Mineral Resources Limited

Thank you, Josh, and good morning, everyone. It's Mark Wilson, CFO here.

Welcome to our March quarterly conference call. I have also with me Chris Chong from Investor Relations.

I'll run through a few highlights first and then I'll be happy to take questions at the end. I know it's a busy morning for everyone.

I'd like to keep the call to an hour max so that you can move to your other calls, and I'm also very conscious that we've given you a lot of additional data this quarter to help you understand where the business is at, so we'll try and step you through that as well. Just starting with my opening comments, starting with governance and regarding the board, I can confirm that the chair selection process is well advanced with the support of Korn Perry.

As you would expect, the shortlist of candidates has conducted extensive due diligence. We look forward to making an announcement before the end of the financial year, as we've previously foreshadowed.

In terms of the recent board resignations, you'll appreciate I'm not in a position to make any additional comments. What I can do is point you to the governance update that was released on 13 February a few months ago, and I'll note to the best of my knowledge there have been no new matters identified since that update.

I'll also note that other directors have attended the EGC meetings from time-to-time, and I'm told the EGC will continue to have a role going forward. Finally, work on strengthening processes, policies and controls continues with dedicated resources inside the business.

Now I'll move on to highlighting a few points from the quarterly, starting with liquidity in the balance sheet. Liquidity remains strong.

We had 1.25 billion of liquidity available at 31 March, including a fully undrawn $800 million revolving credit facility. Onslow Iron continues to be cash flow positive.

The carry loan at Onslow Iron, which to remind you is a receivable from our JV partners for funding them into the project, is now being repaid and sits at just below $800 million. As of 31 March, our net debt totaled 5.4 billion.

CapEx was around 360 million, predominantly Onslow, and CapEx in the fourth quarter is expected to be a similar amount, consistent with guidance overall. There was a working capital outflow in the reporting of about 50 million, and whilst a bit difficult to estimate the movement in volumes that we're expecting, we expect a similar movement in Q4.

In terms of our bonds, they're trading a bit below par, reflective of a broader decline in the bond and credit markets. Just to remind people that the interest rate on those bonds is fixed, and so there's no impact on our serviceability or our interest expense.

Bondholders remain fully supportive of the MinRes credit and remain comfortable with our ability to refinance the group's debt maturities. The only variable, the only thing that has changed is the coupon that we might be exposed to in a refi.

In early February, it was probably around 8%. If we were to try to refi today, it would be closer to 10% to 11%.

But I want to emphasize we've got two years before the first bond maturity falls due, and that gives us a lot of flexibility. As we've said before, as the Onslow project ramps up, our EBITDA will continue to increase, and our net debt to EBITDA will naturally decline.

We have spoken at length previously about the levers that sit within the business if we need to pull the deleveraging. We have a 10-plus billion dollar balance sheet with various assets that we can monetize if we need to.

In terms of safety, TRIFA at 3.67, that increase is primarily due to the construction at Onslow, and as we see construction wind down, we expect that number will improve. In terms of guidance, for lithium, Marion we've had strong volumes, as you will note, through the quarter, and so we're increasing our volume guidance to 185,000 to 200,000 tons, our shared SC6 equivalent, and we're maintaining guidance.

We're also maintaining Wodgina volume and cost guidance. Onslow, following the stoppage of haulage in March, we're now forecasting marginally lower volumes, 8.5 to 8.7, about attributable share, down from 8.8 to 9.3 previously, and we're maintaining our FOB guidance between 60 and 70 a dollars a ton.

Mining services volumes expected to be towards the bottom end of the guidance range. I think the market understands volumes will increase as Onslow line ramps up.

We are providing guidance in terms of the EBITDA for mining services for FY'25 per production volume ton. We expect that to sit between 2.10 and 2.20 per ton.

In terms of mining services production in the quarter, volumes were at 62 million, and they fell slightly due to Yilgarn and Bald Hill going into current Maintenance, but we also had some external volume growth that partially offset those projects going into current maintenance. In terms of iron ore, total attributable production was 6 million tons, shipments in line with that.

In terms of average realized price for the quarter, across the operations was U.S.$89, representing an 86% realization. In terms of Onslow, I'd describe it as a mixed quarter.

We had a fourth-train shipper started in March with 19 vessels loaded through the quarter and 3.6 million tons shipped. As we've previously announced, the rear two trailers of a road train tipped on their side on the Hall Road on the 17th of March, and we paused operations there for five days, with haulage resuming upon consultation with the regulator, with speed restrictions in place.

As the Hall Road is upgraded, the average speeds resume back to plan. Mining activities at Ken's Bore as a result were shipped to development, and production reduced to 3.4 million tons in line with haulage.

The main constraint at Onslow currently is haulage due to the upgrade works being undertaken on the Hall Road, as previously discussed. That upgrade program remains scheduled for completion next quarter.

To date, we've upgraded and [indiscernible] 43 kilometers of the road. Once fully upgraded, the Hall Road capacity will be significantly higher than 35 million tons, as we can add more trucks.

That's a question that comes to us from time-to-time. The constraint of the road is actually limited by truck loadout and road train unloading capacity of over 60 million tons.

April shipping, giving you a sense of that, we expect it to be between 1.3 million and 1.4 million tons tied to the haulage. We are forecasting a significant increase in haulage by road trains through May and June, up to 2.7 million to 2.9 million tons per month.

We've given you the numbers in the quarterly to support that. Significantly increased haulage fleet, up to 84 jump of road train sets and moving contractor trucks that can travel down the highway, up to 85 to 100 to support those numbers.

We've also given for the first time the average cycle times per day for each of those sets. In terms of the fifth and final transhipper, which we need to be able to deliver 35 million tons, that's scheduled to arrive at Onslow early in May and then we'll move through a period of wet commissioning and we expect that to be operating early June.

In terms of the Pilbara hub itself, we shipped a total of 2.3 million tons, which is another solid quarter. In terms of lithium, we had a good operational quarter for that business.

Total SPOD production across Marion and Wodgina, 133,000 diametric tons with shipments of 127,000 tons. The average realized price achieved across both Wodgina and Marion, this is an SC6 equivalent number, is U.S.$844.

At Marion, production was strong at 70,000 tons, up 21%. We had higher quality feed from the current pit and we had stronger recoveries.

And as a result, we've increased, as I said earlier, volume guidance for the year to 185,000 to 200,000 tons, up 20% from the previous midpoint. We've been saying for a while that the cost will come down across our lithium operations.

The March quarter has shown that. For Marion, we saw cost reduction measures flowing through with costs on an SC6 basis at U.S.$708 a ton and we're maintaining guidance, as I said earlier.

In terms of Wodgina production, 63,000, up 17%, quarter-on-quarter. Again, significant increase in recoveries from plant improvements and the delivery of more fresh ore.

Again, that in turn drove FOB costs down. FOB at Wodgina was U.S.$775 a ton on an SC6 equivalent basis.

Again, as I said earlier, we're maintaining guidance for the full year. Finally, in terms of energy, we finished the drilling at Moriary Deep and Lockyer-6 during the quarter.

We're continuing with the analysis of the results of that drill work and working with the Hancock team on that. The first well for the MinRes-Hancock venture, Dandaragan Deep-1, commenced drilling in March and we'll have a better understanding where that's come in over the next month or so.

I'll end my opening comments there and I'll now hand back to Josh to queue for questions. Thank you.

Mark, first question's on the balance sheet, just sort of cash matters. First of all, thanks for providing the additional detail in the result, which is helpful.

A question on the covenant testing of the revolver, which I see the 800 million revolver. I know you pointed out here that you think that you will comply with the maintenance covenants at the end of June.

Can you just step through that covenant itself? Is it a typical EBITDA net interest covenant?

How do we adjust the EBITDA? Is it just based on group EBITDA?

Yes, good morning, Paul. Thanks for the question.

Yes, we have given a little bit more flavor across a number of points in the report this time round. In terms of the covenants, whilst confidential, I won't give you the full details.

You should assume that they're a typical covenant package for a facility like this. The main focus is an ICR-type covenant, which is EBITDA over interest and the EBITDA treat as underlying.

Okay, thanks, Mark. I might come back and talk through the mechanics of all that, certainly adjusting for interest expense, et cetera.

The second question is on just broadly the balance sheet in general. I know you've pointed out that an equity raise is not under consideration, so I'm just curious around how you think about still downside case scenarios and potentially a plan B and pulling levers, as you've always mentioned, with respect specifically to asset sales.

Do you have any active testing of the market on any asset sales at the moment? And if you do, how do you actually order those options?

How do you think about actually ordering those levers or asset sales in priority?

I mean, there's about six questions in that, Paul, but I'll do my best to remember them, and I'm sure you'll pull me up if I forget any. The way I think about it is this.

There's a cost associated with every choice, right? I mean, equity a raise, as we keep being encouraged to do so by aspects of the market, that in my mind has a huge cost at today's price, huge impact on shareholders who don't participate.

So I think of that as an extreme high-cost alternative. At the other extreme, I've got precedent transactions for the road at over a billion for half of it that I know I could transact on if I needed to.

Again, I'm not saying it's a priority or a preference, but I'm giving an example. We've talked previously about opportunity to do something with the carry loan, which is sitting at 800 million.

So there's a lot of capital tied up in those two assets alone. We get inbound queries from time-to-time on other assets within the portfolio.

That's no surprise. We had that with the gas assets over six months ago, and we moved to transact as a result of that level of inquiry.

Basically, we sit down and we weigh up all the options. We look at the portfolio.

And what I would say, Paul, is that the assets that I'm describing are not assets that will take six months or 12 months to transact on if we need to do that. So we can move quickly if we need to.

In terms of the way we think about downside scenarios and so on, I'm probably jumping ahead of a few questions at some point, and I think I've said this previously. I should actually acknowledge that the world's obviously a bit of a different place than it was three months ago in terms of the external environment.

There's a little bit more uncertainty. We're still seeing reasonable demand through the iron ore markets.

We've said previously we see somewhat of a floor around 90 there. We do test our portfolio with prices below that.

Prices would have to stay below that for a while before we'd need to start to move on any of the other opportunities. So I think I've tried to address the various questions in your list, but if there's anything else, I'm sure you'll come back.

Just to start on the governance piece, and I'll come back with an operational question. So just interested in your comments around in the release around the replacement program for the chair is on track by the end of June.

Can you give us a little more color perhaps on perspectives on priorities and timelines around the new chair potentially replacing board talent given recent resignations, addressing the vacancies and the ethics in governance committee, and then I guess in respect of the board response to last year to beginning the potential succession process for Mr. Ellison.

Yes, good morning, Lachlan. Nice to talk.

In terms of the chair process, what I would say is that that process has been running for a number of months. As I said, we've been working with Korn Ferry on it.

As you would expect, it's identified a number of very strong candidates for the role. It's also identified a number of directors who whilst they are extremely interested in the opportunity felt that they wouldn't have the bandwidth to be able to commit to the chair role as it would entail that may raise over the next 12 to 18 months for time reasons.

So what I'm saying, therefore, is that we actually have identified other names through that process. As it was, our constitution limited the board to a board of nine directors, which is where we were at prior to the recent changes.

So in fact, the changes have given us or afforded us an opportunity under the constitution to be able to move more quickly than we would have been otherwise able to do. So I guess what I'm saying is I think we've got some flexibility in that process and we're expecting, as I said, to have that new appointment made over the next few months, next six weeks or so.

In terms of the EGC and so on, in my comments, I noted that a number of the existing or remaining directors participated, attended at those meetings from time to time. The board's meeting shortly to consider the composition of the various committees.

Some of those changes will be interim until the new chair is appointed. In terms of succession around Chris and so on, the position there is no different to where it's been for the last few months.

He's fully committed to doing what he can to drive shareholder value and he will, as he himself has said, work with the board on that process in due course. In terms of, I think that covers off your first question, Lachlan.

Yes, Mark, that's great color. Thank you so much.

The second question is operational and in respect of lithium. So quite an impressive cost out performance in terms of where you've got those assets to.

Can you talk to the expectation going forward in terms of how long you can sustain at these cost levels? I mean, is there any point in the next year or two where you need to come back and increase stripping or some other set of factors that might dictate those costs need to lift again?

Or is that the new benchmark to take forward? Thank you.

Yes, thanks for the observation and it's been a while since we've had as good a performance out of lithium for the quarter as the one we've just had. And I think it's demonstrated the potential of these assets.

I know it's been a while coming. I know we've had some misses along the way.

In particular with Wodgina, it shows the impact of having access to fresh feed and continual fresh feed. We're operating two trains generally.

Every now and then we turn the third one on, but not for very long. And that's allowed us to drive those costs down.

We've also changed some of our mining practices. But most importantly, we're getting better recoveries through the plant there.

So the way I think about it, to answer your question is, the plant with fresh feed, we've got a better sense of the recoveries and what's possible. So that shouldn't change.

The real variable will be stripped in future years. I'm not going to give guidance for '26 in this call.

But we expect and one of the questions I will anticipate is, why do you keep operating the lithium assets if you're cash neutral or thereabouts? Yes, last month, the assets actually were cash positive.

The reason that we, particularly with Wodgina, the reason we keep operating these assets through this period is because we're effectively investing for what will be a very strong performing asset in 12, 18 months time. As we continue to expose the ore body, we get to a point where we have consistent threshold for three trains.

And at that point, we'll see the strip lower. We actually see the grade improve in the mine plan.

We expect recoveries to improve. So we expect costs to be lower in terms of Wodgina.

Marion's a little bit different. It's always a strip operation.

It's complex in the sense that we operate out of multiple pits and we're moving from pit to pit at different times. So it's a little bit more volatile in terms of its cost profile.

But, hopefully that gives you a bit of flavor. We'll have more context, more detail when we do our update at the end of the year.

Look, I wanted to ask a couple of quick ones. The first one was around, we've talked a bit about the balance sheet, but I wanted to get a bit more color perhaps on the working capital side of things.

You've obviously given us some understanding of the 50 million outflow you're expecting in the next quarter. But you are coming to the end of a very big construction cycle.

And as you step into FY'26, working capital is obviously going to be key in terms of how your deleveraging happens as well and how lean you can run that business. So I guess my first question is, how should I be thinking about working capital into next year?

Is this going to be an incremental source of cash for us as we step into a very pivotal FY'26? And I'll come back with a second.

Thanks.

Morning, Rahul. Thanks for the question.

I think the best way to think about it next year, and I know it moves around from quarter-to-quarter and there are quarters when we release a fair bit of cash out of working capital and others that consume. And I think next year, a reasonable starting point is to assume 100% conversion, cash conversion of EBITDA.

I think, yes, I take your point around the unwind of the construction that typically sees accounts payable come off. But there are other aspects in the business as we grow, we think we can manage and release some capital out of.

So I think if you just start with 100%, that's a pretty good baseline.

Okay, that's helpful. Thank you for that.

And then I guess my second one, really appreciate the extra detail on Onslow today. And obviously, you've talked about your monthly run rates you're expecting in May and June as well, as an average, at least.

And obviously, you still have the last transhipper to be delivered in June. So if I take a step back and I convert those monthly run rates, you're already kind of starting to flag for May and June between 32.5 million to 35 million tons per annum production run rate.

And obviously, as I said, the transhipper doesn't come until June, you're still running slow speeds on the haul road. How should we be thinking about this asset going forward?

You just talked a bit about, Mark, you talked a bit about the toll road being capable of doing much more than the 35. It almost seems like the transhippers are perhaps doing a bit better as well.

I know it's early days, you still have a lot of work to do before you get to nameplate. But how should we think about the potential in the asset beyond that?

And then the second part of that question on Onslow price realizations seem to be going very well. I mean, is that representative now of this mine going forward?

Or are there still some variables we need to be worried about?

Let me take that first, that last question first. In terms of the realizations, we're really pleased with the way that the product's been received in the market.

The customers are finding that it's working well through their plants. So, yes, there's a strong appetite for it.

And as we've said previously, Bauer would love to have all of our product if we would agree to let it have it. In terms of the transhippers, I don't want to get ahead of ourselves here.

We are very pleased with the way that the transhippers are performing. We do believe that we can get up to 32 million out of the four transhippers based on the cycle times that we're seeing possible.

We're getting better than nameplate performance through parts of the loading facility, for example. And to remind you, we're less than a year into operation.

So I think that there's potential there. The one thing I would say is that as with everything, you need to have redundancy in the system.

You need to have the flexibility to do maintenance. You have unexpected unplanned issues that arise from time-to-time.

So I don't want to be talking in excess of 35 million with five. I just don't think we've shown that yet and I think that we'd be getting too far ahead of ourselves.

But I will just close that question by saying we're very pleased with the way they're performing.

Just one quick question from me. So just with the haul road, you've had to slow down the speed with the issues that you've had, but you've increased the amount of road trains that you have on there.

So just looking at the cost, I mean, the costs look pretty good at the moment, but can you just give some insights or comment on how much these extra road trains are impacting costs and how much the unit costs will come down once you finish the upgrades and increase the speeds and everything goes back to normal? Thanks.

Sure. Good morning, Jonathan.

The way to think about that is that the haulage costs are a cost of mining services. And the mining services charges are fixed for the JV.

So the Onslow costs per ton themselves, as we quote them, are not impacted by those additional, the cost of the additional haul trucks. You are right in identifying those costs there.

There's no question the cost this half in mining services will be higher as a result and less productive tons in the sense of the activity that's required to move them. But we factored all of that into the guidance that we've given around the EBITDA for mining services of between $2.10 and $2.20.

So that's where those costs sit.

A quick one on cost at onslaught, noting the $68 a ton sits below your guidance range. Assume that you probably had a few benefits associated with sort of ramping up the mine and operating below your nameplate production capacity.

Can you just sort of highlight those, because I think consensus expected those costs to be set higher. And I'm going to follow up.

Good morning, Rob. If I caught that correctly, you're just asking for a little bit more flavor of the impact of the ramp up on the cost, is that right?

That's right, because costs were lower than where some expected it to be and I just sort of wanted a bit of flavor around why that were and where we can, and the rate at which we can expect that to trend in the future.

Yes, okay. I think the best way to think about it is, we've previously given a projected fault number, which was anchored off pricing a year, 18 months ago, at 45.

And that assumption assumes full run rate, 35, mine operating in a mature state. Obviously, this quarter is lower than we've reported previously.

The costs have come down. We've had the benefit.

Part of the impact is that the mining services ramp up rates, step down over time, tied to time rather than to volume. So as we move through the ramp up period, the mining services costs come off a little bit, the cost charged to the JV that is, and the benefit of that is seen in that number that you were quoting.

I think we won't see the number really get down towards the end of the 40s until we get towards that 35 million ton per annum run rate for an extended period.

Thank you. And then just a question on mine operations, obviously.

The wet weather on the haul road impacted your ability to haul during the quarter. Did you pay back your ramp up and your focus on development at the mine?

Can we expect that to give future benefits associated with the reorientation of [indiscernible]?

We refocused on the mine development. We got to a point where the stockyards were full.

So we focused on development in terms of waste movement and so on. But we were in a position where we'd slowed down activity to a point.

But as you'd understand, that shift to moving waste and so on, well, that would benefit down the track. Yes.

Hopefully a couple of quick ones. Firstly, just on Onslow and getting to 35 million tons in the September quarter.

Currently, you're obviously using a lot of additional fleet on public roads. Do you assume you'll get to 35 just with all the off roads so you can get down to the cost structure?

Or will you still be using third party haulage to get to 35 by the end of the September quarter?

Good morning, Glyn. So our modelling and our experience shows that we can get to the 35 just with our off-highway fleet once we have the unconstrained speeds and able to operate along the length of it.

So we expect the cost of the supplementary contractor fleet will come out of the mining services business next half.

Okay. So you think they'll be gone by the time you get to 35?

Okay, thanks.

Yes.

And the second question, Mark, quickly, just on your net debt, obviously increased a little bit again over the quarter. If we look at your current projections for the quarter and pricing, assume it stays where it is, have we seen peak debt or do you think we go a little bit higher before we peak out?

Thanks.

In terms of peak debt itself, yes, if it goes higher, it's not going to go significantly higher. In terms of net debt to EBITDA, it's coming down every month.

Yes.

Okay. But the peak net debt probably this quarter if things go well on your projections?

Yes.

Mark, wondering if you can just give a little bit of an update on some of the contingent payments that you're expecting to come in over time related to the gas business. I'm particularly interested in the Moriary drilling.

I think previously you'd said that the work on defining a resource there would be done by February. So any particular reason why that's been delayed and how are you thinking about some of those contingent payments that are still kind of expected to come in over time?

Thanks.

Yes. Good morning, Matt.

The answer is that the process under the arrangements with Hancock basically require third party experts report assessment. And then each party has input into that, has involvement with that.

So it's just a process and that's offshore. It's being done offshore.

So it's just a process of working through that and all the data points that exist for it. So it's a little bit slower than I would like, but we should have a reasonable feel by the end of this quarter where we've landed.

And that's also for Lockyer, similar issue there in terms of assessment of the outcome. And just to explain that a little bit better, we've drilled one well there, but there are other wells in the nearby proximity.

So it's not like you're trying to assess the impact of one single well. You're trying to assess the way that that reservoir operates through that broader environment with the input of the other wells, if that makes sense.

That's why it's taking a little bit longer.

Okay. Thanks Mark.

So in your view, all of the required drilling has been done and really it's now more sitting in the data gathering and interpretation phase at the moment.

That's correct. Yes.

Cash is [4.50 million] [ph], so that's lower than the street had you ending the FY and we're only in March quarter at the moment. What are the key buckets of chunky things in there, Mark, if any?

Was interest payable in the March quarter? Was there any big working cap moves, anything to call out that we should think about?

I mean, we have interest payments through March, April and also in May, depending on the month. So it can be a little bit lumpy.

I'd have to get back to you and just try and reconcile back against the street numbers, which we can do and take that offline with you.

Okay. Got it.

And then, so interest costs at the moment are running above 400 million a year. And so if the base case is to roll the debt, which it seems like it is, and you're going to move from mid eight to an interest rate to 12% as per your comments, I mean, I know a lot can happen in the next period of time before that debt needs to be rolled, but how do you de-gear?

What is the base case for the balance sheet, I guess? Is it that assets are sold?

Is it that it's too early to know because it depends on commodity markets and the bond markets, et cetera? Or is there any sort of color around what the base case is?

Can I just be very clear? I don't intend to roll at 12%.

And I don't need to roll at 12%. And I've got two years in which to execute that refi.

And I would expect that interest rate to be lower, considerably lower when we do refi, primarily because the Onslow ramp up will be complete by that point. But to get to the more substantive aspect of your question, next year we'll see the business move into a free cash flow positive state.

We will see de-leveraging. As a result, we'll see free cash balances increase.

We have a cost associated with refinancing or repaying bonds before they're callable. So we would have to weigh that up.

The first one becomes callable at par next week, which means we can refi it with no cost. At the other extreme, we could be looking at an 8% plus premium to refi.

So we're unlikely to be wanting to pay down debt for the sake of paying down debt where it's going to cost us to do so. But we'll continue to monitor that as we work through and build those cash balances up.

And finally, as I said earlier in my comments, we do retain the option to continue to monetize parts of the balance sheet if we need to. That's something we just, as we've been doing for a few years, we keep an eye on it regularly.

A couple from me, just wondering if you can talk through the potential port charged there of $1.40. I mean, do you expect to need to pay that at some point?

It reads as though you don't, but just wondering what the process is around disputing that and whether that actually does end up needing to be paid. And then the other question I had, again, just on the unit cost, the really good outcome in the quarter, it does look as though you've got costs stepping up next quarter just to get to the upper end of the guidance range at the guided tons.

Am I reading that wrong? Just wondering if you can talk through that.

Thanks.

I'm assuming you're referencing Onslow numbers with that last question. Is that right?

Yes.

Yes, that's right. Sorry.

Yes. I mean, the answer is, we've given ourselves a little bit of flexibility in those numbers when we got to the upper end of the range.

But yeah, we're very pleased with the result in the quarter. And we're pleased with the way that the operations are aligning with where we thought they would in our modelling a few years ago.

In terms of the port charges, let me just provide a little bit of color around that, because we probably haven't been as clear in the statement as we should have been. There's two components to it.

And I should emphasize that these charges got put to us by the Port Authority after we'd started operations. So we were a bit surprised by them.

First one is a 90 cent per ton charge. And the port would have that apply against all tonnage movements in the channel.

The second is a 50 cent charge, which is, as we understand, only going to be applied on tons through maintenance periods when transhippers are alongside berth for maintenance and so on. Regardless of how they describe them, we've taken a view that the port can only lever reasonable charges.

And we've started process in court to try to get to the bottom of it and understand the background of the charges. And that's just a process we're going to step through.

Ultimately, the cost will be cost for JV, not for MinRes. At this point, we don't believe we're going to have to pay them, but time will tell.

And what's the current port charge at the moment, please?

I don't think we've ever disclosed that. I'd have to check that and get back to you.

It's not significant. At Utah, it's 11.

At Oslo, it's significantly less than that.

And just a really quick follow-up, if I may. Just your confidence levels of getting into the 40s as a unit cost now that you've had it for a little while running?

I'm confident I am. I think that the work that we've done, as I said earlier, we're pleased with the way the operation is falling into line in terms of our previous projections.

I know we've had some disruption with cyclones and with the road upgrade works and some of the truck issues. But by and large, I think the project's actually falling into place well and I'm confident with those costs in the 40s.

Mark, a question on the mining services EBITDA per ton guidance you provided of $2 to $2.10. I just want to confirm, does that exclude the revenue that you bank from the Hall Road?

Because just noting in the first half that I think your margin was around $2.60 a ton or thereabouts when we exclude the $29 million you banked. So I'm just trying to figure out what the second half looks like to get to the average of $2 to $2.10.

Yeah.

So, Paul, you can assume that it's like for like. The $2.10 to $2.20 is what we expect across all the volume out of mining services for the year.

And then, yes, actually, I was about to start to give guidance for next year and I've cut myself off, so self-selected there.

That's fine. I think you've answered it.

Also, it's coming down because of the, partly because what you said earlier around just using the contract trucks, right, the additional cost to see the cash flow.

Yes. I should have explained that better.

This half has seen a fair bit of disruption through the mining, for the mining services. If you think about the mining services, they're still around the crushing, but more from the pit to the ocean going vessel.

There's been a fair bit of disruption through that whole period for the reasons we've talked about. And so that's been less efficiency, driving the costs down.

You can take a view as to what you think that will be going forward. Yes.

Yes. Okay.

And then just an accounting question, and this is a small one, but just a note too on the front page on the revaluation of the $3 billion unsecured bond. Was there much movement there in the other $1 million amount, just trying to work out the, what, how that contributed to net debt increase, if at all?

We were using 63 at the, at the half, so it wouldn't have been a material movement.

Just on the undrawn facility, I understand, you know, you answered the question to Paul at the start, obviously it's all [Onslow] [ph], but to run your cash down to what looks like now three to four months of liquidity just on the cash side, is there a reason why you haven't drawn the revolver? Are there issues at all, or is there something else?

No, there's no issues, Glyn. I mean, I could draw the 800 today if I wanted to.

I could draw all of it. The way we think about it is, it's not intended to be a source of permanent capital.

It's intended to be drawn from time-to-time, depending on working capital requirements and the state of the business for a period of time. But at this point, we don't need to.

And the process of drawing it, and again, just to explain it, it's a very simple process to draw it. And we've got nine banks in the, nine banks in the facility.

It's a club structure. We've got another half a dozen who would love to be a part of it, that we can turn to, to add to it if we want to, or if we want to swap anybody out for whatever reason.

So we've got a fair bit of flexibility with it, but we don't need to draw it. We haven't needed to draw it through the quarter.

Okay. And if you drew it, you can get the money within 24 hours, can you?

Yes, it's as simple as, it might be 48, but it's as simple as, I mean, essentially I have to represent that there are no defaults subsisting at the time of the draw. So that's on me.

And then it's a notice to a bank, whichever bank we choose out of the nine, they've all got different pricing and terms. And then we get the money within a couple of days.

Okay. So it's expensive sort of short-term liquidity.

So hence, no need to really draw it if you can avoid it.

Yes. I mean, there's no need to incur the interest cost if we don't need to.