Earnings call transcript: Aurelia Metals’ Q1 2025 sees strong gold revenue growth

Aurelia Metals reported a robust first quarter for 2025, highlighted by a significant increase in gold revenue, driven by both higher production and prices. Despite this growth, the company’s stock experienced a decline, with a 3.23% drop in its last trading session, contributing to a significant year-to-date decline of 65.9%. According to InvestingPro analysis, the company appears undervalued compared to its Fair Value, suggesting potential recovery opportunities. The company outlined ambitious development projects and operational improvements aimed at sustaining its growth trajectory.

Key Takeaways

• Gold revenue surged by approximately $33 million, primarily due to increased production.
• The Great Cobar project received approval, with a $91.8 million investment planned.
• Operating costs rose by $4.5 million, influenced by higher state royalties and power costs.
• The company targets a processing capacity of 1.1-1.2 million tonnes.
• Workforce expansion is planned, with an increase to 350 full-time employees by FY2026.

Company Performance

Aurelia Metals delivered a strong performance in Q1 2025, with gold revenue seeing a notable increase. The company ended the quarter with $106.7 million in cash, driven by substantial cash flow from its Peak mine. InvestingPro data reveals the company maintains a healthy balance sheet with more cash than debt, though its overall financial health score remains moderate at 1.17. This performance aligns with a favorable gold and copper price environment, positioning Aurelia Metals well within the industry. For deeper insights into Aurelia’s financial health and growth prospects, investors can access comprehensive Pro Research Reports available on InvestingPro, covering over 1,400 US equities.

Financial Highlights

• Gold revenue: Increased by ~$33 million (higher production and prices)
• Operating costs: Rose by $4.5 million (state royalties, power costs)
• Cash position: $106.7 million at quarter-end

Outlook & Guidance

Aurelia Metals is optimistic about its future, with plans for the Federation Mining project to reach commercial production by Q4 FY2025 and the Great Cobar development to start in Q1 FY2026. The company remains focused on exploration and resource expansion, aiming to enhance operational efficiencies and reduce costs.

Executive Commentary

CEO Brian Quinn emphasized the company’s focus on employee retention and cost improvements, stating, "We want to focus very much on cost per tonne improvements." Chief Technical Officer Andrew Graham highlighted the strategic timing for resource assessments, noting, "The intention is to cut off for the resource on drilling at the end of the financial year."

Risks and Challenges

• Rising operating costs: Continued increases in state royalties and power costs could pressure margins.
• Project execution risks: Timely development of the Great Cobar and Federation projects is crucial for future growth.
• Market volatility: Fluctuations in gold and copper prices could impact revenue.

While the company’s financial performance in Q1 2025 was strong, the market’s reaction suggests investor caution, possibly due to rising costs and the ambitious nature of its upcoming projects. InvestingPro forecasts revenue growth of 10.89% for FY2024, with analysts maintaining positive expectations. The company trades at a modest 0.49 times book value, potentially offering value for long-term investors. Aurelia Metals remains committed to its strategic initiatives, with a focus on operational efficiency and growth. Discover more exclusive insights and 13 additional ProTips for Aurelia Metals on InvestingPro.

Full transcript - Aurelia Metals (AMI) Q3 2025:

Conference Operator: I would now like to hand the conference over to Mr. Brian Quinn, Managing Director and CEO.

Please go ahead.

Brian Quinn, Managing Director and CEO, Aurelia Metals: Thank you very much, and good morning, and thanks for all joining today for the Really Metals quarter three update. I have Martin Cummings, our Chief Financial Officer Angus Wiley, the Regional General Manager of the CohBar Region and Andrew Graham, our Chief Technical and Business Development Officer, on the call with me today, and we’ll obviously take questions at the end of the call for any one of us. Look, just to start off with, I’ll talk about each page as I refer to the information. I will then pass on to Andrew, who will then pass on to Maarten to talk through the cash flows and balance sheet. To start off with, look, a strong production and cost performance of the quarter with both Peak and Federation mine both working to deliver good results.

We had a strong, obviously, gold delivery for this quarter, which is in sequence with our mine plans for the full year. And the business delivered a sort of good all in sustaining cost of $15.93 dollars per ounce. And that’s obviously been supported by very strong realized prices as well to give us a good margin for the quarter. I’ll talk to some of the physicals in general when I get to each of the slides. Federation Mining ramping up nicely, obviously still within our approved budget, and we are likely to move into commercial production in quarter four FY ’twenty five, but definitely ramping up, and we’ll talk about some of the details of that at the relevant slide also.

Our balance sheet and cash balance of $107,000,000 for the quarter after really investing $90,000,000 into Federation and also spending our monies on exploration as well is going very strong. A huge effort and performance from delivering 44,500,000.0 from peak this quarter also with good volumes, good ounces, but also supported by good gold pricing, which is a great outcome for the business. And lastly, although quarter four FY ’twenty five, big milestone was the delivery of the Great Cobar project, which we announced recently. We’ll talk a bit more about it during the presentation. But really leveraging the gold prices to transition our business to copper into the future.

Just to remind some of the key points here, there’s NPV of $51,000,000 at our planning assumptions, dollars 164,000,000 NPV based on spot price at March 22. And really, we’ll be developing the project from early quarter one FY ’twenty six and getting into a sequence of development and various project works over the next couple of years. I’ll talk to the Gantt chart and Tommy that in the presentation as well. If I could just move on to Slide four, group production costs for the quarter. As we sort of highlight, gold has been strong for us this quarter.

Copper also both of those two commodities sitting just under guidance at the moment at the end of quarter three. Zinc and lead are a bit as they are right now. They are on track still track for guidance. We have actually stockpiles of Federation of ore, seen both at Federation and at peak, which will be processed soon and into this quarter, quarter four, and that will allow us to still deliver our guidance on those various commodities. We’ve actually had some stockpiles there based on trucking that is being ramped up at the moment to get the ore to the Peak processing facility.

But overall, if you look at our commodities, we’re on track for the full year. Operating costs, no issues there at the moment. We foresee that we’ll deliver within guidance for the operating costs. Our sustaining capital run rate was higher at the end of quarter two because we purchased two trucks. Quarter three has been a period of back to sort of normality again and we believe for the full year we’ll be still within the guidance as we stated in the FY 2025 guidance.

Growth capital, once again $56,400,000 at the end of quarter three, still definitely tracking well and truly to be within the guidance of 70,000,000 to $80,000,000 The key point there really is Federation project has pretty much declined development, infill drilling and some workshop modifications still underway. But realistically, the capital spend is slowing down in quarter four as we move towards commercial production and ramping up the operation. So once again definitely on track for our growth capital and staying in the budget for Federation project. Exploration, if you recall for the first couple of quarters we had a bit of a slow start renegotiating contracts and establishing the sites to be ready. Quarter three has delivered more in terms of ramping up.

In quarter four, there’s a lot of activity that Andrew will talk about that we’re doing in quarter four to deliver our exploration results this year as well. So in summary, no concerns. Definitely, all the measures are in the right direction for our business to deliver the value we’ve talked about throughout each quarter so far. On Slide five, obviously, very much on a sustainability basis, our injury frequency rate is continuing to trend down. We’ve had some injuries around hand injuries in this quarter, which are not pleasing to see.

Obviously, there’s a big campaign at the moment to reduce those injuries by really having our people focus on pinch points and line of fire, where they’re putting their hands when they’re doing their work, wearing gloves. We have a massive campaign on this quarter really sort of change that trend into having people return home every day like they should without injuries and obviously that’s a very key focus of the leisure team on-site. In terms of our other metrics, we continue to work very well with communities in the Cobar region. Definitely a lot of interest into our Cobar hub, which we have located in the center of Cobar, where our staff meet with people regularly and talk about the Cobar project recruitment, general sort of information around the community that is relevant to the community. Once again, highlighting Cobar is a great place to work and it’s a great community we’re working with.

And environmentally, no major concerns. Our frequency rate remains on track, and and we’ll continue to be on track as we continue to to upgrade various facilities over the coming twelve to eighteen months as well. I’ll just move on to slide five and talk about sorry, slide six and talk about the peak, executing the plan and guidance at the moment. Our development rate continues to range up. We are aspiring to get over 1,000 meters per quarter.

We’re resourcing up with people and equipment to deliver that. Obviously, we were sort of on track. We’ve had a few operator availability issues and some maintenance issues in the last quarter that we’re getting on top of, and we have a very focused development improvement project that was kicked off in March. And as the report highlights, March was a record month for us in terms of development meters and we anticipate trying to leverage that and continue on to really get above this 1,000 meters per quarter as a focus for the team. Our unit costs, mining unit costs were a bit higher this quarter on the back of lower volume, operator availability and we also had our new contract kick in this quarter, which has increased our ramping costs under the new contract.

To deal with that, one of the things actually that has been a focus of our technical team has to be to lower the dilution coming out of mine, therefore bringing quality tons to the surface and removing dilution. We have seen some uplift in our recoveries net grades as a result of that coming through the plant, which is fantastic. And we’re in an active recruitment process to try and get more operators being available to obviously get our tonnes as well. So one additional point I will make, we’re kicking off in quarter four a cost per tonne focused project with bringing external support to make that happen. And so that will obviously still work towards reaching my aspiration of around $100 a tonne over the near future or medium term.

Second batch of ore came from Federation. And once again, we’re getting some really good recoveries and performance out of the ore at Federation. One of the things, one of the points that have been asked in the past is around are we going to continue batching or blending. At this point in time, we are going to continue batching the Federation ore to maximize recoveries and recalibrate consistently the ore with the geological model to make sure we can keep that moving as long as we can. If the plant processing plant obviously at peak becomes a constraint then obviously you may consider blending if we need to.

But right now the folks will be on keeping it batch campaigns. And like I said earlier, March gave us an all in sustaining cost of peak of $1.353 per ounce, which is in the right direction and a very good margin as well from a point of view of the business. One notable point, which is worth holding at the peak is the gold grades did go up. That wasn’t high grading. We were basically mining in line with the sequence for the mine and we anticipated those sort of numbers would occur over the full year results.

And as a result, in quarter three, that’s when the results come through. So definitely, should we hit there, it’s basically part of the overall sequence for the twelve months. On Federation, which is Slide seven, development has also this quarter continued to deliver another record for the quarter, which is great for the Federation as we continue to ramp up. Most all of the major service works completed, like I said earlier, it’s just really now finishing up the service mobile workshop extension that was planned and executed over the last couple of months. That’s expected to be finished this financial year, in line with our sort of moving to commercial production at the end of the quarter four.

Infill drilling programs continue to be a key focus. A second rig has basically been moved to Federation in April and will be obviously spinning as well, which will obviously focus on infill drilling beneath the current stope areas into FY ’twenty ’7 and FY ’twenty eight, while our current rig continues to do the infill drilling in front of ourselves. The Admiral project remains within the approved budget, as we’ve said before, which is a great outcome considering most projects I referred to don’t deliver that sort of result. We did get the increase in our haulage of oil and crude as we committed to focusing on for the 200,000 to the 600,000 tonnes. That’s all being done in order three.

And as a result, some of the trucking delays we’ve experienced in February by getting trucks back on the road to move the ore from Federation to peak will be sorted out because we’ll have additional trucks running additional hours now in this quarter to make up the ground that we lost over a week or so in February. So overall, like I said, ramping up development, mining activity is going well. The drilling infill drilling program is increasing in intensity as we’ve committed to in previous quarter and really now it’s about hauling the ore and getting into the peak processing facility and maximizing the returns out of the ore in line with our plans for quarter four and full year. I might just turn to Slide eight and just talk about the delivery of our growth projects. In the previous presentation last week, we talked about obviously the Great Cobar project being approved.

We talked about how it fits into the sequence of all the projects, so people can understand where we are and what we’re trying to deliver at our earlier metals and how it sort of works towards targeting at 1.1 to 1.2 mean tons of process capacity over the coming years. So to be clear, as you can see in this scan chart, Federation project will meet its commercial production and then it will basically be moving out of project and fully into operations in FY ’twenty six quarter one. In the background, we’re working on our water management upgrade that we had approved recently. That works well and fully underway and is sort of from an engineering and working with the manufacturers that’s kicking along nicely and the project team is working on that. The peak plant optimization, that is still in study work, and we’ll see the study work for that come out in the coming quarter or so, and then we’ll be able to understand and communicate what that looks like to the market as well.

And lastly, the Great Cobar project, obviously, very exciting news for us, which I’ll talk about in more detail in a second, but this is sort of showing the sequence of cash flow and the sequence of timing where we really will look at onboarding in quarter four FY 2025 and buying the equipment in quarter four, FY ’twenty five, we’ll designify the equipment and it will be available ready so we can actually kick off our development in quarter one, FY ’twenty ’6, and start development activities and start pursuing our Great Cobar project into real life. So that’s obviously the sequencing and that’s how we’re trying to show people what’s going on with really Federation ramping off and the other projects sort of moving into execution in a controlled way and how we’re to manage cash flow against our operating performance. As I said earlier, what that’s going to give us is 1.1 to 1,200,000 tons capacity and that will place us into the 50% copper gold and 50% zinc lead or in the future once we have all these things in place, which will be very much a great business. If I move on to just Slide nine, just to reiterate what we discussed last week on the Great Cobar project.

Once again, I talked about the financials upfront and talked about the capital investment of just over $91,800,000 over a three year period. And what it will include is developing the two declines from Jubilee or Body Down to the Great Cobar. We are going to own and mine that to maximize synergies with existing operations. We’ll still be mining in New Cobar and Chesney, which is located in the North in the New Cova Mine site facility. We’ll be looking at the green line on the picture shows the shaft that will be arranged in 2027.

We’ll be looking at a new power supply servicing structure work in 2028. And we’ll basically be looking at first ore in 2028 with an initial mine rate of 500,000 tonnes ramping up over a period of time. And that will be sequenced with our existing ore that we’re getting out of the North mine in Chesney and New Cobar, etcetera, as well. So we can actually maximize the volumes coming out of this particular facility. As we highlighted also in that update provided recently, this particular project gives us significant option value beyond the base case.

We sort of provide information in that presentation on some drill holes that we do have beneath the resource that we put into this current Great Cobar project. And once we get ourselves down towards the ore body, set up our drill platforms, we’ll be setting up drill rigs to really understand and unpack the potential of what Great Cobar is likely to be beyond what’s in the current model now, which is all upside for the base case effectively. If you want more information, obviously, was a release provided on the April 16, which is called the Great project approval, which happy for you to refer to that for more information on that detail. I’ll pass over to Andrew to talk about exploration.

Andrew Graham, Chief Technical and Business Development Officer, Aurelia Metals: Thanks, Brian. Just firstly on Great Kvaer, certainly a key milestone for the development and technical team in getting that approved to execution. I’d just like to acknowledge Justin Woodward, our group manager at Tech Services, who led that study as well as a very large team internally, largely internally resourced with external assistance, the key milestone getting to that stage. Anyway, flipping now to exploration on Slide 10. We also last week as well as the Great Cobar approval released some exciting drill results last Thursday from our ongoing exploration drilling at Federation West.

Now you might recall the discovery announcement in June, Hole ’2 ’15, which is offset to the Northwest of Federation. We hit about 4.6 meters at that stage, good grade zinc leg copper gold, and it’s about a 40 meters from existing workings. So what we’ve been doing this quarter is following that up with drilling. And last week, we we released some of that drilling. You know, it’s an ongoing program, so we don’t have it all just yet.

But certainly two holes to flag, 12 and a half meters, 20% zinc, 9% lead, 1% copper with gold. 17 and a half meters is 11% zinc, 6% lead, point four copper with gold. It feels a lot like the drilling that I was releasing to you in Diamond on Federation ore body itself. So really exciting to have that within the couple hundred meters of the planned workings there of Federation. Also, just as we went to put out that release, we also intercepted a further massive and semi massive sulfides in Hole 222.

Score photos of that in the release of last week, so certainly have a look at that and we’ll bring you those results once we have them. Now based on the success we’ve been having at Federation West, we’ve decided to keep that surface drill rig at Federation West for the remainder of the financial year. It will certainly give us a better understanding of what we’ve got in that area, but hopefully, it will also give us some more great results that we can bring to you as we get those assays in. As I mentioned, 140 meters from planned workings. If it does start to build out, it’s certainly readily mineable from our workings there at Federation.

Now staying within the Nimmoji District, we are partway through the Nimmoji drill program that we’ve spoken about previously. This has been paused because the rig is staying at Federation West. So we are in the process of mobilizing a second surface drill rig to the Limogi District, which will be there hopefully next month to allow us to then continue that Nimmoji drill program. We also, through the quarter, got results back from the downhole electromagnetic survey that we completed at Nimmoji and that will help guide that further drilling. Now at Peak, we’ve definitely been very busy, both underground and on the surface.

So at Gladstone, which is a new Cobar mine, we targeted drilling a gap in the resource from underground. Gladstone sits kind of between Chesney and Yukobar, but further west and this quarter we’ll continue to drill that, this time the surface part of the program to better understand what we got there at Gladstone. We wrapped up our program at Young Australian. There’s a long section in the release just to orientate yourself to where that is, but it’s the third of the ore bodies in what we call the Proteus Corridor South Of Chesney, so it’s alongside Mount Pleasant and Burrabunge. We also were active at Queen Bee, continuing surface drilling.

You may recall we put our results on Queen Bee drilling previously, targeting depth extensions of those. Queen Bee sits about 10 kilometers south of the peak processing plant And through the next quarter, we intend to then bring the rig back down to Queenby to target some of the satellite prospects. Excitingly for the team, the quarter also saw that rig move to Sarsus and Sarsus sits north of the Cobar town. It’s the first time that’s been drilled since the ’90s. So fingers crossed, we get some good results out of that.

Now we should be in a position to provide you some results through the fourth quarter of our activities at peak and once we get those assays in. I’ll pass on, I think it’s on to Martin at this stage.

Martin Cummings, Chief Financial Officer, Aurelia Metals: Yes. Thanks, Andrew. So I’ll just turn to Slide 11. And as you’ll know from our release last week, we finished the quarter with cash of $106,700,000 And of course, our loan note remains undrawn. Obviously, the standout this quarter was peak with $44,600,000 of mine cash flow.

That takes the operation to around $82,000,000 for the nine months of this financial year. The cash flow this quarter, 24,000,000 higher than last quarter. And obviously, the notable increase was from our higher gold production. And as Brian stressed, we were mining high gold grade areas in line with our plan, but they did come with lower base metal grades, which was reflected in production. So our gold revenue of just under $33,000,000 higher, around $28 of that was from higher production and around $4,500,000 of that from higher prices quarter on quarter.

So our realized price coming through for the quarter was just under $4,400 which is obviously lower than where we sit today. Base metal production, as

Brian Quinn, Managing Director and CEO, Aurelia Metals: I said, was lower.

Martin Cummings, Chief Financial Officer, Aurelia Metals: That was around $9,000,000 And as we get the trucks restarted and catch up this quarter, move that 27,000 tonnes of stockpile from Federation, We do expect that our base metal production and our revenue will lift this quarter. On operating costs, they were about $4,500,000 higher this quarter. The largest movement was in state royalties. So with this higher price environment, that was around $1,500,000 additional royalty cost this quarter. We’ve also had some higher power costs coming through from our new contract that started January 1.

I will stress that we didn’t know about this. It was reflected in our guidance that we put out. And we also started our second charter flight from Brisbane to Kovar in January, and we have seen some inefficiencies in charter flights in the quarter as we transition people across to the charter and off their commercial flight arrangements. But otherwise, costs have been fairly stable. And as Brian said, we’ve now got our cost reduction project team in place, and we’ll look to offset any inflation but also lower those costs in the coming quarters.

I didn’t include it on the chart, but in the report, you’ll see there was a small cash flow for Dag’s. So we’ve now finished and finalized all of the shipments. So there was a $400,000 adjustment there. And now we’re reporting Dargs closure and care and maintenance costs within the care and maintenance area. It was just $100,000,000 for Dargs for this quarter.

Federation spend, consistent $19,000,000 And as Brian said, most of the mining most of the activity now is mining with the surface infrastructure in place, and we continue to track within guidance and budget for the project. And just a few other comments on the chart. The tax cash flow. So just to let you know, we are now paying PAYG installments on tax of around just under $500,000 per month. We did also recognize some proceeds from some asset sales during the quarter.

They sit within the working capital area. There was around $900,000 to do with sale of some noncore equity holdings that we had. And we also put through a sale of some biodiversity credits that were excess of around $2,700,000 Nicely, this was able to offset some additional cash backing that we had to do this quarter. So we had a $3,300,000 cash backing requirement, and that went through in January. And as I’ve mentioned in previous quarters, we will see some small amounts going through for cash backing given our current facility with Trafigura is at its limit.

So we’re cash backing those. And as part of an upsize of the performance bond facility, once we put that in place, we’ll be able to get that cash backing back. So at the March, that was just under $15,000,000 So in summary, a fantastic quarter cash wise, obviously, highlighted by the cash generation at peak. Our strength our balance sheet is stronger, 10,000,000 increase in cash and really gave gives us confidence to commence the great CohBar investment. So thanks for your time.

I’ll hand it over to you, Brian.

Brian Quinn, Managing Director and CEO, Aurelia Metals: Thanks, Martin. Thanks, Andrew. Look, just to summarize our key focus areas and wrap up for quarter three and looking into quarter four and beyond, very much focused on expanding our margins, taking advantage of the nice price environment, also keeping a clear focus on reducing our cost per tonne, making sure that our cash flows are obviously being maximized in terms of how we run our business grow our business, and obviously developing our copper growth options, which we talked about earlier. If I look at the across the spectrum for focus areas, as I sort of have talked about previously, operational performance to say to deliver FY ’twenty five is obviously first and foremost to make sure that we do deliver what we said we’re going to deliver and generate the value that’s in our budget to grow our business. Obviously, I wanted to call out the operational team, the regional operation team that worked very hard up until the end of quarter three, obviously, to really make sure that we are delivering the value and obviously, we’re seeing some of the results from quarter three from peak and also the ramp up work in Federation in the operations, definitely want to call out the team there for the great results and great focus.

Federation ramp up to commercial production is obviously the focus area for this quarter. Once again, we are sort of starting to demobilize our project team. Redpath are doing a great job, call out for them as far as their development activities are concerned and also, once again, delivering record meters and hopefully, we can continue to build up our performance as we go into quarter four and beyond. I want to call out three groups there, Redpath, the Federation project team and also the Federation operations team really sort of bringing that together nicely as we move into FY 2026. Our productivity and cost focus, which I referred to earlier and Martin just talked about as well, is something we’re going to take very seriously and put dedicated resources on focusing to really see what we can do to improve our margin.

So BI team will be working very closely with our operations team to deliver that with an external third party helping make sure we can maximize the value of that opportunity. Our peak play optimization studies will be getting worked on to bring to final investment decision. That’s sort of the last piece of the various optimization studies we’ve talked about. We’ve obviously discussed that being around mill and the materials handling being the last part of our optimization work we’re doing to get to 1,100,000 to 1,200,000 tonnes. So that will be sort of work we’re focusing on in this quarter.

The Great Travail project readiness, obviously the approval being done. The team is and as actually Andrew called out, there’s a lot of people involved from our internal organization to really be part of that project to bring it to the forefront of the approval process led by Justin. But now it’s really moving into execution and having our execution project team getting that readiness to commence development in July is a handover happening in the background as we talk. And as we said, that will be really focused on recruitment and getting equipment in the area set up and making sure we have a project that can deliver and taking the learnings out of Federation project as well. And then lastly, ongoing exploration programs that Andrew just referred to.

So lots of work going on this quarter, especially around Federation and Nimigi and also exploration activities happening up around the peak operation as well. So as you said, they’re the sort of key focus areas that will allow us to continue our business in the right direction and they haven’t changed substantially. They’re still very much where we need to be to deliver our business value and our growth going forward. So I might pause there and pass back for questions.

Conference Operator: Thank you. Your first question comes from Daniel Roden from Jefferies. Please go ahead.

Daniel Roden, Analyst, Jefferies: Morning, guys, and congrats on a good quarter. I thought I’d make good off of last week and start off with my question on Federation and if you could provide a bit of color on the, I guess, the orientation interpretations and how, I guess, you’re tracking with that and what your understanding there is on how it’s going to impact, I guess, the ramp up and operations, etcetera, please?

Brian Quinn, Managing Director and CEO, Aurelia Metals: Yes. Sure. Thanks, Dan, for the question. So look, obviously, as we’ve sort of highlighted last quarter and again this quarter, our infill drilling is sort of informing our stope design and development design as we continue to move down in the decline of depth. One of the rigs is obviously very much focused on making sure we understand what FY ’26 looks like and that’s sort of a ramp up is definitely in line with that.

And the second rig we’re boarding will continue to obviously drill to define FY 2027 and 2028. I guess what I can confirm is that for the drilling we’ve done and for the information that we received from the drilling that the contained metal is definitely won’t for the drilling information will definitely support our ramp up process that we put forward.

Daniel Roden, Analyst, Jefferies: Yes. Okay. Awesome. And I just wanted to unpack a little bit. You’ve given obviously, since the great cover kind

Brian Quinn, Managing Director and CEO, Aurelia Metals: of the lease the other week, I

Daniel Roden, Analyst, Jefferies: think you’ve given some of the timeline information to you. I just wanted to unpack, I guess, new cover and, I guess, the longevity of the asset. There would be expansion of the peak mill to the 1.1, one point two. That new cover feed, I guess where does that fit into the longevity of the portfolio? When what’s the time line there that you expect that to be, I guess, in operation for?

And what’s the longer term kind of outlook for some of that data material?

Brian Quinn, Managing Director and CEO, Aurelia Metals: Yes, sure. I’ll just provide a brief answer, then I’ll pass it to Andrew to any specifics you may want more on. Look, in terms of the focus, so the new co bar, well, obviously, we’re currently mining out of now, as know, and we’re mining a lot of Chesney out of there now, and we’ll continue to mine Chesney over the next couple of years as we move more across into the New Cobar mine and less into the South Mine. So into FY ’twenty eight, we will basically be starting to bring ore out of Great Cobar. Now as a ramp up process, we’ll still have the sort of new Cobar ore deposits, including Chesney sort of blending in with that Great Cobar ore.

And the intention will be that we’ll get to 500,000 tonnes out of Great Cobar once the development and the ore body has been obviously driven and drilled out. And then we’ll basically have less of the Chesney and other areas of the new Cobar mines involved and be very much focused on Great Cobar. Once we get over towards the ore body, we’ll be setting up drill platforms to drill down into these known areas where we’ve already we have holes that show resource good drill results underneath the current planned ore bodies. And not forgetting, I think your question was how long, well currently the mine lost eight years. So we’ll be drilling down to understand what’s beyond that.

And then obviously, once we know that, we can obviously build the mine plan accordingly. That will include reviewing the volumes coming out of the mine. That will involve reviewing one other capital. We may need to increase the volumes if there is obviously an opportunity to mine more out of Greg Cobre and so forth. So mean realistically right now the base case that we sort of talked about is to get across the drill while we start to develop and the ore body and obviously start production at the sort of 500,000 tonnes while we understand what’s around the deposit to understand what potential there is to grow further beyond that.

Andrew, was there anyone to add to that at all?

Andrew Graham, Chief Technical and Business Development Officer, Aurelia Metals: No. Think you’ve largely covered it, Brian. Just one thing to recall, when Great Cobo was first talked about the PFS study stage, there was a bit more pressure to get to Great Cobo ore sooner. Certainly, some of the exploration success we’ve had around peak in that brownfield step out type drilling has allowed us to to time break Cobar and push it out a little bit, which has worked very well into the lab federation, as Brian has talked about today, being built ramping up and then allow us to move into Great Cobre develop that while we have a good source of material. They’re not like a lot of mining projects that are hanging on that tongue coming out of the ore body.

We have the benefit that we’ll continue to feed out of New Cobar with New Cobar and Chesney in production and then transition our way into Great Cobar. So it’s a good place to find ourselves. As Brian mentioned, exploration potential at Great Cobar is fantastic and it doesn’t take away from the fact that there’s still exploration potential in the broader New Cobar mines as well. And that, understanding that, looking at what our inventory is in the couple of years as we get into Great Cobar will allow us to optimize that. It may be that we push beyond 500 out of that whole new Cobar operation.

But these are the sorts of things that will make those decisions with information in time.

Brian Quinn, Managing Director and CEO, Aurelia Metals: Yes, good point. Thanks Andrew.

Daniel Roden, Analyst, Jefferies: Awesome. Thanks guys. Was just trying to get a gauge on how you’re thinking about if you were to expand to take kind of beyond that, how you’re thinking about the FEED strategy there, but that’s a very comprehensive question. And I might just ask one more if I can, just to freshen this off, Fred, Federation, if I kind of backs all of the back to calculate your mining unit costs there are quite low. I just wanted to understand if there were still costs being capitalized from the mining operation perspective that’s not flowing through quite yet.

Martin Cummings, Chief Financial Officer, Aurelia Metals: I haven’t got the calc in front of me, Dan. But yes, we are still capitalizing all of so how we’re doing it, I think I ran through last month is when we’re taking up any production, we’re taking up an offsetting amount of mining and admin costs down at Federation to basically offset the revenue and that going through the P and L. And then what you’re seeing in growth capital is the residual above, which is effectively that noncommercial portion we’re reporting within growth capital.

Conference Operator: Your next question comes from Paul Kaner from

Paul Kaner, Analyst, Unknown: Yes. Hi, Brian, Martin and Andrew. Thanks for taking my questions. Just touching further on Dan’s question there on Federation and that ore body orientation. I mean, might be a bit too early to tell, but how is that sort of changing with depth?

Or do you expect what you’re sort of seeing in the upper levels to continue down dip?

Brian Quinn, Managing Director and CEO, Aurelia Metals: Look, I think the the key point there, Paul, is that what we’re we’re drilling to understand exactly that. So we’ve seen the orientation change and the drilling we’ve done for the for the stopes levels for FY ’twenty six confirm that orientation change and confirm the contained metal. We have to just the second drill rig being installed will continue to understand that further and obviously allow us to design our mine accordingly. So we’ll get to a certain point where we’ll have probably more clarity on anything additional to that. But realistically, we’re just basing on the fact that as we’re drilling, we’re sort of identifying the contained metal at the levels where we are now in FY ’twenty six is what we had planned.

We just need to continue drilling. That’s what the extra rig is there for. Andrew, is there anything additional to that one at all?

Andrew Graham, Chief Technical and Business Development Officer, Aurelia Metals: No. I think that’s all on that, Brian.

Paul Kaner, Analyst, Unknown: Yeah. Too easy. And then just secondly on COBAR more broadly, I guess, the labor and housing situation. You’ve got Poly that’s sort of ramping up and and Mac there as well. How’s your turnover at the moment?

And any sort of key positions that you’re struggling with at the moment?

Brian Quinn, Managing Director and CEO, Aurelia Metals: Look, I’ll answer that briefly and I’ll hand it over to Angus. So look, obviously, are no doubt we have lost people to poly metals and lost people to other places as well in terms of turnover broadly as the New South Wales region has continued to attract and Queensland regions continue to attract people into the various locations. At the moment, obviously, we are looking at an employee value proposition to see how we can retain people in a more sort of robust way that we’re rolling out over the coming months to really sort of hopefully decrease that sort of turnover to get more stability. We are recruiting. We are finding people.

We find good people to replace the people who are leaving. But obviously, if we can retain good people, that’s obviously first prize. So yes, we have had operator availability with some turnover challenges like most places. We are getting people who have left who are coming back as well and rejoining based on wanting to work back with us again. So it’s sort of one of those things, but the key thing for us, Paul, is we’ve got a strategy to really look at employee value proposition to sort of make sure that we can attract and retain people going forward as we build our company.

And we’re also going to be recruiting and start the recruiting process already for the great COVA additional people as well, which is going very well at the moment actually, going very well with who we sort of put their hands up for opportunities. Angus, any comments?

Angus Wiley, Regional General Manager of the CohBar Region, Aurelia Metals: No. As you said, Brian, I think we’re actually tracking quite well with recruitment for Great Cobar. So we’ve got a team focused on that as a project. Yeah, we’ve certainly got turnover, but yeah, no different to anyone else in the industry. I think we’re probably doing better than most in our ability to attract people.

And as we go forward and roll out the updated employee value proposition in the near term, we hope to see that stabilize even further.

Brian Quinn, Managing Director and CEO, Aurelia Metals: In terms of your question, Paul, around housing, obviously, we’ve got, I guess, call it a camping town now for people working at peak or a five hour dyno, which is working very well, just 70 rooms. And we’ve also got our camp at Herrera which isn’t fully utilized yet. So we’ve got facilities to place people. We’ve also got housing in Cobar which we’re bringing and offering to people who want to relocate to the Cobar region and work in the Cobar region. So that’s ongoing.

And as Martin talked about, we’ve put a second charter on now to accommodate the ramp up at Federation and also for the Great Cobre people that we may bring on FIFO as well as residential.

Paul Kaner, Analyst, Unknown: No, that’s great. I appreciate the color. And then just lastly, maybe one for Andrew, just looking at some of those Federation West intercepts and cracking results there. Just looking at that cross section, could you maybe just provide a little bit more color on where the ore body remains open and, I guess, where it’s closed off based on your current drilling?

Andrew Graham, Chief Technical and Business Development Officer, Aurelia Metals: Yes. No problem, Paul. And perhaps that long session is not the easiest thing to understand, and and really, there’s a lot of work still going on to try to understand that question you just asked around where is it closed off and where do we have potential. Certainly open at depth and there’s work going on that and drilling currently. The bit that we’re really trying to understand is what else is in that region.

So obviously, this has opened up a new possibility offset, know, I say, the 140 meters from the line of the existing Federation ore body. But what is the potential to extend that along that orientation? So there’s going to be and that’s part of the reason we’re keeping the rig there for the rest of this financial year is really to try to help us answer some of those questions and really understand it better. You know, it’s it’s great and a really good piece of work to get that initial discovery hole. These follow-up holes have been fantastic, you know, better thicknesses, better grades.

So really allows us to allow us to start thinking about this growing into something. You know, we’ll we’ll include those results into the inputs into our resource when we go to rerun that through this year, as well as any other drilling we do between here and the end of the financial year. So it’s probably a bit too early to answer your question, Paul. But certainly, it’s got all the makings of being something quite interesting for us.

Conference Operator: Your next question comes from Adam Baker from Macquarie.

Daniel Roden, Analyst, Jefferies: It seems all the questions are in Federation today, so I might continue on that theme. Just some pretty good results from Federation West as you outlined. Just wondering how you’re thinking about the exploration budget. It seems 10,000,000 to $15,000,000 exploration budget is pretty conservative considering some of the results that you’re getting and considering your balance sheet position in pretty strong position here. Could you ramp up that exploration expenditure heading into next year?

Brian Quinn, Managing Director and CEO, Aurelia Metals: Look, at this point in time, we haven’t actually worked through what the budget will be for next year. We’ll run through a strategy review of the exploration team, Andrew, in the coming weeks, and then we’ll obviously understand what the right level of spend is based on location, based the drill rig availability and based on what makes sense for us. So I probably can’t answer that question right now. That’s sort of work in progress as we review that strategy going into FY ’twenty six. Fair to say that obviously the amount of money we’re spending now is giving us the information we need.

If we make a decision to move faster on some of these things, we’ll definitely include them in the revised budget in FY ’twenty twenty six. Not forgetting the balance sheet position is strong, but we do have various projects as you’re aware in FY 2026 as well, but we need to sort of make sure that we’re balancing our overall cash with the project exploration and our operating costs also. That’s we’re just going be mindful of the overall picture.

Daniel Roden, Analyst, Jefferies: Okay, great. And maybe just the timing on the resource updates for Federation, but more broadly, are there expected to be any other resource updates outside of Great Cobre?

Brian Quinn, Managing Director and CEO, Aurelia Metals: Andrew, any comments on that one?

Andrew Graham, Chief Technical and Business Development Officer, Aurelia Metals: Yeah. Look, as I mentioned earlier, the intention is to cut off for the resource on drilling at the end of the financial year, June. There’s been a process of several months to be able to pull that together into a resource that we can disclose, but that will then include an update across the entire portfolio resources and reserves. Targeting being out for our full year result in October.

Daniel Roden, Analyst, Jefferies: Thank you. I might just sneak in our volume, Brian. Commercial production for federation, since you’re indicating that it could occur by June, what do need to see before you’re comfortable declaring commercial production here?

Brian Quinn, Managing Director and CEO, Aurelia Metals: Well, once again, we’re looking at commercial production in terms of the sort of revenue getting in and dispersing against the costs. But as we sort of said, the costs really now are focused on deep line development and infill drilling. The rest of the cost of the project is kind of now nearly subsided apart from the small amount of money spent on the motor workshop upgrades. So realistically, we just the volume coming out of federation will give us the revenue, obviously, and and costs will basically be the offset sort of get to that point. So that’s what we’re confident in quarter four.

We’re in that right position and will remain under budget for the total project as a result of that.

Daniel Roden, Analyst, Jefferies: Thank you.

Conference Operator: Your next question comes from Paul Hissy from MA Financial.

Paul Kaner, Analyst, Unknown: Just a quick one. Martin, can you just back out the $17,800 realized copper price for me for peak for the quarter?

Martin Cummings, Chief Financial Officer, Aurelia Metals: Yes. We had some shipment finalizations. So what we do with our realized prices, we factor in total revenue divided by copper sold. So sometimes we do get realized prices that look a little bit quirky because of that, and it was just to do with the reval on a shipment from the December.

Conference Operator: Your next question comes from Ashley Chan, a Private investor. Please go ahead.

Ashley Chan, Private Investor, N/A: Hi, guys. Thanks, Brian, Martin, Angus and Andrew for the updates on the quarterly report. I just got a couple of questions on three different areas. Just on staffing and recruitment, how many full time equivalent employees do you have currently, and what is your target for end of twenty twenty six?

Brian Quinn, Managing Director and CEO, Aurelia Metals: For the end of FY twenty six?

Ashley Chan, Private Investor, N/A: Yep.

Brian Quinn, Managing Director and CEO, Aurelia Metals: I don’t have that number in front of me right now. Angus, do you have that number in close to you at all? The FY twenty six?

Angus Wiley, Regional General Manager of the CohBar Region, Aurelia Metals: Only in a I can only approximate. So really around Great Cobar, we’re aiming to add 30 FTEs for the Great Cobar project. That takes us to around three fifty FTEs at peak. So that’s really where we’re targeting at the moment, that increase with Great Cobar.

Ashley Chan, Private Investor, N/A: Okay. So that means, I guess, for full year financial year 2026, you’ll be have to do sustainability reporting to asset. I guess, is that under is that underway? We got process in place for that?

Angus Wiley, Regional General Manager of the CohBar Region, Aurelia Metals: Yes. Sustainability, great sustainability lead, Jon O’Thompson, has been working on working towards that and has a timeline and a process in place.

Andrew Graham, Chief Technical and Business Development Officer, Aurelia Metals: Excellent. The

Ashley Chan, Private Investor, N/A: second question is more for Brian and Martin on capital management. So from your presentation, you can see that there’s basically about $50,000,000 of CapEx in each financial year for ’twenty six and ’twenty seven. You have $100,000,000 in cash and you’re going to have positive free cash flow from a peak configuration even accounting for capital expenditure. When do you think a decision or when you’ll be having a look at a decision or putting together a recommendation on the timing for share buyback?

Martin Cummings, Chief Financial Officer, Aurelia Metals: I think Ashley, it’s Martin. Look, right now, as I think we talked about last week, focus on those capital projects that you talked about. As part of our capital management planning, we’ll continue to look at those kind of returns, whether it be dividends or buybacks. But really, the focus over the next couple of years is primarily on delivering these capital projects in any price environment. So what I can say is that it’s in our mind.

We do think about it. But what we want to say publicly about that is that we’re committed to capital projects for now.

Ashley Chan, Private Investor, N/A: Alright. Okay. Third question is just on grade Cobar. So you have the opportunities of exploration, which we understand and offer but you also mentioned operational opportunities, which will enhance option value for Aurelia. What does it mean?

Great covarcates further operational opportunities?

Brian Quinn, Managing Director and CEO, Aurelia Metals: Yes. It’s a good question. I’ll answer that briefly and pass it on to Angus. So look, what we mean by that is that we’ve currently used the from a project point of view, used the rates of development and rates of cost from the Peak South Line and parts of Chesney to come up with an average number that we put into our models for the Great Cobar project. We basically understand the conditions in, obviously, Great Cobar, a better, both roof wise and, hopefully, water wise conditions wise than the South Mine.

So what we are basically saying in our release on improvements is that we are going to focus very much, as we said in the report today, on cost per tonne improvements starting effectively in quarter four onwards to really go after this $100 to $110 a tonne top number. That’s my aspiration to get to that sort of mining cost. That will substantially bring more value back into the organization than the current numbers we’re putting to the model obviously for the grade covar. So that’s what we talk about when we talk about improvements. It’s really around the cost per tonne improvement to get us there.

It’s our development improvement, development cost per meter improvement to develop the declines to get down to the actual drill platforms into the ore body as well. It’s basically having a program very focused on those two things, which we believe and to do the economics, it actually gives us substantial uplift in value as well. Angus, anything you want to add to that at all?

Angus Wiley, Regional General Manager of the CohBar Region, Aurelia Metals: Yeah. I suppose just around the synergies, the clear example, like, yeah, we’ll have the the new Cobar Chesney team working with the Great Cobar team under the single shift boss. So, for example, something like the truck, will have a dedicated truck focused on Great Cobra, but it also allows opportunities for that truck. If there’s smooth the dirt at Great Cobra, it goes and moves the dirt from a stope at Chesney and provides synergies in that aspect.

Ashley Chan, Private Investor, N/A: All right. And then on the exploration side or just more sort of operational, just on you made notes that there is potential from, let’s say, twelve, fifteen meter depth up to two kilometer depth. So just forgive forgive my ignorance. It is possible to mine that heat. Are there other similar mines in the area?

What are the analogs for mining up to two kilometers if you were to discover anything?

Brian Quinn, Managing Director and CEO, Aurelia Metals: Andrew, do you want to ask that one or and I’ll pass on to to Angus as well.

Andrew Graham, Chief Technical and Business Development Officer, Aurelia Metals: Yeah. Look. I think the the obvious analog in the region is CSA, which is I can’t remember exactly how deep it was about 1,600 meters or something like that. Absolutely possible to chase these things at depth. What was in the study takes us nowhere near that kind of level.

So if we did have exploration success at depth, there’s certainly an ability to continue to mine and pull that material. Also, flagged as well as the depth extension potential, definitely potential to the north. So we’re saying, A, lens plenty of potential at depth B and C, the potential they join up and there’s potential then that they expand and also go to depth. There’s also potential beyond those to the north as well as along the entire decline that takes us to Great Cobar. It’ll be a fantastic ability to drill off that and then look for other possibilities in the region.

I guess, you want to comment just on the depth, please?

Angus Wiley, Regional General Manager of the CohBar Region, Aurelia Metals: Yes. Look, Ashley, just on our current operations of the Perseverance Steep’s area goes down to 1.7 kilometers below surface. So we’re not mining at that level at this point, but we obviously have in the past. So certainly no issue there. And in reference to CSI, I think they’re well over two kilometers deep at this point.

So if that gives you some scale.

Brian Quinn, Managing Director and CEO, Aurelia Metals: I actually I think and we have operating procedures which allow us to do that in terms of any sort of stress activity. So we actually have operation procedures at our peak mine to manage those things accordingly and technology to help us as well. So it’s not up for me territory for us.

Ashley Chan, Private Investor, N/A: Excellent. And then I guess for Andrew, for the B zone and the C zone and testing whether it’s contiguous or not and any extensions at it. Has there been any post 02/2004 drilling into the between the B and C zone or under the A zone, beneath the A Zone?

Andrew Graham, Chief Technical and Business Development Officer, Aurelia Metals: You can recall exactly which drilling was in which year, but there really hasn’t been a lot of work done on those for a lot of time. That’s drilling we did through end of twenty one to twenty two was three holes from surface and the extension on either. That was they were deep holes and that was extensive drilling, you know, sort of $300,000 a hole. Hence, we didn’t want to continue with that. It was great to be able to demonstrate that Alen’s continued and it presents enough inventory for us to want to get across there knowing that the mine will make money.

But the goal will be to be underground and drill from underground much, much shorter holes, much deeper drilling, and then we will continue to test all of that. We have a plan to put an exploration drive in off the level when we get to Great Cobar, effectively just straight out to the North area to allow us to drill off that platform. And then also plan to do similar platforms as we head up and also down that initial development of Great Cobar. So definitely something give us time to get across there and then we’ll pepper that with drilling from underground and really look at what it looks like.

Ashley Chan, Private Investor, N/A: Perfect. Thank you. Thanks. That’s all my questions. Thank you very much again.

Conference Operator: Thank you. You. There are no further questions at this time. And I hand back to Mr. Quinn for closing remarks.

Brian Quinn, Managing Director and CEO, Aurelia Metals: Yes, thanks very much. And thanks for everyone dialing in today and questions. Hopefully, those questions have been helpful for others listening to the call as well. Once again, thanks also to the Aurelia team in total. It’s been a big quarter and we have another really big quarter ahead of ourselves as we move into some of these project works.

Once again, thanks for dialing in. Thanks for your questions and feedback and thanks for the really team for delivering. Appreciate it. We’ll speak to you end of this quarter. Thank you.

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

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