top of the bucket of savings that we're looking at across various issues in Queensland. And you've seen us already addressing some of the elements of the cost base of Queensland with restructure we embarked on last week. Those ones that you saw us in at the start of last week are in the guidelines where the 100 is on top of, just to be clear.

Anyone have anything to add? Yeah, no, I'm fine. Can I say to you that I think there is a mixed change? Yep. There's definitely a mixed change because whereas Creek Tons come out, and as you know, there's 100% yield there and they're closer to the port, they're going to be replaced by a higher quality product out of Vickery. But Vickery is, the way I think about Vickery is that it's simply a box cut that's being developed for a future mine. Unfortunately, accounting standards require me to push the costs of Vickery through the unit costs. So that's contributing to this. I've also got, We've got early days in safeguards mechanism at Narrabri. So we've got an estimate in there for what that might cost us. And we're obviously working hard to work our way through that whole process. So that's coming in. But you would have seen us unwind some stocks out of Tarrawonga last year, and that contributed to sales volumes. Those sales volumes aren't being used or aren't there this year to come through in use, uptake or pay. So there is a There's a volume impact that in the long run gets solved by a bigger victory at a point in time in the future and by a return of Narrabri to a better level of product production. So there are a few things going on.

That's very clear. Thanks. Just a quick follow-up there before I move on to the second one. You've also talked about NSW still doing circa 90% of your development spend. I guess within that, you've got Narrabri Longwall 203 now going to FY25. So, I mean, at what point do you actually decide whether this development capex now starts going into the bigger Vickery or to Narrabri Southern Ops, considering that 90% development's been going there?

Raoul, I'm not sure where the 90% comes from. Queensland's 40% of the capex guidance. New South Wales is 60%.

Got it. I might have got that wrong. I can follow that up offline.

No, I see. You're referring to the subset for development capex only. That's correct. I'm talking about development specifically. Yeah, yeah. Yeah, got it. Yeah, look, Narrabri, obviously, there's an area, obviously, transitioning between stage two, if I can call that, the 200 panels and the 300 panels. The CAPEX 300, Stage 3, which we're hoping for imminent approval given that the activist's application to seek leave to the Federal Court has been dismissed. The ball firmly sits in the hands of the Federal Minister now to approve that. But we have curtailed, we've had to curtail the CAPEX spend on Stage 3 capital and push that out. But there is still There is still a bunch of work which needs to be done, obviously, in the 200 panels, and that's where we're currently mining 203. And so that work is required to continue. Until we have some clarity on Stage 3 full approval, the EPBC approval, we'll continue to be prudently pushing the capital out for as far as we can responsibly do so.

Got it. Okay. All right. Final question, just around your balance sheet. Kevin, you did mention it briefly. In your introductory comments, the board will have a strong position early next year if the deal goes ahead as expected, and you'd probably be in a net cash position. If we assume that it has gone ahead and you are in a net cash position, I guess two questions that come to investors' minds are obviously different. how to think about that 20 to 50% EPS range and if you think that's still relevant for the business going forward. And then secondly, you have previously said that the Anglo deal is something that you're not going to look at. Does that change your views on that side of the equation as well?

I'm going to leave Paul to answer the Anglo deal because I don't think that's a long sentence. That's a simple one, no. Okay. And then the second one, if you have a look at the slides that Kylie's inserted in the back there on guidance, you'll see that there's an awful lot of non-cash charges come through. So I think the 20% to 50% will consider that as we get through the process. But I do think as we expect to settle this in the first quarter next year, that the board will have a good look at what are the competing uses for capital. And given that we've been at the lower end of distributions to shareholders, I'd not be surprised if they actually looked upon that in a, in a way that said that recognised the support shareholders provided. I don't think I'm saying anything untoward there, Paul.

No, I think I've just been told that we've got quite a few people in the question queue role, so we're going to have to hand the mantle over to somebody else and keep it relatively brief. We've got 15 minutes remaining. Okay, that's very clear. Thank you. Cheers.

The next question comes from Adam Martin with EMP. Please go ahead.

Yeah, morning, Paul, Kevin. Just like a similar sort of follow-up question there. I mean, you've obviously got this net debt target range, half to one and a half X, you'll be sort of at the lower end, maybe even below it. Should we think you're going to sort of, once this deal's complete, will you look to sort of go to almost a net cash position or do you think you're going to stick between that half to one and a half and potentially, you know, give better returns over the next couple of years around the dividend?

Look, I'm happy to say I've got no plans to retire the debt. So we've relevered the balance sheet modestly as a result of this process. We believe that the balance sheet and the business should maintain a level of debt that's modest, and that's what those credit ratios say. So I would suggest you should not model the retirement of the debt as your base case at all, if that makes sense.

Okay. Yeah, that sounds good. And just back on the cost, can you give a bit more of a split between New South Wales and Queensland? You sort of mentioned in the April pact that you'd give us a split. Can you give us a split?

Yeah, no, look, I think we've just taken the view that the cost is best managed on a group basis and to dive into more detail in that regard is not going to be particularly useful given that you don't make profits out of one or the other, you make profits out of the business. And... So we're going to stick with this and simplify your life by just giving you one cost.

Okay, very good. That's all for me. Thank you.

Your next question comes from Paul Young with Goldman Sachs. Please go ahead.

Morning, Paul and Kevin. First one on the Blackwater sell-down. Kevin, I think you mentioned that there's a US $2 return management fee associated with it. Correct me there. But on the other side, is there, with the offtake, is there any impact on the

pricing um to benchmark i is there an agreed discount to to any type of index being plastic etc yeah paul that's correct you've got it on the management fee you have two dollars us indexed uh for sales times that's uh that's value enhancing on on the metrics for the deal and of course the cash flow until the time of completion we keep 100 of that as well so that um that takes i think the metrics the metrics on the return on blackwater from our perspective even at the broker consensus level. I think it's somewhat set up.

Sorry, Kevin, on the offtake? Yeah. Yeah, no, no, you shouldn't. You should be modelling what we've told you. There's a customary market arrangements with long-term offtake, long-term customers that have been taking this product for decades.

Right, okay. So to confirm there's no discount attached to the contribution?

To put it in my language, there's no cross-subsidisation between future earnings and purchase price.

Right, okay. Okay, thanks. And then maybe back into costs, Paul. I mean, I think you used in the in the presentation, harmonising Queensland, New South Wales. I'm interested in what that word actually means. Is that just sort of introducing the Whitehaven culture? And so I'm interested in your thoughts there, but just more broadly around the opportunities and the cost out. So you've said 200 people are leaving the business. You've also got additional savings of 100 per annum by the end of FY25. Where are these opportunities? Are we talking around tech services? Are we talking associated with systems like OneSap? Are we talking about removing truck fleets? Can you provide a bit more information about the cost out opportunity across Blackwell and Dornier? Thanks.

Yeah, thanks, Paul. I'll just quickly say, look, we just run a simpler operating model than what these two mines have been used to be running under. Not to say better or worse or whatever it is, but From our perspective, there certainly is a more complex model. We want to streamline it. Part of the headcount reductions, as you've seen, as part of that, there'll be further additions to that going forward. But we do, obviously, we don't have the complexity of the operating services model, obviously, but we did take all the people on originally to have a look at what's really going on there. That was just part of the deal. Ian's obviously focused on a whole range of initiatives on an operational sense, so I might get him to cover off you know, some of the headline items that we're tackling.

Yeah, thanks, Paul. So just to give you a little bit of colour, I mean, you asked some areas. So maintenance would be one of them. You know, traditionally that's been done on a sort of calendar basis. We're going to look for performance management and extending the life of components. There's a balance to, I guess, capital replacement, what we're going to look at there. Just the whole equipment rationalisation based on productivities, you know, the fleets we've got. the ratios of ancill equipment, and also a look at the suitability of some of the existing equipment and looking to optimize there. When you look at all the sort of the contracts we inherited those in the short period we had to stand up, we basically took on board sort of what was there, but there's no doubt that there's room to work through those and rationalize some of those arrangements, but probably in number and value. In and around sort of, and it's sort of a by-product of the people space, the whole, what I'll call logistics, camp accommodation, planes, and all of that area. Again, we basically stood up what was in place and duplicated that. And there's a whole lot of room for some improvement there. Paul touched on, you know, continuing to look at, I guess, structure and optimising structures. That never goes away. I mean, that is in both businesses, Queensland and New South Wales. And maybe one of the other ones is in the explosive space. We changed, I think we made you aware earlier on, we changed at Blackwater, the explosive supplier. That transition is going well. We beefed that area up. But as far as sort of technical expertise to get in there and start utilising some of the new products, electronic detonation timing and all the rest of it, there are a number of sort of opportunities there to save money. So, Maybe that's a bit of a look at the laundry list that we're tackling.

Yeah, that's good. Thanks, Ian. Appreciate that. Thanks, Jen. So that's it for me.

Your next question comes from Daniel Roden with Jefferies. Please go ahead.

Good night, guys. Thanks for taking my question. I just wanted to understand the sell-down from Blackwater, the $1.8 billion, what, I guess, the cost and tax implications are you expecting in FY25?

Cost impacts? Oh, tax impacts. Ah, well, the short answer for that is that there is about a – there'll be a tax. The net proceeds will be down by about $100 million U.S. So the $1.8 billion is about a $100 million U.S. tax bill attached to it.

Awesome. And just confirming, regulatory processes, competition appearances and so on, Approvals still need to obviously go ahead.

It's the customary approvals and, you know, FIRB is one of them and the other one will be some competition authorities in some other jurisdictions. But we think that's a three- to five-month process. FIRB, probably three to four. And the competition depends on who you talk to and how it goes and where you have to go, but typically done within three to five months. But nothing controversial in any of that? No. Look at where we're selling this culture. It's India, Japan, Korea, and a few others.

that's perfect and um uh maybe just um i guess concerning uh how i've interpreted um when that transaction does close and let's assume it's around the march quarter 25 um there will be an update on the capital management i guess policies and um figuring out what's going to happen with the additional free cash um generated by the business kind of post that period is that understanding generally aligned with uh what you've said yeah look i think

We'll settle the transaction and then we'll look at the run rate for the balance of the year. And I think as we've highlighted there, the board will have an opportunity to review for the final dividend, the settings, the buyback still on pause, just to be clear for everybody. But the board will certainly have the opportunity to look at the final dividend and whether or not the payout ratio that you've seen is declared now a little bit above the bottom. of that guidance, the 20% to 50% of the thermal business. I think there'll be an opportunity for the board to revisit that and look at where they want to calibrate that going forward based. But it will be at the year end rather than that in March or something earlier, depending on when the settlement of the transaction occurs. They'll be wanting to see the run rate of the business for the full year.

Crystal Collier, thank you, guys. And I'll pass it on.

Thanks. Your next question comes from Rob Stein with Macquarie. Please go ahead.

guys uh just two quick ones uh the offtake uh is it 30 or does it extend to um a materially greater source of volume um for blackwater yeah the off takes are consistent with their performance uh generally for for historic they've been big consumers of the product and and obviously that's driving

the attraction for them to come in and take the equity slice. There is the opportunity to scale up and down there, but the key point here is these are both important and material consumers of both products, the semi-hard and the semi-soft out of Blackwater, and it's obviously important enough to their business that they want to put serious money to work here to ensure that they have consistency of supply over time.

Sorry, is that a 50% offtake? Is that 60% of the production under offtake? How can we sort of think through that?

I don't think we're about to tell you that. So the other thing I'd probably get you to do is because we don't disclose commercial and confidence contracts with customers, but I think I'd encourage you to go and have a look at the Nippon Steel and the JFE announcements to their own market. It'll give you an insight into why they wanted a stake in this business. Really informative slides.

No problems. And then just the final question, the op costs build, it looks working capital in nature, especially in the Queensland assets. Are we expecting that to revert back to a certain number across FY26, 27? And are we expecting once you've built the Rob stocks that production is going to revert up to that guided rate as disclosed at the time of the transaction?

Yeah, look, I think we're still satisfied that the five-year averages that we've given you, we're happy with those and the physical and the pathway to those physical outcomes and the costs related to them where we feel comfortable with. Obviously, we've just been through a competitive process and we've shared our views on that with our incoming joint venture partners and they've also satisfied themselves. in the same way. So, yes, there is, we've highlighted, a need of Blackwater in particular for build in image blasted ground and also pre-strip inventories ahead of dragline utilisation to make sure those draglines can hum at all times. And then, of course, Dornier is all about efficiency, efficiency of the AHS system. But, yeah, there will be a build-up on those inventories to sustainable levels then should moderate as you settle into a more rhythmic basis of stripping.

Epic. Thank you. I'll pass it on.

Your next question comes from John Sharp with CLSA. Please go ahead.

Yeah, good morning, Paul, Kevin and Sam. Congratulations on the sell-down. I'm sure it's been a busy time. Just another question on unit costs, but more to do with this new legislation, same work, same pay. I know you briefly called it out, but I'm hearing from key contacts, particularly from the coal mining industry, that it's having a much more dramatic impact than most people probably realise. Can you just discuss how much effect it's having on the unit costs? And I'm also interested to know if there are any other unintended consequences that you're seeing other than, of course, pushing up the unit costs.

Yeah, look, the spectre of same job, same pay affects each producer differently depending on their configuration of labour hire to own workforce. And obviously... When we took over the Queensland assets in particular, we obviously collapsed the labour hire component of that into our workforce. So it's not to say there's no contractors there. It's just to say that the operating services environment doesn't exist in our ownership as it did before. And so there is an inflationary impact generally of converting labour hire across to our own people. And that will be evident in New South Wales as it would be in Australia. in Queensland. So we're not quoting numbers in terms of that, but we are at the very early stages of this. And so let's see how that settles across the year. We have noted a couple of forays of these negotiations have already taken place within the industry, not with particularly favourable outcomes, I have to say from a cost perspective. So we are watching that very closely to see where that goes. We do have our own exposure in New South Wales to a collective bargaining case, which Narrabri has been drawn into. So we're watching that very closely to ensure that we can minimise any inflationary impacts from that collective bargaining claim.

Okay, thanks. And just to follow up, are there any other unintended consequences of that that you're seeing?

No, I wouldn't say so. As I mentioned before, labour availability is better. And you've seen us obviously addressing some of that in Queensland already and we'll continue to work on during the course of this year. But we do expect if labour is more available, then inflationary aspects of labour should actually come down. I've called this out before. We are not seeing that yet, although it should come in time. And we're not the only ones thinking about the efficiency of the operations in the sector. And we know there's been some changes announced from other producers in Queensland in particular. And so that should assist in the moderation of inflation, the labour component of our business. But as I say, we're just not seeing it yet.

Okay, thanks. And my second question is just on the Hatton, Flit and Mallard. this indefinitely. I assume there's a certain price that you would stop this operation. There's little doubt that it's increasing unit costs and I would imagine it's taking focus away from the moneymaker, which is the long wall. I'd like to know the strategic perspective. Is it due to reducing risk for take or pay? Just interested in your thoughts there.

I'll jump in there. So, look, I mean, we've got an area at Narrabri that is approved to mine cut and flip. It's not suitable for Longwall. So we will continue to do cut and flip while it's providing, I guess, a positive outcome. And I don't foresee that changing any time in the near future. And. we actually have a number of other areas or potential areas around Narrabri that could become cut and flip and they will be part of the body of work we've got going forward. So, and yes, you're correct. It does assist with the table pay, but that's not the only driver in that, I guess, decision-making process. And yeah, I mean, we've had it in there for a period of time and I guess, say over the last six months, we really started to see it hitting good, steady delivery of results. So, We're pleased with it and we'll continue to keep going for the foreseeable future. We can't wait.

Okay, great. I understand if you can't take long, will you? Makes sense. Thanks. I'll pass it on.

Your next question comes from Lachlan Shaw with UBS. Please go ahead.

Yeah, morning, Paul and team. Thanks for your time. Just a quick one with Blackwater and the blasted inventory and pre-strip catch-up. Can you help us with a bit more insight around how much of the OPEX guidance is accounted there? And secondly, how long is that whole process expected to play out there?

Yeah, I'll jump into how long it's going to take. I mean, you know, we've already ramped that up and progressing and... The good aspect is the pre-strip fleets are going really well too. So trying to get that in advance is a good problem to have. They're chasing us, but, you know, we've got the resources up there. We've got the new team. So it's probably, you know, it's going to continue to grow. To get to where we want it to be is probably at least 12 but maybe 18 months, and then that should stay in a sort of steady state.

Yeah, I think that's, as Ian's saying, the – Performance has stepped up and so it's sort of chasing us down. So as we've stepped up the pre-strip, the actual production has stepped up as well. So the drag line is working better. And then, but we are, we do have, you may recall that we've taken the decision to bring a bit more stripping capacity onto site. And so the first of those large excavators is on site now and being assembled. And so we are not at the full enhanced stripping capacity on site yet. So that commissioning process, the builder commissioning process will go on still for a couple of months. And then we'll have that capacity on the ground plus the trucks to be able to get further ahead. So yeah, it's nice to see us making better strides to strip more efficiently and greater volumes, but in actuality, you know, the drag lines are chasing the pretty strict fleet down, which is not a good problem to have.

And then just in terms of the cost, I mean, is there a way to think about that, that just kind of the additional cost of resetting that sort of fault back into the cost savings you might find elsewhere at the asset? Is that the right way to think about it?

I think you're always going to blast the inventory. There's probably a way that that coming, which is, I would have said the number of, Like, what have we got?

We've got 20 to 30 million metres of drill dirt that we need to push some bomb into. Yeah, so we're targeting to have sort of that 50 million metres of shot dirt ahead of us.

Yep. And maintain that. And maintain that consistently.

Okay, thanks. That's helpful. And then just quickly, second question, just on the met coal market. We're coming out of Monsoon in India. We're all looking for the buyers there to come back. There's some interesting tax changes going on with the steel mills there. I mean, what are your team telling you with, you know, hard PLVs sort of just above $200? What are you hearing from the market and what's the view going into end of year and next year? Thanks.

Yeah, we observe the same thing, obviously, with Indian buying relatively subdued at the moment. I think there's a bit of sentiment, negative sentiment, I think, generally for the Asian market. But we are seeing inquiries out of India coming in now. So that is a change, as we expect to see. So as they emerge from this period, we want to see them getting more active in the market, and we are seeing it. So that's nice. So the inbound inquiry is starting to kick up. So that gives you some comfort that you're going to see some buying activity, which will tighten the market. Of course, we'd like to see greater than $205. We'd like to see that, of course. But, you know, we're here for the long haul, and the focus – will be to make sure that we rebase the business's cost, ensure that the margins are the healthiest possible and resilient through a cycle, not just when things are good.

But I would say, Lachie, that all the stories that you see in the report about Indian growth, they're real. When that place is growing six to eight and that demand is going to grow, it's just slowly...

That's great. Thank you. I'll pass it on.

Your next question comes from Chen Jiang with Bank of America. Please go ahead. Good morning, Paul and Kevin.

Congrats on the Blackwater sale. A lot of... production and cost questions could ask. Maybe if I can, you know, have two questions on the Queensland call. It's been, I guess, five months since you acquired, you know, Blackwater and Donia. I'm wondering for, you know, I had a look at your management change. You had a new general manager from Blackwater and Donia. And also, I think you made around 200 people redundant from Donia recently. I'm wondering, is there any other, you know, is there any extra capacity or room to streamline Donia and Blackwater? And also that 100 million per annum of the core cell, is that included in FY25? course guide is already. Thank you.

Thanks, Chen. The Queensland operations came as they were and so there is lots of opportunity there for improvement of the assets and the teams on the ground are doing a very good job in that regard. Yes, we have put new leadership in at both sites. One of the sites came the GM who was there before chose to move on to do other things and so there was a logical replacement there. We had two excellent acting people there taking carriage of the assets until we transitioned in. But now we've got stronger teams there and they are doing a very good job in focusing the operations. So the opportunities are significant at both sites. And the challenge here is just to make sure we prioritise, re-prioritise ourselves here and focus on the big things that matter. The initiatives you saw us start with last week, they are a beginning. There is further opportunities for streamlining and improvement going forward. So you'll see us during the course of the year address that. To your question about the $100 million, that is outside the guidance. So that is in addition to. So better volume, lower cost, that's the way the guidance works for sure. But the $100 million on top of it is outside of that.

right thanks so it's outside of guidance and that can you implement that from fr25 or or we have to wait until you've done pre-stripping and then because your queensland code as well as new southwest code are unique spaces in fr25 you're guided higher than FR24. I guess for Queensland, that's due to pre-stripping, but for New South Wales, I guess you mentioned longer movement and lower volume. I'm just wondering how, you know, the benefits coming from that beyond FR25.

Yeah, that was a long dissertation there, Chin. So I think what you're looking for is, we need to get, obviously, in Queensland, particularly Blackwater, to the levels of volumes of inventory that we want to be able to run those seven drag lines harder. And that will result in more coal being produced. And so getting to a stable level of inventories to allow the drag lines to be deployed without delay to new areas is our objective here. Dawn is very different. Dawn is all about productivity. It is an established commercial AHS operation. And so we do need to work on that. It's not where we would like it to be, but they have made very good progress in particular Q4 also gave us indications of encouragement there. But both those sites, both those sites will be subject to further review to reduce costs from the business. But as Ian said, the build in inventories will take, certainly won't be done within 12 months. It's more like 18 months for sure. So once that is done, you should see the volume start to improve outside of that period.

Sure, sure, I understand. So around 12 to 18 months integration and all the work. Yeah, sure, I understand. May I have another follow-up just on the Queensland call? Is that part of your plan to change your, I guess, your marketing strategy, including the mix of how you sell the Medco product versus... versus BHP's time. Thank you.

I'm not sure what change you're referring to there, Chen. So no, we have no plans to change.

Like a customer base. Sorry. Yeah, I apologize. Just like a customer base. I know you have very good relationship with the Japanese meals. But I guess India is where the incremental medical demand is coming from. you know, I don't have details on how Blackwater or Donia customers like versus BHP's time. I'm just wondering if you have anything under your plan to change how BHP used to operate from the marketing or customer or even co-mix perspective.

Yeah, I think we just need to keep these questions relatively succinct if we could, Chen. Whatever BHP did from their marketing perspective is a matter for them. We have good relationships in these markets. We have established an office, a representative office in India. And so, as you rightly point out, that is a significant upside from a met coal demand perspective and we'll be continuing to leverage that. We know a lot of the players there already, having sold semi-soft and PCI to that market for many years, and we'll be continuing to focus on that. But we'll be running the marketing and logistics component of our business the way Whitehaven does it, as opposed to whatever may have happened in the past. I think we're running out of time. We've got one more question. So can I just ask that next person to come on, ask that question, if they could be succinct, please, that would be great.

Thank you. Your final question is from Glen Lawcock with Baron Joly. Please go ahead.

Hey, Paul, I'll try and be succinct. So look, just quickly, talking around all your peers in Queensland, they talk about the below rail being an issue. You know, the system is running about 12% below what it did at its peak five years ago. Can you just maybe talk a bit about how things are travelling for you? You had some issues in Q4. So, you know, are you comfortable the below rail can actually step up? And then just any weather, because it's been quite above average rainfall the last few weeks. Thanks.

Yeah, thanks, Lee. That is a good question. So I'm surprised it didn't come up earlier. Dornier, as we commented before, had suffered in that first quarter of not receiving the pathways necessary to move the sales tons we were preferred in the first quarter. Obviously, we've elevated that significantly with the incumbent, but we've also brought in an additional provider there to help us out, provide further pathways. Since that time, we are clawing back actually some of the lost ground, which has been pretty positive. And so this quarter is looking much, much better. And so credit to all those parties, the incumbent and others involved, that is improving. So you're quite right, though, that everybody is complaining about the same thing in the system itself. Our issue was more a situational issue where extracting Dornier out of the centrally managed BMA contract caused a bit of a glitch in the allocation of pathways in the internals of Horizon Networks. But that is being addressed, so I appreciate the change there. I think you've got to be actively managing this going forward. So we've got to be on our game here. Dornier is a relatively small piece of the puzzle in that system. And so we've got to be on our toes to make sure we're always getting our share of the pathways, our contractual share of the pathways that we're paying for. The challenge here, as you know, is the system changes. does require maintenance. And there's a tricky balance there. I know that the argument has been in the past, if you pay us more for maintenance, we can provide more pathways. That's not an unfamiliar proposition for any regulated asset. So we've just got to make sure that we're getting all the pathways that we deserve. But we are recovering ground in this quarter, which is very positive.

And I think, I mean, I'm assuming everyone understands this, but obviously that discussion isn't around Dornier. I mean, Blackwater and that rail chain is, you know, plenty of capacity, dedicated stockpile type of range. So we don't foresee that same challenge out of Blackwater. The joys of having two rail lines.

And any weather impacts from the rain we've had above average?

Oh, look, yeah, this month, you know, there was a little bit of rain in and around, but, you know, we kicked off July really well and, you know, we're not seeing any overall challenges for Q1 falling out of that, so no.

Alright, thanks very much.

That concludes our question and answer session. I'll now hand back to Mr Flynn for closing remarks.

Yep, thanks very much everybody. Appreciate you taking the time. It's been a lot. I know we sent you a lot of documentation this morning on this excellent joint venture formation opportunity and the results for the year. I know there'll be lots more questions, but we'll be seeing many of you over the course of the next week too. But if you have any questions, you know where to find us. We'll look forward to engaging you on all the aspects of what we've announced today. Thank you.