Mineral Resources Ltd Ord

Thank you for standing by and welcome to Mineral Resources Analyst Call covering today's release of its June 2025 Exploration and Mining Activity Report. Your speakers today are Mark Wilson, Chief Financial Officer, and Chris Chong, General Manager, Investor Relations. A little bit of admin before we kick off. This is a sell-side call with analysts able to ask both text and live audio questions. To ask a text question, select the messaging icon, type your question in the box towards the top of the screen, and press the send button. To ask a live audio question, press the request to speak button at the top of the broadcast window. The broadcast will be replaced by the audio question screen. Use the dial-in number and access PIN provided to ask your question via the phone. Alternatively, for those on a home network or personal network, you can ask your question via the web by pressing join queue. If prompted, select Allow in the pop-up to grant access to your microphone. If you have any issues using the platform, dial-in details can also be found on the home page under Asking Audio Questions. Text questions can be submitted at any time, and the audio queue is now open. This call is being recorded with a written transcript being uploaded to the MNRES website later today. I will now hand over to the MNRES team.

Effective from 1 July. We had a board meeting, a group board meeting at NIRES yesterday, and Mel's in the office this morning, so she's just sitting in on the call. As usual, I'll run through a few highlights first. We've tried again in this document to give you a little bit more information than historically we've given, just to try and progress transparency. That's been released to the Exchange this morning, and then take questions at the end. I'll start with the key highlights. Overall, pleased to advise that the business across all segments has delivered volume and cost guidance for FY25. I'd characterize it as a solid performance across all aspects of the business. We've made a lot of positive change on a number of fronts across the last three months, and there's this continued focus on execution within the business. You would have seen through various announcements that the board and governance refresh that we've been meeting for some time is well progressed and underway. As I said, Mel, effective as chair from the start of this new financial year, also joined by two non-executive directors in Ross Carroll and Laurie Tremayton. Both of them joined the meeting yesterday for the first time. So that change of the board is leading a significant governance refresh. and is one of the key priorities of the new chair, along with strengthening the balance sheet. Through this whole process, management's working with the board to continue to review levers available to it across all aspects of the business, and we're doing a refresh of our capital allocation framework under the guidance of the board. In terms of Onzo, pleased to confirm that it continues to be cash flow positive, both at mining services and at commodity level. We'll take you through them in a little bit more detail shortly. In June, we hit an annualised run rate of 32.4 million tonnes per annum at Onzo, which was a great performance, particularly as we only had our last fifth trans shipper there operating, really, for the last week or so of that month. In today's report, we've actually provided some guidance for shipped tons out of Onslow Iron. Our share, 17.1 to 18.8 million tons, equivalent to 30 to 33 million tons on a 100% basis. Roadworks are the reason why we're not hitting 35 million tons across the whole year. And again, I'll talk you through that in a little bit more detail as we get to Onslow. Completion of the whole road upgrade remains on track for completion through the end of this quarter, as is our move towards 35 million tonne per annum run rate, which we expect to hit at the end of September or thereabouts. As is, I think, generally well understood, seasonality impacts... for this operation, typically between November and March with cyclone season. Again, I'll talk you through that as I think about the numbers. In terms of safety, the tripper for the 12 months on a rolling basis was 3.84. It's a tick up. We had a few higher injury, sorry, higher recordable injury numbers in the first half. And then we've had significant reduction in hours over the course of the year with on-site construction coming off and also ball fill and yield gain operations stopping into Karen Maintenance. As corporate, very pleased with where we finished the year with liquidity. We finished with over 1.1 billion at 30 June. And as a result, we'll see net debt to EBITDA continuing to reduce. We kept a small balance on our revolving credit facility drawn at 30 June, but we had more than $500 million in cash, including that draw. Just so that everybody's clear, I expect to have full access to that RCA facility going forward, and that's consistent with what I've said from a number of quarters now. In terms of net debt, we finished at $5.3 billion for the year, In terms of the quarter, the key movements, we had a $200 million FX gain on the US unsecured bonds. We had a couple of hundred million dollars in interest payments in the quarter. We had a small working capital outflow, circa $50 million. We had a couple of hundred million dollars spent in CapEx. CapEx in FY19... Sorry, FY19. That's a long time ago. FY25. came out at $1.9 billion, which was below guidance of 2.1. Just to be clear, about $100 of that delta is a timing issue relating to Onzon and the timing of certain payments. That $100 will fall into FY26, and the other balance of $100 is represented by savings across the business. I'm just going to make a quick observation about FY26 CapEx. We're still working through with the board what that looks like. And as normal, we will provide more detail of the guidance, the more detail re-guidance of the FY25 result at the end of this month. But as I've said previously, we expect that CapEx number to come in just a little bit over half of the FY25 spend, so circa a billion or thereabouts. About half of that will be sustaining, and then we'll have some significant ongoing spend at Onslow, including the tranship as the completion of the road and the opening up of Upper Cane as a satellite deposit. And then we've also got some... exploration spending, athletics and energy. But again, I'll take you through all that in more detail in about a month's time. When we think in terms of capex, we've historically quoted net of asset finance. We've given a little bit more flavour in this material around what the gross figures look like, just to help in terms of numbers for FY26. we're thinking we'll have about $150 million of asset finance in both yellow goods and transshippers 6 and 7. And as we've talked about that before, those transshippers are important to take us above 35 million tonnes. In terms of leverage, again, consistent with what we've talked about, for a while EBITDA continues to increase month on month, and as a result, our net debt-to-EBITDA ratio continues to decline organically. In terms of the carry loan at Onslow, which is an important asset of the group, representing our receivable for funding our partners into the project, that's being repaid with interest. The current balance of 30 June was $766 million. and that's a net decrease of just over $20 million. That balance did actually go up through the quarter because as we bring construction to completion, we invoice that goes on the carry loan, so that $20 million is a net number. In terms of full-year statutory report, that will be released at the end of August. We've given... some indication of the potential adjustments that we've identified as we move towards year end. Obviously, that's all subject to audit and so on, but trying to give you an advanced look at some of that material. Turning to the business, just step through this quickly so we can get to questions. The mining services performance was very strong. We've come in just at the bottom end of guidance range in terms of volumes, but our EBITDA performance per tonne margin is expected to be at the higher end of the guidance range of $2.10 to $2.20. We recorded a record 83 million tonnes in the quarter, which is up 21 million tonnes in the prior quarter, and that's driven by the ramp-up of Onslow mine. And I should also add the mining services, the external facing... Sorry, I'm going to say external facing... The crushing and haulage businesses have done incredibly well over the past year, the last six months in particular. In terms of iron ore, iron ore total attributable production was 8.9 million tonnes, shipments of 8.3. We realise US$79 on average across both hubs, and that's about an 80% realisation, would have been 82% with our prior period adjustments. As you would have all seen, the iron ore prices moved back over 100 in recent times. The forward curve actually had quite an interesting shape to it. It was quite flat, so we've taken the opportunity to just start to hedge some of our volumes over the next six months to lock in some of that price gain. In terms of Onslow in particular, very pleased with the progress over the last quarter. As I said, the fifth train shipper really started towards the tail end of June. We loaded 30 vessels and 5.8 million tonnes shipped. We had 147 trucks operating across the quarter, 83 of them ours and 64 contractors on average. 31,008 road train trips completed over that road that a number of people were able to see through the quarter. And this is a statistic that always amazes me. We travelled an aggregate of almost 10 million kilometres on that road through that period. In terms of where we are at the moment, we have 120 min-res, in fact, over 120 min-res trucks commissioned on site, heading towards the 140 that we need. And our plan continues to be to transition contracted trucks out following road completion at the end of this quarter. In terms of FY25 shipments for Onslow, 14 million tonnes on a 100% basis, 8 million tonnes of our 57% share, and FOB costs were $57 a tonne in the quarter, full year at 63. Pilbara Hub, we shipped a total of 2.5 million, another strong quarter. That took full year shipments to a touch under 10 at 9.7 million tonnes. FOB costs were $76 a tonne, at the low end of guidance. And as we've announced separately, we completed in the quarter the sale of the Yorgan to an unrelated third party, which was a good outcome for the group and for the state of WA. In terms of lithium, you know, I think, again, this quarter's highlighted the quality of these two assets, Wojena and Marion. We've continued to work to bring flexibility into the operations wherever we can. The average realised price across both sites was US$6.42, dry metric tonne on an SE6 equivalent basis. Malmarion numbers were impacted as shipments were weighted heavily to June in the quarter, and it also has a discount applied to it for the lower road portion of its tonnes. So the average prices were about 8% below average indices. The price in lithium, and I'm sure you guys want to ask me a few questions about this, but the market's been up and down a bit. Prices were back towards $600, just over $600 in early June, and then since then we've seen prices bounce back strongly to $800 to $900. In terms of spot production, Marion and Warden have generated 145,000 tonnes and shipped 135,000, and the relationship with both of the JV partners, Elven Island Gang, continue to be very, very positive. In terms of Marion specifically, the FY25 shipments were 203,000 tonnes on an SE6 equivalent basis, above the high end of the guidance. And four-year costs, again, on SC6 basis, FOD costs were at $900. June quarter FOD costs, however, were $717. And that's in line with the prior quarter. And that shows the benefit of higher feed and continued plant improvements. And again, I can talk to this in more detail in the questions, but we've tried to bring more flexibility into the operations at Marion, recognising it's a DMS operation. What we're trying to do is, and you would have seen this in the quarterly results, targeted higher grades and focused on recovery than just pure volume. That does, depending on what we do with some of those flexible options, have the potential to increase costs a little bit next year or this new year, but we'll talk about that a bit later. In terms of, and as I said, we'll give more guidance before you result, but very, very happy with the way Mount Marion is shaping up. And one of the opportunities we see for the new year is to continue to pull the third strip out of it. In terms of Wojnar, another fantastic performance, production 32% up. better quality feed. We've talked about the importance of that feed for some time and the direct relationship through to recoveries. Costs on an SE64 basis down into 641 at Wojnar. Significant reduction over the course of a year. That's driven by continued laser focus on cost management and continue to improve recoveries. We've talked in the quarterly a little bit about some of the changes to the plant we're doing to give us a little bit more flexibility again in operation, and we're expecting to see recovery rates tip up above 65% through FY26. Just to give you a little bit of background of the costs, we're right through stage two now in terms of the all-body development there. That all-body's gotten better as we get deeper through that stage. FY26, we're just starting to open up stage three. Tend to see a few more stringers and narrow veins at the top, and then we expect to get better quality as we go deeper. So just bear that in mind as we think about costs for next year. Again, we'll provide explicit guidance in the result in a month's time. And just finishing finally with energy, we received just a day or so ago independent certification in relation to Moriari Deep, which came in at 27 BCF on a 2C contingent resource basis, which is just below the minimum threshold that we needed for a contingent payment on that asset. Lockyer 6, the arrangement there doesn't have a minimum threshold. That's going through the same certification process and we'll expect to find the outcome of that this quarter. So just in summary, very pleased with the quarter, both in terms of the operations, the continued performance of Onslow, the setting up of the business as we move into FY26, and the integration with the new board and chair. So business is set up very well going into 26. There's great energy in the business and a very strong focus on continuing to take it forward and strengthen it. With all that, conscious I've been talking for a bit, I'll now hand back to David for questions. Thanks.

Thank you, Mark. If you have not yet submitted your text question or joined the live audio queue, please do so now. I will introduce each caller by name and ask you to go ahead. You will then hear a beep indicating your microphone is live. And our first caller today comes from Paul Young. Please go ahead.

Good morning, Mark and Chris and Mal. Thank you all and thanks for joining. Mark, first question is on just liquidity. Looking at December half and I know you've drawn down part of your revolver and you're going through the budgeting process at the moment for next year. But when you look at, I guess, your internal model at the moment, do you need to draw down any more of that revolver in the December half, or are you looking to refire the $1.3 billion senior secured potentially early, just trying to get a handle on how you're looking at liquidity in December half? That's the first question. Thanks.

Yeah. Hi, Paul. Thanks, and thanks for joining. The way I think about it is this. Q1 and Q3 of each quarter typically have the tightest, because that's where we have pretty significant royalty payments, and... In this new financial year, we also have a front-ended weighting of CapEx as we move to complete the road, and we make some milestone payments on transshippers and the like, carryover payment of acquisition of Iron Belly as well. So, you know, there's a little bit of cash moving around this current quarter. If we do another draw, you know, it'll only be for a relatively short period. But, you know, I think the point that I want to emphasise is it's a revolving credit facility. It's there for working capital purposes. We pay to have it available so we can draw it when we need it, and then we pay it back when we don't need it, and that's par. So, you know, bigger picture, I'm very comfortable with the liquidity position. I feel like the business is in good shape. Onzo's starting to generate a fair bit of cash, and... And we're coming to the tail end of that CapEx profile, so we've got a pretty good grip on what the outflows will be over the next six months.

Thanks, Mark. And with respect to the refi of the 1.3?

Sorry, the 1.3, you mean the 700 US? Are you talking about the bonds?

Sorry, the scene is cured in June. Yeah, that's right. That's right. June, May 27th.

Yeah, so that's unsecured, yeah. But, yeah, US 700, so we have a bond, US 700, that's due in May 27. We are in good shape on that, and by that I mean, when I spoke to the quarterly three months ago, it was a few weeks after Liberation Day, the world was a different place, there was a lot of global uncertainty there, spreads had opened up, markets were pricing in a fair bit of risk and uncertainty just generally. If you look at where the bonds are trading today, they've probably come in for 100 bps or more. We continue to have really strong support from our bond investors in the US and we're in a period where we can't do anything with it. We need a fresh set of financials which we'll have at the end of August and unless something changes significantly, you could assume that we'll be targeting something like that this afternoon. OK, good to know. And then... Sorry, Paul, just my point. I really don't see any execution risk on that. As I've said before, it becomes a question of price to clear it, but I don't see any execution risk on pushing that maturity out.

Yeah, understood. Thanks, Mark. And then maybe moving to Onslow and... Good update today and broadly in line with what we saw a couple of months ago on the side visit. But just curious around your comments around some hedging because we're hearing there's been quite a lot of producer hedging on this bump in iron ore price as well. So you're one of the companies that's done it. So I'm just wondering if you can talk through the volumes you've hedged, pricing and just how that works and how we should think about it. And then also just on your realized pricing for Onslow, which came down a lot. A fair bit, considering on the visit, the team was talking about realised pricing. So just wondering if there's anything in relation to that with respect to one of the prepayments. Thanks.

Yeah, so no impact on the prepayment. Those sales are the sales in a very soft way. iron ore market for a period through that quarter. We've typically found discounts move like that in the past, where the price starts to move back towards 90. In terms of the hedging, yeah, I looked at that curve. It was almost flat out to January, which was quite extraordinary. Anyway, what we've done is we've laid in a number of zero-cost markets collars which put a floor typically um around 99 to 100. um we won't go above a third of production in the in the half you know we're just trying to get the balance right but we're just taking the opportunity to lock away some of that downside thank you the next question is from glenn lawcock please go ahead

Hi, Mark. Good morning. I just had a couple of quick ones. Just trying to discern your comments around you've got capex to spend on the transshippers, but then you said you've got $150 million of asset financing, which also is for the transshippers. What's the distinction between the two spends? Thanks.

Morning, Glenn. Nice to talk. So what I was trying to do was call out the material items of spend coming up this year, just to give you a heads up. What I'm saying is, what I'm also saying for the first time is, when we think about FY26, we're thinking in terms of about $150 million of asset finance generally through that period. That's not exclusively transshippers. It includes things like the rest of the haul truck fleet, you know, the jumbo row trains. and also some yellow gear, mobile gear, as we roll off older assets and acquire new assets over the course of the year.

Yeah, sorry, Mark. I guess maybe I misspoke a bit, but I was just trying to assume, if we're spending CapEx on the trend shippers, why are we also asset financing as well? It feels like I'm doubling up. Is there something I'm obviously missing?

Yeah, so, Glyn, historically we've talked CapExNet. We've historically reported net. What I'm trying to do today is give you a sense of both net and gross and give you a sense, in some cases, of how we're going to use the asset finance. So we can sit you through the detail offline if you like, but I'm trying to give you both those pieces of information to give you a little bit more transparency.

That's great. And then just a final question. You made the comment that I couldn't keep up with you, but I think you said 27 BCF on the first exploration for energy, which came in below the levels for contingent payment, but you said Lockyer 6 certification should happen this quarter, but there's no level for contingent payment for that one. So... What's the best case scenario, do you think, out of the 300-odd million that we could receive? You know, any thoughts on what we could get this half?

Yeah, apologies if I was talking quickly. I should have spoken a little bit slower. We're targeting out of Lockyer. Most we can get would be around 100.

Our next question comes from Lachlan Shaw. Please go ahead.

Yeah, good morning, Mark, Chris, Mel. Thanks for the time and thanks for taking my questions. Two from me. Just starting at Onslow, obviously, you know, pleasing for the guidance into FY26. Can you give an indication of how you're thinking about pulling together that quarter of, you know, above 35 million tonne per annum run rate to secure the next 200 million from MSIP? And I'll come back with my second.

Sure. Good morning. In terms of the way we see this year, and specifically to answer your question, clearly this quarter that we're in now, we're going to be impacted by completion of the road. That causes inefficiencies in terms of the movements and the like. We have contracted vehicles that are less efficient through the port in load and the load out of the mine. So we factor all that in. So this quarter will be softer than others. Obviously, we have weather through the Q2 and Q3. That'll be the same every year, as we've talked about on a number of occasions. And then we have a pretty clear Q4, we would expect. In terms of your specific question around targeting the three months and the 200, I think the best way to think about it is this. We can't plan for the weather. We can't deal with the weather. It'll be what it'll be. But what we can do is develop plans to sprint and to flex. We have a little bit of capacity within the system to be able to do that despite the constraints that we're dealing with this quarter. I should have said in the comments that July production is going to be a little bit softer. And that's because we've taken the opportunity through July whilst the road's being upgraded to basically focus on maintenance, not just at the plant, but also in the transshippers. So we've been getting all the maintenance done, getting everything cleared up. That'll give us an opportunity to start to go hard at production over the next month or so.

Yeah, great. And just to follow up there, So the spring capacity, we're not talking there about transshippers 6 and 7, are we, in the next 12 months? We're just talking about, you know, I suppose they're bottlenecking or identifying incremental spring capacity and what's there today?

Yeah, I should have been clearer. Apologies. We have spring capacity at different parts through the chain, but in particular with the haulage constraints, we've got some temporary storage closer to the mine near the truck maintenance facility at Yarrae. and that gives us a little bit more flexibility in the way that we move tons through the system whilst the road upgrade's happening.

Yeah, okay, right. That's great, thanks. And then my second question, just to the mining services margin, yeah, sort of top of the guidance range, but you did highlight that that's been impacted, a bit of a drag from the contractor trucks. Can you give us an indication of, you know, as those trucks demobilise through December half, you know, what sort of uplift, you know, might you be able to sort of bank from the mining service margins? Thanks, Mark.

I prefer to hold guidance on mining services margins to... you know, to the results in a month. Historically, it's been around $2. There have been lots of varying... Yeah, as you've identified, there have been lots of impacts, lots of factors impacting the last few months, including the contract of vehicles. But the mining services business is on its road across a lot of other things, and so there are a lot of other factors that feed into what those margins will be going forward. So... I know I'm hedging. I know I'm not giving you the answer that you want, but I'd prefer to hold the guidance commentary back on the margins until the end of August.

The next question comes from Rahul Anand. Please go ahead.

Hi. Morning, team. Thanks for the call. First question is, on what you know. A lot of them on the debt side have been asked. So this year's recovery on my numbers, and I know you don't report this, is around 55%. And you've talked about the HICs coming in and potentially taking it to 65 next year. Now, that's a big list. How long do these things take to ramp up properly and optimize and get to that 65 level? And when do you actually expect that all of that impact could be felt in the cost case. That's the first one. I'll come back with the second.

Morning, Raoul. Nice to talk. I touched in my comments on the introduction of flexibility into our operations and the introduction of those HICS cyclones has already had a significant impact. As the market would know, we have three trains running, not running, we have three trains constructed at Wagena. We've been running two trains, sometimes three, depending on circumstances. We've been able to complete the installation of the HICS on one train, so we've got pretty good evidence of the impact that has had on the performance of the train and the recoveries. and we're expecting to have the third, the final cyclone installed by mid-August. So we should see the benefit of those increased recoveries for the vast majority of the year. And as I said, we're not guessing with the data that we're quoting here or the numbers we're quoting. We've actually seen it operating day to day.

Okay, brilliant. That's clear. Look, second question is just a bit of an extension from Lockheed's question, and I was going to ask you about the mining services margin, so I'll change it a bit. So you were nearly at the top end of your next year guidance for Onslow in the month of June, right? But obviously you'll have maintenance and other things, and you're using contractors at the moment. So my question is, when do you expect to be 100% min fleet, being able to operate on the private haul road, and... not have any contractors or any use of the public highway? And the reason I'm asking this really is because I want to understand when that contingent payment can be expected to come through from Morgan Stanley Infrastructure Partners.

Thanks. Well, nice question. And I will anticipate what you are going to ask on the mining services because I probably didn't answer it fully. When we gave guidance on the 210 to 220, at that stage there were a huge number of moving pieces around. Contractor trucks, volumes, costs of those contractors. We were mobilising, continuing to mobilise a lot of vehicles and people. So we took a view at the time and we wanted to make sure we got it right. And over the balance of the quarter, we were able to actually identify some savings. In terms of Onslow and the $200 million and the full run rate and Morgan Stanley Infrastructure Partners, I should say that we've got a fantastic relationship with the guys at Morgan Stanley Infrastructure Partners. They've been incredibly supportive of the business and they're very keen for us to hit that threshold. I'll try to answer it a little bit differently. We'll have a window to run it at hard times. before the cyclone season starts. Now whether that's November or December, you can assume we'll be going for it before then. If for whatever reason we can't get there, we'll have another opportunity to do that in calendar year 26, once the season is finished around the end of March. We see clear windows to go at it. What I was trying to say earlier, and I'll try to be a bit clearer, whilst the road is an impediment to us delivering that milestone, it doesn't preclude us from doing so. We just need to have a few things work in our favour, including the use of this sprint capacity whilst we're working with the upgrade. We expect to have the contractors off the road by the end of the quarter.

The next question comes from Lyndon Fagan. Please go ahead.

Thanks very much. Just wanted to ask whether any OPEX at Onslow was capitalised in the quarter?

Yeah, so what we've done, Lyndon and I, is we've basically been using the standard cost approach, which we've disclosed throughout until the 30th of June. There was a small amount capitalised, but not much. The actual costs are pretty much in line with what we reported.

So, yeah, we are seeing the FOP costs come down, yeah. Excellent. And then just with the billion dollars of CapEx for next year, what would you say is the amount that's spent above sustained business CapEx?

Sorry, I just missed it. Was that above sustaining CapEx? Was that the question?

Yeah, just trying to get a sense of what the sustaining component of that billion is.

Yeah, so qualification is that I still have to take the new board through all of this and get it all finalised for guidance. But, you know, as we think about it today, and I've obviously got a basis for saying this because I've put the comments out there, about half a billion of it's sustaining. The big portion of that is deferred strip at about $185 million. That's as of current mine plans, but mine plans will be reworked a number of times between now and the end of next month, and it's an opportunity for us to try and take some tons out. One of the areas that we're looking at trying to pull tons out is in lithium, again, with Marion in particular, and just trying to make sure we do that in a way that... That leaves us with the flexibility to operate into the future, which we will do.

The next question is from Kate McCutcheon. Please go ahead.

Hi. Good morning, Mark. Consensus is looking at iron ore below the $100 a ton level that you spoke to that Min had locked in at floor price hedging, I guess. In terms of modelling those revenues, can you please give us a sense of those volumes and the tenure of that floor, of those hedges?

Sure, Kate. Sorry, our volume's a little bit low, but I'm pretty clear that I got your question. In terms of the hedging, what we've done is we've moved to put a floor under realised prices, for this half effectively, if you think about it for this half. And what we've done is we've layered it in at different maturities between now and the end of the calendar year and different volumes. But the essence of it is to put a floor between 99 and 100, depending on the zero-cost collar. The actual percentage of volume we're targeting to go up to a third, but we're not there yet. It'll be less than that. If the prices come back, then we'll lock some more in. But, you know, at the moment, it would be between one and one-half million tonnes at that sort of price.

Perfect. That answers my question on that. And then the May 27 bonds, I assume that window for refi is September. Is there anything you can say around that rate that we could expect those to be refied at based on what we know now or any colour around that?

So the window basically runs within 135 days of year end when we've got fresh financials. We've got... So it basically starts at the end of August and it'll take us through to mid-November. And then it opens again at the end of February next year when we do our next set of financials. You can go outside of that period, but it's a little bit more complicated. In terms of rates and so on, what I would do is refer you to the way the bonds are priced at the moment. They're all trading above par. They're trading quite tightly. Generally, when you go to the market, effectively you raise a new bond. In this case, to repay the old bond, you might expect to pay a small premium for new issuance. But I think if we step back for a moment, and we've talked about this for a while, the credit markets have been supporting min-res through a period of significant capital investment and project development. And they understand that what OzO is about is transforming the business for decades to come with better quality earnings. And I think as the market starts to digest the news out of today, our confidence in terms of going forward and the strength of the performance through June, You know, I would hope that the subject of what the external market's doing, that rates continue to tighten. But, you know, if you were to ask me what would the cost be today, it would probably be about 8.5%, but it could be tighter.

The next question is from Matthew Friedman. Please go ahead.

Sure. Thanks. Morning, Mark, Chris and Mal. Can I ask? Another one on mining services, obviously you've had a discussion there on the margins. You called out strong external volume growth in the quarter. Are you able to expand on that at all Mark, maybe give a bit more context on whether that's from existing contracts or new contracts and I guess whether those opportunities for volume growth extend into FY26? Thanks.

Yeah, more than that. I mean, this is the jewel in the crown in this business. It keeps performing really well. The way I would position it is, and I sort of touched on it in one of the earlier responses, there are lots of different components now to this business in terms of different projects, different contracts, different clients. The best way to think about it is that the market positioning remains incredibly strong. The level of inquiry remains incredibly strong. level of awareness of the services that we can bring continues to increase year on year. We have a unique set of capabilities markets appreciating. The performance with the clients this year has been really strong in terms of delivery. The clients have been able to give us the feed into the assets. We've been able to process it. It's been strong across all those contracts for the first time that I've seen across all of them. Historically, there's been some that have been up and down. What I was talking about there was consistency. But in terms of going forward, we haven't guided on tons for 26. We're still looking through that. And in part, that's because some of the tons that go into the guidance relate to deferred strip and the like. And we're moving around with mine plans. We could strip quite a few tons out of some of the operations. The Pilbara, for example, in 26 is going to have less deferred strip. Marion will have less deferred strip than we did in 25 and so on. So I know I'm not giving you a hard number yet, but I'm trying to give you a sense as to how I think about it and the business opportunities for the mining services operation.

No, I understand. Thanks, Mark. And I guess your commentary there is suggesting that certainly, at least from an external contract perspective, that you're still constructive on volume growth in that part of the business. Maybe secondly, if I can ask on the waging performance in the quarter, and obviously, again, you've already spoken through the expected recovery improvements looking forward, but clearly a pretty strong step up in production during the quarter, and you've related that back to the plant performance and also the feed quality. So, I guess in terms of the mine sequencing and the ore quality that's being presented to the plant, is that now a fairly repeatable performance going forward? Is the mine in a better place in terms of delivering higher quality feed? And again, is that likely to be sustainable in coming quarters? Thanks.

Yeah, thanks for the question. If I think back 12 months ago, I was having to explain to you and Your peers, the fact that we'd identified a gap in our understanding of the ore body. We'd had to drill 90 odd extra holes to try to consolidate our understanding. I think I said in my comments earlier that we've progressed well now through stage two and it's just pure ore and it's going through the plant very, very well. What I was trying to say is at Wojna we move through different stages as we develop. We're going to, in 26, we're going predominantly out of stage 3, which we don't have to open it up, it's there, but the upper levels we'll see some narrower veins, some risk of increased dilution and so on, just through the early stages. So all I'm trying to do is temper expectations that it's going to be one for one or just drag right. But when I say that, this plant and the way that it's recovering now is set up very, very well, and it is going to perform very well this new financial year.

The next question is from Rob Stein. Please go ahead.

Thanks for the update. Just quickly on Wojnar, along current theme, the production outweighed shipments. Was there a strategic decision to withhold to seek a better pricing environment and can we expect that to result in a working capital adjustment next quarter? And I've got to follow up just on CapEx and the balance sheet.

Yeah, I think the answer is that in terms of shipping and working capital at Wojana, we basically try to time the ships to go when the stockpile's there, when the ore's available. Sometimes there's a delay up there depending on access to the wharf. which can have a little bit of an impact but not significant. I don't think you should be factoring any sort of material working capital movement at Wojnar over the next quarter or six months.

And then, sorry, just to follow up, you know, just looking at the cost performance of the assets, you know, it was a surprise across the board. in what way was that facilitated by a build in the food stripping and the like? Because I know that your CapEx number is also a beat as well. So just trying to get a handle on, you know, how sustainable some of those cost-out initiatives are. Yeah.

It's a great question. So the CapEx was more a timing thing. There was a little bit of element of strip that came out of the forecast that we thought we were going to spend, but it was more a timing thing on a chunk of the Oslo spend. In terms of... Generally, if I think about the cost performance, we've talked about cost performance for almost 12 months now, and you know that we've taken lots of heads out of the business all the way through. We've changed the rosters. We've reduced depletes. We've re-sequenced. We've actually developed an even greater sophistication with the mine planning in terms of the technologies that we're using that are giving us better insights and able to refine more quickly the planning. So, So it's more iterative, and we're getting great results from it. And that's not to say that we're kicking the can down the road and we're going to have problems next year or the year after. I'm not saying that at all. I'm saying that we're able to identify the best way to optimise the extraction of the ore, and we're doing that, coupled with the focus on taking direct costs out of the operations. So, you know, I've given you some... some hints around how I'm thinking about costs for Wojnar and Marion in the new year. I don't see it going back to where it was 12 months ago. I'm just trying to encourage you guys not to just drag right and use that phrase again, and I don't mean to be flippant about it, but hopefully I've given you a little bit of a sense as to how I'm thinking about it.

The next question is from Ben Lyons. Please go ahead.

Thank you. Good morning, everyone. Similar theme to the previous question, please, Mark. And obviously you've made several very high-level comments about how the business is broadly responding to low lithium prices. But I guess similar to Rob's question, my intuition is that when you change the mine plans and you further high-grade these assets by reducing the strip ratio, clearly at some future point there comes a period of having to catch up on that stripping. So can we put some numbers around the strip ratios expected for fiscal 26, for example, or even more broadly, when you're expecting the next major cutbacks at each of the assets? Thank you.

Morning, Ben. Nice to talk. So, yeah, we can provide that when we give the full guidance next month. But, yeah, there are various aspects to cost performance. Strip is just one. and recovery is another. And, you know, I'd encourage the market to think about how well those assets have performed in terms of recoveries, particularly Wojana. We've really got that plant tuned well now, and that's had a significant impact on performance. In terms of stripping generally, Marion's a little bit different, as you know, because of the expectation that at some point in the future we'll go underground. We started that work. We put it on pause 12 months ago to preserve capital. We're very conscious that we need to be developing the mine to be able to continue to go underground at the right time when market allows us. But take on board what you've asked, and we'll make sure that we come back and deal with that through the year-end process with guidance.

Okay, okay. Thanks, Mark. And, yeah, I do appreciate the disclosure of the recoveries and look forward to that disclosure continuing in the future. Second question, maybe just a housekeeping one on the accounts. Can you possibly remind us of the outstanding balance of the loan to RDG and whether you're expected to take some kind of provision over that facility with the fiscal 25 result. And then secondly, just some clarity on where the asset financing that you've alluded to will come through in the accounts, whether that sort of pops into investing cash flows or financing cash flows. Thank you.

Sorry, Ben, I heard the first question, which was around RDG loan balance and possible accounting adjustments. I'm sorry, you're a little bit quiet at our end, probably not at your end. Would you mind just repeating the second one? I just couldn't pick it up. I'm sorry.

Yep, no worries. The asset financing that you've alluded to, which I think was about $400 million in fiscal 25 and a further $150 million, I think you said, for fiscal 26, where can we expect to see that showing up in the accounts, please? Does it come through investing cash flows or financing cash flows? And I assume there's also an interest component applicable to those facilities. Thanks.

Sorry, Ben. The answer on IDG is the IDG loan, you can have a look at the accounts from December. They're lodged. It may have gone up a little bit in the half, but that'll give you a broad sense of it. In terms of the asset finance, you know, that shows up both, obviously, on the asset side and on the debt side. So it does go into the gross debt number.

The next question is from Mitch Ryan. Please go ahead.

Morning, Mark and Tim. Sorry. Mark, I didn't think you answered Ben's question there. You talked to the balance sheet, but where does it come to in the cash flows?

Oh, sorry. Yeah, I missed his question. It comes through on the cash flows in the financing component. So you can see it through the financing line.

Okay, thanks. My question just related to Ken's bore and the strip ratio, they're obviously quite low at 0.5. Can we start to see that? How do we think about that as Cardo bore comes online? Does that increase? And does the strip ratio that you're talking to include or exclude the clay eeyores that you're sort of stockpiling for when the beddy plant comes online?

In terms of the strip generally, it's one of the features of Kensmore that differentiates it from the other final operations up there. It is low. We expect that to continue for some time. I don't expect the satellite deposits... So the satellite deposits will contribute about a third to the production out of Kensmore. So I don't expect... the activity at Uppercane and Cardo Boar to materially impact that number. In terms of the clay, I actually don't know the answer to that. I would assume that it's all factored in, but we can take that offline and come back to you and confirm that.

Appreciate your time this morning.

Thank you. Thanks. The next question is from John Sharp. And if I could please ask that you speak up. Thank you.

Yeah, morning, Mark and team. Just one question from me. Production seems to be progressing well at Onslow, but logistics has always been the high-risk constraint there, with the potential of becoming stockpile-bound if haulage or port is delayed. By my rough estimates, you're carrying around 2 million tonnes in stockpile across the system. Please correct me if I'm wrong there. And in terms of capacities, my numbers are you have about 1.5 million tonnes at the mine, 350 to 400,000 tonnes at Gary, and then 200,000 tonnes at Port. Again, correct me if I'm wrong there, but can you just tell us how you're managing this and whether it's being managed fairly tightly, please?

Yeah, great question. You've got the general trust of it correct. The share at the port does hold that $200,000, and Yari does have the capacity up to about $400,000. It doesn't have $400,000 in it today, but it has the potential to be at that sort of volume, and that's one of the levers that we have in terms of spring capacity and so on. In terms of the way that we manage it is ultimately we just slow down crushing if we need to and mining. Now, obviously, there's an efficiency consideration with that, which we need to be cognizant of. But we do have that flexibility because we're integrated all the way through. So, yeah, we manage it at the front end that way.

Okay, thank you. I'll leave it there.

Thank you. The next question is from Khan Pekka. Please go ahead.

Hi, Mark, Mel, and Chris. One question on FY26 CapEx, just to go back to Gwyn's question. Of the $1 billion, is that a gross or a net number? So does that include the $1.50 in asset financing? And how much is expected to be spent on the lithium business? And does that include a float plant at Mount Marion? And I'll circle back in a second.

I can't. The number that I quoted was a net number. And in terms of lithium, we have not allowed for a float plant at Marion in our spend for FY26. That's something that we... continue to monitor though.

Sure, thank you. And then the second one was if you could give maybe an indication of how many corridors of the whole road have been upgraded. I think from memory at site it was around 60 at the end of May. Do you have that number off the top of your head?

I think we say about 60% in the in the document so that's about 90 90k i don't have the precise kilometers but i can get that for your car sure that's that's perfect and then finally just on um on the contractor haulage would you have an indication of average cost per kilometer come to that uh no i don't i'm sorry um i know I know what we pay across different parts of our operation, but I can't actually give you that number. It's not because I won't, it's because I just don't know it. I'm sorry, but again, we can take that offline with you.

Thank you. That concludes today's call. Thanks for your time and have a great day. Please reach out to the MINRAS team if you have any follow-up questions. You may now disconnect.