Aurelia Metals Ltd

Thank you for standing by and welcome to the Aurelia Metals Limited March 2026 quarterly conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would like to hand the microphone to Mr. Brian Quinn, Managing Director and CEO. Please go ahead.

Thanks, Aisley. Good morning and thanks to everyone for joining us in the Eurelia Mills March Quality Report. With me today, our Planned Air Leisure team, including Martin Cummings, the CFO, Andrew Graham, our Chief Technical and Development Officer, and Angus Wiley, our General Manager for the Karabakh region. We'll be working our way through the slides that were released today, and at the back of the end of that presentation, we'll also move to questions to the people online. Look, today's release is testament to a really going very strong performance and interdiscipline delivery outcomes that we've actually been able to achieve. We really continue to set the business to success and each quarter delivering what we say we'll do and ultimately providing good cash flow and profits for our shareholders in FY26 and beyond. From today's presentation and relief, I hope investors can appreciate the results are very good and we actually have a lot more to come. So I'll move on to slide two, the forward-looking statement. Please take the time to revisit your own time. On to slide three, it's with great pleasure that I can present the highlights of this quarter to the market today with some really clear sets of messages. Firstly, such a strong gold market we're in right now. We've been able to pivot and really deliver strong gold production for the quarter and an improvement to our guidance numbers as well for re-setting up for the remainder of the year with an increase in ounces. This is supported by also having longer stocks building on our stockpiles up to 61,000 tonnes. So we're really setting up to do risk to business for quarter four and beyond. Our cash flows are also moving in the right direction, delivering free cash flow this This is also showing some great results from our business and reinforcing our message to our shareholders that the business is hitting the right direction with the production and costs and the investments we're making. Our team have been actively engaged in safety this last quarter, really putting some step changes in place around behaviour-based safety programs, implementing our revised fatal risk programs to keep people safe and really improve our close-out actions and field leadership time also. In previous quarters we had numerous injuries around contracted partners and we've been able to really focus heavily on the ability to improve that over this last quarter. There's still lots to do. We want everyone to return home the same way they come to work safely and that's obviously something we're very proud that we're working on these programs to improve that for people working at Avelia. Obviously our balance sheet has continued to remain strong and obviously Mark will talk more about that later. in terms of what's happening in the balance sheet and what's going to be happening into the next quarter as well. All of the results from our teams at Federation have continued to demonstrate strong and disciplined delivery. Federation wine has increased the tonnages and also gold grades, and I think we've engaged our business. These results are actually improving our throughput at our peak mill as well, and that's allowed us to support the peak throughput at record rates which continue to ramp up as we get ready for expansion. The quality and blend of the Federation Ore is really helping us be able to ramp up our peak plant and get ready for expansion, and also get our stocks ready for these expansions. Lastly, our projects team are delivering expansion growth projects in the business in a very, very consistent way. We've actually obviously kept up the Great Cobar on track, and the Thickler project, and the Territory Mill expansion is also on track. as per what we've committed in the past. So overall, a very pleasing result for the highlights to talk through today and the message about how our business is delivering what we're committing to deliver and, in some cases, exceeding expectations for market as well. I think we'll turn to slide four, which is our cost and production slide. The key message for this slide is we're very focused on delivering value and cash, as I spoke about. You can sort of see from the slide the increase in our guidance for gold and also I'll just talk a bit about that increase. So our focus for gold has been to bring in some additional stoves that we've identified from infield drilling. So we're not actually taking stoves out of sequence. These gold stoves are basically running in sequence. We're bringing them into the plan and taking advantage of those smaller hydrates on stoves. We're also taking advantage of taking some of the copper ore that we feed into our mill and putting it through our levelling circuit to maximize gold recovery out of that ore as well. So in total, the benefit is we get more gold recovered and obviously more value for our shareholders. Obviously, we're also reporting a slight reduction in our guidance for copper, but that's also in line with the focus of pushing for more gold. So on a total value point of view, we're better off with the higher gold with current gold prices. And that's going to benefit our business and obviously benefit our cost structure as well. This higher gold production will deliver good operating cash and fit us more good cash flows than it could afford for this financial year and also set us up strongly for FY27. I'll just talk a little bit about the operating costs. They're also very much within dives and we don't see any higher costs coming in the Middle East price at the moment that's going to impact these ranges and Martin talks to more of that information in his section. So overall, when I look at the set of guidance numbers we presented, with the exceptional results involved, with a very much good focus on delivering our projects in line with our plans, things are looking very, very good for the company. You'll also notice we've actually reduced our guidance for growth capital. That's all to do with our timing of our projects. The projects are on schedule. It's more around the timing of the spend of those projects, which Mark will also talk to. I'll move on to slide six, which is the peak performance. So with slide six, Peek has continued to push development to have plenty of working areas available to production. This quarter, rate cover was slightly down on metres due to the ventilation establishment's works we had to do in that area. That works are now being set up to allow us to drive the development declines all the way to the bottom of the fresh air raise that will be sinking or raise boring in the second quarter of FY27. So pretty much that work is now set up for success for the continuation of the decline now as we move down towards October. With the build-up of the stocks from both Federation and Peak, As I said earlier, we've accumulated 61,000 tonnes of BOM available for mill and effectively this has enabled our mill to keep punching out really strong throughputs through the mill and allows us to do some record throughputs this quarter, which is impressive. I really want to take my hat off to the teams who are basically running the mill and getting not just good throughputs but also high recoveries. for our profitability business also. Key message here is the plan is ramping up around FY26 and setting up the FY27 once these expansions come online that I'll talk to you very soon. The stock build-up is by design and really focused on de-risking the FY27. So overall, if you look at the big happy hammer progressing and really happy our planning to achieve that at the bottom line. I'll move on to the Federation slide. We've heard the great news from the Federation performance. Mining comes ahead of target. We're continuing to... Sorry, mining comes ahead of target. We're coming 42% higher than the previous quarter. Gold is up by 11% on grade. And both of these sort of key physicals are supporting our improved recoveries in the peak plan as well. Overall, Federation mine continues to be a success story. with additional information that Andrew will provide around the exploration as well. We do see ex-Federation being a really good story for our investors going forward. Just on Federation's costs, the cost per tonne, also moving in the right direction as we committed to as well. As we ramp up our tonnes, we are seeing a reduction in our cost per tonne, which is great. Really proud to present these results to the shareholders in terms of where Federation is. These are the sort of increase in volumes we committed to, the reduction in cost we committed to, and the sort of improvement in our performance is showing through, hopefully, for shareholders. I'll just move on to the growth projects and exploration slide. I'll talk about the growth projects and hand it over to Andrew to talk to us through the exploration update for the quarter. So, of course, the great cover on slide nine, you can sort of see from the timeline, the project's progressing well in line with our commitments. As I said earlier, the focus is getting development down to the bottom of where the fresh air rays would be in place. So we'll have development putting, punching down underneath those areas and then we can start the raised bore work in quarter two FY27. The raised bore is the next key milestone for us, for the project. Obviously we're working through finalising the contractors for that work now and we'll be putting a lot of discipline and focus around making sure that big shaft raised bore is done level. Taking learnings from the shafts we've got at Federation and industry as well to make sure we do that well. The other major change we made in quarter three was the sequencing of the development declines beyond the actual raised bore shaft. We're going to bring our development to sequence to get down to the drilling platforms sooner so we can set up a drilling platform for infill drilling. and also exploration drilling and really unlock the potential of this resource-based reserves that Frank Tobar has for this company. We all believe it's going to be a game-changer but obviously we've got to get down there and put those additional holes in to hopefully give the channels confidence in where it's going. I'll just talk to slide 10 now which is the expansion projects. There's two parts of the project which are progressing very well. Firstly, the tailings and process water management. That project is going very, very well. In fact right now we're dry commissioning that particular thickener and we'll be basically moving to recommissioning in the middle of May as part of that cut over into the plant when we do the shutdown. So at this point in time nothing's stopping us from really delivering what we said we were going to deliver there in terms of the schedule and that's going to apply very, very well for us as well because effectively we'll be pushing higher copper ore through in the quarter four of FY26 and that copper ore obviously will get the benefit of better recoveries and better throughput from the thickener once it's in place as well. So that will actually work out timing wise perfect for our sequencing. The second project is the tertiary ball mill. All the major items are on site. All the excavation work has been done. We're now in the process of the build of the tertiary ball mill and all the electrical works. It's on schedule for quarter one FY27 also. So it's going very, very well and we're looking forward to seeing that. So I'll just reinforce the fact that we've been able to build up stocks, very important expansion is a great result for the team. The fact that we're getting the recoveries through the mill as it stands now and setting up for the expansion is a great result. and the fact that our grades are sort of moving through the planet in a nice way, delivering significant value for us, is also in line with our plan. So, as I said earlier, these are all the right steps and the right questions for us, having come to this point in time, and really happy how the project's been delivered safely. I'm going to hand it over to Andrew to talk through the exploration slides.

Thanks, Brian. We're on slide 11 now for those following along through the pack. Last week we were very excited to be able to release an energy district exploration update. If you haven't had a look at that release I'd encourage you to jump on our website, the ASX website and have a look. Obviously we've been doing very extensive underground infill drilling at Federation but this reporting is of our first exploration focused drilling from underground and we had to get the declines down, get the platforms in place to then be able to do explorations at added value. And it's great that this first program was immediately successful. So the three key items of federation that we released. Firstly, we drilled out federation west further down dip, and we got an extremely good hit about 70 metres further down dip. So it's extended that federation west all-body area You know, when I say very high grade, you know, we were 43% lead plus zinc with 1.2% copper with 0.9 grams gold. You know, a fantastic intercept over nine metres. And there may be midships on the slide. It's in the center there on hole 354. So extremely exciting. We do need to do more work to see if that continues to extend. We are doing some very early work, thinking about whether we push an exploration drive in that direction to allow us to explore there, but also to explore the central part of the observational body at depth. The other interesting piece in that slide, which you can see on the left-hand side, is that we discovered a new lens further west, and we've called this the Harley lens. It was intercepted from surface as well as from underground. Grade's good. Still an enormous amount of work to be done on that. But the pleasing piece for investors to think about is that we found that offset on FedWest, and now we're seeing additional mineralisation further west, which bodes very well for us continuing to find more at Federation. The other fringe benefit we had from exploring from underground is we actually hit some very, very good mineralisation in the early part of the exploration holes, so they're adjacent to the underground workings, and this material's been handed straight over to the mine to infill and then bring into the mine plant. And when I say very, very high grade, we've only got 43 grams gold, over 3.9 metres. We got 48% lead plus zinc over 5.5 metres. So this grade is just exceptional and it'll feed straight into the mine plan as additional material for us to mine. The other bit in our relief, we covered some regional work, Lyle and Lancelot, particularly in that release, but it is important to recognise that we're doing Quite extensive regional early-stage works, both at the Nimigi District but also in the Peak District, or the Cobar District, around Peak, and that's explained in our quarterly report. We're on the hunt for the next federation, and it's really exciting to be able to step beyond the mine areas and start looking for these future deposits for the company. I'll pass over now to Martin on the balance sheet.

Thanks, Andrew. So I'm turning to slide 13. which had our cash waterfall for the quarter. As Brian mentioned, this has been an extremely good quarter for us, which has culminated in an increase in cash to 94.7 million, and that excludes any restricted cash. Our Kovar region cash flow from ops was 36.2 million, driven by strong gold production and sales, and also continued strength in metal prices. As you can see on the right side of this slide, Precious metals remains our dominant revenue source at the moment, and our production outperformance to date this year has enabled us to take advantage of these higher prices. Our hedge book only has 6,000 ounces left over the next three months, so our realised prices will benefit from full exposure to spot from July this year. Our operating costs were higher this quarter in line with our plan, as mining rates ramped up at federations. Federation mining costs include a slightly higher proportion of operating development that is supporting the above-planned production from the mine. For peak, our mining costs in total were lower, which along with higher mined tonnes, reduced our unit costs to $142 a tonne. This does remain above our target, with initiatives underway through our Mining Productivity Improvement Project to either lower spend or increase tonnes mined. Our processing costs were slightly higher this quarter driven by planned maintenance. I'll just cover off diesel as part of our cost base. We have a long-term supply contract for diesel and our deliveries have remained as planned with no interruptions. We continue to have regular engagement with our supplier and we're comfortable from a supplier perspective that these deliveries will continue uninterrupted. Guidance around diesel. Diesel represented around 3% of our total costs. So with the recent increase in oil prices, that's more like 6% today. But as we noted in the report, there are also some rise and fall clauses within our contracts, mainly for logistics-related activities. We're monitoring all our contracts very closely. And again, we will expect to see some cost increases come through from that. But overall, we're comfortable that these costs will be managed within our cost guidance. Therefore, we haven't altered our cost guidance today. And lastly, on the Kovar cash flow was our sustaining capital, which is reported as part of that $36.2 million. Sustaining capital was lower, and for those who've been following that over the year, our spend profile was biased to the first half with some equipment replacement and some machine overhauls. So the majority of our spend now for the rest of FY26 is on sustaining mine developments, and we expect to therefore come in within our guidance range of $50 to $60 million for the year. For growth capital, as Brian mentioned, we did lower our guidance with three main drivers. Firstly, on the plant projects, when we set our guidance, we did include all of the capital for these projects in FY26. There's around $3 million of spend for the ball mill that will now be incurred early in FY27 as we commission the ball mill. and the crushing and materials handling project of around $8 million has been deferred. For Federation, this year we have balanced our mining activities between operating and capital development activities, whereas the guidance did have a higher bias towards pushing the decline down in capital. So this change to balance between operating and capital has meant less capital spend at Federation and about $5 million which will push into FY27 for the decline. And lastly, around our financing cash flows, we did add another $10 million to restricted cash for rehab bonds, taking the total to just under $38 million. So it was a particularly pleasing result that even with that extra $10 million in restricted cash and the payment of some taxes, we still grew our cash balance over the quarter. So just turning to slide 14, and it was a very busy quarter for us on the refinance process, which culminated in the execution of a commitment letter and a term sheet with three tier one global institutions for a senior secured $150 million Australian facility. I'm absolutely thrilled with what we were able to achieve, with this strengthening our balance sheet even further. Of key significance was the performance bond facility, which had managed to upsize by $45 million to $110 million. That $110 million is split into an $80 million five-year tranche and a $30 million three-year tranche and provides enough capacity in every indicator for rehab bond requirements for the foreseeable future. But crucially, in this facility, there are no requirements to cash back, like we have been, any bonds for the term of the facilities, which is a key differentiator. For our revolving credit facility, again, it's slightly larger than what we put in place for Traficura. and has no amortisation profile built in, meaning we are able to access that facility limit for the term of the facility being three years. And finally, as we've noted, the pricing is very competitive relative to the market and also considerably lower than our current facilities. So just to close off comments on the refi, I'd just like to thank our Aurelia team and our advisors for the effort to secure this amazing commitment. My thanks also to Citi, Credec and HSBC for your demonstrative support of our business going forward. I'd also just like to shout out to some of the other institutions that were involved in this process. As we included in the announcement, this was an oversubscribed process and we weren't able to accommodate all of the credit approved offers that we received. But I do thank you for your efforts in participating with us. So in summary, it's been a fantastic quarter for us with strong production, generating free cash, and our future financing facilities in place with financial close targeted for May. So thank you, and I'll hand it back to you, Brian.

Yeah, thanks, Brian. Thanks, Andrew. Just to, you know, wrap up in terms of the key focus areas for the organisation, you know, to leverage the results for this quarter and the previous quarters that we've been able to achieve to the market. Yeah, we're really safely prioritising strong gold production and delivering a robust cash flow outlook building on what we've already put in place and building on the balance sheet that Mark just talked about and obviously building on the re-buy we're doing as well. So the company's in really good shape and much more to come. So our focus area is really about maximising cash flow generation and value through using our portfolio of operations to maximise that and, as we said before, to continue to maximise the plant throughput and work towards our objective of 40,000 copper equivalent tonnes in FY28. And at this point in time, all the projects, all of the work is well underway and on track and delivering as we've committed. We are going to continue to outperform Planet Federation. It is going very well, as I mentioned, and hopefully investors can sort of see that Federation is delivering now and with the information Andrew shared, it's got a lot more potential that will be unpacked in the near future. We're going to continue to execute our plan at peak as well. We've put a productivity project in a peak and really looking at how we can extract more value from the peak operations while Great Covile has been set up. And it's going to be a key focus, ongoing key focus to execute that productivity improvement plan. In terms of Great Covile, it's about really us focusing on the key milestones that need to be achieved and make sure that we de-risk any of the projects that are deliverables and make sure they deliver on time. and on cost going forward to set up the business properly going forward as well, like we have for the other projects. And importantly, we need to continue to attract and retain the right people in the organisation to enable us to do this. You know, Aurelia has really good infrastructure and improving infrastructures for the expansions. It has a high perspective geology, as we've always spoken about, and you can sort of see from the grades and recoveries we're getting now, both the geology and infrastructure support It's like this business can deliver lots of value for our shareholders. And with the right people, you know, this business can really try going forward beyond what it's doing now. So I really want to wrap up by saying thank you to our teams for their support in getting these results. But like I said, there's a lot more to come and the organisation's in a really good position right now to leverage what we've built over the past. So, Ashley, I'll hand it back over to you so we can go through any questions we may have and then I'll provide a wrap-up after that.

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're on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Paul Caner with Ordmanet. Please go ahead.

Hi, thanks Brian, Mark and Andrew. Just a couple of questions for myself. Firstly, just On guidance at peak, you're obviously prioritising gold now by focusing on some of those smaller, more complex stokes. Sort of noting that these were outside of the mine plan, I just want to confirm that there's sort of no implications for 27 guidance and that sort of stoke sequencing in FY27?

Yeah, thanks, Paul. I'll answer that briefly and hand it over to Angus if he wants to add into it. Basically, these states were identified during infield drilling from the various underground workings. And so the opportunity was while we're there, we could set them up for success and take the gold ore now. So we're not sort of robbing or bringing things forward to take them now and then shortfall FY27. That's exactly what we're not doing. Are there any other comments on that at all?

Yeah, so as Brian said, no, we're not robbing from 27. The tech services team have done a great job identifying different additional resource areas and able to bring that into the plan this year.

Okay, great. Yeah, that answers it. And I guess, is there any additional material that you've... identified from infill that could maybe come into the mine plan now for FY27?

There's ongoing infill work at both Chesney and Kairos at the moment and Peak North and we'll continue to bring material in as it presents itself and certainly we continue to see good results from our infill and the team are working hard on bringing that material forward.

And I guess the key point, Paul, is that obviously we aren't stealing from the future to pay for now. These are opportunistic or that we can bring in while we're in those locations using the infill information we have now. It's a great result for our regional tech services teams to identify these things and with the current prices be dynamic about these things as well without destroying sort of medium, long-term, shallow value. So we're very excited by this opportunity we've been able to find based on the current price environment as well.

Yeah, no, that's clear, Brian. And I guess, given there's no change to group operating cost guidance, there's no material additional costs by bringing this stuff in?

Look, in terms of the, you know, these smaller scopes, you know, obviously require payment itself of the larger scopes. So when you're seeing multiple smaller stoves, it's the same, but for the total volume of the large stove, you do have to put some additional cost into it. And as we sort of reported, the cost per tonne at peak is obviously down from last quarter, not down to where we'd like it to be, in terms of where we're sort of focused on as a business, through our productivity improvement projects. But those costs are sort of still in line with our guidance, but it's not changing those numbers that straightforward.

Yeah, great. And then just last one from me, just... On that growth capital deferral there at Federation, you're prioritising operating development. I guess similarly, what sort of implications does this have for 27 and 28 developments, specifically the decline development there in 27?

Yeah, we're pushing the decline development down for infill drilling and exploration drilling. So in terms of the overall production profile, it doesn't impact the overall production profile. In fact, if you look at our development, as a federation, we're actually doing very, very well with development leaders. So I have to say, on balance, when we talk to the GOs about what's required versus our production profile, we can deliver both with the current scheduling and current profile we're delivering. So there's no impact on FY27. In fact, FY27 requires I hope, Paul, that we can present some really good numbers on what that looks like also on the way to the FY26 numbers in production.

Okay, great. No, that's it for me. I'll pass it on. Thanks, Paul.

Your next question comes from Paul Hissey with MOLIS. Please go ahead.

Thanks. Look, apologies. I did try to cancel my questions. But seeing as I'm here, just to follow up, but I mean, from the outside looking in, and look, sorry, let me go back a step. You provided a great breakdown with Paul there earlier. But just from the outside looking in, it does look like you're trying to prep the business to be a little bit more defensive from a cash flow perspective. So with the deferral of some of the capex and the prioritisation of some potentially higher margin gold material, look, I think you've probably answered the question around what's driving that. But Maybe just a little bit more on the timing of the CAPEX and some of these projects that look like the spend is going to now move out into next year, if you can, Brian, please.

Yeah, sure. On the CAPEX for the expansion for the tertiary mill, that's just a timing thing in terms of when the work's being done and obviously when the money will come through. It doesn't change the schedule. We always said 1F by 27 would be sort of target time for ramping up. In terms of the other capital that Martin spoke about, basically when we set that target in FY26, it was based on sequencing of the mines when we're going to be obviously taking more ore out of the north mine versus the south mine. With the current gold prices and current commodity prices in general, we are definitely the plan looks in favour of more mining out of the South mine and we have a crusher in place underground for the South mine in situ. So when it looks at timing of when we need to put the mobile crusher and materials handling in, we're still working through that as management and when that's likely to be in place we'll then sort of talk about when that capital is required. But right now it's not urgent to put it in but it will be at some point in time. We just wait for the timing. So it's nothing to do with, you know, trying to defer capital for cash or anything else. It's just literally a timing of when it makes sense based on when the mine plan dictates when it should actually happen, if that makes sense. Yeah, okay, thank you. And just in terms of part of the question on, in terms of, you know, taking higher grade now, it's literally because we are in working areas where we've done infill drilling and we thought we'd be closing out areas, and we aren't closing them out. We're finding more. So rather than come back later, you're best to take it now, and the price environment supports that, so it makes complete sense. So it's not high grading. It's literally taking the high grade that we're finding in those areas while we're working there, while we're looking at, you know, closing those areas out. We're not closing them out. In fact, we're opening them up. So it's fantastic that you guys are going to work on that for us. Yeah, okay.

Understood. Thanks, Brian.

Once again, if you wish to ask a question, please press Star 1 on your telephone and wait for your name to be announced. We'll now pause a short moment for any final questions to register. There are no further questions at this time. I'll now hand back to Mr Quinn for closing remarks.

Yeah, thanks, Ashleigh, and thanks, everyone, for dialling in today to hear the Q's March quarter results. Like I said, we are very happy how we're travelling as a company. I'd like to thank, obviously, the teams on the ground. Everyone's contributing to these results across the board, both our employees and contracted partners. Special thanks to, obviously, the executive leadership team. They're working very hard to set the coming up for the future and making sure that we've got the right sort of thinking in place to continue to value both the cash flow level and value for our shareholders as well. and the boards are being supportive of the plan we're putting in place and the strategies we're delivering against right now. But once again, thanks to the shareholders for supporting us and believing the story and tracking us as we continue to improve. We believe we have a good outlook and we believe there's much more to deliver in the future quarters, so I hope you can continue to support us and we'll keep delivering. Thanks very much for joining the call. We appreciate it.

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