Earnings call transcript: Aurelia Metals Q1 2025 shows strong growth and innovation

Aurelia Metals reported robust financial results for the first quarter of 2025, with significant revenue and operational advancements. The company’s stock saw a slight increase, reflecting investor confidence in its strategic initiatives and future growth prospects. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics, with impressive returns of over 100% in the past six months. Key highlights from the earnings call include a revenue of $84.8 million and a strong cash position, alongside strategic operational improvements.

Key Takeaways

• Aurelia Metals reported gross revenue of $84.8 million.
• The company’s cash position remains robust at $124 million in liquidity.
• Operational costs are expected to decrease significantly by the end of the year.
• The Federation mine ramp-up is progressing better than planned.
• Aurelia is targeting significant growth in copper production by FY2028.

Company Performance

Aurelia Metals demonstrated strong performance in Q1 2025, driven by strategic operational improvements and a focus on innovation. The company’s revenue of $84.8 million reflects its robust position in the market, backed by a strong cash flow from operations amounting to $24 million. The company is also making significant strides in reducing operating costs, which are expected to trend down from $367 per tonne to $328 per tonne by year-end.

Financial Highlights

• Revenue: $84.8 million
• Cash from operations: $24 million
• Liquidity: $124 million
• Operating costs: $367 per tonne, expected to decrease to $328 per tonne

Outlook & Guidance

Aurelia Metals maintains its FY2026 production and cost guidance, focusing on increasing copper’s share in its ore mix to 50%. The company is also committed to ongoing exploration in the Cobar region, enhancing its mineral resources and reserves. Future projections include targeting 40,000 copper equivalent tonnes in FY2028, indicating a bullish outlook on copper demand.

Executive Commentary

CEO Bryan Quinn emphasized the company’s focus on self-funded growth and its optimistic outlook on copper fundamentals. "Our growth continues to be self-funded," Quinn stated, highlighting the company’s strategic advantage in the copper sector. He also noted, "We’re very bullish on copper and the fundamentals of copper," underscoring the company’s confidence in its future prospects.

Risks and Challenges

• Supply chain disruptions could impact operational efficiency.
• Fluctuations in metal prices may affect revenue and profitability.
• Regulatory changes in mining operations could pose compliance challenges.
• Environmental concerns and sustainability issues may require additional resources.
• Competition from other mining companies in the Cobar region could pressure market share.

Aurelia Metals’ Q1 2025 earnings call reflects a positive trajectory for the company, with strategic initiatives in place to capitalize on market opportunities and enhance shareholder value. The company’s focus on operational efficiency, innovation, and copper growth positions it well for sustained success in the coming years. For comprehensive analysis and detailed financial metrics, access the full Pro Research Report available exclusively on InvestingPro, covering over 1,400 top stocks with expert insights and actionable intelligence.

Full transcript - Aurelia Metals (AMI) Q1 2026:

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Thanks, Rochelle. Look, I’m Bryan Quinn, Aurelia Metals Managing Director and CEO. On behalf of our team and the board, I would like to provide you with some key points from Quarter One of FY26. I do thank all of you for joining us today on the call. I know it’s a busy time. I’m joined by Aurelia Metals Chief Financial Officer, Martin Cummings, our Chief Business Development Technical Officer, Andrew Graham, and our Cobar Regional General Manager, Angus Wyllie. We’ll run through the presentation and then take questions after the presentation. In today’s presentation, we’ll be referring to the slides released in today’s market, and we’ll spend additional time on any illustrations we pack to cover anything important.

Just to kick off, first and foremost, it’s a strong start to the year for us in terms of Quarter One production, definitely in line and on track against executing our strategy across the business. Metal production and costs are very much on track, and our cash position has remained robust at $124 million liquidity on the back of $84.8 million gross revenue sales and improving cost per tonne results. This has delivered approximately $24 million cash from operations, if you exclude sustaining capital. This strong result was underpinned by focus on ongoing productivity improvement projects across the business, especially at Peak. I’ll talk to some more of these physical results as the presentation progresses, and I will obviously talk to some of the financials and the balance sheet later as we have the discussion on the balance sheet.

One important thing, obviously, the business is in great shape, and our growth continues to be self-funded, which is important for us as a business because that’s what we’re committed to do. If I just talk about Federation, the ramp-up is definitely moving in line with our plan. In fact, it’s delivering better than our plan with strong environments in development meters and tonnages. I’ll recap on some of those in future slides as well, but we’re very happy how Federation mine is now progressing. Our Great Cobar project commenced on the 1st of July, and really, development and construction activities are definitely heading in the right direction, on track, and our run rates are definitely improving and got some good conditions and a very good team on the job. That’s great news for us.

Importantly, we’ve also released our Mineral Resource and Reserve (MRA) report for calendar year 2025, which represents growth in our resource and reserves. Resource up 12% to 21 million tonnes and reserves up 17% to 5.5, driven largely by copper increases in the region, which we’ll also talk to later in the slides. All of these results today really enforce that we are a business that’s delivering what we’ve committed and working hard as a team to deliver better results than we’re committed to, where it’s possible also, to really support maximum value for our shareholders. On the next slide, which is our group production and costs, the key message I want to get across to our investors is our delivery of our guidance at this stage remains very much in the range we talked to before the start of the financial year for both production and costs.

During Quarter One, the mining sequence and production sequence has been very much focused on base metals, in particular, zinc and lead. Quarter Two will sequence to an increasing proportion of copper ore. At the moment, both costs, capital, and our commodities that we’re producing from our business is definitely moving in the right direction, as is our exploration projects as well that we’re working on. On the next slide, which is our sustainability slide, our injuries for the quarter were not in line with our expectations. We’ve had a few injuries which really have not been satisfactory. We fundamentally believe all injuries can be preventable, and people can leave work at the end of the day without injuries. On these occasions, we’ve had a few people with injuries which have not been satisfactory.

Our focus on this is to really reinforce our efforts on shorter-term contract management, ensuring that our people that come onto site on a short term are really using our process around taking five, doing JHAs properly, and really being supervised well. A large amount of the injuries have been over the last 12 months, really around hand injuries, making sure people aren’t putting their hands in areas where there’s pinch points. We believe we can turn this around and really ensure our people go home safely like we want them to every day. In terms of our environmental results, once again, we’ve delivered some really good results, both meeting our standards and also meeting our compliance requirements and delivering a very good result in terms of our recordable environmental incident frequency rate.

When I move to the next slide, which is our peak performance, when I start talking about our production activities now, our development at Peak continues to improve in line with our targets we’ve committed previously. If you’re from previous quarters, we’ve continued to make step-by-step improvements, and we continue to drive that very, very hard. This is great news for the business as it creates optionality. The more we can get ahead in development, the more we can set ourselves up for creating optionality. If we have a problem in a scoping area, we have somewhere else to go, and we can continue feeding the plant and keep the mill full. We did prioritize Great Cobar development in July and August to ensure a fully resourced and well-designed commencement for Great Cobar.

The outcomes of the quarter have delivered Peak at 1,379 meters, which is a great outcome relative to historical outcomes for Peak as well. We definitely believe the business is in the right direction, and we’re going to continue to focus on that as we go forward with the program we have. Underlying that is we’ve actually had improvements on our truck payloads by 16%, which is part of our productivity project. We’ve also seen our productivity project sort of improve our availabilities in and around 85%, which is our target. For our critical equipment, the focus remains on improving our utilization of our equipment over the coming periods through recruiting the right people and making sure we’ve got people on the job. These actions have all resulted in a reduction in cost per tonne.

As we’ve highlighted before, that 14% reduction is only the first step in the right direction. We have a clear plan through our productivity project to get down towards $100 a tonne, and it’s very much built into the KPIs of our people to deliver that. We have a plan to do that. In terms of our unit costs, as we sort of said, it’s a step in the right direction. In recoveries, we have continued to improve with the delivery of very good quality ore coming from Federation. I want to call out some key numbers here: 85.5% zinc and 88.4% for lead, which is some of our highest recoveries in zinc that we’ve been able to see through the processing plant, which is an amazing result from the plant.

We’ve still got many, many, obviously, projects underway, which we’ll talk to you later, which will continue to improve these recoveries based on what we’re installing around the plant. Overall, the productivity improvement is delivering our results and setting us up for success as we move forward. I’ll move on to the next slide, which is around Federation. We’re really happy with the delivery of Federation performance. We’ve basically continued to see step change in our development, 31% higher, and that’s very much in line with where we want to be now for development. Hopefully, we can even beat that going forward at the same cost with the same resourcing. Definitely, the ramp-up has been very much a positive for our business. Similarly, you can sort of see the ramp-up in our tonnes. It’s been very much a great result for the business.

These are the commitments we made to the market and the investors, and this is what we’re delivering. Overall, although that’s not on the slide in the pack, the mining cost per tonne is around $217 per tonne. We don’t have a benchmark because it’s the first quarter of results we can actually use that cost per tonne. Just as a comparison, we had that against our budget of about $326 per tonne, so quite a substantial, over $100 per tonne difference, better difference that we’re achieving right now for the business at Federation. We expect that to continue to go down in a cost per tonne basis over the coming quarters as we continue to ramp up our tonnes in line with our plan.

Like I said, the exciting thing for Federation is we’re definitely ramping up, and we’re ahead of plan in our volumes, and we expect to deliver that over the 12-month period. I wanted to state now just because we’re reporting Federation as commercial operation, I wanted to stop and take stock of what we’ve achieved as a company around Federation. It’s been a very strong project execution and operating ramp-up. It’s important we stop and pause and sort of call this out to our investors to really think about where we are as a company and what we’ve delivered. Without going through each one of the dot points on the slides, what’s important is the ore body was found in April 2019. There’s been a bunch of studies done, and exploration decline commenced in 2022.

After refinance was secured, we recommenced a development in August 2023, followed by progressive achievements, as you can see on the page, all in line with the commitments we made to investors. We said we’d go after, and we’ve achieved those and allow us to really deliver our commercial production this quarter. I think it’s important that we recognize the team efforts for managing this budget from greenfield exploration to commercial production in such a rapid time and done it very, very safely. No doubt, we’ve had lots of headwinds along the way, like any project. From a company point of view of Aurelia Metals Limited, we’ve delivered that in line with what we committed to the market, which I know is not normal in this industry. I want us to celebrate that as a company and recognize that for our investors.

FY2026 and beyond is really focused on ramping up the business and continuing to unlock potential upgrades to the resource reserves and production targets as we push the decline down deeper and collect more results from infield drilling and provide confidence to our models. Similar to what we’ve done in the upper zones of the ore body, we’re going to continue to progress that into the lower zones, deeper zones, and hopefully be able to provide that information as we progress to unlock further potential for the business. It’s been great to see Federation West Deposit also feature in our story going forward in our Mineral Resource and Reserve (MRA) report, which is exciting for us on the potential of what’s actually at depth and also what’s around the main ore body for Federation.

We’re very excited about where Federation’s going, and I really want to take the opportunity to sort of call it out to really reinforce, you know, we’re now building Great Cobar, and I wanted to lead into if these achievements were done, I want to sort of reinforce the credibility of us as a company to deliver these projects, which we’ve now kicked off with Great Cobar. On the following slide, you know where we are with the Great Cobar as a growth project, capital expenditure, and scheduled progress is on track. I know it’s only early in the project, but realistically, all the key aspects of the project are looking in the right direction. Our development meters, as I’ve highlighted earlier, are definitely in line with the plan and ramping up. We actually have very good confidence over the potential of Great Cobar.

Conditions are good, and the sequencing is getting done well. If you look at the plan on the actual PowerPoint presentation, you can sort of see the purples are Quarter Two, and the greens are Quarter Three, and blues are Quarter Four. Beyond this financial year is red. Why it’s important that the purples look a bit everywhere is we obviously want to maximize the efficiency of our operation by creating working phases. Our jumbo can be operating, our bolting can be operating, and our loading and mucking can be operating all in sequence so we can optimize the performance of this area. We’re very happy with where we are, both surface and underground, and we’ve already started our early engagement with the raise bore contractors to secure availability and pricing for construction of the air raises, which will be in FY2027.

The key message is our growth project for copper is well and truly on its way now and very exciting for us as a company to leverage what we learn in Federation of all the key milestones we’ve delivered. We believe we can do the same with Great Cobar project. Like I said, it’s not the norm for our industry, and I really want our investors to understand as a company, we believe we can do that. The other projects, obviously, which are very important to us, will deliver our processing tonnes and targets of 1.1 to 1.2 million tonnes and allow our strategic aspiration, really our strategic target of 40,000 copper equivalent tonnes in FY2028 to be delivered. Our tailings and process water management is very much on track. The capital we’ve deployed still allows us to be commissioning Q4.

Some really key milestones around the tailings and process water management have been that we’ve been designing the thickener tank overseas. It’s now been designed, it’s been constructed, and it’s been shipped to Australia. The civil works will be underway to get ready for that to be installed and commissioned as per the plan. Our tertiary ball mill will improve our copper recoveries, especially as we move to a 50% copper ore coming into the business in the next couple of years. We’ve actually repurposed the mill, as you recall, from DARGS. It’ll be shipped up and installed into the plant or actually on the outside of the plant and allow us to really grind the material to improve our recoveries. That’s still on track, so is the capital for our commissioning in Q4. Lastly, our crushing and materials handling, that work is underway as well.

The benefit of the crushing and materials handling is really around providing better throughput. If we can take some of the oversized material out of the equation and allow the plant to run at a higher capacity than is currently being achieved, we can get more throughput through and deliver significant more value. All of those projects will give us our 1.1 to 1.2 million tonnes capacity, and they are all working very much in line with our plan, etc. That’s the summary of where we are with our process plant upgrades to deliver our growth. In terms of our Mineral Resource and Reserve report released today, we’re pleased to see that we’ve been able to report an increase, a 12% increase in growth in our resource, a 17% increase in growth in our reserves, and an overall increase in our production target for the business.

The current MRA results are very, obviously, very copper dominant. As we’ve highlighted throughout the year, the observed change in orientation of the Federation deposit has meant that we’ve had to change our mining approach and increased focus on our infield drilling, which has been done successfully, hence the ramp-up and hence the meters we’re delivering at Federation. The results of the mining of the upper levels have confirmed the contained metal is very comparable to the 2024 mineral resource estimate for the upper levels. As we continue infield drilling and it is undertaken in the deeper zones of Federation, the upper zones reconciled essentially have strong potential for the upgrades to the mineral resource reserves and the production target estimates. Our priority really remains on these infield drilling results and unpacking the potential of this deposit.

What’s also important is the Federation resource also remains open at depth and in numerous directions, and drilling these areas will continue to be part of our program exploration, which we’ve done over the last period of time and will continue to. We’re very excited by what we’ve been able to put on the table for our resource reserves, and obviously, still work to be done. Obviously, definitely, I think we’ve got the right plan and the right sort of approach to providing a long-term value for our shareholders. We’re going to move to the next slide on the exploration update. Exciting news we released last week on Nymagee over to Andrew. Thanks, Andrew.

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Thanks, Bryan. I’ll just make a comment on MRA and production target. Obviously, release is going out today. We don’t expect anyone’s read all 159 pages of it, but it’s long and there’s a lot of work that goes into it. I’d particularly just like to acknowledge the work of our competent people. They’re listed on page 11 of the release, and an enormous amount of effort has gone into giving you those results today. As Bryan said, they’re extremely good. Just to touch on a little bit there, you know, peak copper, 19 million tonnes of inventory at 1.8% copper, including 17 million tonnes in new Cobar, including about 11 million tonnes in Great Cobar at 2% copper. The numbers everyone would love. Lead zinc, it’ll, you know, 11 to 12% lead zinc combined at Federation is certainly a valuable ore.

Anyway, turning to exploration, I particularly just want to highlight one thing we’ve been working on, which is Nymagee. You may have seen a release that went out last week on the 16th of October on our Nymagee drilling. If you haven’t seen that, I’d encourage you to go and have a look at that release. It has more details than what we’ve got in this slide here. The slide on page 12 just deals with this at a high level. If you’ve been through MRA so far, you would see that Nymagee, we’re quoting 3.9 million tonnes of material at 1.7% copper with lead and zinc and silver. Importantly, that’s up 70% on our 2024 MRA.

If you have a good memory, you’ll remember I had set a target to our exploration team to try to get to 5 million tonnes of ore, the intention being that I kind of feel that that’s about a number that allows us to justify a mine. We didn’t get there, but we got awfully close. The 70% upgrade is extremely positive. The other pleasing piece is this drilling we released last week didn’t get done in time and assayed in time to flow through to that MRA. This is all in addition to what we’ve put out today for the Nymagee resource. There’s three things, particularly from this drilling, that I’d just like to draw your attention to. The first one, as we noted on the slide, we discovered two new lenses with this drilling, both really quite interesting.

Laser lens, as we’re calling it, about 200 meters further east than Nymagee North. It’s not a position where we’ve seen mineralization before. Some excellent geological work went into targeting that, and we’ve certainly got plenty of follow-up to do on that. The other important lens discovery then is Metropolitan, we’re calling it, which is named after the local pub. It’s between Nymagee Main and Nymagee North. One of the things in order to get a mine up in Nymagee is to try to get continuity. Certainly, being able to try to see a join between Nymagee North and Nymagee Main would be extremely positive to that. Nymagee, the struggling we’ve had at Metropolitan lens, has certainly helped in that regard and further follow-up required. Other things that we flagged in the release, Nymagee North drilling to the north of the Nullan ore, we extended mineralization by about 50 meters.

In the great hole, we’re talking 2.7% copper, 1.8 grams gold with zinc, with lead, with substantial silver. An excellent hole to extend to the north there. I mentioned gold. That’s the third piece just to touch on. We haven’t seen a lot of gold in Nymagee Main, really not much at all. I think the MRA has 0.1 grams per tonne gold in that three-odd million tonnes of material. We’re now seeing some very good gold numbers in this drilling, and it bodes well that we’re actually moving into a higher gold tenor part of Nymagee. In short, strong quarter for exploration. We’ll continue with down-hole EM on Nymagee North, and we’re drilling at the moment on Nymagee Main, targeting some of those down-hole conductor plates below the Nullan ore. Passing on now to Martin.

Martin Cummings, Chief Financial Officer, Aurelia Metals: Hey, Andrew. We’ll just turn to slide 13, which is the balance sheet. As you can see, we finished with cash of just over $88 million at the end of September. Along with our undrawn loan note, which did step down slightly to US $23.3 million this quarter, that takes our liquidity to around $124 million. During the quarter, we did have to put up some more restricted cash, so that financing cash flow in the waterfall of around $1.9 million that we had to lodge as part of the Traffic Euro facility. Now we’re up to $19.6 million of restricted cash. That is not included in the cash flow on the waterfall. I’ve talked before about our process to refinance our facilities, and that’s underway. We are on track to close the revised facilities during this financial year.

When we do that, that $19.6 million, along with any future restricted cash, will be able to be returned. In terms of what’s happening with restricted cash, the next milestone is in the December quarter where the $19.6 million will actually increase to just over $27 million. That’s in line with the schedule of cash backing. In terms of the other movements, as Bryan said, we’re now reporting Federation as an operating asset, and we’re reporting it as part of the Cobar region. The Cobar region generated $24 million of operating cash flow. The way we represent this chart, though, is that we show it after sustaining capital. $8 million contribution for the quarter. That did, as some of you have noted, not include a build-up of concentrate that we had during the quarter.

There was around $10 million of realisable value from concentrate that we hadn’t sold at the end of the quarter. Most of that was zinc concentrate, and we’ll look to move that concentrate during the December quarter. Within the result, Federation did contribute a modest operating cash flow now that it’s a commercial production operation, and that will ramp up during the year. Overall, when we factor in the sustained capital, it was slightly negative. That sustaining capital is supporting our future production. As the mine builds up its tonnes and as we build up the throughput at peak, you know that operating cash flow will increase. Bryan’s taken us through the growth capital projects. All I really need to say there is that the spend on those projects is tracking in line with guidance and in line with our budgets, as is the exploration spend.

In the working capital, there was a net outflow of $5.5 million for the quarter. Predominantly, that was driven by when we pay our annual incentives to staff. That happened in September. There was also a little bit of trade creditors unwind that I talked about last quarter, predominantly being the incentive payments. Finally, I’ll just talk about all-in sustaining costs. You’ll notice that we’re not reporting all-in sustaining costs in the report. We’ve been talking for a while about the fact that all-in sustaining costs was a less relevant metric for us in terms of assessing business performance. We haven’t guided on our all-in sustaining costs since FY2024. We did guide this year in dollar millions, and we reported that in the report. What we will do this year is to report our performance based on a dollar per tonne metric.

As you can see, for the Cobar region, it was $343 a ton. That represents all costs, all operating costs right through to royalties, concentrate, refining, transport, etc. For the group, with the addition of care and maintenance and corporate costs, it was $367 a ton. That really will trend down, particularly as Federation volumes ramp up and as the throughput goes through our plant. To give you a sense of how that $367 per tonne compares to our guidance for this year, if you took the midpoint of our group operating costs and the midpoint of our tonnage volume for the year, you’ll get a dollar per tonne of around $328 a ton. As you can see, $367, we are above it. As Federation volumes increase and our throughputs increase, we will average $328 for the year. We should be finishing the year lower than $328.

In summary, it’s been a really strong start on production and our cost metrics, and that is all supported by our ongoing strong balance sheet. I’ll leave it there and hand it back to you, Bryan.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Thanks, Martin. Thanks, Andrew. Look, just to wrap it up, our focus area is really developing our copper growth options towards 40,000 copper equivalent tonnes in production in FY28. The key focus areas have not changed, to be honest. We still want to focus on maintaining our disciplined capital allocation, which we’ve been doing and doing successfully. We want to continue doing that. We’re improving our productivity and maximizing cash generation in our business, which we obviously are self-funding our projects and building our business from within, which is a great position to be in. We want to continue safely ramping up Federation and extending the mine life through the work we’re doing with the infield drilling and the resource drilling, which is, once again, a good opportunity for us as a company to do that. We’re going to continue to push that really hard.

We’re getting the increase in the results now in volumes. Once again, also make sure we safely deliver the Great Cobar project along the milestones that we committed to the market in the release of the project that was done early this calendar year. Focus on our pipeline of low-cost growth options. Andrew obviously talked about one just now with Nymagee. We’ve got a very good exploration program planned for this year to really test a few key targets across the region. We always excel by the high prospectivity of this region, and we always talk about it. The best way to substantiate it is by putting holes into the ground, which is what we’re doing.

Importantly, we obviously have attracted some really good people and we’re retaining really good people, but we’re going to continue to attract people as we grow our business in the region and deliver the results we’re being committed to. Overall, we’re happy where we are as a company in terms of our delivery for Quarter One. It really sort of supports FY24 and FY25 results. Those foundations have allowed us to continue to build the company, deliver reliable results, and we’re very, very good sort of performance as a company, and we see the future looking very bright for ourselves. Without further ado, I’ll hand it back to you, Rocco, to get you to questions.

Conference Moderator: Yes, sir. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Today’s first question comes from Paul Cayner at ORD Minette. Please go ahead.

Yeah. Hi, James. Thanks. Thanks for taking my questions. I’ve got two here that’s around the updated resource and reserve. Firstly, at Federation, tons and tons of grades have come down there, which shouldn’t be too unexpected, I guess, as you mentioned, given your previous commentary around the improved ore body knowledge. I’m just wondering, at this stage, how should we think about FY2028 production? Obviously, that aspirational target has been provided. From memory, that’s sort of based on the old mining method. Is there a potential that FY2028 follows a similar trend to FY2026 and FY2027 after you get more infill drilling, or is there something, I guess, giving you confidence that that ore body does widen at depth?

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Yeah. Thanks, Paul, for the first question. In terms of our outlook, we’ve made mention in our report that our guidance numbers for FY2026 and our outlook for 2027 and 2028 remain unchanged. We’ll continue to do more work on that as the drilling progresses as we get deeper. The infield drilling will give us more confidence on our numbers. At this stage, we don’t foresee giving you any different outlook numbers at this point in time. It’s all going to just come down to, hopefully, once we push the decline deeper and get those drill holes in and get more confidence that there’s always an upside potential to these numbers as well. At this stage, Andrew, any additional comment to that at all?

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Probably just one comment, and I won’t comment on the guidance that flowed through. Now, we’ve got the models through into our life and mine planning work. One thing which we did do just to see where we were losing tonnes, and you’ve called that out, Paul, was just to look at where vertically that was the case. Certainly, in each of the commodities, the tonnes are given up at depth, like right near the bottom. Part of that is we just don’t have the drilling there for the new search that we’re doing at the search ellipses we’ve got at that point. You know, as Bryan says, we’re very hopeful that as we continue to get that drilling in down there and at depth and also the infill on the deeper areas, those tonnes come back just as they have in the upper levels.

Interestingly, just to call out gold, we’re seeing commodities often be gold, one that contained isn’t. That’s because in the upper-level drilling, we’ve actually added gold. The hope is that we see more of that as we drill and understand particularly gold, which is a bit nuggety, you know, with greater detail as we go to depth.

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

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Yeah. Look, for Nymagee, we set some internal targets, but Andrew did talk about earlier, but really, it’s going to come to economics. Once we obviously keep working on the drilling for the resource in that area and the potential reserves, we’ll run that through our economic models. The upside for Nymagee, obviously, is there’s a plant less than five kilometers away, which can be restarted for a lower amount of capital. I think it’s fair to say at this stage we just need to get the drilling work finished, and then we can sort of understand what the economics look like.

Like I said, I will highlight, though, the economics are very, very favorable in terms of, you know, downstream processing just being around the corner or even backhauling trucks back to Peak if it made sense to us as well to send material to Peak if we thought that was the right place to send it. We just need to get the economics based on the commodities and the grades and things, Paul, to finalize that, I think, first.

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

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: No, Paul, we’re not seeing anything. Bryan called out the recoveries we’re getting that are strong, but they’re kind of what we expected through the feed study. It’s a good ore that processes very well through the Peak plant.

That’s great. No, thanks for that, Andrew. Bryan, appreciate it. Cheers.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Thanks, Paul, for your questions.

Conference Moderator: Thank you. Our next question today comes from Adam Baker at Macquarie. Please go ahead.

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

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Yeah, sure. Look, thanks, Adam, for your question. The current grades for the quarter are really a representation of where we’ve been mining in the sequence. Angus is online. I might hand it over to Angus to talk about how he sees the remainder of the year based on the grades. Angus, over to you.

Angus Wyllie, Cobar Regional General Manager, Aurelia Metals: Yeah, thanks, Adam. Right now, we are focused on copper in the next couple of months. I’m dropping three copper stopes this week. It really comes back to the sequence and where we’re mining at the time. There’s actually quite a lot of copper to come out of the Peak side this year. We’re focusing in on some of those stopes at the moment, and we’re continuing our sequence over at Chesney, which is working well. We will have low copper in the first quarter, but we certainly will pick that up in the next couple of quarters.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Adam, on top of that, the lower copper has been offset by the higher gold grades as well. It depends on the ore feed we’re providing. We’ve got the gold grade benefit and the copper offset, obviously, on the lower side. As Angus said, that’ll sort of smooth itself out on the quarter-by-quarter position on the mining sequence.

Martin Cummings, Chief Financial Officer, Aurelia Metals: Okay, thanks. Just on the resource and reserve update, I mean, good to see an increase in both reserves and resources there. No doubt, a lot of that was from Great Cobar and in addition to the higher-assumed metal prices. It looks like you have had increasing in the drilling and model updates to both the reserves and resources. That’s a net-net improvement, accounting for all your different ore bodies put together and incorporating, I guess, the losses that you’ve had at Federation from the reevaluation of the ore body. You still kind of come out at a net positive. Is that correct?

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Yeah. You saw resource, reserves, and production targets net positive. Those numbers are based on, obviously, depletion this year across the board, also based on infill drilling and drilling program in general, which is a positive across the board. We’ve got the economic parameters too, which are, you know, we’ve got some better prices in copper and gold, which we’ve been able to sort of take the benefit of. One of the biggest drivers for us is if we can continue to get our productivity in the right direction and get our cost down, which we’re obviously, you know, we’re striving to do. That opens up more potential for us as well with our economic parameters to put more on the table for our reserves and production targets going forward.

Martin Cummings, Chief Financial Officer, Aurelia Metals: Okay, thank you. Thanks for taking my questions.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Thanks, Adam.

Conference Moderator: Thank you. Our next question today comes from David Coats at Bell Potter Securities. Please go ahead.

Thank you. Thanks, Bryan, Paul, and Martin for the presentation this morning. Just quickly, congrats on the good quarter and Federation year’s commercial production, well done. Just on the production and sort of productivity metrics you’ve been reporting, I just wonder what the underlying drivers you’ve been at or if you can identify any underlying drivers for those metrics. Is it people? Is it extra gear? Is it getting kind of critical mass on the number of headings? Can you just give us a bit more sort of depth into that?

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Yeah, sure. Thanks, David, for the question. In terms of peak productivity, it’s really been a focus on getting our maintenance availability up to a certain level. We’ve been changing out old gear that probably wasn’t maintained excellent in the past. We’ve been having a refurbishment and overhaul program and buying in new equipment and selling out old gear as part of the driver. In addition to that is just resourcing up with obviously Great Cobar coming on. We’ve had traditional resources on. Obviously, that’s a challenge when you’ve got a mine still operating in the south side and Great Cobar kicking off. Resourcing, getting utilization up has been a focus, and also getting our payloads and getting our sort of sequencing operating phases available.

One of the big milestones we’ve got this financial year is actually hauling into some of our workings, connecting two of our, if you call it, mining areas, which will reduce our hauling times and our sequencing of getting people into the operations from a utilization point of view. That’s also been a big focus as well to basically haul through a pretty deep mine and actually reduce our time wasted and improve our utilization. There’s a host of things. Not one particular point, but definitely rate availability and utilization have been the focus, which is core to mining, as we all know. There’s just a bunch of things, David.

Nice one. Thanks, Bryan. Just following up on the earlier question around Nymagee and Hera, just wondering what your sort of key opportunities you’re considering for the Hera plant and, you know, any timing or catalyst we should be keeping an eye out for through the rest of this year and into next year might give some direction or some clues on what’s going to happen there.

Yeah, look, I’ll just answer it briefly and maybe hand over to Andrew as well. Right now, we’ve got to continue the exploration program to understand Nymagee. We obviously will continue to look around the region to see if anyone wants to, you know, if someone needs a plant and wants to sort of engage with us around the use of that plant that can actually give us economic benefit and sort of whether it’s a tolling arrangement or something else, we’ll be open to those opportunities for sure. Realistically, the plant’s costing very little beyond co-maintenance, and you know, we won’t be spending any money on that until we have a clear execution path going forward. If Nymagee is something that goes forward, you’ve obviously got an approval process to run through, project work to run through.

We’re sort of talking several years away before Nymagee would actually, you know, be an option for us to put for the Hera plant. There are other options around the region that, you know, we’ll continue to talk to. Andrew, is there any addition to that at all for Hera plant question?

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Yeah, it’s just worth noting that we’re constantly looking at a range of potential feed sources for our two plants in the region, within our own portfolios. Nymagee is one. We’ll do some work this year on Hera, the mine, and there’s still ore in there. Obviously, with gold price running north of $4,000, copper price up, and lead zinc prices up, we do need to continually check whether it makes sense to pull some tons out of there. As mentioned earlier, we’re looking at Nymagee. We’ve sort of got this target that we’re working towards that also is impacted by price to a degree. We’re looking at that. Within Peak itself, there’s a number of ore body opportunities. The most obvious is Great Cobar. We’re on our way there. Something like Cladstone in that region could also come in.

Now, it’s running 2.5% copper in our latest Mineral Resource and Reserve (MRA) report. There’s a lot of work to do to think a bit about what the feed looks like and what the mix of processing and mining looks like going forward, which we’ll continue to work through this year.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: That will be offset, obviously, as we look at Peak once we get a Peak expansion or, you know, so it’s the 1.1 to 1.2 million tonnes. We find out what’s happening at Great Cobar. We’ll know more around the resource potential there and at Federation and Nymagee. We’ve just got to look at all those options to see, you know, we have the plan available. What’s the best way we can use it? That’s obviously alive, and as Andrew said, we’re looking at options continually around that as part of his portfolio.

Nice. Okay. Thanks, Bryan. Thanks, that’s Andrew. That’s great.

Thanks, David.

Conference Moderator: Thank you. Our next question comes from Paul Harris with Mullis. Please go ahead.

Good day, guys. Yeah, some more questions on the resource reserve, if I may. Just to call out a couple of things from the document, which you’re right, is quite long. Just with regard to the Peak operation resource, I can see here two and a half million tonnes reduction through no prospects of reasonable economic extraction. I mean, that’s obviously a fairly chunky number. I just wanted to get an understanding. Was that in the 2024 resource and has since been assessed as you’ve got no chance of ever mining it? Or is this something to do with a fresh JORC code? Just take me through that change, please.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Andrew, do you want to take that question?

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Yeah, no problem. I won’t speak to specific numbers. Paul may have to give us, I don’t have them right here in front of me. There is an element of preparing ourselves for New York and reasonable prospects test. There’s also an element of Peak transitioning South Mine into the new Cobar mine with the Great Cobar development. Some of that ore was quite spread out, and we’ve taken a fresh view of what’s the possibility of us doing that while we’re there mining in South Mine. We’ll continue to review those inventories. I mentioned price is one thing, but also, you know, if we’re able to mine South Mine concurrently with the new Cobar when we’re in Great Cobar, some of that material may come back.

We don’t want to end up with a position where we’re sitting with a large resource and we say we’re not mining in South Mine anymore. We’re being quite prudent in pulling some of that stuff out.

Okay, thanks. Just to unpack Federation a little bit more, Bryan, I just want to be sort of clear on what’s happened there. You did flag this back in January that the ore body was looking a little different than you had expected. I think, correct me if I’m wrong, that you said that you sort of have the same sort of metal in the upper levels, I think. We’re seeing a 9% drop in tonnage overall and a 20% drop in contained zinc and lead overall. I just want to sort of get my head around how you can have the same metal, which you might expect from perhaps lower tonnes but higher grades, but then have a significantly lower metal concentration sort of globally there. Should we think about this as being sort of two halves after a lower?

Can you just unpack that a little bit more, please? This is going to be nearly half of your ore feed by the time we get to 2028. I think it’s worth sort of laboring a bit if you can.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Yeah, sure. I’ll make some comments and I’ll hand over to Andrew for some additional comments. I think the key point is we’ve sort of said that for the upper section where we’ve been able to put where the decline was in place and we’ve been able to put the infield drilling in place to understand the complexities of the ore body based on what was originally planned and what was actually identified in the ore body. We’ve been able to hold the payable metal in that area.

The limitation or the numbers you’re seeing different are really the fact that we just need to push a decline down and to get to a point where we can do the drilling, get the results, and then obviously, rather than having a model which sort of takes the top and is what it looks like and here’s the bottom based on the assumptions we have now, is to put the extra effort in pushing the decline down, get the infield drilling to the same level of magnitude of effort we’ve done for the upper zone. We can look at the full potential of what the ore body has to offer. At the moment, it’s all the potential needs to come from the drilling, and that’s what needs to be unpacked as we move down the decline effectively.

Andrew, do you want to make any additional comments to the question at all?

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Just some minor comments. Paul said, you know, we’ve sort of turned from a kind of more amorphous two domains, east-northeast trending mineralization to still having that trend, but then modeling that as a series of kind of north-northeast lenses. With that, they become narrower. With that, we’ve included more dilution. We’ve had a bit of an impact then on grade. As I mentioned earlier to, I think, one of Paul’s questions, we’ve also, when we look at it, given up quite a few tonnes at the bottom, which is really an information modeling kind of where we’re at situation. If you look on, when you get a moment later on, on page 34 of the MRA release, I think there’s a picture of the side by side of the ore bodies, and you can see there some of those tonnes that have been given up at the bottom.

As Bryan’s mentioned earlier, we’re definitely hopeful as we push the decline down to that infill, it becomes a little like what we’re seeing at the upper levels. It kind of says that an upper-lower thing, in some ways, yes, it is. We hope, we expect, but we’ve got to get down by pushing that decline down, getting drill cutties, and doing that infill.

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

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

All right. Following on from that, at an asset level, what does that mean for your operating costs and your CapEx? The ore body’s not quite the same geometry. Is there more development required now to set these stopes up? If the stopes are going to be narrower, does that mean your mining cost has potential upside risks? It can’t be all your old numbers are still entirely valid given what appears to be a reasonably meaningful change in the nature of the ore body.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Yeah, so the original, obviously, in the upper section, we’d already seen that. We’d already put the development meters in there because, effectively, the meters you’re driving and the way we designed the upper section has been meters through the ore body rather than at the end of the ore body coming to the stope. Obviously, as we were to draw, we take the stope. There’s pros and cons for the ore body in terms of what we’re, as we’re developing it and how we extract it, etc. At this point in time, we’ve got to do more work, obviously, as we get more information. We’ve only just got the Mineral Resource and Reserve (MRA) report finalized, so we’ve got to go through the next process and see what that looks like in the future years beyond FY2028 as we get the information through.

Realistically, I don’t see a substantial increase in terms of what you’re alluding to. I think it’s just going to come down to doing more of what we’re doing now, that is, as we set up the decline, we’ll move the decline if we need to slightly to reorientate against where the ore body is. We’ll set up a development accordingly to basically maximize ore recovery for the sort of meters that are required. I think the overall plan is different from a, you know, as you can see from the slide or the page that Andrew Graham referred to. We’ve already been dealing with that in the top section, and we haven’t seen a substantial increase. We’ve just got to continue to get the information to model it properly as we go down.

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

Obviously, we’ve increased that. We have increased the drilling on the infield drilling. That has been an increase to the cost. We’re always going to do infield drilling, but the magnitude of it is actually going to be an increase for us. We do a lot of infield drilling at Peak as well for the ore bodies because they are complex polymetallic ore bodies. Yeah, definitely, there’ll be an increase in the costs of infield drilling to help us get more confidence on the ore body as we move down. That should pay itself back, though, in terms of the benefits it gives to our mine planning, to our developing through the ore body and getting development ore out of the mine into the plant. It really comes down to the geos and the mining engineers working well here to design it well.

That’s probably one of the areas that will increase, and that is the infield drilling to delineate the ore body better.

Okay, great. I guess a global sort of question coming arising from this issue at Federation is to the extent that it’s, I guess, it’s a technical matter, a scientific matter that you’re trying to get on top of here. What are the lessons or the takeaways or the read-throughs for, say, the drilling work you’ve done ahead of the planning and development of Great Cobar?

I acknowledge they’re two different ore bodies, obviously, but regarding what level of drilling you think you need to be confident the mine plan’s going to still hold up when you get there, etc?

Martin Cummings, Chief Financial Officer, Aurelia Metals: Yeah, sure. Andrew, do you want to have a response to that one? I’ll add some stuff onto it.

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Paul, I think you, in some ways, answered your own question. In that they are very different ore bodies. There’s certainly value in being underground, and we’re seeing that at Federation. We always intended on pushing that exploration decline in as quickly as we could. The ore, you know, we modeled as being very valuable. We’re still modeling as being very valuable. It pays to be underground and mining and pulling that to make cash flow. Great Cobar, a little bit different. Obviously, we’re in a new Cobar mine. It’s an ore body extension of an existing mine. We have all of the information from that existing mine. We have drilling through that. It’s much more continuous, much easier, I suppose, to model than at Federation.

We’re not, you know, modeling, well, we are modeling five products, but the reality is the bulk of it’s copper gold as opposed to Federation where you’ve got that interplay of all of those commodities through polymetallic. Very, very different. We’ve also taken a relatively conservative kind of view of what was needed to get across there and make money. If you looked at our study releases, you see we’ve included a relatively small portion of what we believe is the overall, which is more than enough to justify the capital to get across there and to put a shaft in. That’s the other interesting piece. We just need to develop, you know, one of the big kilometers across there and put a shaft in, and then we’re away. It’s a very different risk proposition. It’s a very different ore body.

We’re certainly confident with what’s over there to Great Cobar.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Yeah, I think what’s important there, Paul, is the assumptions we’ve used have been quite conservative for Great Cobar. We’ve taken a lot of learnings out of Federation and applied them to Great Cobar. I think our development assumptions, our layer assumptions, using the existing information we have for an ore body that extends beyond the previous ore body. New Cobar, Chesney, and all those regions are very, very close. Effectively, the learnings have been applied into the model effectively and in a conservative way.

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

Angus Wyllie, Cobar Regional General Manager, Aurelia Metals: Yeah, I guess there’s two parts I’ll touch on. On the loan itself, given it’s undrawn, the facility amount just drops down each quarter. What we’re reporting as the loan amount at the end of September is $23.3 million. There’s been a $700,000 amount on that in May and August. From there, it essentially drops down in one-eighth over the remaining term of eight quarters. You probably have a calculator in front of you. We’re at $23.3 million divided by eight, which is how it will step down from now. The other piece is the performance bond. You obviously can’t repay a performance bond without returning it. The cash backing is the way that we simulate that facility size dropping down. We’ve put through to date $1.94 million against the Trafigura facility. That will then start to step down at just around $7.7 million per quarter from here.

That was the comment I made about cash backing going up to a bit over $26 million at the end of December. The other amount is above and beyond Trafigura. There are other bonds that we obviously couldn’t issue in the Trafigura facility because it was at its limit. That’s what the other restricted cash is.

Yeah, understood. Okay, thanks, guys.

All right. Thanks, Bryan.

Thanks, Paul.

Conference Moderator: Thank you. Our next question today comes from Anthony Barridge at Platts. Please go ahead.

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Yeah, good day. I just noticed, just in terms of the copper macro, like with our data is showing exploration and M&A spend are already on, you know, over a decade high. I’m just wondering whether you’re seeing like some kind of structural shift happening perhaps in the copper macro, which is benefiting you guys now and into the foreseeable future?

Bryan Quinn, Managing Director and CEO, Aurelia Metals: I’m really straight into what you actually, the question you’ve actually asked. Can you repeat the question? Sorry. It’s cutting in and out.

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Sorry, just wondering whether you see a structural shift happening just in the copper macro at the moment, which could be benefiting you guys now and into the foreseeable future, given when our data shows M&A and exploration spend are already at multi-year highs in the past year.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Yeah, sure. Okay, thank you. I’ve got the question now. Yeah, look, I think, you know, we’re very bullish on copper and the fundamentals of copper. I mean, if you look at how many new copper mines are being developed around the place, there’s not a lot. Grades are decreasing in a lot of mines that actually do have copper, or they’re getting deeper and costs are going up, etc., etc. One of our, from a portfolio point of view, moving to, you know, in the next couple of years, 50% of our ore being copper ore overall is a positive for us. I think the fundamentals support that. In terms of M&A activities, it sort of repeats the same thing. The reason why there’s M&A activities happening is because effectively, people can’t find the copper they’re looking for. If you can’t find it, go buy it.

Obviously, that’s the nature of what’s happening around the market right now. As the people have got wealthy out of the gold revenue and gold prices right now, they’re obviously sort of merging into copper and spending their money on copper where they can. I guess in terms of M&A, it’s probably going to be more happening than less, effectively with the current move towards, you know, the decarbonisation, you know, and the copper demand continuing to move in the right direction for us. We see it being positive for our outputs, for sure, and the fundamentals behind copper.

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Sure. Just one more thing. I know that the lack of decent discoveries and the underinvestment in exploration has often been cited as a big cause of what’s the fundamental issue with the pipeline in copper. I mean, our data showing exploration is at an over-decade high last year now. Do you think that things are kind of picking up for the copper industry, or could it still be a long way behind given the amount of time it takes to develop these things?

Bryan Quinn, Managing Director and CEO, Aurelia Metals: I guess the two things is you can spend more on exploration, you’ve got to find somewhere. A lot of the work on exploration is in regions where there’s known copper options. Why we like the Cobar region is we’ve got high prospectivity out there. There’s been X amount of mines over the last hundred or so years that have opened and closed. A lot of our exploration is focused on going drilling underneath where they were because we know there’s actually prospectivity there. There is a lot of increased spend in gold and in copper, and effectively, that’s good, but it’s got to be in areas where there is actually copper to find and the right grades.

There’s a lot of companies obviously mining the stock market with a sort of one-hit zone here, but if you look at what that’s got to compete with, it’s the time it takes to actually get the deposit formed and built and into an operation. It’s sort of five, six, seven, eight years, and that’s where the challenge actually is. Where it really has been successful is we’ve had Great Cobar sitting there. It’s been approved, and we did the sort of business case to the board and had it approved last financial year. We can get straight onto it and make it happen with good grades and good accessibility using our existing mines and infrastructure and do it at low cost.

A lot of these exploration companies can find things, but you still got a long time to get approvals in place, communities to accept the mine going in, infrastructure services. It’s all great devicing, but you’ve got to connect it to something. That’s a challenge a lot of companies actually have in the industry and where we’re placed quite well as a company in the Cobar region. A lot of the big mines, literally, the grades are dropping. The high grades being taken, they’ve got a higher cost per ton. They’re going deeper and deeper, and it’s getting harder and harder. The objective for us is to be low cost and have the ore in front of us and use our infrastructure we have to build our business. I think we’re in a good position to do that. Does that answer your questions?

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Yeah, that’s great. Thanks very much.

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

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

Angus Wyllie, Cobar Regional General Manager, Aurelia Metals: Thanks, Roy. It’s Martin here. I’ll take those. Silver is a small part of our revenue mix. We do actually report on it in the back of the report. You can see all the stuff around production there. It’s more just on a materiality level. Silver is around $10 million to $12 million of revenue for us in a $300 million-plus revenue mix. It’s not that we don’t like the byproduct. It’s probably just a fact of real estate. All the details are in the appendix of the report for silver. In terms of hedging, look, I’ve been fairly open with how we’re thinking about hedging. Right now, with prices where we are, we haven’t done any hedging lately. I don’t feel the need to do any right now. We’ve been using hedging as a way to protect our balance sheet for the capital spend.

As that capital spend rolls off, hedging becomes less relevant in terms of what we use it for, which is insurance to make sure we build our projects. As you know, we have a hedge book. We haven’t added to it lately. We will keep that tool in our kit to maintain.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Balance sheet, but right now I’m not rushing in to do any.

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: On your question, Roy, in terms of future reports, we can always add a line in to represent what that was for the quarter. There’s no problem with that. We’ll refer to the appendix just for the full details. There’s not a problem with that, especially as silver becomes more important, as you said, on a demand basis.

Martin Cummings, Chief Financial Officer, Aurelia Metals: Yep. Just another related question. What will Federation, what’s the impact on silver production of Federation mine coming on stream?

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: I don’t actually have that information in front of me. Sorry, Roy, I don’t have that information in front of me. Maybe we can get back to you on that one. I don’t have it directly in front of me, that level of detail, sorry.

Martin Cummings, Chief Financial Officer, Aurelia Metals: Okay.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Bryan, I can just make a comment on that. If you...

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Go ahead, Andrew.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: ...latest inventory releases, so reserve resource and production targets, silver only makes up six grams a tonne at Federation. As Martin says, it’s always nice to have a byproduct, but in the scheme of global silver producers, it’s quite small.

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Yeah, understood. Okay, Andrew. Thank you. That’s all. Thanks.

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Thanks very much for your question, everyone.

Conference Moderator: Thank you. Our next question today comes from Ashley Chan, a shareholder. Please go ahead.

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

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Thanks for your question, Ashley. Andrew, do you want to respond to that, and I’ll add some things to it as well?

Bryan Quinn, Managing Director and CEO, Aurelia Metals: Yeah. I’ll just comment as far as I can. Osmond Ex, there’s a history there, quite a long history, as you’d imagine, for most of the Cobar region deposits, which has them retaining 5%. It’s something we’ll continue to think about, engage with them, but we certainly don’t comment on what our intentions are in relation to joint ventures or other things.

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: What’s important, I think, Ashley, as well, is that we’ll continue to look at those optionalities all the time. If it makes sense at the right time, we’ll definitely look at these things like we do for any of our deposits and areas we have under our control. If it’s economic or commercial, we’ll definitely consider things. Thanks. Your second question?

Thanks. In the reserves and resources report, I think I saw something about you effectively have an eight-year mine plan target. The question I have is when do you see that will be likely to be a management performance metric or KPI to increase the resources or the mine plan target, sorry, from eight years to about over 10 years? Will it be in calendar year 2026 or calendar year 2027 or 2028? I guess it’s intertwined with when you are able to do more resource delineation. When do you think it would be a management target to do that?

Yeah. Look, we actually have management targets under our LTIs. Our LTIs are derived around us improving our sort of reserve base of the company, and it’s a reserve per share sort of increase. That’s definitely in our KPIs to increase that. Obviously, Ashley, we have to balance that out against spending money and cash that we don’t have. Our focus always is that sort of fine balance. How many years ahead do we need? What’s the sort of reserve per share outcome that looks like that makes sense commercially? For instance, we have enough production target to mine the next five years. As a company our size and with the cash flows we have, is that satisfactory or should it be 10 years? That’s a conversation we have with the board on a regular basis on what’s the right number and what’s the right target.

Back to your original question, myself and Martin and the other ELT members and anyone on an LTI for the company has 40% of our LTI tied to increasing our reserves per share. I hope that answers your question.

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

Thanks for your questions, Ashley.

Conference Moderator: Thank you. There are no further questions at this time. I’ll hand back to Mr. Quinn for closing remarks.

Andrew Graham, Chief Business Development Technical Officer, Aurelia Metals: Look, thanks very much for all the questions today and for the efforts the team has put in to prepare for this quarter. Obviously, the first quarter of the year is always the tough one as you finish the last financial year off. I think as you’ve sort of seen from the results of this quarter, we’ve come out of FY2025 very strong on a four-year basis, and we’ve continued that sort of strength into FY2026, and we continue to plan to deliver those results very strong. A special thanks to the team involved with the Mineral Resource and Reserve (MRA) report. A lot of effort goes into the Mineral Resource and Reserve (MRA) report from drilling, putting a drill rig in the right location through to the samples and the modeling that goes behind that. It’s a big report.

Like I said, with the level of information we have and the continued level we’re going to seek to, of the information we’re going to seek to build confidence in our plans going forward, I believe the company’s in a good position right now to really sort of deliver our targets and deliver the cash flows that sort of we’ve committed to the shareholders. Ultimately, it comes down to our people on the ground. I want to thank our workforce, including our contracting partners, for the delivery this quarter as it’s been for last quarter. Obviously, the focus is on safety. We’re doing everything else well. We just need to make sure people go home safely, and that’s obviously going to be paramount for our focus as a team going forward. Thanks for all the questions. Really appreciate it.

We look forward to presenting to you guys in the next quarter and also at the end of H1 for FY2026. Please go well. Thank you very much.

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

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