Yancoal Australia Ltd

Good day and thank you for standing by. Welcome to Yearn Call Australia fourth quarter report. At this time, all participants are in listen early mode. After the speaker's presentation, there will be a question and answer session. To ask a question during a session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Brendan Fitzpatrick, Investor Relations Manager. Please go ahead.

Thank you, Maggie, and thank you to everyone on the call for joining this briefing on Yancol's fourth quarter production report for 2024. The company recently announced a CEO transition. Today we have several members of Yancol's executive leadership team to recap the quarter and participate in the question and answer session. On the call we have Kevin Su, our Chief Financial Officer. David Bennett, our EGM Operations. James Collins, GM Marketing. Laura Zhang, Company Secretary. Mark Wells, EGM Finance. Mark Jacobs, EGM Environment and External Affairs. And Sharif Farah, EGM Health, Safety and Sustainability. Regarding the CEO transition, as noted in the recent announcement, Mr. Yue has taken on the role of acting CEO. Having been chair of the executive committee and co-vice chairman of our board since 2023, Mr. Yue's leadership has directly contributed to the company's performance. Given his more than 20 years of experience in coal mining operations and management, he is an ideal person to lead the company at this time. We look forward to Mr. Yeo's present participation in future equity market engagement. This is the second time we have addressed the market since Yancol's inclusion into the S&P ASX 200 index last September. We welcome any new participants on the call. And of course, we welcome those of you who have joined us on prior calls. The commentary provided today is based on the quarterly production report published to the Australian Securities Exchange and the Stock Exchange of Hong Kong yesterday, the 20th of January. There is no presentation pack for the conference call. The Yancol website holds past presentations for any participants who require additional information on the company. The fourth quarter capped a great year for Yancol. I'll hand over to our CFO, Kevin Hsu, to review the highlights.

Thanks, Brandon. I also welcome everyone joining us on today's conference call. As mentioned, it was a strong fourth quarter, which resulted in our full-year ROMCO production increasing 4% to nearly 63 million tons, and our annual attributable production and sales increasing by 10% and 14%, respectively. We hit the middle of our production guidance range with 36.9 million tons of attributable saleable co-production. When we report the 2024 financial results in February, we expect our cash operating costs to be around the midpoint of the $89 to $97 per ton guidance range. The combination of high production and the low costs added another $480 million to our cash position during the quarter. And we finished the year with a cash balance of almost $2.5 billion. Yanko operates some of the best coal mines in Australia. These drive our business. And as a result, we currently have financial capacity to pursue corporate initiatives and make distributions to shareholders. We will be in a position to comment further on dividends after the board meets in February to approve the 2024 financial results. I'll now hand over to David Bennett, our Executive General Manager Operations to expand on the operational performance rate.

Thanks, Kevin. Our total recordable injury frequency rate was 6.7 at the end of December. There was an improvement over the quarter and although the rate remains below the industry weighted average of nine, we remain committed to improving the trend through targeted safety intervention activities. Throughout 2024, we targeted a second half weighted production profile. We finished the year with two strong quarters, producing near the limit of our mining permits, equipment capacity, and our rail and port allocations. In fact, at Mullarban, the open cut mine reached its permitted production cap of 16 million tonnes of ROM coal before the end of the year. It was above average rainfall at times during the quarter and our mines in New South Wales and Queensland encountered some weather disruptions. However, in most cases, the rain impacts on production were modest due to past investment in water storage and handling capacity. During the quarter, our mines produced 17.3 million tonnes of ROM coal, 13 million tonnes of saleable coal on a 100% basis, and 9.7 million tonnes of attributable saleable coal. These volumes were almost identical to our third quarter performance. ROM coal production was up at all mines except for Mullarbin, which reached its open production cap. As Kevin mentioned, our full-year attributable saleable coal production increased 10% to 36.9 million tonnes. The production rate averaged almost 10 million tonnes per quarter over the second half. This was a tremendous effort from all of our people and demonstrates what our assets can achieve when operating with limited disruptions. The two Hunter Valley mines, MTW and HVO, had minimal weather delays and increased productivity, particularly at HVO, thanks to increased haul truck utilisation. The two Queensland mines, Yarrabee and Middlemount, were more impacted by wet weather, but still matched or exceeded the previous quarter production. The performance at Yarrabee was particularly encouraging, given the geotechnical conditions and constrained mining conditions, it faced earlier in the year. I'll now hand over to James Collins, our General Manager, Marketing, to provide highlights on the coal sales and coal markets.

James Collins Thank you, David. Our traditional volume was 10.4 million tonnes with a typical mix of thermal The sales volume was 0.7 million tons more than the saleable production after we sold down some stockpiles to meet customer demand ahead of the northern hemisphere winter. Unfortunately, it is mild winter so far, resulting in demand below usual levels. Geopolitical tensions created some volatility in the coal markets, but ultimately there was good supply from most exporting countries and soft demand. Compared to the prior year, Australian thermal coal exports were up 2% for 2024. Major export countries, except for Russia and Colombia, also increased export sales compared to 2023. Across major coal importers, imports were up year on year by 13% into China, by 4% into India, and 10% across Southeast Asia. They were down 1% into Japan and down 14% into Korea due to increased use of biomass in the power generation mix. Consequently, the API5 and GCNUC indices were slightly down during the quarter. They averaged $88 per ton and $138 per ton, respectively. However, our thermal coal realized price increased 4% to 163 Australian dollars per ton with a lagged price components and the weaker Australian dollar, US dollar exchange rate aiding the realized price. Shifting focus to the metallurgical coal markets, these were also stable, albeit at prices lower than six months ago. Steel market conditions remain weak, with global steel output down approximately 6% during the year compared to 2023. The average low-vol PCI price was impacted as its usage is more readily flexed in the steel production process. The average index price was down 10% compared to the third quarter. In contrast, coke production kept the average semi-soft coke and coal index price steady through the quarter. The low vol PCI and semi-soft coke and coal indices we referenced averaged 157 US dollars per ton and 137 US dollars per ton respectively. Our metallurgical coal realized price declined 6% to 242 Australian dollars per ton. Our overall realized price was up 3% to 176 Australian dollars per ton for the quarter. Coincidentally, this was also our overall average realized price for the year. These realized prices were sufficient to deliver the robust cash balance Kevin described. I'll hand back to Brendan to coordinate the question and answer session.

Thanks, James, and also thanks to David and Kevin for highlighting the drivers of a great fourth quarter performance. Delivering on production guidance and ending the year with $2.5 billion in the bank gives Yankole an excellent platform to start 2025. We will now move on to the question and answer session. We'll start with questions coming through on the phone lines, and then we'll move on to questions submitted via the webcast. Maggie, could I please ask you to initiate the process for questions via the phones?

Yes, thank you. As a reminder, to ask the question, please press star 11 on your telephone keypad and wait for your name to be announced. To withdraw the question, please press star 11 again. Just a moment for our first question, please. Our first question comes from the line of Wayne Fung from CMBI. Please go ahead.

Hi, this is Wayne. Thanks, management, for the call. So my question is about the strategic direction going forward given the change in top management at the CEO. So are we going to pursue the growth strategy through M&A or we will probably resume a more stable strategy in the future? Thanks very much.

Hi, Wayne. Thanks for the call. Thanks for having you on the call. It's good to speak with you. In terms of the company's strategy, we've very much got an established position. We're a leading large-scale, low-cost coal producer. We see natural opportunities in the coal sector. We're not limited to looking at coal assets. We're not even limited to operating within Australia. We'd certainly consider many scenarios going forwards. Any decisions and strategy directions will be determined by the board, as has been the case up until this point in time. The change in the CEO doesn't have a material impact on the company going forward, so we've got an extremely capable leadership team sitting around the table here and online, and we've got a very capable board. So between the top down and the executive leadership up, we've got the capacity to pursue the strategic initiatives as directed by the board. And as Kevin mentioned earlier, we've certainly got the financial capacity to consider scenarios going forward. So no change to the messages we've been giving in the past. We're capable and we're considering many opportunities as we always have done.

Got it. Thanks very much, Brendan.

Thank you. Just a reminder, to ask a question, please press star 11 on your telephone keypad. I see no further questions at the moment. I will now pass back to Brandon.

Thank you, Maggie. I'm looking at the questions coming through on the webcast. There are several which strike on similar topics and ask similar queries. I'll amalgamate and combine some of these questions in the interest of efficiency. I'll start with something at the operational level. and I'll direct it to David Bennett. We've just had a really strong fourth quarter and, in fact, a second half. And whilst we haven't given our operational guidance for 2025, which will come in the February result as usual, what are we able to say in terms of the operation outlook, not just in the current year, but across the asset portfolio looking into the future, David?

Lovely. Thanks for the question, Brendan, and to those online. In terms of the last two years of operational planning and performance on our mine sites, we've been recovering from the wet weather periods in 2021 and 2022. We've invested strongly capital-wise in equipment. We have good strategic plans in place to set our mines up to be productive, safe, reliable and cost-effective into the future. Each year we go through a budget process which includes a life of mine valuation as well and that provides good strategic direction for the business in terms of the I guess you'd say the operating conditions of our mine sites at present all mines are productive well resourced with the right equipment the right people the right processes to ensure that we deliver on our budget plans for 2025 and into the future. Thank you.

Thank you David. There are several questions coming through on the topic of dividend, dividend outlook, dividend policy, capacity for dividends into the future periods. Kevin, during the scripted comments we had an introduction saying that we have some capacity for dividends. Are you able to expand on the company's policy and what we can say at this time ahead of the board meeting.

Sure, thanks Brandon. Same as what Brandon just mentioned about the company strategy doesn't change. Same thing for dividend policy, it doesn't change. I can reiterate the policy again. We have this 50% NPAP or 50% free cash flow whichever is higher. This is the guideline for know the the management to plan our dividends distribution uh i didn't know that dividend is about the decision so both will meet in february to decide you know in this case in 2024 a full year dividends also on dividends this is something way just back to what Brandon just mentioned about the corporate strategy is a part of our capital management philosophy basically balancing a growth story weighs a good return to our shareholders as ENCODE doesn't have any debt so we don't really need to worry about the cash outflow to manage our facilities as a result it's very much to see how this is sufficient cash flow to manage both growth opportunities and also our return to our shareholders which with this 2.5 billion dollars cash in the bank we definitely are able to manage thank you thank you kevin and there was just one clarification that the 2.5 billion aussie dollars not us dollars all of our financial reporting is typically in australian dollars

Occasionally, we will reference U.S. dollars most often when we're talking about international coal prices as our current commonly reported in U.S. dollar denominations. There are several questions coming through on the topic of potential M&A, various scenarios being contemplated. I'll reiterate some of the comments I shared when responding to Wayne's question earlier. The company doesn't comment on processes active or past that we may or may not have participated in. We have said in the past that we're a large producer of coal. We have a thermal coal dominated portfolio. Additional met coal could complement our thermal coal assets. We are a low cost producer. We would be naturally looking at things that are margin accretive, cash flow accretive, all those metrics which are relevant for a company of our scale. We don't need more production for the sake of increased output. We are arguably the second largest coal producer in Australia right now. We have said that we're not limited to coal. We would look beyond coal. We have a strategic horizon that runs for 15 to 20 years on our existing assets. And we would look to the transition of the energy market and global coal demands or thermal coal accordingly. But at this point in time, we make the same comment. We've got a very capable team. We look at lots of opportunities. As Kevin mentioned, we've got a lot of financial capacity. There's access to the debt markets. So we're very excited about what the company could do going forward and we'll no doubt be guided by the board and act judiciously as we have in the past. Turning to another topic, we see a few questions coming through, James, relating to the coal markets. Something in particular, the media's reported the transaction, Anglo selling its coal assets last year. Do we see any influence on the metallurgical coal markets coming through from change in asset ownership? We'll start with that one, please, James.

Sure. I would expect that only where it would affect supply and demand, you would see that it impacts the price. So it's not necessarily a change in ownership would necessarily impact price. and impact the price of the underlying commodities.

And more generally, investors looking for comments about the coal price outlook for 2025. We've generally made the observation we see markets relatively balanced, but there are observations coming through that the coal indices have been somewhat softer in the first couple of weeks of 2025. Is there anything that you can comment on the current coal market conditions? Please, James.

Sure. So over the last few weeks here, there has been a softening of the market, presumably on the back of the warmer winter in Europe, as well as a healthy supply. Going forward, the market forward curve does price in a little bit of contango.

um which may be interesting okay and for the benefit of those less familiar with the coal markets that contango being priced in is suggestive of what possible coal price profile in the latter parts of the year so the the concern goes basically

where the prices are at a lower number than the forward prices. So the suggestion would be that the market expects there to be a little bit of a recovery, which could be for a variety of reasons. Thank you, James.

It's fair to say that our usual view that seasonal effects, short-term fluctuations in supply or demand, still the likely drivers that we're watching for over the current 12-month horizons?

That's right. We expect, of course, there will be a continuation of seasonal changes and short-term changes to supply and demand, which, of course, the price will continue to be volatile.

Thanks, James. I saw one question here, which I'll direct to Marc Jacobs. Actually, there's two on a similar topic. The outlook for mining permits in New South Wales. Can we comment on our existing permit durations and any permits that require an extension to allow the operational life? And I believe there was also one that specifically touched on the HBO process, which we have seen comments on in the media.

Yeah, thank you, Brendan. In terms of mining permits, mining permits in New South Wales is typically issued for 21 years and they have rolling expiry dates and they are extended as a matter of course while there is future approved operational opportunity in each of those assets and we manage that process very closely across the portfolio of tenements in terms of the more specific HBO question the approvals on HBO modification application to extend the life of HBO North was lodged in December and was placed on the exhibition. To be plain, that application is seeking some additional time to mine coal that has already been approved under existing approvals, and we do not consider that application to be controversial in any way. In terms of the longer-term mine life extension at HBO, the team is continuing to work on refining its mine plans and working closely with government with the expectation that a more fulsome application will be lodged later this year.

Thanks, Mark. Coming back to the topic of coal markets and coal pricing, James, there's an observation that the GC nuke price has been falling in recent times, while the natural gas price in Europe and the US is rising. That seems to be somewhat different from past correlations between the energy markets. Is there any observation that we can share on the relationship between the different energy markets globally and how the various prices are moving at this point in time?

In years gone by, typically when the gas prices rose, it might make sense to switch power generation from gas to coal if coal was able to produce the power at a lower rate. minute is of an ability to do that because there's fewer um coal plants you generally though will have macroeconomic effects which will affect the two and then you'll see them more in sync um but at the moment there is um healthy supply um of the low ash material and the demand has been a little caused the nuke presumably caused the newcastle price to soften recently and an extension on that topic any

projection into forward periods, whether the relationship between the energy markets would be consistent with what we've seen in the past, or would they somehow begin to change over time?

Well, we don't project forward, but we do take a variety of inputs from the likes of providers of analytics. There will be changes, though, in the way that given this transition in the generation portfolio across different countries, which of course will have some effects.

Thank you, James. On that topic of interrelation between commodity prices, there's an observation that the semi-soft Kirkland coal price is now at or below the 6,000 energy coal, the GCNU style indice, do we have any concerns about what that means for the metallurgical coal market outlook in the steel markets?

I presume that's reference to the spot indice for semi-soft coking, which doesn't have many data inputs for it to rely upon, so that doesn't carry much weight. The current semi-soft pricing, I'd expect to be consistent with what it's been. in the past relative to hard coke and coal. Overall, the comments that we made on hard coke and coal with the steel production, I think still carry through.

Thank you, James. Maggie, I believe we have a question coming through on the phone line. Could I hand back to you for a phone line question?

Yes, thank you, Brendan. Just a moment for our next question, please. We have Peter Lingzi Wang from China International Capital Corporation. Please go ahead with your question.

Yeah, congrats on the Q4 results. I have two questions for the management. The first one is actually impacted the Q4 production output. How is this going to affect the company's production profile this year?

We'll give David the opportunity to talk about the Mullarban performance and the long wall move.

Thank you for your question. Earlier in 2024 we had some unfavourable geological conditions within the development of the next panel that we're going into at Mullarban. So that caused some delay to the long wall once it finished the prior panel. That long wall is actually on relocation as we speak into that panel. that it will commence later this month. So we expect going forward that production from Mullarban Underground in 2025 will exceed what we did in 2024. Those geological conditions have eased and we expect 2025 to be a more normal year for the Mullarban Underground operation.

Thank you David. Peter, your second question?

Yeah, so, and my second question is, how much Menton and CapEx does Yanko consider appropriate for annual?

So, Peter, could you please repeat the question for us?

Yes. How much Menton and CapEx does Yanko consider appropriate?

Ah, the CapEx profile? If you look at the CapEx profile for the last For two years we've been running somewhere between six and eight hundred Australian dollars on an annual basis. That's been covering our regular sustaining capital opportunities and the various fleet replacement cycles and ongoing capital projects we've been working on. We haven't provided a CAPEX forecast or guidance for the current year. But we have said that the activities of the past two years are likely to extend into the foreseeable future. So it gives you some context for what we would potentially be guiding to when we put out the numbers in February.

All right.

Thank you.

Thanks, Brandon. There's no questions on my side.

Thanks Maggie. I've still got several questions coming through on the webcast. One of them is touching on the topic of the CEO transition and what we said in the announcement last week was very much giving you the insight into what took place. Our former CEO David Malt had been highly effective and in the role for five years. He had seen us through the global COVID pandemic well as those years of heavy rainfall after five years in the role the recent holiday period provided the opportunity to reflect on the success the company's had and the strong position it is at this point in time where we're back to full operating profile a very competitive cash operating costs and an extremely strong financial position subsequently David and the board had discussions and The ultimate decision was he took the opportunity to retire, and Yancol's now well positioned to find its next CEO. In the meantime, we've got, as I mentioned, an extremely capable executive leadership team running the business, and we'll look forward to informing the market in the future once we've got an update to provide on this topic. We've got a few follow-up questions on that topic of dividends, Kevin. as much as we can say do we have an expectation for distributions in terms of finals and dividend finals and interim dividend over the coming year any comment we can say given as you've already touched on it's very much at the board's discretion thanks Brandon um I noticed some comments on the white link I can see

question relates to the company's skip 2024 interim dividends and which is actually a good example for us to say away from the company perspective we've been balancing and managing the dividend on a four-year basis and then subject to the corporate initiatives and the strategic you know priorities so way Back to the position where I made it clear earlier about the company dividend policy, we're still sticking to the existing corporate dividend policy and we will assess the dividend return to our shareholders, basically assessing the full year performance.

Yeah. Thanks, Kevin. And there was a question clarifying some of the commentary and intent around potential corporate initiatives, and in particular, referencing past transactions that took place in the marketplace and Yan Cole's expectation for regulatory approval were to participate. The one observation we make here is we've got an ongoing working relationship with all the regulatory groups and authorities. took at face value media commentary that Yanko was involved in any particular transaction. It's worth bearing in mind that such work is time consuming, expensive, requires a lot of resources and effort. The company would not pursue any such activities if it didn't believe it was in a position to be successful. Ultimately, the company has been very discretionary in the past. We've made some great transactions Most recently, the coal and alloy transaction brought Mount Thorley-Warkworth and Hunter Valley Operations into the portfolio, two of the three core assets which drive our business. So through the pursuit of strategic M&A, we can drive the business forward. We've got a history of growth through corporate initiatives and expansion of operations, and the expectation is we will continue to look for those opportunities in the future. On the topic of production, David, we're seeing a question about potential volume increase for 2025 and I'll ask this first question first and I'll come back to a question on cost but perhaps we can give a response in the context of what we achieved in the past quarters and what we could reasonably achieve on a 12-month horizon without getting ahead of ourselves given that the actual production guidance for this year is still pending.

Thank you, Brendan. In terms of opportunity for higher levels of production, the short answer is that opportunity always exists. As was spoken about today, we have great assets, which always provides the opportunity for more volume, but it's clearly not about volume for volume's sake. We're about delivering value, and that may come in the form of additional volume. It may come in the form of improved coal quality. it may come in the form of cost savings, any one of those three areas. So we operate our mines to be productive. As I spoke about earlier, we set our mines up strategically to be safe, productive, reliable, cost-effective and profitable. If it makes sense to chase more volume, we will do that, but not just for volume's sake. It's got to be the right value decision and we look to make sure that our mines can deliver over the long term, not just increased volume over a short-term period.

Thanks, David. There's a second question on operations related to the free on board costs we operate at. As we've indicated in the quarterly report, we're likely to be in the mid-end or the mid-range of guidance when we report in February. We were higher in the first half, it implies a lower operating cost in the second half. What could we say about how our operating costs compare to both the domestic peers and the international peers that are supplying into the international thermal coal markets?

Typically, Yan Coal has always prided ourselves on being a low-cost producer. As Brendan spoke about earlier, we're one of the major play coal producers in Australia. And again, to the point I made a moment ago, it's not about volume at any cost. It's about keeping ourselves low on that cost curve as possible, delivering the volumes that we commit to in our forward estimates and the result of those to basically derive the value and put our company in a healthy position today and going forward. Thanks, David.

the topic of the dividends is coming up again Kevin in particular there's just a request if we could reiterate what the current dividend framework is as set out in our Constitution and perhaps link that to the comment about our cash position and how much cash we need to retain to operate the business on a day-to-day or an ongoing basis thank you thanks Brandon very happy to reiterate

So the dividend in our constitution, our position or the board position is about a 50% of net after-tax profit or 50% of free cash flow, whichever is higher. This is our position in the constitution. And the management has been working on this position to propose the dividend plan. And then we want to just make sure the dividends always a good balance between maximizing shareholders' value with a good growth strategy the company has been pursuing. And currently, the high cash balance of close to $2.5 billion, enabling Yanko to pursue both priorities from capital management perspective. I hope this clarifies. Thanks.

Thank you. And perhaps an extension on the capital management, a comment on the availability of debt financing for Yan coal and how we might be able to utilize that under certain scenarios in the future?

Thank you, Brandon. That's a good question. For Yan coal, our purpose is not to have zero debt. Our purpose is always about maintaining ability to acquire facilities from the market when it's needed. And we believe, and we are very confident, Yanko probably is one of, if not the best company or co-company in the market is able to raise such facilities. So we are absolutely confident to secure such a facility, and in combination with the great cash balance and with a strong view to maximize our shareholders' value. Thanks.

Thanks, Kevin. On the topic of corporate initiatives and opportunities for the company going forward, the questions come through, is FERV approval an ongoing risk for the company as we pursue our strategic initiatives? I'll reiterate what we said previously. Yankol has ongoing dialogue with the various regulatory authorities. Of course, any transaction will be subject to the review and approval as required from such authorities, but we've been successful in the past. We would anticipate having good opportunities to participate in processes going forward. We don't see that there's any reason for Yancob to be particularly concerned. We're an Australian company, Australian headquartered. We've got a strong management team. and a demonstrated ability to operate assets effectively in this country. On the topic of production, David, there was the mention in your comments earlier that there was a production cap for Malarban. Perhaps you could just clarify how production caps work, mining licenses, and how we set up our operations to run.

It's Mark Jacobs here. So every single mine approval in New South Wales is subject to an environmental impact assessment and that environmental impact assessment is predicated on a peak production rate and so every consent comes with production limits at each operation. Generally the mine plans are calibrated to fall within that production cap because we pick a production cap that optimizes the efficient extraction of the resource. The fact that Malarvan reaches production cap is an indication of the fine calibration between the mine planning within the production limits. I hope that answers the question.

Thank you, Mark. On the topics of coal market, James, I'll come back to you. There's a question coming through, and it's asking about a structural shortage of thermal coming as we expected in our Q3 report. I'll touch on it first and say what we've had looked at previously is the likes of the analysis coming through from Wood Mackenzie where we can see the demand profile for exported thermal coal reaching to a higher level and a higher level in a further forward timeframe than was previously anticipated. That view's been pushed out year by year. And we've also seen the potential for supply to deteriorate over time as a consequence of natural mine exhaustion, as well as, I believe, increased domestic use, particularly in Indonesia. So, James, the question is, do we still see the potential for some sort of shortage in the thermal coal markets in the four years?

So the analysts that tend to do the work with regard to that type of conclusion, I don't see much change in what their view is. They still see that there is going to be difficulty with the transition to prove to replace old ones and the transition where necessarily as quick and so there'll still be a requirement for thermal coal going forwards. So their view is not really unchanged if you look at what it was six months ago or one year ago.

Thanks James. There's a question coming through on the topic of the CEO transition asking what David Malt's role was in M&A work previously and how will his part of the work be distributed through this transition process. The observation here is we've got a very capable business development team headed up by our Chief Commercial Officer, Michael Ngo. That team remains in place. They do the lion's share of the initial analysis on any potential growth scenario. David, as CEO, provided a coordination point and between the BD team and our board and the rest of the executive team. As we touched on, our acting CEO and current chair of the executive committee, Mr. Way, has been in position since 2023, a very capable executive with a lot of mining experience. So I think we're very well positioned at this point in time to lean on the existing business development team, our acting CEO, our executive leadership group, as well as the expertise on the board. So between those parties, we'll be able to readily accommodate any initiatives that we wish to pursue. On the topic of growth in M&A, one of the questions coming through is how would we gauge an opportunity, what metrics we might use, an implied rate of return. on the debt or the equity we apply or other metrics which might be relevant. Devin, at short notice, is this something that you could comment on from the CFO's point of view as to how we would gauge and assess potential opportunities?

Sure. Thanks, Brandon. First of all, definitely there will be a hurdle, right? As for any bold discount decision will be made on... obviously internal assessment basis. We just want to assure the investors, Yanko has a very robust NA discipline and also very robust in the capital management philosophy. And that's the reason why how we responsibly use resources we have to maximize shareholders value. Thanks.

Thank you, Kevin. I've got what's the final question at this point in time. It's on the Mount Bully-Walkworth exploration and studies and the expected mine life extension. So what this is referring to is the, I believe, the potential for an underground mine at Mount Bully-Walkworth. It's still very much in the studies phase, subject to review, approval, permitting and so on. If it was to progress, it would be about extending the mine life, not expanding the production profile in the short term. As such, we'd be undoubtedly looking at on an MPV style basis or something similar to gauge its likelihood of being a strong contributor to the company. But as mentioned, at this point in time, the study is still progressing and will update the market. perhaps later in the year when there's something more definitive we can say on that particular initiative. I appreciate I've amalgamated and combined several questions on the webcast. I have endeavoured to cover all the queries as put to the management team through the webcast platform. Maggie, I'll come back to you for a final check on the phone lines and if there is anyone on the webcast who's I haven't touched on their specific query. One last chance to put a question to me via the webcast. Maggie, over to you to check the phones.

Thank you. This is the last chance. If you have any questions on the phone, please press star 11 on your telephone for a question. Thanks, Brandon. I don't see any questions on my end.

Thank you, Maggie. I don't see any further questions coming through on the webcast. Kevin, could I hand back to you to make a few closing comments before we finish the call?

Thanks, Brendan. And thanks to everyone for making the time today to join us on the Yanko fourth quarter call. I want to take the opportunity to reiterate a few key messages. First, as Brendan just mentioned, we have a very capable team of senior leaders. that will ensure continuity and stability of the operations in 2025. Second, we aim to deliver on our guidance every year, just as we did in 2024. We are some of the best mines in the industry, and we are proud of our ability to operate the mines with comparatively low cash operating costs. Third, the scale and the quality of our assets drive the financial performance. We added $480 million to the balance sheet in the past three months and hold close to $2.5 billion. This gives us the financial capacity to pursue corporate initiatives and make distribution to shareholders. Ultimately, dividends are determined by the board, and we will be in a position to comment further after board meetings in February. We look forward to speaking with you again next month after we release our 2024 financial results on 20 February. Have a great day. Thanks.

Thanks, Kevin. This concludes the call. Maggie, could I hand back to you to end the webcast?

Thank you. Thank you, everyone, for coming into today's conference call. This ends the conference. You may now disconnect. Thank you.