Aurelia Metals Ltd

Thanks, Rocco. Look, I'm Brian Quinn, Aurelia Metals Managing Director and CEO. And on behalf of our team and the board, I'd like to provide you with some key points from quarter one of FY26. And I do thank all of you for joining us today on the call. I know it's a busy time. I'm joined by Aurelia Metals Chief Financial Officer, Martin Cummings, our Chief Business Development Technical Officer, Andrew Graham, and our Cobar Regional General Manager, Angus Wiley. We'll run through the presentation and then take questions after the presentation. In today's presentation, we'll be referring to the slides released in today to the market, and we'll spend additional time on any illustrations we pack to cover anything important. Just to kick off, look, first and foremost, it's a strong start to the year for us in terms of quarter one. production definitely in line and on track against executing our strategy across the business. Metal production and cost very much on track and our cash position has remained robust at 124 equity on the back of 84.8 gross revenue sales and improving cost per ton results. This has delivered approximately 24 million cash from operations, which if you exclude sustaining capital, This strong result were underpinned by a focus on ongoing productivity improvement projects across the business, especially at peak. I'll talk to some more of these physical results as the presentation progresses. And Martin will talk to some of the financials in the balance sheet later as we have the discussion on the balance sheet. One important thing, obviously, the business is in great shape and our growth continues to be self-funded, which is important for us as a business because that's what we're committed to do. If I just talk about Federation, the ramp-up is definitely moving in line with our plan. In fact, it's delivering better than our plan with strong performance in development meters and targes. I'll recap on some of those in future slides as well, but we're very happy how Federation mine is now progressing. Our Great Cobar project commenced on the 1st of July and really development and construction activities are definitely heading in the right direction on track and our run rates are definitely improving and got some good conditions and a very good team on the job. So that's great news for us. And importantly, we've also released our MRAW report for calendar year 25, which represents growth in our resource and reserves. Resource up 12% to 21 million tonnes and reserves up to 17%. 5.5, driven largely by copper increases in the region, which we'll also talk to you later in the slides. All of these results today really enforce that we are a business that's delivering what we've committed and working hard as a team to deliver better results than we've committed where possible also to really support maximum value for our shareholders. On the next slide, which is our group production and costs, the key message I want to get across to our investors is our delivery of our guidance at this stage remains very much in the range we talked to before the start of the financial year for both production and costs. During quarter one, the mining sequence and production sequence has been very much focused on base metals, in particular zinc and lead, and quarter two will sequence to an increasing proportion of copper ore. So at the moment, both costs, capital and our commodities that we're producing from our business is definitely moving in our direction, as is our exploration projects as well that we're working on. On the next slide, which is our sustainability slide, our injuries for the quarter were not in line with our expectations. We've had a few injuries which really have not been satisfactory. We fundamentally believe all injuries can be preventable and people can leave work at the end of the day without injuries. On these occasions, we've had a few people with injuries which has not been satisfactory. Look, our focus on this is to really reinforce our efforts on shorter term contract management, ensuring that our people that come onto site on a short term, really using our process around taking five, doing JHAs properly and really being supervised well. And a large amount of the injuries have been over the last 12 months, really around hand injuries, making sure people are putting their hands in areas where there's pinch points. So we believe we can turn this around and really ensure our people go home safely like we want them to every day. In terms of our environmental results, once again we've delivered some really good results both meeting our standards and also meeting our compliance requirements. and delivering a very good result in terms of our recordable environmental incident frequency rate. When I move to the next slide, which is our peak performance, when I start talking about our production activity now, our development at peak continues to improve in line with our targets we've committed previously. For previous quarters, we've continued to make step-by-step improvements and we continue to drive that very, very hard. This is great news for the business. It creates optionality. The more we can get ahead in development, the more we can set ourselves up for creating optionality. If we have a problem in a stoping area, we have somewhere else to go and we can continue feeding the plant and keep them full. We did prioritise Great Cobar development in July and August to ensure a fully resourced and well-designed commencement for Great Cobar. The outcomes of the quarter has delivered peak at 1379 metres, which is a great outcome relative to historical outcomes for peak as well. So we definitely believe the business is in the right direction and we're going to continue to focus on that as we go forward with the program we have. Underlying that is we've actually had improvements on our truck payloads by 16%, which is part of our productivity project. And we've also seen our productivity project sort of improve our availabilities in and around 85%, which is our target. So for our critical equipment, The focus remains on improving our utilisation of our equipment over the coming periods through recruiting the right people and making sure people are on the job. These actions have all resulted in a reduction in cost per tonne, and as we've highlighted before, that 40% reduction is only the first step in the right direction. We have a clear plan through our productivity project to get down towards $100 a tonne, and it's very much built into the KPIs of our people to deliver that, and we have a plan to do that. In terms of our unit cost, as we sort of said, it's a step in the right direction. In recovery, we have continued to improve with the delivery of very good quality ore coming from Federation. I want to call out some key numbers here, 85.5% zinc and 88.4% for lead, which is some of our highest recoveries in zinc that we've been able to see through the processing plant, which is an amazing result from the plant. We've still got many, many projects underway, which we'll talk to you later, which will continue to improve these recoveries based on what we're installing around the plant. So overall, the productivity improvements delivering our results and setting us up for success as we move forward. Moving on to the next slide, which is around federation. We're really happy with the delivery of federation performance. We've basically been continuing to see step change in our development, 31% higher. and that's very much in line with where we want to be now for development, and hopefully we can even beat that going forward at the same cost with the same resourcing, but definitely the ramp-up has been very much a positive for our business. Similarly, you can sort of see the ramp-up in our Tums. It's been very much a great result for the business, and these are the commitments we made to the market and the investors, and this is what we're delivering. Overall, although it's not on the slide in the pack, The mining cost per tonne is around $270 per tonne. We don't have a benchmark. It's the first quarter of results we can actually use that cost per tonne. But just in comparison, we have that against our budget of about $326 per tonne, so quite substantial, over $100 per tonne difference, better difference that we're achieving right now for the business at Federation. We expect that to continue to go down in the cost per tonne basis over the coming quarters. as we continue to ramp up our terms in line with our plan. Like I said, the exciting thing for Federation is we're definitely ramping up and we're ahead of plan in our volumes, and we expect to deliver that over the 12-month period. I want to just think now, just because we're reporting Federation as commercial operation, I wanted to stop and take stock of what we've achieved as a company around Federation. It's been a very strong project execution and operating ramp-up. It's important we stop and pause and sort of call us out to our investors to really think about where we are as a company and what we've delivered. So without going through each one of the dot points on the slides, what's important is the Allbody was found in April 2019. There's been a bunch of studies done and exploration decline commenced in 2022. After refinance was secured, we recommenced development in August 2023, followed by progressive achievements, as you can see on the page. all in line with the commitments we made to investors. We said we'd go after them. We've achieved those and allow us to really deliver our commercial production this quarter. I think it's important that we recognise the team efforts for managing this budget from greenfield exploration to commercial production in such a rapid time and done it very, very safely. No doubt we've had lots of headwinds along the way, like any project, but from a company point of view of Aurelia, we've delivered that in line with what we committed to the market, which I know is not normal in this industry. and I want us to celebrate that as a company and recognise that for our investors. FY26 and beyond is really focused on ramping up the business and continuing to unlock potential upgrades to the resource reserves and production targets as we push the decline down deeper and collect more results from infield drilling and provide confidence to our models. Similar to what we've done in the upper zones of the ore body, we're going to continue to progress that into the lower zones, deeper zones, and hopefully be able to provide that information as we progress to unlock further potential for the business. It's been great to see Federation West Deposit also featuring our story going forward in our Emerald, which is exciting for us on the potential of what's actually at depth and also what's around the main oil body for Federation. So we're very excited about where Federation is going and I really want to take the opportunity to sort of call it out. to really reinforce, you know, we're now building Great Cobar, and I wanted to lead into, if these achievements were done, I wanted to sort of reinforce the credibility of the company to deliver these projects, which we've now kicked off with Great Cobar. So on the following slide, you know, where we are with Great Cobar as a growth project, capital expenditure and scheduled progress is on track. I know it's only early in the project, but realistically, all the key aspects of the project are looking in the right direction. Our development meters, as I highlighted earlier, are definitely in line with the plan and ramping up. So we actually have very good confidence over the potential of Great Cobar. Conditions are good and the sequencing is getting done well. If you look at the plan on the actual PowerPoint presentation, you can sort of see the purples are quarter two and the greens are quarter three and the blues are quarter four and then beyond this financial year is red. Why it's important that the purples look a bit everywhere is we obviously want to maximize the efficiency of our operation by creating working faces so our jumbo can be operating, our bolting can be operating, and our loading and mucking can be operating all in sequence so we can optimize the performance of this area. So we're very happy with where we are, both surface and underground, and we've already started our early engagement with the raised board contractors to secure availability and pricing for construction, the air raise, which will be in FY27. So the key message is our growth project for copper, well and truly on its way now, and very exciting for us as a company to leverage what we learn in Federation of all the key milestones we've lived through with it, and we believe we can do the same with Great Tobar project. Like I said, it's not the norm for our industry, and I really want our investors to understand as a company, we believe we can do that. The other projects, obviously, which are very important to us, which will deliver our processing tons and targets of 1.1 to 1.2 million tons and allow our strategic aspiration, really our strategic target of 40,000 copper equivalent tons in FY28 to be delivered. So our tailings and process water management is very much on track. The capital we've deployed still allows us to be commissioning Q4 Some really key milestones around the tailings and process water management has been that we've been designing the thickener tank overseas. It's now been designed, it's been constructed, and it's been shipped to Australia, and obviously the civil works will be underway to get ready for that to be installed and commissioned as per the plan. Our tertiary ball mill obviously will improve our copper recoveries, especially as we move to 50% copper ore coming into the business. in the next couple of years. So we've actually repurposed the mill, as you recall, from Dargs. It'll be shipped up and installed into the plant, or actually on the outside of the plant, and allow us to really, allow us to grind the material to improve our recoveries. That's still on track, so is the capital for our commissioning in quarter four. And lastly, our crushing and materials handling, that work is underway as well. The benefit of the crushing and materials handling is really around providing better throughput. If we can take some of the oversized material out of the equation and allow the plant to run at higher capacity than is currently being achieved, we can get more throughput through and deliver significant more value. So all of these projects will give us that 1.1 to 1.2 million tonnes capacity, and they're all working very much in line with our plan, etc. That's the summary of where we are with our process plan upgrades to deliver our growth. In terms of our mineral resource and reserves released today, we're pleased to see that we've been able to report an increase, a 12% increase in growth in our resource, a 17% increase in growth in our reserves, and an overall increase in our production target for the business. The current emerald results are obviously very copper-dominant, But as we've highlighted throughout the year, the observed change in orientation of the Federation deposit has meant that we've had to change our mining approach and increased focus on our infield drilling, which has been done successfully. Hence the ramp up and hence the metres we're delivering at Federation. And the results of the mining of the upper levels has confirmed the contained metal is very comparable to the mineral resource estimate for the upper levels. As we continue infill drilling and is undertaken in the deeper zones of Federation, the upper zones reconciles and suggests strong potential for the upgrades to the mineral resource reserves and the production target estimates. So our priority really remains on these infill drilling results and unpacking the potential of this deposit. What's also important is the Federation resource also remains open to depth and in numerous directions and drilling these areas will continue to be part of our program exploration which we've done over the last period of time and will continue to. So we're very excited by what we've been able to put on the table for our resource reserves, and obviously still work to be done, but obviously definitely I think we've got the right plan and the right sort of approach to providing a long-term value for our shales. On my next slide on the exploration update, exciting news we've released last week on Nimigi. Over to Andrew. Thanks, Andrew.

Thanks, Brian. I might just make a comment on Inverland Production Target. Obviously, release is going out today. We don't expect anyone's read all 159 pages of it, but it's long and there's a lot of work that goes into it. So particularly just like to acknowledge the work of our competent people. They're listed on page 11 of the release and the enormous amount of effort has gone into giving you those results today. And as Brian said, they're extremely good. Just to touch on a little bit there, Peak copper, 19 million tonnes of inventory at 1.8% copper, including 17 million tonnes in new cobar, including about 11 million tonnes in grey cobar at 2% copper. The numbers everyone would love. And lead-zinc, 11 to 12% lead-zinc combined at Federation is certainly a valuable ore. But anyway, turning to exploration, I particularly just want to highlight one thing we've been working on, which is NIMIGI. You may have seen a release that went out last week on the 16th of October on our Nimidji drilling. And if you haven't seen that, I'd encourage you to go and have a look at that release. It has more details than what we've got in this slide here. But the slide on page 12 just deals with this at a high level. If you've been through NROR so far, you would see that Nimidji, we're quoting 3.9 million tonnes of material, 1.7% copper with lead, zinc and silver. Importantly, that's up 70% on our 2024 NROR. Now, If you have a good memory, you remember I had set a target to our exploration team to try to get to 5 million tonnes of ore, the intention being that I kind of feel that that's about a number that allows us to justify a mine. We didn't get there, but we got awfully close, and the 70% upgrade is extremely positive. Now, the other pleasing piece is the drilling we released last week didn't get done in time and assayed in time to flow through to that emerald. So this is all in addition to what we've put out today for the IMAGY resource. And there's three things, particularly from this drilling, that I'd just like to draw your attention to. First one, as we note on the slide, we discovered two new lenses for this drilling. Both really quite interesting. So laser lens, as we're calling it, about 200 metres further east than the IMAGY north. It's not a position where we've seen mineralization before. Some excellent geological work went into targeting that, and we've certainly got plenty of follow-up to do on that. The other important lens of discovery then is metropolitan, we're calling it, which is named after a local pub. But it's between Nimidji Main and Nimidji North. And one of the things in order to get a mine up in Nimidji is to try to get continuity, and certainly being able to try to see a join between Nimidji North and Nimidji would be extremely positive to that. And Nimeji, all this drilling we've had at Metropolitan Lens has certainly helped in that regard and further follow-up required. Other things that we flagged in the release, Nimeji North drilling to the north of Ngunnawanore, we extended mineralisation by about 50 metres. You know, in the Great Hole, we're talking 2.7% copper, 1.8 grams gold. with zinc, with lead, with substantial silver. So, you know, an excellent hole to extend to the north there. And I mentioned gold. That's the third piece just to touch on. We haven't seen a lot of gold in Nibiji, Maine. Really not much at all. I think the Emerald has 0.1 grams per tonne gold in that three odd million tonnes of material. But we're now seeing with some very good gold numbers in this drilling, and it bodes well that we're actually moving into a higher gold tenor part of Nimmogee. Anyway, in short, strong quarter for exploration. We'll continue with downhole EM on Nimmogee North, and we're drilling at the moment on Nimmogee Main, targeting some of those downhole conductor plates below Dunoan Ore. Passing on now to Martin.

So we'll just turn to slide 13, which is the balance sheet. And as you can see, we finished with cash of just over $88 million at the end of September. And along with our undrawn loan note, which did step down slightly to US $23.3 million this quarter, but takes out liquidity to around $124 million. During the quarter, we did have to put up some more restricted cash, so that financing cash flow in the waterfall of around $1.9 million. that we had to lodge as part of the Trafigura facility. So now we're up to $19.6 million of restricted cash. So that is not included in the cash flow on the waterfall. I've talked before about our process to refinance our facilities and that's underway and we are on track to close the revised facilities during this financial year. And when we do that, that $19.6 million, along with any future restricted cash, will be able to be returned. So in terms of what's happening with restricted cash, the next milestone is in the December quarter, where the $19.6 million will actually increase to just over $27 million. So that's in line with the schedule of cash backing. In terms of the other movements, as Brian said, we're now reporting Federation as an operating asset and we're reporting it as part of the Kovar region. So the Kovar region generated $24 million of operating cash flow. The way we represent this chart, though, is that we show it after sustaining capital. So $8 million contribution for the quarter. And that did, as some of you have noted, did not include a buildup of concentrate that we had during the quarter. So there was around $10 million of realizable value from concentrate that we hadn't sold at the end of the quarter. Most of that was zinc concentrate, and we'll look to move that concentrate during the December quarter. So within the result, Federation did contribute a modest operating cash flow now that it's a commercial production operation, and that will ramp up during the year. But overall, when we factor in sustained capital, it was slightly negative. But that sustaining capital is supporting our future production. So as the mine builds up its tons and as we build up the throughput at peak, that operating cash flow will increase significantly. Brian's taken us through the growth capital projects. All I really need to say there is that the spend on those projects is tracking in line with guidance and in line with our budgets, as is the exploration spend. In the working capital, there was a net outflow of $5.5 million for the quarter. Predominantly, that was driven by when we pay our annual incentives to staff, so that happened in September. There was also a little bit of trade creditors unwind that I talked about last quarter, but predominantly being the incentive payments. Finally, I'll just talk about all-in sustaining costs. You'll notice that we're not reporting all-in sustaining costs in the report, and we've been talking for a while about the fact that all-in sustaining costs was a less relevant metric for us in terms of assessing business performance. We haven't guided on our all-in sustaining costs since FY24. We did guide this year in dollar millions and we reported that in the report, but what we will do this year is to report our performance based on a dollar per tonne metric. So as you can see for the Cobar region, it was $343 a tonne. So that represents all costs, all operating costs right through to royalties, concentrate, refining, transport, etc. And for the group with the addition of care and maintenance and corporate costs, it was $367 a tonne. So that really will trend down, particularly as Federation volumes ramp up and as the throughput goes through our plan. So to give you a sense of how that $367 per tonne compares to our guidance for this year, if you took the midpoint of our group operating costs and the midpoint of our tonnage volume for the year, you'll get a dollar per tonne of around $328 a tonne. As you can see, 367, we are above it, but as Federation volumes increase and our throughputs increase, we will average 328 for the year, so we should be finishing the year lower than 328. So in summary, look, it's been a really strong start on production and our cost metrics, and that is all supported by our ongoing strong balance sheet. So I'll leave it there and hand it back to you, Brian.

Thanks, Martin. Thanks, Andrew. Look, just to wrap it up, If we are, our focus there is really developing our copper growth options towards 40,000 copper core tonnes in production in FY28. The key focus areas have not changed, to be honest. We still want to focus and maintain just one capital allocation, which we've been doing and doing successfully. We want to continue doing that. We are improving our productivity and maximising cash generation. in our business, which we are obviously self-funding our projects and building our business from within, which is a great position to be in. We want to continue safely ramping up federation and extending the mine life through the work we're doing with the infield drilling and the resource drilling, which is, once again, that's a good opportunity for us as a company to do that, and we're going to continue to push that really hard. And we're getting the increase in the results now in volumes. Once again, also make sure we safely deliver the Great Cobar project along the milestones that we committed to the market in the release of the project that was done earlier this calendar year. Focusing on our pipeline of low-cost growth options, Andrew obviously talked about one just now in imagery. We've got obviously a very good exploration program planned for this year to really test a few key targets across the region. We were always excited by the high prospectivity of this region and we always talk about it. And obviously the best way to substantiate is by putting holes into the ground, which is what we're doing. And importantly, we obviously have attracted some really good people and we're retaining really good people, but we're going to continue to attract people as we grow our business in the region and deliver the results we've been committed to. So overall, we're happy where we are as a company in terms of our delivery for quarter one. It really sort of supports FY24 and FY25 Those foundations have allowed us to continue to build the company, deliver reliable results, and very good performance as a company, and we see the future looking very bright for ourselves. So without further ado, I'll hand it back to you, Rocco, to go to questions.

Yes, sir. Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question. And today's first question comes from Paul Kaner at Ord Minette. Please go ahead.

Yeah, hi, gents. Thanks for taking my questions. I've got two here that surround the updated resource and reserve. So firstly, at Federation... tons and tons of grades have come down there which shouldn't be too unexpected I guess as you mentioned given your previous commentary around the improved all body knowledge I'm just wondering at this stage how should we think about FY28 production obviously that aspirational target has been provided but from memory that sort of based on the old mining method? I mean, is there potential that FY28 follows a similar trend to FY26 and 27 after you get more infill drilling? Or is there something, I guess, giving you confidence that that ore body does widen a depth?

Yeah, thanks, Paul, for the first question. Look, in terms of our outlook, we've sort of made mention in our report that our guidance numbers for FY26 and our outlook for 27-28 remain unchanged. We'll continue to do more work on that as the drilling obviously progresses, as we get deeper, and obviously the infield drilling will obviously give us more confidence always on our numbers. But at this stage, you know, we don't see sort of giving any different outlook numbers at this point in time. It's all going to just come down to hopefully once we push the decline deeper and get those drill holes in and get more confidence, you know, there's always an upside to potential to these numbers as well. So at this stage, Andrew, in addition, comment to that at all?

Probably just one... comment and I won't comment on the guidance that flows through now we've got the model through into our life and mind planning work but one thing which we did do just to see where we were losing tons and you've called that out Paul was just to look at where vertically that was the case and certainly in each of the commodities the tons are given up at depth like right near the bottom and part of that is we just don't have the drilling there for the new search that we're doing, search ellipses we've got at that point. So, you know, as Brian says, you know, we're very hopeful that as we continue to get that drilling in down there and at depth and also the infill on the deeper areas, that those tons come back, just as they have in the upper levels. Interestingly, just to call out gold, you know, we're seeing commodities often, but gold's one that contained isn't. And that's because in the upper level drilling, we've actually added gold. So the hope is that we see more of that as we drill and understand, particularly gold, which is a bit nuggety, as you know, with greater detail as we go to depth.

Too easy. No, that's clear. Thanks for that additional granularity there, Andrew. And then just on Nimigi, obviously some strong growth there. I guess my question is, how big does that need to be to justify switching back on HERA when you maybe combine it with some other material in your portfolio?

Yeah, look, for NIMIGI, we set some internal targets, but Andrew did talk about earlier, but really it's going to come to economics. So once we get the, obviously keep working on the drilling for the resource in that area and the potential reserves, we'll run that through our economic models The upside for Newmagee, obviously, is there's a plant less than five corners away, which can be restarted for a low amount of capital. But I think it's fair to say at this stage, we just need to get the drilling work finished and then we can sort of understand what the economics look like. Like I said, I will highlight, though, the economics are very, very favourable in terms of, you know, downstream processing just being around the corner or even backhauling tracks back to peak, if it makes sense to as well. to send material to peak if we thought that was the right place to send it. But we just need to get the economics based on the commodities and the grades and things, Paul, to finalise that, I think, first.

Yeah, too easy. And just, Andrew, you mentioned the gold there at Nimadjib. Just remind me, is there any other sort of potentially deleterious elements at Nimadjib that might impact processing?

No, Paul, we're not seeing anything and Brian called out the recoveries we're getting. They are strong, but they're kind of what we expected through the seed study. It's a good ore that processes very well through the peak plant.

That's great. Thanks for that, Andrew, Brian. Appreciate it. Cheers. Thanks, Paul, for your questions.

Thank you. And our next question today comes from Adam Baker at Macquarie. Please go ahead.

Yeah, morning, team. Just one on the copper. I mean, the grades from the copper ore. looked a little bit low at 1.01% this quarter, and as a result, you know, versus your midpoint, you're roughly 13% for the year. How should we be thinking about the copper output for the rest of this financial year? Do you expect that to still be quite lumpy in nature, or, you know, can you provide any kind of quarterly weighting for that output?

Yeah, sure. Thanks, Adam, for your question. The current grades for the quarter are really a representation of where we've been mining in the sequence. But Angus is online. I might hand it over to Angus to talk about how he sees the remainder of the year based on the grades. Angus, over to you.

Yeah, thanks, Adam. Yeah, right now we are focused on copper in the next couple of months. We're dropping three copper soaps this week. So it really, yeah, comes back to the sequence and where we're mining at the time. There's actually quite a lot of copper to come out of the peak side this year. So we're focusing in on some of those types at the moment and we're continuing our sequence over at Chesney, which is working well. So yeah, low copper in the first quarter, but we certainly will pick that up in the next couple of quarters.

And Adam, on top of that, the lower copper has being offset by the higher gold grades as well. So it depends on the oil fee we're providing and we've got the gold grade benefit and the copper offset obviously on the lower side. So as Angus said, that'll sort of smooth itself out on the quarter by quarter position on the mining sequence.

Okay, thanks. And just on the resource and reserve update, I mean, good to see an increase in both reserves and resources there, and no doubt a lot of that was from Great Cobar in addition to the higher assumed metal prices. But it looks like you have had increasing in the drilling and model updates to both the reserves and resources. So that's a net-net improvement, you know, accounting for all your different ore bodies put together and, you know, incorporating, I guess, the losses that you've had at Federation from the re-evaluation of the ore body. You've still kind of come out at a net positive, is that correct?

Yeah, so resource reserve and production target is net positive. Those numbers are based on obviously depletion this year across the board, also based on infill drilling and drilling program in general, which is a positive across the board. And obviously we've got the economic parameters too, which are, you know, we've got some better prices in copper and gold, which we've been able to sort of take the benefit off Obviously, one of the biggest drivers for us is if we can continue to get our productivity in the right direction and get our cost down, which obviously we're striving to do, that obviously opens up more potential for us as well with our economic parameters to put more on the table for our reserves and production targets going forward.

Okay, thank you. Thanks for taking my questions. Thanks, Adam.

Thank you. And our next question today comes from David Coates at Bell Potter Securities. Please go ahead.

Thank you. And thanks, Brian, Paul, and Martin for the presentation this morning. Just quickly on, congrats on a good quarter and Federation is commercial production like that. Just on the production and sort of productivity metrics you've been reporting, I just want to know what the underlying drivers you've been at, or if you can identify any underlying drivers for those metrics. Is it people? Is it extra gear? Is it getting kind of critical mass on the number of headings? Can you just give us a bit more sort of depth into that?

Yeah, sure. Thanks, Dave, for the question. In terms of peak productivity, it's really been a focus on getting our maintenance availability up to a certain level. We've been changing out old gear that probably wasn't maintained excellent in the past and so we've been having a refurbishment and overhaul program and buying in new equipment and selling out old gear that's part of the driver in addition to that is just resourcing up with obviously great coba coming on we've had a traditional resources on and and obviously that's a challenge when you've got a mine still operating the south side and kicking off so resource and getting utilization up's been a focus and also getting our payloads and getting our sort of sequencing operating phases available. One of the big milestones we've got this financial year is actually a hauling into some of our workings, connecting two of our, if you call it, mining areas, which reduce our hauling times and our sequencing of getting people into the operations from a utilization point of view. That's also been a big focus as well. to basically hole through and reduce our time wasted and improve utilization. So there's a host of things, not one particular point, but definitely rate, availability, and utilization have been the focus, which is core to mining, as we all know. So there's just a bunch of things. David?

Nice one. Thanks, Brian. And just following up on the earlier question around energy and hero, Just wondering what the sort of key opportunities you're considering for the year of plant and any time your catalysts we should be keeping an eye out for through the rest of this year and into next year might give some direction or some clues on what's going to happen then?

Yeah, look, I'll just answer briefly and maybe hand over to Andrew as well. But right now, you know, we've got to continue the exploration program to understand Nimigi. um we obviously uh will continue to look around the region to see if anyone wants to to you know if someone needs a plan and wants to sort of engage with us around the use of that plan uh that can actually give us economic benefit uh and a sort of a there's a tolling arrangement something else and we'll be open to those opportunities for sure um but realistically the plants costing very little um and um you know we won't be spending any money on that until we have a clear execution path going forward. If Nimigi is something that goes forward, you've obviously got approval process to run through, project work to run through, and we're sort of talking several years away before Nimigi would actually be an option for us to put through the Hera plant. There are other options around the region that we'll continue to talk to. Andrew, is there anything in addition to that at all for Hera plant question?

yeah it's just worth noting that you know we're constantly looking at a range of potential feed sources for our two plants in the region um you know within our own portfolios and imagery is one um we'll do some work this year on hera the mine um and there's still ore in there obviously with gold price running north of 4 000 copper price up and lead zinc prices up um we do need to continually to check whether it makes sense to pull some tons out of there um as i mentioned earlier we're looking at the imagery we've sort of got this target that we're working towards um that also is impacted by price to a degree um so you know looking at that within peak itself there's a number of all body opportunities um the most obvious is great cobar we're on our way there um but something like cladston in that region um It could also come in as running to an half percent copper in our latest MROR. So there's a lot of work to do to think a bit about what the feed looks like and what the mix of processing and mining looks like going forward, which we'll continue to work through this year.

And, David, that will be offset, obviously, as we look at peak, once we get a peak expansion, you know, such as the 1.2 million tonnes. And we find out what's happening at Great Cobar. We'll know more around resource potential there and at Federation and Mimigi. We've just got to look at all those options, see, you know, we have the plan available. What's the best way we can use it? And that's obviously alive. And as Andrew said, we're looking at options continually around that as part of his portfolio.

Nice. Okay. Thanks, Brian. Thanks, Andrew. That's great.

Thanks, David.

Thank you. And our next question comes from Paul Hissey with Mullis. Please go ahead.

G'day, guys. Yeah, some more questions on the resource reserve, if I may. Just to call out a couple of things from the document, which you're right, is quite long. But just with regard to the peak operation resource, I can see here 2,500 tonne. Sorry, yeah, tonnage. It must be 2,500,000 tonne reduction. through no prospects of reasonable economic extraction. I mean, that's obviously a fairly chunky number. I just wanted to get an understanding, was that in the 2024 resource and has since been assessed as you got no chance of ever mining it? Or is this something to do with a fresh York code? Or just take me through that change, please.

Andrew, do you want to take that question?

Yeah, no problem. And I won't speak to specific numbers, Paul, mainly because I don't have them right here in front of me. But yeah, there is an element of preparing ourselves for New York and reasonable prospects test. There's also an element of peak transitioning Southmine into the new Cobar mine with the great Cobar development. Some of that ore was quite spread out and we've taken a fresh view of what's the possibility of us doing that while we're there mining in South Lyme. We'll continue to review those inventories, particularly I mentioned price is one thing, but also if we're able to mine South Lyme concurrently with New Cobar and Marine Grade Cobar, some of that material may come back. But we don't want to end up with a position where we're sitting with a large resource And we say we're not mining in South Mine anymore, so we're being quite prudent in pulling some of that stuff out.

Okay, thanks. And then just to unpack Federation a little bit more, Brian, I just want to be sort of clear on what's happened there. I mean, you did flag this back in January, that the ore body was looking a little different than you had expected. I think, correct me if I'm wrong, that you said that you sort of have the same sort of metal in the upper levels, I think, but we're seeing a 9% drop in tonnage overall and a 20% drop in contained zinc and lead overall. So I just want to sort of get my head around how you can have the same metal, which you might expect from perhaps lower tons but higher grades, but then have a significantly lower metal concentration sort of globally there. I mean, should we think about this as being sort of two halves after a lower? Can you just unpack that a little bit more, please? I mean, this is going to be nearly half of your ore feed by the time we get to 28. I think it's worth sort of labouring a bit, if you can.

Yeah, sure. I'll make some comments and I'll hand over to Andrew for some additional comments. So, look, I think the key point is we've sort of said that we've... where for the upper section where we've been able to put where the decline was in place and we've been able to put the infield drilling in place to understand the complexities of the ore body based on what was originally planned and what was actually identified in the ore body, we've been able to hold the payable metal in that area. The limitation or the numbers you're seeing different are really the fact we just need to push the decline down and to get to a point where we can do the drilling, get the results, and then obviously having a model which sort of takes the top and sort of is what it looks like and here's the bottom based on the assumptions we have now, is to put the extra effort in pushing the decline down, get the infield drilling to the same level of sort of magnitude of effort we've done for the upper zone, and then we can sort of look at the full potential of what the oil body has to offer. So, you know, at the moment, it's all the potential that needs to come from the drilling and that's what needs to be unpacked as we move down the decline effectively. Andrew, do you want to make any additional comments to the question at all?

Just some minor comments. Paul says, you know, we've sort of turned from a kind of more amorphous two domains, east-northeast trending mineralisation to still having that trend but then modeling that as a series of kind of north-northeast lenses and with that they become narrower and with that we've included more dilution so we've had a bit of an impact then on grade as I mentioned earlier to I think one of Paul's questions we've also when we look at it given up quite a few tons at the bottom which is really an information modeling kind of where we're at situation if you look on when you get a moment later on on page 34 of the immoral release i think there's there's a picture of the side by side of the ore bodies and you can see there um some of those tons that have been given up at the bottom um so you know as brian's mentioned earlier definitely hopeful as we push the decline down to that infill it becomes a little like what we're seeing at the upper levels um and you kind of say is that an upper lower thing in some ways yes it is we hope um we expect um but we've got to get down by pushing that decline down, getting drill cutties and doing that in film.

Yeah, so the implication, I guess, is that obviously they were lower, they were always lower confidence at depth because of the drilling density or lack of drilling density and what you've learnt about the complexity in the upper levels, you've effectively had to declassify, you know, to outside resource that material at depth, right? Is that the right, conclusion?

Yeah, it's probably a reasonable way of thinking about it.

Yep. All right. And then so flowing on from that, I guess, at an asset level, what does that mean for your, I guess, your operating costs and your capex. So the ore body is not quite the same geometry. Is there more development required now to set these stoves up? If the stoves are going to be narrower, does that mean your mining cost has potential upside risks? I mean, it can't be all your old numbers are still entirely valid given what appears to be a reasonably meaningful change in the nature of the ore body.

Yeah, so the original, obviously in the upper section, we'd already seen that, so we'd already put the development meters in there because effectively the meters you're driving and the way we designed the upper section has been meters through the ore body rather than at the end of the ore body coming to the stope and obviously sort of as we withdraw, we take the stope. So there's pros and cons for the ore body in terms of as we're developing it. and how we extract it, etc. At this point in time, we've got to do more work, obviously, as we get more information. We've only just got the MROR finalised, so we've got to go through the next process and see what that looks like in the future years beyond FY28 as we get the information through. But realistically, I don't see a substantial increase in terms of what you're alluding to. I think it's just going to come down to doing more, doing now, that is, as we set up the decline... We'll move the decline if we need to slightly to reorientate against where the ore body is and we'll set up a development accordingly to basically maximise ore recovery for the sort of the metres that are required. So I think the overall plan is different from, you know, as you see from the slide or the page that Andrew referred to, but we've already been dealing with that in the top section and we haven't seen a substantial increase. So we've just got to continue to get the information to model it properly as we go down.

Okay. And what about the implications on, say, life of mine exploration and resource definition drilling?

Well, obviously, we've increased that. We have increased the drilling on infill drilling. That's obviously has been increased to the cost. We're always going to do infill drilling, but the magnitude of it has actually obviously going to be an increase for us. We do a lot of infield drilling at peak as well for the ore bodies because they are complex polymetallic ore bodies. But yeah, definitely there'll be an increase in the costs of infield drilling to help us get more confidence on the ore body as we move down. That should pay itself back though in terms of the benefits it gives to our mine planning, to our developing through the ore body and getting development all through out of the mine into the plant. So it really comes down to the geos and the mining engineers working well here to design it well. So that's probably one of the areas that will increase, and that is the infill drilling to delineate the body or body better.

Okay, great. And then I guess a global sort of question arising from this issue at Federation is, to the extent that it's, I guess it's a technical matter, a scientific matter that you're trying to get on top of here, what are the lessons or the takeaways or the read-throughs for, say, the drilling work you've done ahead of the planning and development of Great Cobra? I acknowledge they're two different ore bodies, obviously, but But regarding what level of drilling you think you need to be confident the mine plan's going to still hold up when you get there, et cetera.

Yeah, sure. Andrew, do you want to respond to that one? Then I'll add some stuff onto it.

Well, I think you, in some ways, answered your own question in that they are very different ore bodies. You know, there's certainly value in being underground, and we're seeing that at Federation. We always intended on pushing that exploration decline in as quickly as we could. But the ore, you know, we modelled as being very valuable. We're still modelling as being very valuable. It pays to be underground and mining and pulling that to make cash flow. Great Cobar, a little bit different. So obviously we're a new Cobar mine. It's an all-body extension of an existing mine. So we have all of the information from that existing mine. We have drilling through that. It's much more continuous, much easier, I suppose, to model than a federation. We are modeling five products, but the reality is the bulk of it's copper gold, as opposed to federation where you've got that interplay of all of those commodities in a true polymetallic. So yeah, very, very different. We've also taken a relatively conservative kind of view of what was needed to get across there and make money. And if you've looked at our study releases, you see we've included a relatively small portion of what we believe is the overall, which is more than enough to justify the capital to get across there and to put a shaft in. And that's the other interesting piece. We just need to develop one of the big kilometers across there and put a shaft in, and then we're away. It's a very different risk proposition. It's a very different ore body. And we're certainly confident with what's over there to Great Cobar.

I think what's important there, Paul, is the assumptions we've used have been quite conservative for Great Cobar. We've taken a lot of learnings out of Federation and applied them to Great Cobar. And I think our development assumptions, our layer assumptions, using existing information we have for an ore body that sort of extends beyond the previous ore body And, you know, New Cobas, Chesney and all those regions are very, very close. So effectively, the learnings have been applied into the model effectively and in a conservative way.

Okay, great. And then one last question, if you'll indulge me for Martin. Just if I could just get you to remind me, you spoke of the decrease in the undrawn loan. Does the amount of funds diminish over time there? Martin, just remind me of the mechanics, if you can, please. Thank you.

Yeah, so I guess there's two parts I'll touch on. So on the loan itself, given it's undrawn, the facility amount just drops down each quarter. So what we're reporting as the loan amount at the end of September is 23.3. So there's been a $700,000 amort on that in the May, well, it was in May and August. From there, it essentially drops down in one eighth over the remaining term of eight quarters. So you'll probably have a calculator in front of you where you got 23.3 divided by eight is how it will step down from now. And then the other piece is the performance bonds. So you obviously can't repay a performance bond without returning it. So the cash backing is the way that we simulate that facility size dropping down. And we've got through to date $1.94 million against the Trafigura facility. And then that will then start to step down at just around $7.7 million per quarter from here. So that was the comment I made about cash backing going up to a bit over $26 million at the end of December. The other amount is above and beyond traffic euro, there are other bonds that we obviously couldn't issue in the traffic facility because it was at its limit, and that's what the other restricted cash is.

Yeah, understood. Okay, thanks, guys.

No worries. Thanks, Paul. Thanks, Paul.

Thank you. And our next question today comes from Anthony Barrage at Platts. Please go ahead.

Yeah, good day. Just in terms of the copper macro, our data is showing exploration and M&A spend are already over a decade high. I'm just wondering whether you're seeing some kind of structural shift happening perhaps in the copper macro, which is benefiting you guys now and into the foreseeable future?

Sorry, I'm really straight into the question you've actually asked. So can you repeat the question? Sorry, it's cutting in and out.

Yeah, yeah, sorry. So just wondering whether you see a structural shift happening just in the copper macro at the moment, which could be benefiting you guys now and into the foreseeable future, given when our data shows M&A and Exploration Center are already at multi-year highs in the past year? Yeah.

Yeah, sure. Okay, thank you. I've got a question now. Yeah, look, I think we're very bullish on copper and the fundamentals of copper. I mean, if you look at how many new copper mines are being developed around the place, there's not a lot, and grades are decreasing in a lot of mines that actually do have copper, or they're getting deeper and costs are going up, et cetera, et cetera. So, you know, from a portfolio point of view, moving to, you know, in the next couple of years, 50% of our ore being copper ore, overall is a positive for us. And I think the fundamentals support that. In terms of M&A activities, it sort of repeats the same thing. The reason why there's M&A activities happening is because effectively people can't find the copper they're looking for. So if you can't find it, go buy it. So obviously that's the nature of what's happening around the market right now. As people have got wealthy out of the gold revenue and gold prices right now. They're obviously sort of merging into copper and spending their money on copper where they can. So, yeah, I guess in terms of M&A, it's probably going to be more happening than less. Effectively, with the current move towards, you know, the decarbonisation, you know, and the copper demand continuing to move in the right direction for us, we see it being positive for us, that's for sure, and the fundamentals behind copper.

Sure. There's one more thing. I know that the lack of decent discoveries and the underinvestments in exploration is often being cited as a big cause of what's the fundamental issue with the pipeline in copper. I mean, our data showing exploration is over a decade high last year now. Do you think that things are kind of picking up for the copper industry or could it still be a long way behind given the amount of time it takes to develop these things?

Well, yeah, I guess the two things is you can spend more on exploration, you've got to find more on that. So a lot of the work on exploration is in regions where there's known copper options. And why we like the Cobar region is we've got high prospectivity out there. You know, there's been X amount of mines over the last 100 or so years that have opened and closed. And so a lot of our exploration is focused on drilling underneath where they were because we know there's actually prospectivity there. So, yeah, there is a lot of increased spend in gold and in copper. And effectively, that's... That's good, but it's got to be in areas where there is actually copper defined and the right grades. There's a lot of companies, obviously, you know, mining the stock market with a sort of one hits there and here. But if you look at what that's got to compete with is the time it takes to actually get the deposit formed and built and into an operation. It's sort of five, six, seven, eight years. And that's where the challenge actually is. Where it really has been successful is we've had great co-bars sitting there It's been approved, and we did the sort of business case to the board and had it approved last financial year, and we can get straight onto it and make it happen with good grades and good accessibility using our existing mines and infrastructure and do it at low cost. A lot of these exploration companies can find things, but you've still got a long time to get approvals in place, communities to accept the mine going in, infrastructure services. It's all great to find something, but you've got to connect it to something, and that's a challenge a lot of companies actually have in the industry. and where we're placed quite well as a company in the Cobar region. And a lot of the big mines, literally the grades are dropping. You know, the high grades being taken, they've got a higher cost per ton, they're going deeper and deeper, and it's getting harder and harder. So the objective for us is to be low cost and have the ore in front of us and use our infrastructure we have to build our business. And I think we're in a good position to do that. Does that answer your question? Yeah, that's great. Thanks very much.

Thank you. Our next question today comes from Roy Gillespie, an individual investor. Please go ahead.

Good morning. Yeah. Thanks for a good, solid report. I just want to ask a couple of questions, actually. First is, with the shortage of silver in the world and increasing price, would it be possible or could you... report on silver in the group quarterly performance chart would help highlight the multi-metal facet of Aurelia. And also the other question was about hedging in the future. Do you see any change in that with regards to increasing prices reduction in development capital needed, et cetera, et cetera.

Thanks, Roy. It's Martin here. I'll take those. So silver is a small part of our revenue mix. We do actually report on it in the back of the report, so you can see all the stats around production there, but it's more just on a materiality level. Silver is around $10 million to $12 million of revenue for us, in a $300-plus million revenue mix. So it's not that we don't like the by-product. It's probably just a fact of real estate, but all the details in the appendix of the report for silver. In terms of hedging, look, hedging, I've been sort of fairly open with how we're thinking about hedging right now, where prices, where we are. We haven't done any hedging lately, and I don't feel the need to do any right now. We've been using hedging as a way to protect our balance sheet for the capital spend. As that capital spend rolls off, hedging becomes less relevant in terms of what we use it for, which is insurance to make sure we build our projects. So as you know, we have a hedge book, we haven't added to it lately. And we will keep that tool in our kit to manage the balance sheet, but right now I'm not rushing in to do any.

But just on your question, Roy, in terms of future reports, we can always add a line in to represent what that was for the quarter. There's no problem with that. But we'll refer to the appendix just for the further details. There's no problem with that, especially as silver becomes more important, as you said, on a demand basis.

Yeah. Just another related question. What will Federation, what's the impact on silver production at Federation Mine coming on stream?

I don't actually have that information in front of me. Sorry, Roy, I don't have that information in front of me. Maybe we can get back to you on that one. I don't have it directly in front of me, that level of detail, sorry.

Okay, yeah. Brian, I can just make a comment on that. So in our latest inventory releases, so reserve, resource and production targets, silver only makes up six grams a ton of federation. So as Martin says, it's always nice to have a by-product, but in the scheme of global silver producers, it's quite small. Understood.

Thanks, Andrew.

Thank you. That's all.

Thanks. Thanks very much for your question, William.

Thank you. And our next question today comes from Ashley Chan, a shareholder. Please go ahead.

Hi, Brian, Martin, Andrew, and Angus. Congratulations on another excellent production ramp-up and productive quarter. I've just got a question on two questions. The first question is on joint venture interests in Nemoji. And the second question is on the management of mine plan targets. For Limiti, I noticed in the last exploration update, there was a company called Osmondex that had 5%. Does that mean they have 5% of the whole exploration? Is it just of the exploration area or the mine? And who are they? And is there any thought of buying the minority joint venture interests out either through, I guess, cash or strip or a mixture of cash, strip or royalty?

Thanks for your question, Ashley. Andrew, do you want to have a respond to that? And I'll add some things to it as well.

Yeah, look, I'll just comment as far as I can. So Ausindex, there's a history there, quite a long history, as you'd imagine, for most of the KBAR companies. region deposits, which has them retaining 5%. It's something we'll continue to think about, engage with them, but we certainly don't comment on what our intentions are in relation to other things.

But what's important, I think, Ashley, as well, is that we will continue to look at those optionalities all the time. If it makes sense at the right time, we'll definitely look at these things like we do for any of our deposits and areas we have under our control. If it's economic or commercial, we'll definitely consider things. Thanks. And your second question?

Yep, thanks. So in the reserves and resources report, I think I saw, there was something about you effectively have eight years mine plan targets. So the question I have is, when do you see that will be likely to be a management performance metric or KPI to increase the resources or the mine plan target, sorry, from eight years to about over 10 years? Will it be in calendar year 26 or calendar year 27 or 28? I guess it's intertwined with when you are able to do more resource delineation. When do you think it would be a management target to do that?

Yeah, look, we actually have management targets into our LTIs. So our LTIs are derived around us improving our sort of reserve base of the company. And so it's a reserve per share sort of increase. So that's obviously definitely in our KPIs to increase that. Obviously, Ashley, we obviously have to balance that out against spending money and cash that we don't have. So our focus always is that sort of fine balance. How many years ahead do we need? And what's the sort of, you know, reserve per share outcome that looks like that makes sense commercially? So for instance, we have enough production target to mine the next five years. As a company, our size and with the cash flows we have, is that satisfactory or should it be 10 years? So that's a conversation we have with the board on a regular basis on what's the right number and what's the right target. But back to your original question, myself and Martin and the other ELT members and anyone on an LTI for the company has 40% of our LTI tied to increasing our reserves per share. I hope that answers your question.

Oh, perfect. Thank you very much. Thanks a lot. Again, good luck for the rest of the quarter.

Thanks for your questions, Ashley.

Thank you. There are no further questions at this time. I'll now hand back to Mr. Quinn for closing remarks.

Look, thanks very much for all the questions today and for the efforts the team has put in to prepare for this quarter. Obviously, the first quarter is always the tough one as you finish the last financial year off. But I think as you've sort of seen from the results of this quarter, we've come out of FY25 very strong. on a four-year basis, and we've continued that sort of strength into FY26, and we continue to plan to deliver those results very strong. A special thanks to the team involved with the MRORs. A lot of effort goes into the MROR from drilling, putting a drill rig in the right location through to the samples and the modelling that goes behind that. It's a big report, but like I said, with the level of information we have and the continued level we're going to seek to – build confidence in our plans going forward. I believe the company's in a position right now to really sort of deliver our targets and deliver the cash flows that sort of we've committed to the shareholders. Ultimately, it comes down to our people on the ground. I want to thank our workforce, including our contracting partners for the delivery this quarter as it's been for last quarter. Obviously, the focus is on safety. We're doing everything else well. We just need to make sure people go home safely and that's obviously going to be paramount for our focus as a team going forward. Thanks for all the questions. Really appreciate it. We look forward to presenting to you guys in the next quarter and also at the end of H1 for FY26. And please go well. Thank you very much.

Thank you. That does conclude our conference for today. We thank you for participating. You may now disconnect.