Aurelia Metals Ltd

I would now like to hand the conference over to Mr Brian Quinn, Managing Director and CEO. Please go ahead.

Thank you very much and good morning and thanks for all joining today for the Early Metals Q3 update. I have Martin Cummings, our Chief Financial Officer, Angus Wiley, the Regional General Manager of the Kovar Region and Andrew Gray, our Chief Technical and Business Development Officer on the call with me today and we will obviously take questions at the end of the call for any one of us. Just to start off with, I'll talk about each page as I refer to the information. I will then pass on to Andrew, who will then pass on to Martin to talk through the cash flows and balance sheet. To start off with, look a strong production and cost performance for the quarter with both Peak and Federation Mine both working to deliver good results. We had a strong obviously gold delivery for this quarter which is in sequence with our mine plans for the full year and the business delivered a sort of good oil and sustain cost of $15.93 per ounce. and that's obviously been supported by very strong realised prices as well to give us a good margin for the quarter. I'll talk to some of the physicals in general when I get to each of the slides. Federation Mining ramping up nicely, obviously still within our approved budget and we are likely to move into commercial production in Q4 FY25 but definitely ramping up and we'll talk about some of the details of that at the relevant slide also. Our balance sheet and cash balance of $107 million for the quarter after really investing $19 million into Federation and also spending our monies on exploration as well is going very strong. A huge effort and performance from delivering $44.5 million from peak this quarter also with good volumes, good answers but also supported by good gold pricing which is a great outcome for the business. And lastly, although quarter four FY25, big milestone was the delivery of the Great Tobar project which we announced recently. We'll talk a bit more about it during the presentation but really leveraging the gold prices to transition our business to copper into the future. Just to remind some of the key points here, this MVV of 51 million at our planning assumptions 164 million MPV based on spot price of 22nd of March and really we'll be developing the project from early quarter one FY26 and getting into a sequence of development and various project works over the next couple of years. I'll talk to the Gantt chart and Tommy in the presentation as well. If I could just move on to slide four, group production costs for the quarter. As we sort of highlight, gold has been strong for us this quarter. Copper also, both of those two commodities sitting just under guidance at the moment at the end of quarter three. Zinc and lead are a bit as they are right now, they are still on track for guidance. We have actually stockpiles of Federation ore sitting both at Federation and at Peak which will be processed soon and into this quarter, quarter four and that will allow us to still deliver our guidance on those various commodities. We've actually had some stockpiles there based on trucking that is being ramped up at the moment to get the ore to the Peak Processing Facility. But overall, if you look at our commodities, well and truly on track for the full year. Operating costs, no issues there at the moment. We foresee that we'll deliver within guidance for the operating costs. Our sustaining capital run rate was higher at the end of quarter two because we purchased two trucks. Quarter three has been a period of back to sort of normality again and we believe for the full year we'll be still within the guidance as we've stated in the FY25 guidance. Growth capital, once again, $56.4 million at the end of quarter three, still definitely tracking well and truly to be within the guidance of $70 to $80 million. The key point there really is Federation project has pretty much declined development, infill drilling and some workshop modifications still underway, but really simply the capital spend is slowing towards commercial production and ramping up the operation. So once again, definitely on track for our growth capital and staying under budget. For the first couple of quarters we had a bit of a slow start renegotiating contracts and establishing the sites to be ready. Quarter three has delivered more in terms of ramping up and quarter four is a lot of activity that Andrew will talk about that we're doing in quarter four to deliver our exploration results for this year as well. So in summary, no concerns, definitely all the measures are in the right direction for our business to deliver the value we've talked about throughout each quarter so far. On slide five, obviously very much on a sustainability basis, our injury frequency rate is continuing to trend down. We've had some injuries around hand injuries in this quarter which are not pleasing to see. Obviously there's a big campaign at the moment to reduce those injuries by really having our people focus on pinch points and line of fire, where they're putting their hands when they're doing their work, wearing gloves. We have a massive campaign to really sort of change that trend into having people return home every day like they should without injuries and obviously that's a very key focus of the leisure team on site. In terms of our other metrics, we continue to work very well with communities in the Cobar region. Definitely a lot of interest into our Cobar Hub which we have located in the centre of where our staff meet with people regularly and talk about great Kovar project recruitment, general sort of information in the community that is relevant to the community. Once again, Highline Kovar is a great place to work and it's a great community to be working with. And environmentally, no major concerns. Our frequency rate remains on track and will continue to be on track as we continue to upgrade various facilities over the coming 12 to 18 months as well. I'll just move on to slide five and talk about, sorry, slide six. and talk about the peak, executing a plan and guides at the moment. Our development rate continues to range up. We are aspiring to get over 1,000 metres per quarter. We're resourcing up with people and equipment to deliver that. Obviously, we were sort of on track. We've had a few operator availability issues and some maintenance issues in the last quarter that we're getting on top of. We have a very focused development improvement project that was kicked off in March and as the report highlights, March was a record month for us in terms of development metres and we anticipate trying to leverage that and continue on to really get above this thousand metres per quarter as a focus for the team. Our unit costs, mining unit costs were a bit higher this quarter on the back of lower volume, operator availability and we also had our new contract kick in this quarter which has increased our energy costs under the new contract. To deal with that, one of the things actually that has been a focus of our technical team has to be to lower the dilution coming out of the mine, therefore bringing quality Tums to the surface and removing dilution. We have seen some uplift in our recovery as a result of that coming through the plant which is fantastic and we're in an active recruitment process to try and get more operators being available to obviously get our Tums as well. So one additional point I will make, we're kicking off in quarter four a cost per tonne focused project with bringing in external support to make that happen and so that will obviously still work towards reaching my aspiration of around $100 a tonne over the near future or medium term. Second batch of ore came from Federation and once again we're getting some really good recoveries and performance out of the ore at Federation. One of the points that have been asked in the past is around are we going to continue batching or blending. At this point in time we are going to continue batching the Federation ore to maximise the recoveries and recalibrate consistently the yaw with the geological model to make sure we can keep that moving as long as we can. If the plant, processing plant obviously at peak becomes a constraint then also you may consider blending if we need to but right now the focus will be on keeping it as batch campaigns. And like I said earlier, the March quarter gave us a more sustained cost of of peak of 1.353 per ounce which is in the right direction and a very good margin as well from a point of view of the business. One notable point which is worth holding at peak is the gold grades did go up. That wasn't high grading. We were basically mining in line with the sequence for the mine and we anticipated those that's when the results come through. So definitely no sugar hit there. It's basically part of the overall sequence for the 12 months. On Federation which is slide 7, Development has also this quarter continued to deliver another record for the quarter which is great for the Federation as we continue to ramp up. All of the major service works completed like I said earlier. It's just really now finishing up the service mobile workshop extension that was planned and executed over the last couple of months. That's expected to be finished this financial year in line with our sort of moving commercial production at the end of the quarter. Our infill drilling programs have continued to be a key focus. A second rig has been to Federation in April and will be obviously spinning as well which will obviously focus on infield drilling beneath the current stove areas into FY27 and FY28 while our current rig continues to do the infield drilling in front of ourselves. The overall project remains within the period budget as we've said before which is a great outcome considering most projects I refer to don't deliver that sort of result. We did get the increase in our haulage of all in approved as we committed to focusing on for the 200,000 to the 600,000 tonnes. That's all been done in order three. And as a result, some of the trucking delays we've experienced in February by getting trucks back on the road to move the oil from Federation to Peak will be sorted out because we'll have additional trucks running additional hours now in this quarter to make up the ground that we lost over a week or so in February. So overall, like I said, granting up development, mining activities going well, the infill drilling program is increasing in intensity as we've committed to in the previous quarter and really now it's about hauling the ore and getting into the peak processing facility and maximising the returns out of the ore in line with our plans for quarter four and the full year. I might just turn to the slide. and just talk about the delivery of our growth projects. In the previous presentation last week, we talked about, obviously, the Great Cobalt Project being approved. We talked about how it fits into the sequence of all the projects so people can understand, you know, where we are and what we're trying to deliver at Aurelia Metals and how it sort of works towards tiring our wild 1.1 to 1.2 million tonnes of processing capacity over the coming years. So to be clear, as you can see in this scan chart, Federation project will meet its commercial production and then it will basically be moving out of project and falling into operations in FY26 quarter one. In the background, we're working on our water management upgrade that we had approved recently. That works well and fully underway and is sort of from an engineering and working with the manufacturers. That's kicking along nicely and the project team is working on that. The peak plant optimisation, that is still in study work and we'll see the study work for that come out in the coming quarter or so and then we'll be able to understand and communicate what that looks like to the market as well. And lastly the Great Kovar Project, obviously very exciting news for us which I'll talk about in more detail in a second but this is sort of showing the sequence of cash flow and the sequence of timing where we really will look at onboarding in quarter four FY25 and buying the equipment in quarter four FY25 with zonified equipment and it will be available ready so we can actually kick off our development in in order one, FY26, and start development activities and start pursuing our great co-buyer project into real life. So that's obviously the sequencing and that's how we've tried to show people what's going on with really Federation ramping off and the other projects sort of moving into execution in a controlled way and how we're going to manage the cash flow against our operating performance. As I said earlier, what that's going to give us is a 1.1 to 1.2 million tonnes capacity and that will phase us into 50% copper gold and 50% zinc lead or in the future once we have all these things in place which will be very much a great business. If I move on to just slide 9, just to reiterate what we discussed last week on the Great Cobar project. Once again, I talked about the financials up front and talked about the capital investment of just over $91.8 million over a three-year period and what it will include is developing the two declines from Jubilee or Bodiedown to the Great Cobar. We are going to own and mine that to maximise synergies with existing operations. We'll still be mining in New Cobar and Chesney, which is located in the north, in the New Cobar mine site facility. We'll be looking at the green line on the picture that shows the shaft, that will be a ring in 2027. We'll be looking at a new power supply and servicing structure work in 2028 and we'll basically be looking at first ore in 2028 with an initial mining rate of 500,000 tonnes ramping up over a period of time. That will be sequenced with existing ore that we're getting out of the North mine in Chesney the volumes coming out of this particular facility. As we've highlighted also in that update provided recently, this particular project gives us significant option value beyond the base case. We sort of provide information in that presentation on some drill holes that we do have beneath the resource that we've put into this current Great Cobar project and once we get ourselves down towards the ore body, set up our drill platforms, we'll be setting up drill rigs to really understand and unpack the potential of what Great Cobar is likely to be beyond what's in the current model now which is all upside for the base case effectively. If you want more information obviously there was a release provided on the 16th of April which is called the Great Cobar Project Approval which happy for you to refer to that for more information on that detail. I'll pass over to Andrew to talk about exploration.

Thanks, Brian. Just firstly, on Great Cobar, certainly a key milestone for the development of technical team in getting that approved to execution. I'd just like to acknowledge Justin Woodward, our group manager of tech services, who led that study, as well as a very large team internally, largely internally resourced with external assistance. The key milestone getting to that stage. Anyway, flipping now to exploration on slide 10, We also last week, as well as the Great Cobar, approved a release and exciting drill results last Thursday from our ongoing exploration drilling at Federation West. Now, you might recall the discovery announcement in June last year, Hole 215, which is offset to the northwest of Federation. We hit about 4.6 metres at that stage, good grade zinc lead copper gold, and it's about 140 metres from existing workings. So what we've been doing this quarter is following that up with drilling. And last week we released some of that drilling. It's an ongoing program, so we don't have it all just yet. But certainly two holes to flag, 12.5 metres, 20% zinc, 9% lead, 1% copper with gold. 17.5 metres, it's 11% zinc, 6% lead, 0.4% copper with gold. it feels a lot like the drilling that I was releasing to you in time on Federation or body itself. So really exciting to have that, you know, give him the couple hundred metres of the planned workings there at Federation. Also, just as we went to put out that release, we also intercepted a further massive and semi-massive sulphides in hole 222. Score photos of that in the release of last week, so certainly have a look at that, and we'll bring you those results once we have them released. Now based on the success we've been having at Federation West, we've decided to keep that surface drill rig at Federation West for the remainder of the financial year. It'll certainly give us a better understanding of what we've got in that area, but hopefully it'll also give us some more great results that we can bring to you as we get those assays in. As I mentioned, 140 metres from planned workings. If it does start to build out, it's certainly readily mineable from our workings there at Federation. Now, staying within the Nimidji District, we are partway through the Nimidji drill program that we've spoken about previously. This has been paused because the rig is staying at Federation West, so we are in the process of mobilising a second surface drill rig to the Nimidji District, which will be there hopefully next month. to allow us to then continue that imaging drill program. We also, through the quarter, got results back from the downhole electromagnetic survey that we completed at imaging, and that'll help guide that further drilling. Now, at peak, we've definitely been very busy, both underground and on the surface. So at Gladstone, which is the new Cobar mine, we targeted drilling a gap in the resource from underground. Gladstone sits at kind of between Chesney and New Cobar, but further west, and this quarter we'll continue to drill that, this time the surface part of the program, to better understand what we've got there at Gladstone. We wrapped up our program at Young Australian. There's a long section in the release just to orientate yourself to where that is, but it's a third of the ore bodies in what we call the Proteus Corridor south of Chesney, so it's alongside Mount Pleasant and Burra Bungee. We also were active at Queen Bee, continuing surface drilling. You may recall we put our results on Queen Bee drilling previously, targeting depth extensions of those. Queen Bee sits about 10 kilometres south of the peak processing plant, and through the next quarter, we intend to then bring the rig back down to Queen Bee to target some of the satellite prospects. Excitingly for the team, the quarter also saw that rig move to Tharsis, and Tharsis sits north of the Cobart town It's the first time that's been drilled since the 90s, so fingers crossed we get some good results out of that. Now, we should be in a position to provide you some results through the fourth quarter of our activities at peak, and once we get those assays in. I'll pass on. I think it's on to Martin at this stage.

Yeah, thanks, Andrew. So I'll just turn to slide 11, and as you'll know from our release last week, we finished the quarter with... Cash of $106.7 million and of course our loan note remains undrawn. Obviously the standout this quarter was peak with $44.6 million of mine cash flow. That takes the operation to around $82 million for the nine months of this financial year. The cash flow this quarter 24 million higher than last quarter and obviously the notable increase was from our higher gold production and as Brian stressed we were mining high gold grade areas in line with our plan but they did come with lower base metal grades which was reflected in production. So our gold revenue of just under 33 million higher, around 28th of that was from higher production and around 4.5 million of that from higher prices quarter on quarter. I realise price coming through for the quarter was just under $4,400 which is obviously lower than where we sit today. Base metal production as I said was lower, that was around $9 million and as we get the trucks restarted and catch up this quarter, move that 27,000 tonnes of stockpile from Federation, we do expect that our base metal production and our revenue will lift this quarter. On operating costs, they were about $4.5 million higher this quarter. The largest movement was in state royalties, so with this higher price environment, it was around $1.5 million additional royalty cost this quarter. We've also had some higher power costs coming through from our new contract that started 1st of January. I will stress that we did know about this. It was reflected in our guidance that we put out. And we also started our second charter flight from Brisbane to Cobar in January and we have seen some inefficiencies in charter flights in the quarter as we transition people across to the charter and off their commercial flight arrangements. But otherwise costs have been fairly stable and as Brian said we've now got our cost reduction project team in place and we'll look to offset any inflation but also lower those costs in the coming quarters. I didn't include it on the chart but in the report you'll see there was a small cash flow for Darg's so we've now finished and finalised all of the shipments so there was a $400,000 adjustment there and now we're reporting Darg's closure and care and maintenance costs within the care and maintenance area. It was just under $1 million for Darg's for this quarter. Federation spend, consistent $19 million and as Brian said most of the activity now is mining with the surface infrastructure in place and we continue to track within guidance and budget for the project. Just a few other comments on the chart, the tax cash flow, so just to let you know we are now paying PAYG instalments on tax of around just under $500,000 per month. We did also recognise some proceeds from some asset sales during the quarter. They sit within the working capital area. There was around $900,000 to do with sale of some non-core equity holdings that we had and we also put through a sale of some biodiversity credits that were excess of around $2.7 million. Nicely, this was able to offset some additional cash backing that we had to do this quarter. So we had a $3.3 million cash backing requirement. and that went through in January and as I've mentioned in previous quarters we will see some small amounts going through for cash backing given our current facility with Trafigura is at its limit so we're cash backing those and as part of an upsize of the performance pond facility once we put that in place we'll be able to get that cash backing back. So at the end of March that was just under $15 million. So in summary, a fantastic quarter cash-wise, obviously highlighted by the cash generation at peak. Our balance sheet's stronger, $10 million increase in cash, and really gives us the confidence to commence the great Carbire investment. So thanks for your time. I'll hand it back to you, Brian.

Thanks Martin, thanks Andrew. Look, just to summarise our key focus areas and wrap up for quarter three and looking into quarter four and beyond, very much focused on expanding our margin, taking advantage of the nice price environment but also keeping a clear focus on reducing our cost per tonne. making sure that our cash flows are obviously being maximised in terms of how we run our business and grow our business and obviously developing our copper growth options which we talked about earlier. is obviously first and foremost to make sure that we do deliver what we said we're going to deliver and generate the value that's in our budget to grow our business. Obviously, when we call out the operational team and the regional operation team, they've worked very hard up until end of quarter three obviously to really make sure that we are delivering the value and obviously listening to some of the results from quarter three from Peak and also the ramp-up work in Federation in the operations. Definitely want to call out the team there for the great results and great focus. Federation ramp-up to commercial production is obviously the focus area for this quarter. Once again, we are sort of starting to demobilise our project team. Redpath are doing a great job, call out for them as far as the development activities are concerned and also once again delivering record metres and hopefully we can continue to build up our performance as we go into quarter four and beyond. Want to call out three groups there, Redpath. the Federation project team and also the Federation operations team really sort of bringing that together nicely as we move into FY26. Our productivity and cost focus which I've referred to earlier and Martin just talked about as well is something we're going to take very seriously and we've dedicated resources on focusing to really see what we can do to improve our margin. So our BI team will be working very closely with our operational team to deliver that with an external third party helping make sure we can maximise the value of that opportunity. Our peak plan optimisation studies will be getting worked on to bring the final investment decision. That's the last piece of the various optimisation studies we've talked about. We've obviously discussed that being around the mill and the materials handling being the last part of our optimisation work we're doing to get to the 1.1 to 1.2 million tonnes. So that'll be sort of work we're focusing on in this quarter. The great thing about project readiness, obviously the approval being done, the team is, and as actually Andrew called out, there's a lot of people involved from our internal organisation to really be part of that project to bring it to the forefront of the approval process led by Justin, but now it's really moving into execution and having our execution project team getting that readiness to commence development in July is a handover happening in the background as we talk. And as we said, that will be really focused on recruitment and getting equipment in the area set up and making sure we have a project that can deliver and taking the learnings out of Federation projects as well. And then lastly, ongoing exploration programs that Andrew just referred to. So lots of work going on this quarter, especially around Federation and NIMIGI and also exploration activities happening up around the peak operation as well. So as you said, they're the key focus areas that will allow us to continue our business in the right direction and they haven't changed substantially. They're still very much where we need to be to deliver our business value and our growth going forward. So I might pause there and pass back for 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. And if you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Daniel Roden from Jefferies. Please go ahead.

Thanks. Morning, guys. And perhaps I'm a good caller. I thought I'd make good off of last week and start off with my question on federation and if you could provide a bit of color on the – I guess the – orientation interpretations and how, I guess, you're, you know, tracking with that and what your understanding there is on how it's going to impact, I guess, the ramp up and operations of Federation, please.

Yeah, sure. Thanks. Thanks, Dan, for the question. So look, obviously as we've sort of highlighted last quarter and again this quarter, our refill drilling is sort of informing our stove design and development design as we continue to move down in the decline of depth. One of the reasons is obviously very much focused on making sure we understand what a FY26 looks like and that's sort of Our ramp-up is definitely in line with that and the second reed we brought in will continue to obviously drill to define FY27 and 28. I guess what I can confirm is for the drilling we've done and for the information that we've received from the drilling that the contained metal is definitely – for the drilling information we'll definitely support our ramp-up process that we've put forward.

Yep, okay, awesome. And I just wanted to unpack a little bit. You've given, obviously, since the Great Cobar kind of release the other week, and I think you've given some nice timeline information to you. I just wanted to unpack, I guess, new Cobar and, I guess, the longevity of the asset, you know, there with the expansion of the peak mill to the 1.1, 1.2. You know, that new Cobar feed – I guess, where does that fit into the longevity of the portfolio? What's the timeline there that you expect that to be, I guess, in operation for? And what's the longer-term kind of outlook for some of that data material?

Yeah sure, I'll just provide a brief answer then I'll pass over to Andrew to any specifics you may want more on. Look in terms of the focus, so the New Cobar, well obviously we're currently mining out of there now as you know and we're mining a lot of Chesney out of there now and we'll continue to mine Chesney over the next couple of years as we move more across into the New Cobar mine and less into the South mine. So into FY28 we'll basically be starting to bring ore out of Great Cobar. Now as a ramp-up process we'll still have the sort of new Cobar ore deposits including Chesney sort of blending in with that Great Cobar ore and the intention will be that we can get to 500,000 tonnes out of Great Cobar once the development has been obviously driven and drilled out and then we'll basically have less of the Chesney and other areas of the new Cobar mines involved and be very much focused on Great Cobar Once we get over towards the ore body, we'll be setting up drill platforms to drill down into these known areas where we've already, we have holes that show resource, good drill results underneath the current planned ore bodies. And not forgetting, I think your question was how long, well currently the mine lasts eight years. So we'll be drilling down to understand what's beyond that and then obviously once we know that we can obviously build the mine plan accordingly. That will include reviewing the volumes coming out of the mine. That will involve reviewing what other capital we may need to increase the volumes if there is obviously an opportunity to mine more out of Great Cobra. and so forth. Realistically, right now, the base case that we've talked about is to get across the drill while we start to develop the ore body and obviously start production after 500,000 tonnes while we understand what's around the deposit to understand what potential there is to grow up further beyond that. Andrew, is there anything you want to add to that at all?

No, I think you've largely covered it, Brian. Just one thing to recall, when Great Cobar was first talked about, the PFS study stage, there was a bit more pressure to get to Great Cobar or sooner. Certainly some of the exploration success we've had around peak in that brownfield step-out type drilling has allowed us to time Great Cobar and push it out a little bit, which has worked very well into the Federation, as Brian's talked about today, being built ramping up and then allow us to move into Great Cobar, develop that while we have a good source of material. So we're not like a lot of mining projects that are hanging on that pun coming out of the ore body. We have the benefit that we'll continue to feed out of New Cobar with New Cobar and Chesney in production and then transition our way into Great Cobar. So it's a good place to find ourselves. As Brian mentioned, exploration potential at Great Cobar is fantastic and it doesn't take away from the fact that there's still exploration potential in the broader new COBAR mines as well. And drilling that, understanding that, looking at what our inventory is in a couple of years as we get into Great COBAR will allow us to optimise that. It may be that we push beyond 500 out of that whole new COBAR operation. But these are the sorts of things that will make those decisions with information and time.

Yeah, good point. Thanks, Andrew.

Yeah, no, awesome. Thanks, guys. I was just trying to get a gauge on how you're thinking about if you were to expand to take kind of beyond that, how you're thinking about the fade strategy there, but that was a very comprehensive question, thank you. And I might just ask one more if I can, just to freshen it up a bit on Federation, if I can back to calculate your mining unit costs there are quite low. I just wanted to understand if there were still costs being capitalised from the mining operation perspective that's not flowing through quite yet.

i haven't got the calc in front of me dan but yes we are still capitalizing uh all of so how we're doing i think i ran through last month is when we're taking up any production we're taking up um an offsetting amount of mining and admin costs down at federation to basically offset the revenue and that going through the p l and then what you're seeing in growth capital is the residual above which is effectively that non-commercial portion we're reporting within growth capital Okay, understood. Thanks, guys.

I'll pass it on. Thank you very much. Thanks, Dan.

Thank you. Your next question comes from Paul Caner from Ordmanet. Please go ahead.

Yeah, hi, Brian, Martin, Andrew. Thanks for taking my questions. Just touching further on Dan's question there on federation and that all-body orientation thing, I mean, it might be a bit too early to tell, but how is that sort of changing with depth, or do you expect what you're sort of seeing in the upper levels to continue down dip?

Look, I think the key point there, Paul, is that we're drilling to understand exactly that. So we've seen the orientation change and the drilling we've done for the stopes levels for the FY20, 26 confirm that orientation change and confirm the contained metal, this second drill rig being installed will continue to understand that further and obviously allow us to design our mine accordingly. So, we'll get to a certain point where we'll have probably more clarity on if it anything additional to that but realistically we're just basing on the fact that as we're drilling we're sort of identifying the containment at the levels where we are now and FY26 is what we had planned. We just need to continue drilling. That's what the extra rig is there for. Andrew, is there anything additional to that one at all?

No, I think that's all on that, Brian.

Yeah, too easy. And then just secondly on Cobar more broadly, I guess just the labour and housing situation, you've got Polly that's sort of ramping up and Mac there as well. How's your turnover at the moment and any sort of key positions that you're struggling with at the moment?

Look, I'll answer that briefly. I'll hand over to Angus. So, look, obviously we are... No doubt we have lost people to polymetals and lost people to other places as well in terms of turnover more broadly as the New South Wales region and Queensland regions continue to attract people into various locations. At the moment, obviously, we are looking at an employee value proposition to see how we can retain people in a more sort of robust way that we're rolling out over the coming months. to really sort of hopefully decrease that sort of turnover to get more stability. We are recruiting, we are finding people, we find good people to replace the people who are leaving but obviously if we can retain good people that's obviously first prize. So yeah, we have had operator availability with some turnover challenges like most places. We are getting people who have left who are coming back as well and rejoining based on wanting to work back with us again. So it's sort of one of those things. But the key thing for us, Paul, is we've got a strategy to really look at an employee value proposition to sort of make sure that we can attract or retain people going forward as we build our company. And we're also going to be recruiting and start the recruitment process already for the Great Cobar additional people as well, which is going very well at the moment, actually, going very well with who's sort of putting their hands up for opportunities. Angus, any comments?

No. As you said, Brian, I think we're actually tracking quite well with recruitment for Great Cobar. So, yeah, we've got a team focused on that as a project. Yeah, we've certainly got turnover, but yeah, no different to anyone else in the industry. I think we're probably doing better than most in our ability to attract people. And as we go forward and roll out the updated employee value proposition in the near term, we hope to see that stabilise even further.

In terms of your question, Paul, around housing, obviously we've got a – I guess we call it a – a camp in town now for the people working at Peak who are a FIFO and Dino, which is working very well, just 70 rooms. And we've also got our camp at Harrah, which isn't fully utilised yet. So we've got facilities to place people. And we've also got housing in Cobar, which we're bringing an offering to people who've want to relocate to the Cobar region and work in the Cobar region. So that's ongoing and as Martin talked about, we've put a second charter on now to accommodate the ramp up at Federation and also for the great Cobar people that we may bring in on FIFO as well as residential.

No, that's great. I appreciate the colour. And then just lastly, maybe one For Andrew, just looking at some of those Federation West intercepts, some cracking results there. Just looking at that cross-section, could you maybe just provide a little bit more colour on where the all-body remains open and, I guess, where it's closed off, based on your current drilling?

Yeah, no problem, Paul. And perhaps that long section... not the easiest thing to understand, and really there's a lot of work still going on to try to understand that question you just asked around where is it closed off and where do we have potential. Certainly open at depth, and there's work going on on that, drilling currently. The bit that we're really trying to understand is what else is in that region. So obviously this has opened up a new possibility offset as I say, 140 metres from the line of the existing federation or body. But what is the potential to extend that along that orientation? So there's going to be, and that's part of the reason we're keeping the rig there for the rest of this financial year, is really to try to help us answer some of those questions and really understand it better. It's great and a really good piece of work to get that initial discovery hold These follow-up polls have been fantastic. You know, better thicknesses, better grades. So it really allows us to start thinking about this growing into something. Yeah, we'll include those results into the inputs into our resource when we go to rerun that through this year, as well as any other drilling we do between here and the end of the financial year. So it's probably a bit too early to answer your question, Paul. but certainly it's got all the makings of being something quite interesting for us.

No, I appreciate that, Andrew. Look, I'll pass it on. Thanks very much. Cheers. Thanks, Paul.

Thank you. Your next question comes from Adam Baker from Macquarie. Please go ahead.

Thanks, Brian and team. Thanks for the question. Seems all the questions are on Federation today, so I might continue on that theme. Just some pretty good results from Federation West, as you outlined. Just wondering how you're thinking about the exploration budget It seems a $10 million to $15 million exploration budget is pretty conservative considering some of the results that you're getting and considering your balance sheet position in a pretty strong position here. Could you ramp up that exploration expenditure heading into next year?

At this point in time we haven't actually worked through what the budget will be for next year. We'll run through a strategy review of the exploration team, Andrew, in the coming weeks and then we'll obviously understand what the right level of spend is based on location, based on the drill rig availability and based on what makes sense for us. So I probably can't answer that question right now. That's sort of work in progress as we review that strategy going into FY26. Fair to say that obviously the amount of money we're spending now is giving us the information we need. If we make a decision to move faster on some of these things, we'll definitely include them in the revised budget in FY2026. The balance sheet decision is strong but we do have various projects, as you're aware, in FY26 as well but we need to sort of make sure that we're balancing our overall cash with the project exploration and our operating costs also. So we're just going to be mindful of the overall picture.

Okay, great. And maybe just the timing on the resource updates for Better Ocean, but more broadly, are there expected to be any other resource updates outside of Great Cobra?

Andrew, any comments on that one?

Yeah, look, as I mentioned earlier, the intention is to cut off for the resource on drilling at the end of the financial year, the end of June. There's then a process of several months to be able to pull that together into a resource that we can disclose, but that will then include an update across the entire portfolio, resources and reserves. So, targeting being out for our full year result in October.

Thank you. I might just speak in our volume, Brian. Commercial production for Federation seems you're indicating that it can occur by June. What do you need to see before you're comfortable declaring commercial production here?

Well, once again, we're looking at commercial production in terms of the sort of revenue getting in and dispersing against the costs. But as we sort of said, the costs really now are focused on decline development and and in-field drilling, the rest of the cost of the project has kind of now nearly subsided apart from the small amount of money spent on the mobile workshop upgrades. So realistically, the volume coming out of Federation will give us the revenue obviously and costs will basically be the offset to get to that point. So that's why we're confident in quarter four we're in that right position and we'll remain under budget for the total project as a result of that. Thank you.

Thank you. Once again, if you wish to ask a question, please press star 1. Your next question comes from Paul Hissey from MA Financial. Please go ahead.

Thanks. Just a quick one. Martin, can you just back out the $17,800 realised copper price for me for peak for the quarter?

Yeah, we had some shipment finalisations. So what we do with our realised price is we factor in total revenue divided by copper sold. So sometimes we do get realised prices that look a little bit quirky because of that, and it was just to do with a reval on a shipment from the December quarter.

Yep, understood. Okay, thanks. That's all from me. Thanks, Paul.

Thank you. Your next question comes from Ashley Chan, a private investor. Please go ahead.

Hi, guys. Thanks, Brian, Martin, Angus and Andrew for the Jason McCoy report. I just got a couple of questions on three different areas. Just on staffing and recruitment, how many full-time equivalent employees do you have currently and what is your target for end of 2026?

For the end of FY26? Yeah. I don't have that number in front of me right now. Angus, do you have that number in close to you at all, the FY26?

I can only approximate. So really around Great Cobar, we're aiming to add 30 FTEs for the Great Cobar project. That takes us to around 350 FTEs at peak. So that's really where we're targeting at the moment. that increase with Great Cobra.

Okay, so that means, I guess, for financial year 2026, you'll have to do sustainability reporting to ASIC. I guess, is that underway? Have you got a process in place for that?

Yes, sustainability, great sustainability lead, Jono Thompson, has been working towards that and has a timeline and a process in place. Excellent.

The second question is more for Brian and Martin on capital management. So from your presentation, you can see that there's basically about 50 million capex in each financial year for 26 and 27. You have 100 million in cash and you're going to have... positive free cash flow from a peaking federation, even accounting for capital expenditure. When do you think a decision or when you'll be having a look at a decision or putting together a recommendation on the timing for share buyback?

Hi Ashley, it's Martin. Right now, as I think we talked about last week, focus on those capital projects that you talked about. As part of our capital management planning, we'll continue to look at those kind of returns, whether it be dividends or buybacks, but really the focus over the next couple of years is primarily on delivering these capital projects in any price environment. So what I can say is that it's in our mind. We do think about it, but what we want to say publicly about that is that we're committed to capital projects for now.

All right. Okay, third question is just on Great Cobar. So you have the opportunities of exploration, which we understand, but you also mentioned operational opportunities, which will enhance option value for Aurelia. What does it mean, great co-bark rates for the operational opportunities?

Yeah, it's a good question. I'll answer that briefly and pass it on to Angus. So what we mean by that is that we've currently used the, from a project point of view, used the rates of development and rates of cost from the peak south mine and parts of Chesney to come up with a, an average number that we put into our models for the Great Cobar project. We basically understand the conditions in obviously Great Cobar are better both roof-wise and water-wise, conditions-wise than the South Mine. So what we are basically saying in our release on improvements is that we are going to focus very much, as we said in the report today, starting effectively in quarter four onwards to really go after this $100, $110 a tonne top number that's my aspiration to get to that sort of mining cost. That will substantially bring more value back into the organisation than the current number put into the model obviously for the Great Cobar. So that's what we talk about when we talk about improvements. It's really around the cost per ton improvement to get us there. It's our development improvement, development cost per metre improvement to develop the declines to get down to the actual drill platforms and to the ore body as well. It's basically having a program very focused on those two things. which we believe, and to do the economics, it actually gives a substantial uplift in value as well. Angus, anything you want to add to that at all?

Yeah, I suppose just around the synergies, the clear example, like, yeah, we'll have the new Cobar Chesney team working with the Great Cobar team under the single shift boss. So, for example, something like the truck, we'll have a dedicated truck focused on Great Cobar, but this also allows opportunities for that truck If there's smooth to dirt at Great Cobar, it goes and moves the dirt from a stope at Chesney and provides synergies in that aspect.

All right. Thank you. And then on the exploration side, or small to operational, just on – you made notes that there is potential – from, say, 12, 15-meter depth up to 2-kilometer depth. So just to give my ignorance, it is possible to mine that deep. Are there other similar mines in the area? What are the analogs for mining up to 2 kilometers, if you were to discover anything?

Andrew, do you want to ask that one, or I'll pass on to Angus as well?

Yeah, look, I think the obvious analogue in the region is CSA, which is... I can't remember exactly how deep, but about 1,600 metres or something like that. Absolutely possible to chase these things at depth. What was in the study takes us nowhere near that kind of level. So if we did have exploration success at depth, there's certainly an ability to continue to mine and pull that material. Also, we flagged, as well as the depth extension potential, definitely potential to the north. So we're saying A lands plenty of potential at depth. B and C, there's potential they join up and there's potential then that they expand and also go to depth. There's also potential beyond those to the north, as well as along the entire decline that takes us to Great Cobar. It'll be a fantastic ability to drill off that and look for other possibilities in the region. I guess, do you want to comment just on the depth piece?

Yeah, look, actually, just on our current operations, the Perseverance Deep area goes down to 1.7 kilometres below surface, so we're not mining at that level at this point, but we obviously have in the past, so certainly no issue there. And in reference to CSA, I think they're well over 2 kilometres deep at this point, so if that gives you some scale.

I think, actually, and we have operating procedures which allow us to do that in terms of any sort of stress activity. So we actually have operation procedures at our peak mind to manage those things accordingly and technology to help us as well. So it's not up to me territory for us.

Excellent. Thanks. And then I guess for Andrew, for the B zone and the C zone and testing whether it's contiguous or not and any extensions at depth, Has there been any post-2004 drilling between the B and C zone or under the A zone, beneath the A zone?

I can't recall exactly which drilling was in which year, but there really hasn't been a lot of work done on those for a lot of time. That drilling we did through end of 21 into 22 was three holes from surface into the extension on A zone. That was, they were deep holes and that was expensive drilling, you know, sort of $300,000 a hole. Hence, you know, we didn't want to continue with that. It was great to be able to demonstrate that A-Lens continued and it presents enough inventory for us to want to get across there, knowing that, you know, the mine will make money. But, you know, the goal will be to be underground and drill from underground, much, much shorter holes, much cheaper drilling. and then we will continue to test all of that. We have a plan to put an exploration drive in off the level when we get to Great Cobar, effectively just straight out to the north there to allow us to drill off that platform, and then also plan to do similar platforms as we head up and also down that initial development of Great Cobar. So definitely something, you know, Give us time to get across there and then we'll pepper that with drilling from underground and really look at what it looks like.

Perfect. Thank you. Thanks. That's all my questions. Thank you very much again.

Thank you. Once again, to ask a question, please press star 1. We'll pause a moment for any final questions to register. Thank you. There are no further questions at this time and I hand back to Mr Quinn for closing remarks.

Yeah, thanks very much. And thanks for everyone dialling in today and the questions. I hope those questions have been helpful for others listening to the call as well. Once again, thanks also to the earlier team in total. It's been a big quarter and we have another really big quarter ahead of ourselves. as we move into some of these project works. So once again, thanks for dialling in. Thanks for your questions and feedback, and thanks for the really team for delivering. Appreciate it. We'll speak to you in this quarter. Thank you.