Earnings call transcript: Mineral Resources Q4 2025 sees strong liquidity and CapEx reduction

Mineral Resources Ltd (MinRez) concluded its fourth-quarter earnings call with robust financial performance, highlighted by significant liquidity and a reduction in capital expenditures. The company ended the fiscal year 2025 with over $1.1 billion in liquidity, while net debt stood at $5.3 billion. Capital expenditure came in below expectations, marking a pivotal financial strategy shift. According to InvestingPro data, the company maintains a GOOD overall financial health score of 2.95, despite operating with a significant debt burden. With a market capitalization of $302.13 million and a P/E ratio of 12.57, investors seeking deeper insights can access comprehensive analysis through InvestingPro’s detailed research reports.

Key Takeaways

• Mineral Resources reported over $1.1 billion in liquidity at year-end.
• CapEx for FY 2025 was $1.9 billion, below the projected $2.1 billion.
• The Onslow iron ore project achieved a run rate of 32.4 million tonnes per annum.
• Wodgina lithium operations recorded a 32% production increase.
• Iron ore prices have surpassed $100 per tonne, impacting market strategies.

Company Performance

Mineral Resources demonstrated strong operational results in Q4 2025, with notable achievements in its Onslow iron ore and Wodgina lithium projects. The company’s ability to manage costs effectively while enhancing production capabilities positions it favorably within the mining services market. The strategic focus on operational efficiency and cost management has been pivotal in maintaining its competitive edge.

Financial Highlights

• Liquidity: Over $1.1 billion at year-end.
• Net Debt: $5.3 billion.
• CapEx: $1.9 billion for FY 2025, below the $2.1 billion guidance.
• FX Gain: $200 million on US unsecured bonds.

Outlook & Guidance

Looking ahead, Mineral Resources plans to reduce CapEx to approximately $1 billion for FY 2026, with half allocated to sustaining CapEx. The company targets an increased production run rate of 35 million tonnes per annum at Onslow and expects lithium recovery rates to exceed 65% in FY 2026. InvestingPro analysts project positive net income growth this year, with additional exclusive insights and forecasts available to Pro subscribers. Get access to over 10 additional ProTips and comprehensive financial metrics through InvestingPro’s advanced analytics platform. Strategic initiatives include the potential refinancing of May 2027 bonds and exploring underground mining opportunities at Marion.

Executive Commentary

Mark Wilson, CFO, expressed satisfaction with the quarter’s outcomes, stating, "We’re very pleased with the quarter, and in terms of the operations, the continued performance of Onslow, the setting up of the business as we move into FY ’26." He also highlighted the company’s proactive approach to hedging iron ore prices, saying, "We’ve taken the opportunity to just start to hedge some of our volumes over the next six months to lock in some of that price gain."

Risks and Challenges

• Volatile commodity prices, particularly lithium and iron ore, could impact profitability.
• Potential supply chain disruptions may affect operational efficiency.
• Macroeconomic factors, including interest rate fluctuations, could influence refinancing efforts.
• Regulatory changes in mining policies could pose compliance challenges.
• Market competition remains intense, demanding continuous innovation and efficiency.

Mineral Resources’ strategic initiatives and financial prudence have positioned the company well for future growth. The focus on operational efficiencies and market adaptability will be crucial as the company navigates the challenges and opportunities in the mining sector.

Full transcript - Mineral Resources Ltd (MIN) Q4 2025:

Call Moderator: Thank you for standing by, and welcome to Mineral Resources Analyst Call covering today’s release of its June 2025 Exploration and Mining Activity Report. Your speakers today are Mark Wilson, Chief Financial Officer and Chris Chong, General Manager, Investor Relations. A little bit of admin before we kick off. This is a sell side call with analysts able to ask both text and live audio questions. To ask a live audio question, press the Request to Speak button at the top of the broadcast window.

The broadcast will be replaced by the audio question screen. Use the dial in number and access PIN provided to ask your question via the phone. Alternatively, for those on a home network or personal network, you can ask your question via the web by pressing join a queue. If prompted, select allow in the pop up to grant access to your microphone. If you have any issues using the platform, dial in details can also be found on the homepage under asking audio questions.

Text questions can be submitted at any time and the audio queue is now open. This call is being recorded with a written transcript being uploaded to the MinRez website later today. I will now hand over to the MinRez team.

Mark Wilson, Chief Financial Officer, Mineral Resources: Yeah. I picked up from January. We had a board meeting, group board meeting with yesterday, and Mel’s in the office this morning, so I was just sitting in on the call. As usual, I’ll run through a few highlights first. We’re on the quarterly.

We’ve tried again in this document to give you a little bit more information than historically we can just to try and progress transparency. That’s been released to the exchange this morning and then take questions at the end. I’ll start with the key highlights. Overall, pleased to advise that the business across all segments has delivered volume and cost guidance for FY ’twenty five. I’d characterize it as a solid performance across all aspects of the business.

We’ve made a lot of positive change on a number of fronts across the last three months. And there’s this continued focus on execution within the business. You would have seen through various announcements that the board and governance refresh that we’ve been moving for some time is is well progressed and underway. As I said, Mel Mel affected as chair from the start of this new financial year, also joined by two nonexecutive directors in Ross Carroll and Larry Tremaine. Both of them joined the meeting yesterday for the first time.

So that change of the board of is leading a significant governance refresh and is one of the key priorities of the new chair along with strengthening the balance sheet. Through this whole process, management’s working with the Board to continue to review levers available to it across all aspects of the business, and we’re doing a refresh of our capital allocation framework under the guidance of the Board. In terms of bonds, I’m pleased to confirm that it continues to be cash flow positive, both at mining services and at commodity level. I’ll take you through them in a little bit more detail shortly. In June, we hit an annualized run rate of 32,400,000 tonnes per annum at Onso, which was a great performance, particularly as we only had our last fifth or fifth trans shipper there operating really for the last week or so of that month.

In today’s report, we’ve actually provided some guidance for shipped tonnes out of Bonslow iron. Our share, 17,100,000.0 to 18,800,000 tonnes equivalent to 30,000,000 to 33,000,000 tonnes on 100% basis. Roadworks, the reason why we’re not hitting 35,000,000 tonnes across the whole year. And again, I’ll talk you through that in a little bit more detail as I get to on slide. Completion of the haul road upgrade remains on track.

So completion through the end of this quarter as is our move towards 35,000,000 tonne per annum run rate, which we expect to hit at the September or thereabouts. As is, I think, generally well understood, seasonality impacts for this operation, typically between November, March with cyclone season. Again, I’ll talk you through that as I think about the numbers. In terms of safety, the trip up for the twelve months on a rolling basis was 3.84. It’s a tick up.

We had few higher injury sorry, higher recordable injury numbers in the first half. And then we’ve had significant reduction in hours over the course of the year with on-site construction coming off and also Bald Hill and Yogarne operations stopping into care and maintenance. As corporate, very pleased with where we finished the year with liquidity. We finished with over $1,100,000,000 at thirty Jan. And as a result, we’ll see net debt to EBITDA continuing to reduce.

We kept a small balance on our revolving credit facility drawn at thirty June, but we had more than $400,000,000 in cash, including that draw. Just so that everybody’s clear, I expect to have full access to that see a facility going forward. That’s consistent with what I’ve said from a number of quarters now. In terms of net debt, we finished at $5,300,000,000 for the year. In terms of the quarter, the key movements, we had a $200,000,000 FX gain on The US unsecured bonds.

We had a couple $100,000,000 in interest payments in the in the quarter. We had a small working capital outflow, so, like, 50,000,000. We had a couple $100,000,000 spent in CapEx CapEx in f y nineteen sorry, f y nineteen. That’s a long time ago. F y twenty five came out at 1,900,000,000.0, which was below guidance of 2.1.

Just to be clear, about 100 of that delta is a timing issue relating to Onslow and the timing of certain payments. That 100 will fall into FY ’26, and the other balance of 100 is represented by savings across the business. Just going to make a quick observation about FY ’twenty six CapEx. We’re still working through with the Board what that looks like. And as normal, we will provide more detail of the guidance and more detailed guidance of the FY ’twenty six FY ’twenty five result at the end of this month.

But as I’ve said previously, we expect that CapEx number to come in just a little bit over half of the FY ’twenty five spend, so circa $1,000,000,000 or thereabouts. About half of that will be sustaining, and then we’ll have some significant ongoing spend at Onslow, including the trans shippers, the completion of the road and the opening up of the Upper Cairn as a satellite deposit. And then we’ve also got some exploration spend, including some energy. But again, I’ll take you through all that in more detail in about a month’s time. When we think in terms of CapEx, we’ve historically quoted net of asset finance.

We’ve given a little bit more flavor in this material around what the gross figures look like just to help in terms of numbers for FY ’twenty six. We’re thinking we’ll have about $150,000,000 of asset financing, but yellow goods and transship is six and seven. And as we’ve talked about that next with with continues to increase month on question. Month and as a result, net debt to EBITDA ratio continues to decline organically. In terms of the carry line at Onslow, which is an important asset of the group, representing our receivable for funding our partners into the project.

That’s being repaid with interest. The current balance, thirty June, was $766,000,000 and that’s a decrease of a net decrease of just over $20,000,000 That balance should actually go up through the quarter because as we bring construction to completion, we invoice that goes on the carry line. So that $20,000,000 is a net number. In terms of full year statutory report that will be released at the August, we’ve given some indication of potential adjustments that we’ve identified as we move towards year end. Obviously, that’s all subject to audit and so on, but trying to give you an advanced look at some of that material.

Turning to the business, just step through this quickly so we can get to questions. The mining services performance was very strong. We’ve come in just at the bottom end of guidance range in terms of volumes, but our EBITDA per tonne margin is expected to be at the higher end of the guidance range of $2.1 to $2.2 We recorded a record 83,000,000 tonnes in the quarter, which is up 21,000,000 tonnes in the prior quarter, and that’s driven by the ramp up of Bonslow Mine. And I should also add the mining services, the external facing and sorry. I’m gonna say external facing.

The the crushing and haulage businesses have done incredibly well over the past year, the last six months in particular. In terms of iron ore, iron ore total attributable production was 8,900,000 tons, shipments of 8.3. We realized US79 dollars on average across both hubs, and that’s about 90% realization, would have been 82% with our prior period adjustments. As you would have all seen, the iron ore prices moved back over 100 in recent times. The forward curve actually had quite an interesting shape to it.

It was quite flat. So we’ve taken the opportunity to just start to hedge some of our volumes over the next six months to lock in some of that price gain. In terms of Onslow, in particular, very pleased with the progress over the last quarter. As I said, the fifth trans shipper really started towards the June. We loaded 30 vessels and 5,800,000 tonnes shipped.

We had 147 trucks operating across the quarter, 83 of them a one and sixty four contractors on average, 31,008 road train trips completed over that road that a number of people were able to see through the quarter. And this is a statistic that always amazes me. We travel an aggregate of almost 10,000,000 kilometers on that road through that period. In terms of where we are at the moment, we have one hundred and twenty minuteres, in fact, one hundred and twenty minuteres trucks commissioned on-site, heading towards 140 that we need. And our plan continues to be to transition contracted trucks out following road completion at the end of this quarter.

In terms of FY ’twenty five shipments, for Onso, 14,000,000 tonnes on 100% basis, 8,000,000 tonnes of our 57% share and FOB costs were 57 tonnes dollars a tonne in the quarter, full year at $63 Pilbara Hub, we shipped a total of $2,500,000 another strong quarter. That took full year shipments to a touch under 10,000,000 at 9,700,000 tonnes. Pulp cost was $76 a tonne at the low end of guidance. And as we’ve announced separately, we completed in the quarter the sale of the Yogan to an unrelated third party, which was a good outcome for the group and for the state of WA. In terms of lithium, I think, again, this quarter’s highlighted the quality of these two assets at Wodgina and Marion.

We continue to work to bring flexibility into the operations wherever we can. The average realized price across both sites was US642 dollars dry metric ton on an SE6 equivalent basis. Mount Marion numbers were impacted as shipments were weighted heavily to June in the quarter, and it also has a discount applied to it for the lower grade portion of its tonnes. So the average prices were about 8% below average indices. The price in lithium, and I’m sure you guys wanna ask me a few questions about this, but the market’s been up and down a bit.

Prices were back towards 600, just over 600 in in early June. And then since then, we’ve seen prices bounce back strongly and to 800 to 900. In terms of spot production, Marion Wodgina generated 145,000 tons and shipped 135,000 and the relationship with both of the JV partners, Elton Island Gangfeng continue to be very, very positive. In terms of Marion specifically, FY ’twenty five shipments were 203,000 tonnes on an SE6 equivalent basis, above the high end of the guidance. And full year costs, again, on the SE six basis, FOB costs were at 900.

During the quarter FOB costs, however, were $7.17, That’s in line with the prior quarter, and that shows the benefit of higher feed and continued plant improvements. And again, I can talk to this in more detail on the questions, but we’ve tried to bring more flexibility into the operations at Marion, recognizing it’s a DMS operation. What we’re trying to do is and you would have seen this in the quarterly results, targeted higher grades and and focused on recovery than just pure volume. That does, depending on what we do with some of those flexible options, have the potential to increase costs a little bit next year or this new year, but we’ll talk about that a bit later. In terms of and as I said, we’ll give more guidance before you result, but very, very happy with the way Mount Marion is shaping up.

And one of the opportunities we see for the new year is to continue to pull the third strip out of it. In terms of Wodgina, another fantastic performance, production 32% up, better quality feed. We’ve talked about the importance of that feed for some time and and the direct relationship through the recoveries costs on a s e six forward basis down into 06/1941 at Wodgina, significant reduction over the course of the year. That’s driven by continued laser focus on cost management and continued improved recoveries. We’ve talked in the quarterly a little bit about some of the changes to the plant we’re doing to give us a little bit more flexibility again in operation, and we’re expecting to see recovery rates tick up above 65% through FY ’twenty six.

Just to give you a little bit of background of the costs, we’re right through Stage two now in terms of the ore body development there. That ore body’s gotten better as we get deeper through that stage. FY ’26, we’re just starting to open up stage three, tend to see a few more stringers and narrower veins at the top, and then we expect to get better quality as we go deeper. So just bear that in mind as we think about cost for next year. Again, we’ll provide explicit guidance in the result in a month’s time.

And just finishing finally with energy. We received just a day or so ago independent certification in relation to Moriari date, which came in at 27 Bcf on a 2C contingent resource basis, which is just below the minimum threshold that we we needed for a contingent payment on on that asset. Lockyer six, the arrangement there doesn’t have a minimum threshold. That’s going through the same certification process, and we’ll expect to find the outcome of that this quarter. So just in summary, very pleased with the quarter, but in terms of the operations, the, you know, the continued performance of Onslaught, the setting up of the business as we move into FY ’26 and the integration in with the the new board and chairs.

So business is set up very well going into ’26. There’s a great energy in the business and a very strong focus on continuing to take it forward and strengthen it. With all that, conscious I’ve been talking for a bit. I’ll hand back to David for questions. Thanks.

Call Operator: Thank you, you to go ahead. And our first caller today comes from Paul Young. Please go ahead.

Paul Young, Analyst: Good morning, Mark, Chris and Mal. Hope you’re well and thanks for joining. Mark, first question is on just liquidity. Looking at December and I know you’ve drawn down part of your revolver and you’re going through the budgeting process at the moment for next year. But when you look at, I guess, internal model at the moment, do you need to draw down any more of that revolver in the December?

And or are looking to refi the $1,300,000,000 senior secured potentially early? Just trying to get us a handle on how you’re looking at liquidity in December. That’s the first question. Thanks.

Mark Wilson, Chief Financial Officer, Mineral Resources: Yeah. Hi, Paul. Thanks for joining. The way I think about it is this, Q1 and Q3 of each quarter typically the tightest because that’s where we have pretty significant royalty payments. And in this new financial year, we also have a front end of waiting of CapEx as we move to complete the road, and we make some milestone payments on trans shippers and the like, carry out the payment of acquisition of Vine Valley as well.

So, yeah, there’s a little bit of cash moving around this this current quarter. If we do another draw, it’ll only be for a relatively short period. But I think the point that I want to emphasize is it’s a revolving credit facility. It’s there for working capital purposes. We pay to have it available so we can draw it when we need it, and then we pay it back when we don’t need it.

And that’s part. So but, you know, bigger picture, I’m very comfortable with the liquidity position. I feel like the business is in good shape. Monza is starting to generate a fair bit of cash, and And we’ve coming to the tail end of that CapEx profile. So we’ve got a pretty good grip on what the outflows will be over the next six months.

Paul Young, Analyst: Thanks, Mark. And with respect to the refi of the 1.3?

Mark Wilson, Chief Financial Officer, Mineral Resources: Sorry. The 1.3, you mean the 700 US? You’re talking about the bonds?

Paul Young, Analyst: Sorry. The same is secured during in in yeah. That’s right. That’s right. During May 27.

Mark Wilson, Chief Financial Officer, Mineral Resources: Yeah. So that’s unsecured. Yeah. But yeah. US 700.

So we have a bond US 700 that’s due in May 27. We are in good shape on that. And by that, I mean, when I spoke to the quarterly three months ago, it was a few weeks after Liberation Day. The world was a different place. There was a lot of global uncertainty.

Spreads had opened up. Markets were were pricing in a fair bit of risk and uncertainty just generally. If you look at where the bonds are trading today, they’ve probably come in 400 bps or more. You know, we continue to have really strong support from our bond investors in The US, and we’re in a a period where we can’t do anything with it. We need a fresh set of financials, which we’ll have at the August.

And, you know, unless something changes significantly, you you could assume that we’ll be targeting something like that this half.

Analyst: And Okay. Good

Paul Young, Analyst: to know. And then

Mark Wilson, Chief Financial Officer, Mineral Resources: Sorry, Paul. Just one final thing. I’d I’d really don’t see any execution risk on that. As I’ve said before, it becomes a question of price to clear it, but I don’t see any execution risk on pushing that maturity out.

Paul Young, Analyst: Yes, understood. Thanks, Mark. And then maybe moving to Onslow and good update today and broadly in line with what we saw a couple of months ago on the site visit, just curious around your comments around some hedging because we’re hearing there’s been quite a lot of producer hedging on this bump in iron ore price as well. So you’re one of the companies that’s done it. So I was just wondering if you can talk through volumes you’ve hedged, pricing and just how that works, how we should think about it.

And then also just on your realized prices for Onslow, which came down a fair bit considering on the visit, it was we were took the the team was talking up realized pricing. So just wondering if there’s anything in relation to that with respect to that on one of the prepayments. Thanks.

Mark Wilson, Chief Financial Officer, Mineral Resources: Yes. So no impact on the prepayment. I mean, those those sales are the sales in a in a very soft iron ore market for a period through that quarter. We’ve typically found discounts move like that in the past where the price starts to move back towards 90. In terms of the the hedging, yeah, I I looked at that curve.

It was it was almost flat out to January, which was quite extraordinary. Anyway, we what we’ve done is we’ve laid in a number of zero cost collars, which put a floor typically around 99 to 100.

Kaan Pekka, Analyst: We

Mark Wilson, Chief Financial Officer, Mineral Resources: won’t go above a third of production in half. We’re just trying to get the balance right, but we’re just taking the opportunity to lock away some of that downside.

Call Operator: Thank you. The next question is from Glen Lawcock. Please go ahead.

Glen Lawcock, Analyst: Hi, Mark. Good morning. I just had a couple of quick ones. Just trying to discern your comments around you’ve got CapEx to spend on the trans shippers, but then you said you’ve got $150,000,000 of asset financing, which also is for the trans shippers. What’s the distinction between the two spends?

Thanks.

Mark Wilson, Chief Financial Officer, Mineral Resources: Morning, Glyn. Nice to talk. So what I was trying to do is call out the the the material items of spend coming up this year, just to give you a a heads up. What I’m saying is what I’m also saying for the first time is when we think about FY ’26, we’re thinking in terms of about a 150,000,000 of asset finance generally through that period. That’s not exclusively trans shippers.

It includes things like the rest of the whole truck fleet, the jumbo road trains and also some yellow gear, mobile gear as we roll off older assets and acquire new assets over the course of the year.

Glen Lawcock, Analyst: Yes. Sorry, Mark. Maybe I misspoke a bit. But I was just trying to say, if we’re spending CapEx on the trend shippers, why are we also asset financing as well? Why it feels like I’m doubling up?

Is there something I’m obviously missing?

Mark Wilson, Chief Financial Officer, Mineral Resources: Yeah. So so, Glenn, historically, we’ve talked CapEx net. We’ve we’ve historically and and, you know, reported net. What I’m trying to do today is give you a sense of both net and gross and give you a sense, in some cases, of how we’re going to use the asset finance. So we can can sip you through the detail offline if you like, but I’m trying to give you both those pieces of information to give you a little bit more transparency.

Glen Lawcock, Analyst: That’s great. And then just a final question. You’ve made the comment that you I couldn’t keep up with you, but I think you said 27 Bcf on the first expiration for energy, which came in below the levels of contingent payment. But you said Lockheed six certification should happen this quarter, but there’s no level for contingent payment for that one. So what’s the best case scenario you think out of the $300 odd million that we could receive?

Any thoughts on what we could get this half?

Mark Wilson, Chief Financial Officer, Mineral Resources: Yeah. Apologies if I was talking quickly. I should have spoken a little bit slower. We’re targeting out of lock here. Most we can get would be around 100.

Call Operator: Our next question comes from Lachlan Shaw. Go ahead.

Lachlan Shaw, Analyst: Two for me. Just starting at Onslow, obviously, pleasing for the guidance into FY 2026. You give an indication of how you’re thinking about pulling together that quarter of above 35,000,000 tonne per annum run rate to secure the next 200,000,000 from MSRP? And I’ll come back with my second.

Mark Wilson, Chief Financial Officer, Mineral Resources: Sure. Good morning. In terms of the way we see this year and specifically to answer your question, clearly, this quarter that we’re in now, we’re going to be impacted by completion of the road that causes inefficiencies in terms of the movements and the like. We have contracted vehicles that are less efficient through the porting load and and, you know, the load out of the mine. So we we factor factor all that in.

So so this quarter will be softer than others. Obviously, we have weather through the q two and q three. That’ll be the same every year as as we’ve talked about on a number of occasions, and that we have pretty clear q four we would expect. In terms of your specific question around targeting the the three months and the the February, I think the best way to think about it is this. Yeah.

The the we can’t we can’t plan for the weather, and we can’t deal with the weather. It’ll be what it’ll be, but what we can do is develop plans to to sprint and to flex. We have a little bit of capacity within the system to be able to do that despite the constraints that we’re dealing with this quarter. You know, I should have said that in my comments that July production is going be a little bit softer, and we that’s because we’ve taken the opportunity through July whilst the road’s being upgraded to basically focus on maintenance, not just at the plant, but also in the trans shippers. So we’ve been getting all the maintenance maintenance done, getting everything cleared up.

That will give us an opportunity to start to go hard at production over the next month or so.

Lachlan Shaw, Analyst: Yes. Great. And just to follow-up there. So the spring capacity, we’re not talking there about transship of six and seven are we in the next twelve months? We’re just talking about, I suppose, debottlenecking or identifying incremental spring capacity and what’s there today?

Mark Wilson, Chief Financial Officer, Mineral Resources: Yes. I should have been clearer. Apologies. We have we have spring capacity at different parts through the chain, but in particular, with the haulage constraints, we’ve got some temporary storage closer to the mine near the truck maintenance facility at Yarrie, And that gives us a little bit more flexibility in the way that we move tons through the system whilst the right upgrade is happening.

Lachlan Shaw, Analyst: Yes. Okay. All right. That’s great. And then my second question, just to the mining services margin, sort of top of the guidance range.

But you did highlight that that’s been impacted, a bit of a drag from the contracted trucks. Can you give us an indication of as those trucks demobilize through December, what sort of uplift might you be able to sort of bank from the mining service margins? Thanks, Mark.

Mark Wilson, Chief Financial Officer, Mineral Resources: Prefer to hold guidance on mining services margins to to, you know, to the results in a month. I mean, historically, it’s been around $2. There have been lots of very yeah. As you’ve identified, there have been lots of impacts, lots of factors impacting over the last few months, including the contracted vehicles. But the mining services business is on slide plus a lot of other things, and so there are a lot of other factors that fade into what those margins will be going forward.

So I know I’m I know I’m hedging. I know I’m not giving you the answer that you want, but I prefer to hold the guidance commentary back on the margins until the August.

Call Operator: The next question comes from Rahul Anand. Please go ahead.

Analyst: Hi, good morning team. Thanks for the call. First question on Wodgina, there’s a lot of them on the debt side have been asked. So this year’s recovery on my numbers, and I know you don’t report this, is around 55%. And you’ve talked about the HICs coming in and potentially taking it to 65% next year.

Now that’s a big lift. How long do these things take to ramp up properly and optimize and get to that 65 level? And and when do you actually expect that all of that impact could be felt in the cost base? That’s the first one. I’ll come back with a second.

Mark Wilson, Chief Financial Officer, Mineral Resources: Morning, Rahul. Nice to talk. I I I touched in my comments on the introduction of flexibility into into our operations, and and the the introduction of those Hicks cyclones has already had a a significant impact. So as as Margaret would know, we have three trains running not running. We have three trains constructed at Wodgina.

We’ve been running two trains, sometimes three, depending on circumstances. We’ve been able to, complete the installation of the Higgs, on one train, so we’ve got pretty good evidence of the impact that has had on the performance of the train and and the recoveries, and we’re expecting to have the the the final cyclone installed by mid August. So we should see the benefit of those increased recoveries for the vast majority of the year. And as I said, we’re not guessing with the data that we’re quoting here or the numbers we’re quoting. We’ve actually seen it operating day to day.

Analyst: Okay, brilliant. That’s clear. Look, second question is just a bit of an extension from Lockheed’s question and I was going to ask you about the mining services margin, so I’ll change it a bit. So you were nearly at the top end of your next year guidance for Onslow in the month of June, right? But obviously, you’ll have maintenance and other things, and you’re using contractors at the moment.

So my question is when do you expect to be 100% min fleet being able to operate on the private haul road and not have any contractors or any use of the public highway? And the reason I’m asking this really is because I wanna understand when that contingent payment can be expected to come through from Morgan Stanley Infrastructure Partners? Thanks.

Mark Wilson, Chief Financial Officer, Mineral Resources: Ralph, nice question. And I will anticipate what you are going to ask on the those contractors. We were mobilizing continuing to mobilize a lot of vehicles and and people. So we we took a view at the time, and we wanted to make sure we got it right. And over the the balance of the the the quarter, we were able to to actually identify some savings.

In terms of Onslow and the 200,000,000 and the full run rate and Morgan Stanley Infrastructure Partners, you know, I should that we’ve got a fantastic relationship with the guys at Morgan Stanley Infrastructure Partners. They’ve been incredibly supportive of the business, and they’re very keen for us to hit that that threshold. I’ll try to answer it a little bit differently. We’ll have a window to run it at hard before the cyclone season starts. Now whether that’s November or December, you can assume we’ll be going for it before then.

If for whatever reason we can’t get there, we’ll have another opportunity to do that in if sorry, in calendar year ’26 once the season is finished around the March. So we we see clear windows to go at it. What I was trying to say earlier, and I’ll I’ll try to be a bit clearer. Whilst the road is an impediment to to to us delivering those that milestone, it doesn’t preclude us from doing so. We just need to have a few things work in our favor, including the use of this Sprint capacity whilst we’re working with the upgrade.

We expect to have the contractors off the road by the end of the quarter.

Call Operator: The next question comes from Lyndon Fagan. Please go ahead.

Lyndon Fagan, Analyst: Thanks very much. Just wanted to ask whether any OpEx at Onlov was capitalized in the quarter?

Mark Wilson, Chief Financial Officer, Mineral Resources: Yes. So what we’ve done, Lyndon and I, is we’ve basically been using the standard cost approach, which we’ve disclosed throughout until the June 30. There was a small amount capitalized, but not much. The actual cost’s pretty much in line with what we reported. So, yeah, we are seeing the FOB costs come down.

Yeah.

Lyndon Fagan, Analyst: Excellent. And and then just with the billion dollars of CapEx for next year, what would you say the amount that’s spent above sustaining business CapEx?

Mark Wilson, Chief Financial Officer, Mineral Resources: Sorry, I just missed it. Was that above sustaining CapEx? Is that the question?

Lyndon Fagan, Analyst: Yes. Just trying to get a sense of what the sustaining component of that dividend is.

Mark Wilson, Chief Financial Officer, Mineral Resources: Yeah. So the qualification is that I still have to take the new board through all of this and get it all finalized for guidance. But as we think about it today, and I’ve obviously got a basis for saying this because I’ve put the comments out there, about half a billion of it’s sustaining. The big portion of that is deferred strip at about 285,000,000. That’s as of current mine plans, but mine plans will be reworked a number of times between now and the end of next month, and it’s an opportunity for us to try and take some tons out.

You know, one of the areas that we’re looking at trying to pull tons out is, you know, lithium again with Marion in particular, just trying to make sure we do that in a way that leaves us with the flexibility to operate into the future, which we will do.

Call Operator: The next question is from Kate McCatchen. Please go ahead.

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

Mark Wilson, Chief Financial Officer, Mineral Resources: Sure, Kate. Sorry, volume is a little bit low, but I’m pretty clear that I got your question. In terms of the hedging, what we’ve done is we’ve we’ve moved to put a floor under realized prices for this half effectively, if you think about it for this half. And what we’ve done is we’ve layered it in at different maturities between now and the end of the calendar year and different volumes. But the essence of it is to put a floor of between between 99 and a 100 depending on the zero cost collar.

The actual percentage of volume, we’re targeting to go up to a third, but we’re not there yet. It’ll be less than that. If the prices come back, then we’ll we’ll lock some more in. But, you know, at the moment, it’s it would be between one, one point five million tons at that sort of price.

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

Mark Wilson, Chief Financial Officer, Mineral Resources: So the window basically runs within one hundred and thirty five days of year end when we got fresh financials. We’ve got so it basically starts at the August, and it’ll take us through to mid November. We and then it opens again at the February next year when we do our next set of financials. You can go outside of that period, but it’s a little bit more complicated. In terms of rates and so on, what I would do is refer you to the way the bonds are priced at the moment.

They’re all trading above par. They’re trading quite tightly. Generally, when you go to the market, effectively, you raise a new bond, in this case, to repay the old bond. You might expect to pay a small premium for new issuance. But I think if if we step back for a moment, when we’ve talked about this for a while, the the credit markets have been supporting MinRez through a period of significant capital investment and project development, and they understand that what Ozlow is about is transforming the business for decades to come with better quality earnings.

And I think as the market starts to digest the news out of today, our confidence in terms of, going forward and the strength of the performance through June, you know, I would I would hope that the subject of what the external market’s doing, that rates continue to tighten. But if you were to ask me what would the cost be today, it would probably be about 8.5%, but it could be tighter.

Call Operator: The next question is from Matthew Friedman. Please go ahead.

Mark Wilson, Chief Financial Officer, Mineral Resources0: Sure. Thanks. Morning, Mark, Chris and Mal. Can I ask another one on mining services? Obviously, you’ve had a discussion there on the margins.

You called out strong external volume growth in the quarter. Are you able to expand on that at all, Mark? Maybe give a bit more context on whether that’s from existing contracts or new contracts? And I guess, whether those opportunities for volume growth extend into FY ’twenty six? Yes.

Mark Wilson, Chief Financial Officer, Mineral Resources: Good morning, Matt. Yes. I mean, this is the jewel in the crown of this business. It keeps performing really well. The way I would position it is, and I I sort of touched on it in one of the earlier responses, there are lots of different components now to this business in terms of different projects, different contracts, different clients.

The best way to think about it is that, yeah, the the market positioning remains incredibly strong. The level of inquiry remains incredibly strong. Level of awareness of the services that we can bring continues to increase year on year. We have a unique set of capabilities, markets appreciating. The the performance with the the con with the clients this year has been really strong in terms of delivery.

The clients have been able to give us the feed into them into the assets. We’ve been able to process it. It’s been strong across all those contracts for the first time that I’ve seen across all of them. Historically, there’s been some that have been up and down. What I was talking about there was consistency.

But in terms of going forward, we haven’t guided on tonnes for ’26. We’re still looking through that. In in part, that’s because some of the tonnes that go into the guidance relate to deferred strip and the like. And we’re we’re we’re moving around with mine plans. We could strip quite a few tons out of some of the the operations.

The Pilbara, for example, in ’26 is gonna have less deferred strip. Marion will have less deferred strip than we did in ’twenty five and so on. So I know I’m not giving you a hard number yet, but I’m trying to give you a sense as to how I think about it and the business opportunities for the mining services operation.

Mark Wilson, Chief Financial Officer, Mineral Resources0: No, I understand. Thanks, Mark. And I guess your commentary there is suggesting that certainly, at least from an external contract perspective, that you’re still constructive on volume growth in that part of the business. Maybe secondly, if I can ask on the Wodgina performance in the quarter. And obviously, again, you’ve already spoken through the expected recovery improvements looking forward.

But clearly, a pretty strong step up in production during the quarter, and you’ve related that back to the plant performance and also the feed quality. So I guess in terms of the mine sequencing and the ore quality that’s being presented to the plant, is that now a fairly repeatable performance going forward? Is the mine in a better place in terms of delivering higher quality feed? And again, is that likely to be sustainable in coming quarters? Yes.

Mark Wilson, Chief Financial Officer, Mineral Resources: Thanks for the question. If I think back twelve months ago, I was having to explain to you and your peers the fact that we’d we’d we’d identified a gap in our understanding the ore body. We’d had to drill 90 odd extra holes to try to consolidate our understanding. I think I said in my comments earlier that we’ve we’ve progressed well now through stage two, and it’s just, you know, it’s just pure ore. And it’s going through the plant very, very well.

What I was trying to say is at Wodgina, we move through different stages as we develop. We’re going to in ’26, we’re going predominantly out of stage three, which we which I don’t we we don’t have to open it up. It’s there, but the upper levels will see some narrow some narrow vein, some risk of increased dilution and so on just through the early stages. So all I’m trying to do is temper expectations that it’s gonna be one to one or or just, you know, drag right. But when I say that, this plant and the way that it’s recovering now is set up very, very well, and it is going to perform very well this new financial year.

Call Operator: The next question is from Rob Stein. Please go ahead.

Mark Wilson, Chief Financial Officer, Mineral Resources1: Thanks for the update. Just quickly on Wodgina, along current theme, the production outweighed shipments. The very strategic decision to withhold to sort of seek a better pricing environment and can we expect that to result in a working capital adjustments next quarter? And I’ve got a follow-up just on CapEx and the balance sheet.

Mark Wilson, Chief Financial Officer, Mineral Resources: Yes. I think the answer is that in terms of shipping and working capital at Wodgina, the we we we basically try to time the ships to go when productions when the stockpile’s there, when when the oil’s available. Sometimes there’s a delay up there depending on access to the to the wharf, which can have a little bit of an impact, but not significant. I don’t think you should be factoring any sort of material working capital movement at Wodgina over the next quarter or six months.

Mark Wilson, Chief Financial Officer, Mineral Resources1: And then sorry, just a follow-up. Just looking at the cost performance of the assets, it wasn’t a surprise across the board. In what way was that facilitated by a building deferred stripping and the like? Because I know that your CapEx number was also abate as well. So just trying to get a handle on how sustainable some of those cost out initiatives are.

Just sort of forecasting that Yes.

Mark Wilson, Chief Financial Officer, Mineral Resources: It’s a great question. So the CapEx was more a timing thing. There was a little bit of element of strip that came out of the the forecast that we thought we were gonna spend, but it was more a timing thing on on a chunk of the Oslo spend. In terms of generally, if I think about the cost performance, we’ve talked about cost performance for almost twelve months now, and and you know that we’ve taken lots of heads out of the business all the way through. We’ve changed the rosters.

We’ve reduced dig flights. We’ve resequenced. We’ve actually developed an even greater sophistication with the mine planning in terms of technologies that we’re using that are giving us better insights and able to refine more quickly the planning. So so it’s more iterative, and we’re getting great results from it. And that’s not to say that we’re kicking the can down the road, we’re gonna have problems next year or the year after.

I’m not saying that at all. I’m saying that we’re able to to identify the best way to optimize the the extraction of the ore, and we’re doing that coupled with the focus on taking costs out of the op direct costs out of the operations. So, you know, I’ve given you some some hints around how I’m thinking about costs for Wodgina and Marion in the New Year. I don’t see it going back to where it was twelve months ago. I’m just trying to encourage you guys not to just drag right now use that phrase again, and I don’t mean to be flipping about it.

But, I’ve given you a little bit of a sense as to how I’m thinking about it.

Call Operator: The next question is from Ben Lyons. Please go ahead.

Mark Wilson, Chief Financial Officer, Mineral Resources2: Thank you. Good morning, everyone. Similar theme to the previous question, please, Mark. And obviously, you’ve made several very high level comments about how the business is broadly responding to low lithium prices. But I guess similar to Rob’s question, my intuition is that when you change the mine plans and you further high grade these assets by reducing the strip ratio, clearly at some future point there comes a period of having to catch up on that stripping.

But can we put some numbers around the strip ratios expected for fiscal ’twenty six, for example? Or even more broadly, when you’re expecting the next major cutbacks at each of the assets? Thank you.

Mark Wilson, Chief Financial Officer, Mineral Resources: Good morning, Ben. Nice to talk. So we can provide that when we give the full guidance next month. But, yeah, there there are are various aspects to cost performance. Strip is just one, and recovery is another.

And, you know, I’d I’d encourage the market to think about how well those assets have performed in terms of recoveries, particularly Wodgina. We’ve really got that plant tuned well now, and that’s had a significant impact on performance. In terms of stripping generally, Marion’s a little bit different, as you know, because of the expectation that at some point in the future, we’ll go underground. We started that work. We we put it on pause twelve months ago to to preserve capital.

We’re very conscious that able to continue to go underground at the right time when market allows us. But take on board what you’ve asked, and we’ll make sure that we come back and deal with that through the year end process with guidance.

Mark Wilson, Chief Financial Officer, Mineral Resources2: Okay. Okay. Thanks, Mark. And yeah, I do appreciate the disclosure of the recoveries and look forward to that disclosure continuing in the future. Second question, maybe just a housekeeping one on the accounts.

Can you possibly remind us of the outstanding balance of the loan to RDG and whether you’re expected to take some kind of provision over that facility with the fiscal ’twenty five result? And then secondly, just some clarity on where the asset financing that you’ve alluded to will come through in the accounts, whether that sort of pops into investing cash flows or financing cash flows? Thank you.

Mark Wilson, Chief Financial Officer, Mineral Resources: Sorry, Ben, I heard the first question, which was around RDJ loan balance and possible accounting adjustments. I’m sorry, you’re a little bit quiet at our end, probably not at your end. Would you mind just repeating the second one? Just couldn’t pick it up. I’m sorry.

Mark Wilson, Chief Financial Officer, Mineral Resources2: Yes, no worries. The asset financing that you’ve alluded to, which I think was about $400,000,000 bucks in fiscal ’twenty five and a further 150,000,000 I think you said for fiscal ’twenty six. Where can we expect to see that showing up in the accounts, please? Does it come through investing cash flows or financing cash flows? And I assume there’s also an interest component applicable to those facilities.

Thanks.

Mark Wilson, Chief Financial Officer, Mineral Resources: Sorry, Ben. The answer on RDG is the RDG loan, you can have a look at the accounts from December. They’ve they’ve lodged. It may have gone up a little bit in the half, but, you know, that’ll give me a broad sense of it. In terms of the asset finance, that shows up both on the obviously, on the asset side and on the debt side.

So it does go into the gross debt number.

Call Operator: The next question is from Mitch Ryan. Please go ahead.

Mark Wilson, Chief Financial Officer, Mineral Resources3: Morning, Mark and Tim. Sorry, Mark, I just didn’t think you answered Ben’s question there. You talked to the balance sheet, where did it come through in the cash flows?

Mark Wilson, Chief Financial Officer, Mineral Resources: Sorry. I it. I missed this question. It comes through on the cash flows in the financing component. So you can see it through the financing line.

Mark Wilson, Chief Financial Officer, Mineral Resources3: Okay. Thanks. My question just related to Ken’s boar and the strip ratio, they’re obviously quite low at 0.5. Do we start to see that how do we think about that as Cardo boar comes online? Does that increase?

And does the strip ratio that you’re talking to include or exclude the clayey ores that you sort of stockpiling for when the bedding plant comes online?

Mark Wilson, Chief Financial Officer, Mineral Resources: In terms of the strip generally, it’s one of the features of Kensborg that differentiates it from the other iron ore operations up there. It’s it’s it is low. We expect that to continue for some time. I don’t expect the satellite deposits. So the satellite deposits will contribute about a third to the production out of Kinsbaugh.

So I don’t expect the activity at Upper Cain and Cardo Baugh to materially impact that number. In terms of the claim, I actually don’t know the answer to that. I would assume that it’s all factored in, but we can take that offline and come back to you and confirm that.

Mark Wilson, Chief Financial Officer, Mineral Resources3: Appreciate your time this morning. Thank you.

Mark Wilson, Chief Financial Officer, Mineral Resources: Thanks.

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

Mark Wilson, Chief Financial Officer, Mineral Resources4: Good morning, Mark and team. Just one question from me. Production seems to be progressing well at Onslow, but logistics has always been the high risk constraint there with the potential of becoming stockpile down if haulage or port is delayed. By my rough estimates, you’re carrying around 2,000,000 tonnes in stockpile across the system. And please correct me if I’m wrong there.

And in terms of capacities, mine numbers, you have about 1,500,000 tonnes at the mine, three and fifty thousand to 400,000 tonnes at Yauri and then 200,000 tonnes at Port. Again, correct me if I’m wrong there, but can you just tell us how you’re managing this and whether it’s being managed fairly tightly, please?

Mark Wilson, Chief Financial Officer, Mineral Resources: Yes. Great question. You’ve got the general trust of it correct. The the share that the at the port does hold that 200,000, and Yarrie does have the capacity up to about 400,000. It it doesn’t have 400,000 in it today, but it has the potential to beat at that sort of volume.

And that’s one of the one of the levers that we have in terms of spring capacity and so on. In terms of the way that we manage it is, ultimately, we just slow down crushing if we need to and and mining. Now, obviously, there’s an efficiency consideration with that, which we need to be cognizant of. But we do have that flexibility because we’re integrated all the way through. So, yeah, we that we manage it at the front end that way.

Mark Wilson, Chief Financial Officer, Mineral Resources2: Okay. Thank you. I’ll leave it there.

Call Operator: Thank you. The next question is from Kaan Pekka. Please go ahead.

Kaan Pekka, Analyst: Hi, Mark, Nell and Chris. One question on FY 2026 CapEx, just to go back to Gwynne’s question. Of the $1,000,000,000 is that a gross or a net number? So does that include the 150,000,000 in asset financing? And how much is expected to be spent on the lithium business?

And does that include a float plant at Mount Marion? And I’ll circle back with a second.

Mark Wilson, Chief Financial Officer, Mineral Resources: Khan. The number that I quoted was a net number. And in terms of lithium, we have not allowed for a float plant at Marion in our spend for FY ’twenty six. That’s something that we continue to monitor though.

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

Mark Wilson, Chief Financial Officer, Mineral Resources: I think we say about 60% in the document, so that’s about 90 ks. I don’t have the precise kilometers, but I can get that for you, Khan.

Kaan Pekka, Analyst: Sure. That’s that’s perfect. And then finally, just on on the contractor haulage, would you have an indication of average cost per kilometer comes with?

Mark Wilson, Chief Financial Officer, Mineral Resources: No. I don’t. I’m sorry. I know I know what we pay across different parts of our operation, but I can’t actually give you that number. It’s not because I I won’t.

It’s because I just don’t know it. I’m sorry. But, again, we can take that offline with you.

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

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