Ladies and gentlemen, thank you for standing by. My name is Krista and I will be your conference operator today. I would like to welcome everyone to the Aurelia Metals Limited Financial Year 2026 full year results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star then the number 1 on your telephone keypad. To withdraw your question, again, press star 1. Thank you. I would now like to turn the conference over to Martin Cummings, Interim Chief Executive Officer. Martin, please go ahead.
Thank you, Krista, and good morning, everyone. Thank you for joining us for the Aurelia Metals FY 2026 results call. I am joined today by Leigh Collins, our Interim CFO, Andrew Graham, our Chief Development Technical Officer, and Angus Wyllie, our General Manager for the Cobar region. We will be talking to the slide pack that we released this morning on the ASX platform. Before I start, I would like to refer you to another announcement that we released on Tuesday regarding the appointment of our new Managing Director and CEO, Steve Badenhorst. Steve will commence with Aurelia on the 6th of October and will bring deep operational experience to the role. He joins us at an exciting time as we continue on our growth journey that will deliver value for our shareholders, and certainly the team on the call today are looking forward to working with Steve.
We will turn to slide 3, and FY 2026 was a very strong year for Aurelia. Operationally, we delivered gold production that exceeded our revised higher guidance and base metal production in line with guidance. We continued to ramp up mining at Federation that resulted in above-budget tonnes for the year, commenced and advanced the development of Great Cobar, and progressed the peak planned expansion projects. With the Tailings Thickener commissioned and the Tertiary Ball Mill nearing commissioning. On top of that, we grew our mineral resources and ore reserves. That operational performance translated directly into financial outcomes. Higher production volumes, stronger recoveries, and favorable commodity prices drove a substantial growth in earnings, margins, and cash flow, which Leigh will cover. Importantly, we also completed the refinance of our balance sheet, replacing the previous facilities with a larger, more flexible, and overall more cost-effective funding structure.
With those elements together of operational performance, strong cash generation, and a growing production profile supported by a refinanced balance sheet, it enabled our board to also consider shareholder returns, declaring a fully franked FY26 final dividend of AUD 0.01 per share. Which is the first dividend that Aurelia has declared since 2020. I will just hand over to Leigh now to just walk through our financial highlights.
Thanks, Martin. Turning to slide 4 for those of you following along, the financial results are really reflective of the operational progress that has been made across the business over the past several years. Company revenue has increased 40% to AUD 480 million, driven by strong production, particularly from gold. Gold remains our dominant revenue source at around 55% of that total. EBITDA increased 55% to AUD 189 million, and pleasingly, our EBITDA margins improved to almost 40%, which shows that we are capturing the benefits of higher metal prices. Our cost performance for the year came in at the top end of our guidance, but did reflect some of the investments that we made during this year, particularly in production drilling, to really set us up well for FY 2027. We also face cost pressures from higher diesel prices, but pleasingly, we did not experience any supply issues.
Net profit after tax increased 69% to AUD 82.7 million, and earnings per share also increased 69% to AUD 0.0488 per share. The results highlight the leverage that our growing production profile is having on earnings, and further increases are expected as we continue to ramp up the mine at Federation and bring expanded peak plant capacity online. Moving along to slide 5 on the balance sheet, the particularly pleasing thing here is that the higher earnings we just spoke about is matched by strong cash generation. The Cobar operations generated AUD 140.5 million of operating cash flow after sustaining capital, which entirely funded our growth pipeline, our pipeline of growth projects, and our exploration for the year. With the successful close of the refinance in June, we finished the year with cash of AUD 143 million, up from AUD 110.1 million a year earlier.
The refinance of the debt facilities with Citi, Credeq, and HSBC boosts our liquidity to around AUD 184 million and improves financial flexibility, lowers our financing costs, and improves the balance sheet capacity required to support the next stage of growth at Great Cobar and across the broader business. Finally, a lot of effort goes into the full-year financial results, and I would like to take the opportunity to thank Aurelia's finance teams and our statutory auditors, EY, for their hard work. With that, I will hand it back to you, Martin.
Thanks, Leigh. I am just now turning to slide 6, and as Leigh mentioned, the operational and financial improvement that he has outlined has given us an opportunity to think about capital management strategy. On this slide, we are summarizing how we are currently thinking about our capital allocation. Our first priority will always be operating safe and reliably, focusing on maximizing our cash flow and the value from our assets. Equally, it is about ensuring we reinvest in those assets to preserve them to support extensions to our mine lives that we believe we can realize. That strategy was underpinned by the excellent returns we saw this year. As Leigh said, over AUD 140 million of cash flow generated from the Cobar assets. Second, we will consider and prioritize our growth.
During FY 2026, we invested almost AUD 63 million into value-accretive growth projects and exploration that will result in higher ore tonnes mined and processed going forward, which as we have seen this year, can have a very positive impact on our cash and exploration success that can extend our mine lives. After those investments in growth, we can then consider returns to shareholders. As I mentioned earlier, given the strength of the operating result, our cash generation, and our balance sheet position, the board has declared the AUD 0.01 per share dividend. That will be paid in early October, and totals approximately AUD 17 million. Importantly, this dividend does not come at the expense of further growth. We retain substantial cash and liquidity and continue to fund our growth pipeline. We think now is the right time to strike a balance between operating performance, investment in growth, and returns to shareholders.
With Steve joining us in October, we will continue to work with the board to further mature our capital management strategy, and we will be able to provide further color on that in due course. Turning now to slide seven, which contains our production guidance. As you can see here, we are growing our mining and processing rates, and that is translating into higher metal production. We processed over 800,000 tonnes during FY 2026, and we expect to process between 1.05 and 1.15 million tonnes in FY 2027. Key to this production guidance is the continuation of strong gold production we have seen this year with our guidance range higher at 50,000- 60,000 ounces, up from the 50.4 thousand ounces we produced in FY 2026. Predominantly, this gold is coming from the Peak South mine, with the higher gold price providing a great opportunity to extend the life of that mine.
Production of base metals is also expected to increase across all the metals we produce, with 2.5 thousand tonnes- 3.5 thousand tonnes of copper, 26 thousand tonnes- 34 thousand tonnes of zinc, and 17 thousand tonnes- 25 thousand tonnes of lead. As highlighted here, our production profile is expected to be weighted towards the second half once plant expansion projects are completed and commissioning, enabling throughput rates to progressively increase. You will recall that we built a good amount of ROM stocks at the back end of FY 2026, so once that processing capacity comes online, we are well-placed to step up the processing rates. On to slide eight, as we are guiding in dollars these days for costs, it is natural that our total costs have increased with the additional volumes that we are planning to mine and process this year.
I want to leave you with the key point is that the higher scale that we are putting into the business is resulting in a unit cost reduction. Our Cobar region unit costs were AUD 369 per tonne processed in FY 2026 for the 806,000 tonnes we processed. Assuming the midpoint of tonnes processed for FY 2027, that unit rate is expected to drop between 11% and 19% to AUD 300 to AUD 330 per tonne. I must stress that these costs represent both on-site and off-site costs of the operation. Beyond the normal mining, processing, and administration costs, they also include state royalties, concentrate transport, and smelter treatment and refining charges. For Dargues, last year, we reported the small spend within our group operating costs.
However, this year it is appropriate to pull that out and report it separately with a range of AUD 10 million-AUD 12.5 million planned on rehab, with activity really winding up this year. As noted, these costs will be seen in cash, but largely offset by the rehab provision in the P&L. Importantly, though, we have not allowed for any additional asset sales of equipment still on-site at Dargues, and were we to do that, we will realize that as other income at the time. Our sustaining capital is expected to be in the range of AUD 65 million-AUD 75 million. A big part of this sustaining capital, as I mentioned earlier, is the longer mine life we are now seeing in the Peak South mine. That means we have added some sustaining capital investment for infrastructure and services.
The Peak South mine was the original mine at the Peak operation and operates an ore hoist and an underground crusher. So there is a considerable amount of infrastructure that we want to preserve to realize that longer mine life. In addition to this, we are looking at investments in FY 2027 into additional accommodation in Cobar to house our expanding workforce and to continue our investment in mobile fleet with a number of new pieces of fleet and midlife rebuilds of some of the existing fleet. Finally, to growth capital and exploration, which is expected to be between AUD 64 million and AUD 88 million. The majority of this spend relates to Great Cobar, and the range we are guiding for this year is in line with the spend profile we released in the feasibility study.
Along with the Tertiary Ball Mill project, there is ongoing decline advance at Federation, and we have actually included the guidance for New Occidental, which does remain subject to board approval during FY27. Importantly, we continue to view these investments in line with the discipline we have displayed over recent years, with our plan to fund this via operating cash flow to maintain our strong balance sheet. Moving to slide 9, you can see what an indicative cash flow scenario looks like based on this guidance. Using a recent spot commodity price, if you take our guidance ranges for metal production, adjust them for payabilities, and deduct our operating costs in sustaining capital guidance, what you are left with is a considerable amount of operating cash flow generated. That cash flow is available for investments in growth projects, exploration, and shareholder returns.
The key message is that our operational performance is growing, and a growing production profile and a strong balance sheet puts us in an enviable position. With that, I will hand over to you, Andrew, to run through our other major release today, which is the update to our 2026 MROR.
Thanks, Martin. As people may have seen, as well as the full year release, we have also released our updated MROR today. In summary, it is a very good news story. Overall, resources are up, even after depletion, from 29 million tons last year to 30.6 million tons this year, which continues the trend of increases, which can be seen on slide 10 for those following along. Reserves are up 49%, again, despite depletion to 8.2 million tons. I will just say that does include the reserve element of New Occidental Tails, and I will talk about that in a minute. Worth noting that all of those inventories are determined on long-term price assumptions at a well-below spot. We do that consciously so we do not get caught out by chasing the market. For example, our resource uses a USD 2,600 gold price.
For those who love to follow the gold price, AUD 4,600 today, so AUD 2,000 more. There is plenty of potential which we will capture by production, and also by short-term planning. Of particular note, and it is the bottom left-hand corner of that slide, is the Peak Underground copper resource, which makes up 19.6 million tons of the 21.4 million ton Peak Underground resources. At a grade, and it is important you look at the grade, 1.8% copper and 0.8 grams gold. In anyone's language, that is an enviable copper resource from a producing mine at a time when the world is desperate for copper and desperate for gold, and the prices of both are running hard.
All of that is even before we get across to Great Cobar and start our intensive drill out once we are across there, which is not that far in the future. So Peak is evolving, and it is evolving as the group's copper-gold cornerstone, which is a really important thing to take account of. Turning to Federation, the MROR is largely the product of detailed infill drilling that has been completed through the year. It is defining a tighter set of domains, substantially more grade in those domains. What we end up seeing then is less tons, more grade, for about the same base metals. What does that mean for a mining business? Well, it means that we are mining, trucking, processing less ore tons, which is great from the point of view of costs. Then we still achieve the same amount of metal. So it is a really good outcome.
I did flag in the release today the plan for an exploration drive. One of the updates to provide, and it is exciting, is that we have actually taken the first couple of cuts of that exploration drive in the last few days. Once we get that in, it will provide us drill platforms, particularly to target Fed Central to depth, as well as to target Federation West, which we have talked about previously. We did report New Occidental Tails reserve and resource on June 16th. I do encourage you to go back and have a look at that, which provides quite a bit of detail. It is now in our consolidated reserve and resource statement this year, 2.6 million tons of 0.65 grams per ton gold in resource.
The way we have done our Mineral Resource and Ore Reserve Statement this year, we have kept it separate, which allows you as investors to think about the business from the point of view of the underground tons and separately tailings tons, which, as we flagged in that release, will go through the plant in addition to underground material, not displacing underground material. We are currently, as Martin flagged, active on the feasibility study for that project, in line with our timeline, which is to do that through the first half of financial year 2027. Look, to summarize on MROR, it is a good news story, more metal, substantial inventory, on which we then build a substantial life in commodities, copper, gold, zinc, which the world needs going forward.
I will just take a little commercial break and jump a little off script, but just also to flag this year we did our first mandatory climate reporting, which is part of the 4E release. The good news, our governance and risk process still is in very good stead for that work, and as well as our scope 1 and scope 2 greenhouse gas reporting, which we have been doing for quite some time. We have a sustainability strategy, which we have talked to you about previously. If we deliver under that, we will certainly deliver what we need to do against any identified climate-related risks. Pass back to you, Martin.
Thanks, Andrew. Just to close out on slide 11. In conclusion, our priorities for FY 2027 are clear, and some of you will recognize these points as we have been focused on them for some time. First and foremost, we will continue to operate safely and reliably. Operationally, our focus is on maximizing mining tons, mining productivity to align with our increasing throughput capacity at the Peak plant. From a growth perspective, Great Cobar will be a major contributor to our copper production profile, as Andrew outlined, and we are focused on maintaining progress to bring that into production in FY 2028. It is also one of our most exciting exploration opportunities, so getting across there to establish exploration platforms is a priority. We will continue to invest in our people and our culture, and we have been working on targeted programs to build our leadership capability, which are now underway.
Finally, we will continue to look for organic growth options in our portfolio to drive further value like we did this year with the new Occidental project. To close, I would just like to acknowledge the Aurelia team for their dedication and their effort. There remains many opportunities to pursue, but it is worth reflecting on pride on what we have achieved to date. I would also like to give a special shout-out to Bryan Quinn, our recently departed MD and CEO, for his tireless efforts to rebuild Aurelia to where it is today. Bryan joined us at a crucial time and was laser-focused on improving our operational performance and maximizing our cash generation, which are all the themes we have been talking about today. So thank you, Bryan, and good luck with your next role. Thanks, Krista. I am happy to hand back to you now for questions.
Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, again, press star one. Your first question call comes from Paul Kaner with Ord Minnett. Please go ahead.
Yeah. Hi, gents. Thanks for taking my questions. Firstly, just on your reserve statement and maybe one for Andrew, nice increase there in Federation grades. Can you maybe just elaborate a little bit more on that from what you touched on re the domains there? I just want to get a sense if there's any change to the mining method at all, and does this sort of influence, I guess, what your thinking is for FY 2028?
Hey, Paul. Thanks for the question. Definitely no change to the mining method and no change to what we've talked to the market about previously. What we are seeing is with the ongoing infill drilling, which we've now been doing for quite some time, we do define tighter domains, better grade. It does result in less tons in those, but it means we can effectively be a bit more constrained in what we're stoping and mining. Yeah, it doesn't impact what we've talked about going forward. It doesn't impact our forecast of tons of metal out of the operation. One thing to note is gold. We've seen grade in those inventories up substantially, on lead and zinc. We've also seen quite a bit of conversion, which is that infill piece playing out now through the measured.
Gold at this stage hasn't followed, but we are seeing certainly in the measured piece, substantially more gold grade, and I do hope that that continues what we're seeing. We are getting that positive reconciliation on gold going forward. We do need to do some work through this year just around how we model that. Obviously, the detailed infill drilling allows us to really understand it, but when we don't have that detailed measured category in drilling, how we model that going forward. That's a goal for us for this year. But yeah, I think it's only positive really, particularly in the current gold market.
Yeah. Thanks. Thanks for that granularity, Andrew. Just secondly, on Great Cobar, just more broadly, how is that ramp up going? Then second to that, just on your exploration budget for FY 2027, how much would be focused there on that asset, with that coming online in FY 2028?
Andrew, do you want to take the exploration one first, and then Angus, I will throw to you for the other part?
Yeah, absolutely, Martin. We have increased the budget a bit this year on exploration, which is great. We have lots to do, as people will appreciate. We are active at the moment on regional programs, taking up some of those targets where we have done soils and defined real targets, and we have got substantial RC programs on those. As I mentioned just a moment ago, we are in the process of developing the exploration drive at Federation, which will give us great drill platforms to drill from. We have plenty of opportunity around Peak itself, and we have had a lot of success, as you would see from the MROR, in defining additional mineralization around Peak, particularly in the South Mine, which is great. It is in production. It gives us the opportunity to continue to chase that. Then we had the earn-in, with Legacy just slightly to the west of Peak.
We do have planned programs, particularly with airborne FALCON survey first up, just to really start to understand what is possible there. So a lot of activity. We are not factoring Great Cobar yet. We have got to get across there first. Obviously, once we are across, then we will drill that infill around mining, but then also the exploration piece that comes from that. Just with the orientations, it does not make sense to try to drill across to Great Cobar, until we are across there, just to get the right angles.
Martin, I might throw to you.
Thanks there .
or Angus on Great Cobar.
Yeah. Angus, do you just want to comment on Great Cobar and how things are progressing there?
Yeah. No, thank you. Great Cobar's progressing well. We are on track for the base of the raise bore chamber in November, in line with our plans. We have started surface works, the top of the raise bore chamber so that the concrete collar is going in at the moment. We are starting to see that progress on surface as well. So, tracking well to get across there this year.
No, that is great. Thanks. Thanks very much for that color. Then just last one, to maybe you, Martin and Leigh, just on that dividend, and thanks for that new capital management framework. Obviously, there is still a bit of growth spend in FY2027, but at spot prices where they are, I think you still should generate pretty decent free cash flow. I guess my long-winded question is why not return more given this outlook and your strong balance sheet? Or am I sort of being too greedy here?
Greedy? I am not sure. This is the first dividend we have declared in six years. We thought AUD 0.01 was appropriate, just given there is still some capital to spend this year, and we want to get the plant projects commissioned. We want to get Great Cobar close to production. So yeah, everyone's model probably shows further down the line that there is capacity for more. But that is something we want to work with the board and with Steve when he arrives on that. But for now, we thought AUD 0.01 was a nice way to start the returns to shareholders.
Yep, too easy. No, that is it from me. I will pass it on. Thank you.
Thanks, Paul.
As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Your next question comes from the line of Peter Kormendy with Shaw and Partners. Please go ahead.
Good morning. Thanks for taking the question. Following on from Paul's question, I suppose, just a point of clarity, what is the board's policy with respect to dividends? Is there a particular payout ratio, or how do they view that?
Hey, Peter. No, we haven't really defined that yet. What we've looked at is the operational performance this year, the cash this year, and the balance sheet refinance and the capacity to start the returns. At this stage, we've structured it as a returns that's based on board discretion. The process of firming up what that looks like in terms of payout ratios or more structure is part of what I was alluding to with the further work that we'll do with the board.
Yeah. Okay. Thanks, Martin.
Thanks, Peter.
We have no further questions at this time. Mr. Cummings, I would like to turn the conference back over to you.
Yeah, thank you, Krista. Thank you, everyone, for joining us today. As I said earlier, this is a proud set of results for the Aurelia team to deliver to you. We look forward to maintaining that growth journey and delivering further great results. So thanks for your time. We will be out next formally for the quarterly in October, where Steve will have joined us, so you will get to meet him early on in his tenure. So thanks very much. Have a great day.
Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.