Release Date: August 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aurelia Metals Ltd (ASX:AMI, Financial) reported a 45% increase in underlying EBITDA, reaching $81 million.
- The company saw a 119% improvement in cash flow from operating activities, resulting in a strong balance sheet with $116.5 million at the end of FY24.
- Mining cost per tonne reduced quarter-by-quarter, setting up for improved performance in FY25.
- The Federation project is on track for first stope ore in Q1 FY25, with commercial production expected by July 2025.
- Exploration results continue to be impressive, with significant potential for future discoveries in the Cobar region.
Negative Points
- The company experienced two recordable injuries over the last 12 months, indicating a need for improved safety measures.
- Gold production guidance for FY25 is lower, ranging from 40,000 to 50,000 ounces, due to the cessation of operations at Dargues.
- Lead and zinc production from Peak is expected to be slightly lower in FY25 due to volume reductions and grade declines.
- The Federation project faced headwinds such as rainfall delays and inflationary pressures, impacting development timelines and costs.
- The exploration budget is limited, which may constrain the ability to fully capitalize on the high prospectivity of the tenement package.
Q & A Highlights
Q: What sort of grades should we expect from Federation in FY25?
A: Bryan Quinn (CEO): The focus will be on zinc and lead, with gold and a small proportion of copper. Martin Cummings (CFO): There will be a decent proportion of development ore this year, so grades will be slightly lower than full production, around 10% to 12% combined lead and zinc.
Q: Can you break down the growth CapEx guidance of $70 million to $80 million for Federation?
A: Bryan Quinn (CEO): The primary spend will be on mine development and pushing the decline down. Surface infrastructure and other works will account for around $14 million. Over half of the spend this year will be on pushing the decline down and infill drilling.
Q: How should we think about the ramp-up in FY26?
A: Bryan Quinn (CEO): We are targeting full production rates during calendar year 2026, reaching a 50,000-tonne run rate. This involves pushing the decline down and opening additional levels over the next 18 months.
Q: What is the future potential of the Maiden resources for Queen Bee and Nymagee?
A: Andrew Graham (Chief Development & Technical Officer): The grades are promising, but more drilling is needed to grow the tonnages. Queen Bee's 560,000 tonnes at 2.2% copper is a good start, but not enough for a mine. Nymagee's resource has grown from 1.9 million tonnes to 2.3 million tonnes, and we aim to expand it further.
Q: What is the main focus of the exploration budget for FY25?
A: Andrew Graham (Chief Development & Technical Officer): The budget is focused on Federation and Peak, with significant work planned for Nymagee. We are also allocating funds for regional prospects to ensure continued advancement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
