Mineral Resources Limited

Effective from 1 July. We had a Board meeting -- Board meeting yesterday, and Noel is in the office this morning, so it's just sitting in on the call.

As usual, I'll run through a few highlights first. 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. Start with the key highlights.

Overall, pleased to advise that the business across all segments has delivered volume cost guidance for FY '25. 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 3 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 well progressed underway. As I said, Mel effective as chair from the start of this new financial year, also joined by 2 nonexecutive directors in Ross Carroll and Lawrie Tremaine.

Both of them joined the meeting yesterday for the first time. So that change of the Board is leading a significant governance refresh and is one of the key priorities of the new chair along with strengthening of the balance sheet.

Through this whole process, management is working with the Board to continue to review leaders 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 Onslow, pleased to confirm that it continues to be cash flow positive, both at mining services and at commodity level.

I'll take you through that in a little bit more detail shortly. In June, we hit an annualized run rate of 32.4 million tonnes per annum tons at Onslow, which was a great performance, particularly as we only had our fifth last transhipper 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 Onslow Iron. Our share of 17.1 million to 8.8 million tonnes equivalent to 30 million to 33 million tonnes on a 100% basis.

Roadworks, the reason why we're not hitting 35 million tonnes across the whole year. And again, I'll talk you through that in a little bit more detail as we get to Onslow.

Completion of the haul road upgrade remains on track for completion through the end of this quarter is our move towards 35 million tonne per annum run rate which we expect to hit at the end of September or thereabouts. As, I think, generally well understood seasonality impacts for this operation typically between November and March with cyclone season again, I'll talk through that as I think about the numbers.

In terms of safety, the TRIFR for the 12 months on a rolling basis was 3.84. It's a tick up.

We had a new 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 the Onslow construction coming off and also Bald Hill and Yilgarn operations stopping into care and maintenance. As corporate, very pleased with where we finished the year with liquidity.

We finished with over $1.1 billion at 30 June. And as a result, we see net debt-to-EBITDA continuing to reduce.

We kept a small balance on our revolving credit facility drawn at 30 June, but we had more than $400 million in cash, including that draw. Just so that everybody is clear, I expect to have full access to that RCF facility going forward that's consistent with what I've said a number of quarters now.

In terms of net debt, we finished at $5.3 billion for the year. In terms of the quarter, the key movements, we had a $200 million FX gain on the U.S.

unsecured bonds. We had a couple of hundred million dollars in interest payments in the quarter.

We had a small working capital outflow of circa $50 million. We had a couple of hundred million dollars spend in CapEx.

CapEx in FY '19 -- sorry, FY '19, that was a long time ago -- FY '25 came out at $1.9 billion, which was below guidance of $2.1 million. Just to be clear, about 100 of that delta is a timing issue relating to Onslow and the timing of certain payments.

That $100 million will fall into FY '26. And the other balance of $100 million is represented by savings across the business.

Just going to make a quick observation about FY '26 CapEx. We're still working through with the Board what that looks like.

And as normal, we will provide more detailed review guidance in more detail review guidance of the FY '25 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 '25 spend, so circa $1 billion or thereabouts.

About half of that will be sustaining and then we'll have some significant ongoing spend at Onslow including the transhippers, the completion of the road and the opening up of [indiscernible] as a satellite deposit. And then we've also got some exploration spend, including some energy.

But again, I'll take you through all of 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 growth figures look like just to help in terms of numbers for FY '26, we're thinking we'll have about $150 million of asset financing both yellow goods and train 6 and 7.And as we've talked about that before, those trains are important to take us about 35 million tonnes.

In terms of leverage, again, consistent with what we've talked about for while EBITDA continues to increase month-on-month and as a result, the net debt-to-EBITDA ratio continues to decline organically. In terms of the carry loan at Onslow which is an important asset of the group, representing our receivable for funding our partners into the project.

That's been repaid with interest and the current balance at 30 June was $766 million, and that's a decrease of -- a net decrease of just over $20 million. That balance should actually go up through the quarter because as we bring construction to completion, we invoice that goes on the carry loan so that $20 million is a net number.

In terms of full year statutory report that will be released at the end of August, we've given some indication of the 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 $2.10 to $2.20. We recorded a record 83 million tonnes in the quarter, which is up 21 million tonnes in the prior quarter, and that's driven by the ramp-up of Onslow loan.

And I should also add the mining services, the external facing -- sorry, I'm going to say external facing, the crushing and haulage businesses have done incredibly well over the past year, the last 6 months in particular. In terms of iron ore, iron ore total attributable production was 8.9 million tonnes.

Shipments of 8.3%. We realized USD 79 on average across both hubs, and that's about 80% 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 one interesting shape to it. It was quite flat.

So we've taken the opportunity to just start hedge some of our volumes over the next 6 months to walk in some of that price gain. In terms of Onslow in particular, I'm very pleased with the progress over the last quarter.

As I said, the fifth trainshipper really started towards the tail end of June. We loaded 30 vessels and 5.8 million tonnes shipped.

We had 147 trucks operating across the quarter, 83 of them ours and 64 contractors on average. 31,008 road train trips completed over the road that a number of people are able to see through the quarter.

And this is a statistic that always amazes me, we traveled an aggregate of almost 10 million kilometers on that road through that period. In terms of where we are at the moment, we have 120 MinRes, in fact, over 120 MinRes trucks commissioned on site in towards the 140 that we need.

And our plan continues to be to transition contracted trucks out volume growth completion at the end of this quarter. In terms of FY '25 shipments for Onslow, 14 million tonnes on a 100% basis, 8 million tonnes of our 57% share and [FOB] costs were $57 a tonne in the quarter full year at 63.

Pilbara Hub shipped a total of $2.5 million, another strong quarter. That took full year shipments to a touch under 10 at 9.7 million tonnes.

FOB cost of $76 a tonne at the low end of guidance. And as we've announced separately, we completed in the quarter the sale of the Yilgarn 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 has highlighted the quality of these 2 assets of Wodgina and Marion. We've continued to work to bring flexibility into the operations, where ever we can.

The average realized price across both sites was USD 642 dry metric tonne on an SC6 equivalent basis. Now 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 want to ask me a few questions about this, but the market has been up and down a bit.

Prices were back towards 600, just over 600 in early June and then -- since then, we've seen prices bounce back strongly and to 800 to 900. In terms of spod production, Marion and Wodgina have generated 145,000 tonnes and shipped 135,000 and the relationship with both of the JV partners [indiscernible] continue to be very, very positive.

In terms of Marion specifically, FY '25 shipments were 23,000 tonnes on an SC6 equivalent basis, above the high end of the guidance and full year costs, again, our SC6 basis at FOB costs were at 900. During the quarter, FOB costs, however, were $717 million and 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 tried to bring more flexibility into the operations of 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 focus on recovery than just pure volume.

That does -- depending on what we do with some of those flexible options have the potential to increase cost 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 we result, but very, very happy with the way that Marion is shaping up.

And one of the opportunities we see for the new year is to continue to pull the deferred strip out of it. In terms of Wodgina, another fantastic performance, production 32% up.

better quality. We talked about the importance of that feed for sometime and the direct relationship through the recoveries, costs on the SC6 basis down into 641 at Wodgina, a 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 about 65% through FY '26.

Just to give you a little bit of background of the costs, we're right through Stage 2 now in terms of the ore body development there. that ore body has gotten better as we get deeper through that stage.

FY '26, we're just starting to open up Stage 3, 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 better in mind as we think about costs for next year.

Again, we'll provide explicit guidance in the results in a month's time. And just finishing finally, with energy.

We received just a day or so ago independent certification in relation to [indiscernible], which came in at 27 Bcf on a 2C contingent resource basis, which is just below the minimum threshold that we needed for a contingent payment on that asset. Lockyer 6 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 continued performance of Onslow, the setting up of the business as we move into FY '26 and the integration with the new Board and chairs. So business is set up very well going into '26.

There's great energy in the business and a very strong focus on continuing to take it forward and strengthen up. With all that, I'm conscious I've been talking for a bit.

I'll hand back to David for questions. Thanks.

Mark, first question is on just liquidity. Looking at December half, 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, your internal model at the moment, do you need to draw down any more of that revolver in the December half. And or are you looking to refi the $1.3 billion secured potentially early.

Just trying to get a handle on how you're looking at liquidity in December half. That's the first question.

Yes. Paul, thanks for joining.

The way I think about it is this Q1 and Q3 of each are 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-ended weighting of CapEx as we move to complete the road and we make some milestone payments on train shippers and the like, carry on the payment of acquisition of Iron Valley as well.

So yes, there's a little bit of cash moving around this current quarter. If we do another draw, it will 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.

But bigger picture, I'm very comfortable with the liquidity position. I feel like the business is in good shape.

Onslow is starting to generate a lot of cash and we're 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 6 months.

And with respect to the refi of the 1.3?

Sorry, the 1.3, you mean USD 700 million? You're talking about the bond?

The senior structured loan. Yes, that's right, due in May '27.

Yes. So that's unsecured.

Yes. But yes, USD 700 million.

So we have a bond USD 700 million that's due in May. We are in good shape on that.

And by that, I mean, when I speak to the quarterly 3 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 pricing in a fair bit of risk and uncertainty just generally. If you look at where the bonds are trading today, they'll probably come in for 100 bps or more.

we continue to have really strong support from our bond investors in the U.S. And we're in a period where we can't do anything with it.

We need a fresh set of financials, which we'll have at the end of August. And unless something changes significantly, you could assume that we'll be targeting something like that this half.

And then...

Sorry, Paul, just my point I 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.

Yes. Understood.

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 side business. But 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 have done it. So I was just wondering if you can talk through the volumes you've hedged pricing and how that works now 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, there was -- the team was talking about realized pricing. So just wondering if there's anything in relation to that with respect to the unwind of the prepayments?

Yes. So no impact on the prepayment.

I mean those sales are the sales 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 hedging Yes, I looked at that curve, it was almost flat out to January, which was quite extraordinary. -- anyway.

What we've done is we've laid in a number of 0 cost collars which put a floor typically around 99% to 100%. we won't go above 1/3 of production in the half.

We're just trying to get the balance right, but we're just taking the opportunity to lock away some of that downside.

I just had a couple of quick ones. Just trying to discern your comments around you've got CapEx to spend on the transshippers but then you said you've got $150 million of asset financing, which also was for the transshippers.

What's the distinction between the 2 spends?

So what I was trying to do is call out the material items of spend coming up this year, just to give you 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 $150 million of asset finance generally through that period. That's not exclusively transshippers.

It includes things like the rest of the haul truck fleet the jumbo road trains and also some again over year as we roll off older assets and acquire new assets over the course of the year.

Yes. Sorry, Mark.

I mean I guess I was -- maybe I misspoke, but I was just trying to see if we're spending CapEx on the transshippers, why are we also asset financing as well? Why it feels like I'm doubling up.

Is there something I'm obviously missing?

Yes. So Glyn, what historically, we've talked CapEx net.

We've historically 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, and how we're going to use the asset finance.

So we can set 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.

No, that's great. And then just a final question.

You made the comment that -- I couldn't keep up with the view, but I think you said 27 Bcf on the first exploration for energy. Came in below the levels of the contingent pain, but you said Lockyer 6 certification should happen this quarter, but there's no level for contingent payment for that one.

So what's the best case scenario do you think out of the $300-odd million that we could receive? Any thoughts on what we could get this half?

Yes. Apologies if I was talking quickly, I should have spoken a little bit slower.

We're targeting again, out of Lockyer, most we can get would be around $100 million.

2 for me. Just starting at Onslow.

Obviously, pleasing sort of guidance into FY '26. Can you give an indication of how you're thinking about pulling together that quarter of above 35 million tonnes per annum run rate to secure with the next $200 million from MSI?

And I'll come back with my second.

Sure. 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 port in load and the layout of the mine.

So we factor all that in. So this quarter will be softer than others.

Obviously, we have weather through the Q2 and Q3. That will be the same every year as we've talked about on a number of occasions.

And then we have pretty clear Q4 we would expect. In terms of your specific question around targeting the 3 months and the $200 million I think the best way to think about it is this, we can't plan for the weather.

We can't deal with the weather. It will be what it will be.

But what we can do is develop plans 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.

I should have said that in my comments that July production is going to be a little bit softer, and that's because we've taken the opportunity through July, whilst the road is being upgraded to basically focus on maintenance, not just at the plant, but also in the transshippers. So we've been getting all the 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.

Yes, great. And just a follow-up there.

So the spring capacity, we're not talking there about transshippers 6 and 7 in the next 12 months. We're just talking about, I suppose, debottlenecking or identifying incremental sprint capacity and what's that today?

Yes. I should have been clearer, apologies.

We have sprint 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 [indiscernible] and that gives us a little bit more flexibility in the way that we move tonnes through the system whilst the road upgrades happening.

Yes. Okay.

All right. That's great.

And then my second question -- but 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 contractor trucks. Can you give us an indication of as those trucks demobilize through December half, what sort of uplift might you be able to sort of bank from the mining service margins?

I prefer to hold guidance on mining services margins to the results in a month. Historically, it's been around $2.

There have been lots of varying -- as you've identified, there have been lots of impacts lots of factors impacting the last few months, including the contract vehicles. But the Mining Services business is on plus a lot of other things.

And so there are a lot of other factors that feed into what those margins will be going forward. So I know I'm hedging.

I'm not giving you the answer that you want but I'd prefer to hold the guidance commentary back on the margins until the end of August.

First question on Wodgina, 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 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.

Rahul, nice to talk. I touched in my comments on the introduction of flexibility into our operations and the introduction of those HICs, cyclones, has already had a significant impact.

So as the market would know, we have 3 trains running -- not running, we have 3 trains constructed at Wodgina. We've been running 2 trains, sometimes 3, depending on circumstances.

We've been able to complete the installation of the HICs on 1 train. So we've got pretty good evidence of the impact that has had on the performance of the train and the recoveries.

And we're expecting to have 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.

Okay, brilliant. That's clear.

Look, second question is just a bit of an extension from Lachlan's question, and I was going to ask you about the Mining Services margin or change it a bit. So you're 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% in fleet being able to operate on the private whole road and not have any contractors or any use of the public highway.

And the reason I'm asking this really is because I want to understand when that contingent payment can be expected to come through from Morgan Stanley Infrastructure Partners?

Rahul, last question, and I will I'll anticipate what you're going to ask on the mining services because I probably didn't answer it fully. When we gave guidance on the $210 million to $220 million at that stage, there were a huge number of moving pieces around contracted trucks volumes, costs of those contractors, we were mobilizing -- continuing to mobilize a lot of vehicles and people.

So we took a view at the time, and we wanted to make sure we got it right. And over the balance of the quarter, we were able to actually identify some savings.

In terms of Onslow and the $200 million and the full run rate in Morgan Stanley Infrastructure Partners, I should so 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 have 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 -- sorry, in calendar year '26 once the season is finished around the end of March.

So we see clear windows to go at and what I was trying to say earlier, and I'll try to be a bit clearer. Whilst the road is an impediment to us delivering those -- that milestone.

It doesn't include us from doing so. We just need to have a few things work in our favor, including the use of the sprint capacity whilst we're working with the upgrade.

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

Just wanted to ask whether any OpEx at Onslow was capitalized in the quarter?

Yes. So what we've done, Lyndon, is we've basically been using the standard cost approach, which we've disclosed throughout until the 30th of June.

There was a small amount capitalized, but not much. The actual costs pretty much in line with what we reported.

So we are seeing the cost come down, yes.

Excellent. And then just with the $1 billion of CapEx for next year, what would you say the amount that's spent above sustaining business CapEx?

Sorry, sorry, I just missed it. Was that above sustaining CapEx?

Was that the question?

Yes. Just trying to get a sense of what the sustaining component of that $1 billion is?

Yes. So 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 $0.5 billion of it is sustaining. The big portion of that is deferred strip at about $185 million.

That's as of current mine plans, but mine plans have been 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 tonnes out. One of the areas that we're looking at trying to pull tonnes out is lithium again, with Marion in particular, and 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.

Consensus is looking at iron ore below the $100 a tonne level that you spoke to that MinRes had locked in a floor price hedging, I guess. In terms of modeling those revenues, can you please give us a sense of those volumes and the tenure of that flow for those hedges?

Sure. Okay.

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 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 a 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 99% and 100% depending on 0 cost collar.

The actual percentage of volume we're targeting to go up to 1/3 but we're not there yet. It will be less than that.

If the prices come back, then we'll lock some more in. But at the moment, it's -- it would be between 1 million, 1.5 million tonnes at that sort of price.

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?

So the window basically runs within 135 days of the year-end when you've got fresh financials. We've got -- so it basically starts at the end of August, and it will take us through to mid-November.

We -- and then it opens again at the end of February next year when we do our next set of financials. And 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 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 we step back for a moment, when we talked about this for a while, the credit markets have been supporting MinRes for a period of significant capital investment and project development. And they understand that what Onslow 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, that our confidence in terms of going forward and the strength of the performance through June. I would hope that subject to what the external market is doing, that rates continue to tighten.

But if you were to ask me what would the cost be today would probably be about 8.5%, but it could be tighter.

Could 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 '26?

Yes. I mean this is the jewel and the crown in this business.

It keeps performing really well. The way I would position it is, and 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 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 performance with the clients this year has been really strong in terms of delivery. The clients have been able to give us the feed 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, and we haven't guided on tonnes for '26. We're still looking through that.

And in part, that's because some of the tonnes that go into the guidance relate to deferred strip and the like. And we're moving around with mine plans, we could strip quite a few tons out of some of the operations.

The Pilbara, for example, in '26 is going to have less deferred strip, Marion will have less deferred strip than we did in '25 and so on. So no, 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.

No, I understand. And I guess your commentary there, 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 your 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. Thanks for the question.

If I think back 12 months ago, I was having to explain to you and your peers, the fact that we -- we've identified a gap in our understanding the ore body. We've had to drill 90-odd extra holes to try to consolidate our understanding.

I think I said in my comments earlier that we progressed well now through Stage 2, and 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 3 which we -- which I don't -- we don't have to open it up. It's there, but the upper levels, we'll see some narrower veins, 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 going to be 1 for 1 or it will just drag right. But when I say that, this plant in 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.

Okay. Thanks for the update.

Just quickly on Wodgina along current theme the production outweighed shipments. Is that a 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.

Yes. I think the answer is that in terms of shipping and working capital at Wodgina, we basically tried to time the ships to go when productions, when the stockpile is there, when the ores available.

Sometimes there's a delay oot there depending on access 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 6 months.

And then -- sorry, just a follow-up. Just looking at the cost performance of the assets, was a surprise across the board.

In what way is that facilitated by a build in the deferred strip and the like because I note that your CapEx number is also a beat as well. So just trying to get a handle on how sustainable some of those cost-out initiatives are?

Can you sort of forecast that one?

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 forecast that we thought we were going to spend. But it was more a timing thing on a chunk of the Onslow spend.

In terms of -- generally, if I think about the cost performance, we've talked about cost performance for almost 12 months now. 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 fleets, we've re-sequenced.

We've actually developed an even greater sophistication with the mine planning in terms of the technologies that we're using that are giving us better insights and able to refine more quickly the planning. 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 going to have problems next year or the year after.

I'm not saying that at all. I'm saying that we're able to identify the best way to optimize the extraction of the ore and we're doing that, coupled with focus on taking costs out of the direct costs out of the operations.

So I've given you 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 12 months ago.

I'm just trying to encourage you guys not to just drag right and use that phrase again, and I don't mean to be flipping about it, but hopefully, I've given you a little bit of a sense as how I'm thinking about it.

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 lower 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 ratio is expected for fiscal '26, for example?

Or even more broadly, when you're expecting the next major cutbacks at each of the assets?

Ben, nice to talk. So we can provide that when we give the full guidance next month.

But there are various aspects to cost performance. Strip is just one, and recovery is another.

And 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 is 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 put it on pause12 months ago to preserve capital. We're very conscious that we need to be developing the mine to be able to continue to go underground at the right time when the market allows us.

But take on what you've asked, and we'll make sure that we come back and deal with that through the year-end process with guidance.

Okay. Okay.

And 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 expecting to take some kind of provision over that facility with the fiscal '25 results?

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?

Sorry, Ben, I heard the first question, which was around RDG 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? I just couldn't pick it up, I'm sorry.

Yes, no worries. The asset financing that you've alluded to, which I think was about $400 million in fiscal '25 and a further $150 million, I think you said, for fiscal '26.

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.

The answer on RDG is the RDG loan, you can have a look at the accounts from December they've lodged. It may have gone up a little bit in the half, but that will give you a broad sense of it.

In terms of the asset finance that shows up both on the -- obviously, on the asset side, not on the debt side. So it does go into the gross debt number.

But Mark, I just didn't think you've answered Ben's question there. You talked to the balance sheet, but where did it come through in the cash flows?

Sorry, yes, I missed this question. It comes through on the cash flows in the financing component.

So you can see it through the financing line.

Okay. My question just related to Ken's Bore 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 Bore comes online? Does that increase?

And does the strip ratio that you're talking to include or exclude the clay ores that you sort of stockpiling for when the new plant comes online?

In terms of the strip generally, it's one of the features of Ken's Bore that differentiates it from the other in operations up there. 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 1/3 to the production out of Ken's Bore. So I don't expect the activity at Upper Cane and Cardo Bore 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.

Just one question from me. Production seems to be progressing well at Onslow, but logistics has always been the higher risk constraint there.

with the potential of becoming stockpile bound if hauling report is delayed. By my rough estimates, you're carrying around 2 million tonnes of stockpile across the system.

And please correct me if I'm wrong there. And in terms of capacities, my numbers, you have about 1.5 million tonnes of the mine.

350,000 to 400,000 tonnes at Yari and then 200,000 tonnes of ore, 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?

Yes, great question. You've got the general thrust of it correct.

The share at the port does hold that 200,000 and Yari does have the capacity up to about 400,000. It doesn't have 400,000 in it today, but it has the potential to be at that sort of volume.

And that's one of the levers that we have in terms of sprint 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 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 yes, we manage it at the front end that way.

One question on FY '26 CapEx, just to go back to Glyn's question. Of the $1 billion, is that a gross or a net number?

So does that include the $150 million in asset financing? And how much is expected to be spent on the Lithium business?

And does that include a float plant at Mt. Marion and i'll circle back with the second?

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 '26, that's something that we continue to monitor.

Sure. And then the second one was, if you could give maybe an indication of how many kilometers of the haul road have been upgraded?

I think from memory at site, it was around 60 at the end of May. Do you have that number off the top of your head?

I think we say about 60% in the document. So that's about 90,000.

I don't have the precise kilometers, but I can get that for you.

Sure. That's perfect.

And then finally, just on the contractor haulage, would you have an indication of average cost per kilometer tonnes that?

No, I don't. I'm sorry.

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 won't, because I just don't know.

I'm sorry. But again, we can take that offline with you.