Thank you, operator, and welcome everybody. Nice to have you here this afternoon. My apologies up front for starting this in the middle of the day or towards the over the half of the day. Obviously, we've got some exciting news today, which you've now seen being released. But just the logistics of the day in terms of getting approvals and so on in different time zones meant that the release for for BHP and ourselves have come out so after midday. And then the scramble, obviously, to get you all to this call. So thank you very much for all making that effort. Appreciate it greatly. It is an exciting day for us at Whitehaven, for sure.
We've now executed the sales agreements with BHP and Mitsubishi to acquire Daunia and Blackwater mines, as you now know, and this is set to transform our business in a significant way. I expect to go about 30, 40 minutes through the presentation here, explaining to the transaction, our strategic rationale for the transaction itself, and then we'll obviously have an opportunity for questions, answer in the session afterwards. I'm joined here today with Kevin Ball, our CFO, Ian Humphris, our EGM of Operations, and Kylie Fitzgerald and Keryn Zambrowski from our Investor Relations team. You'll also note, of course, we brought forward the quarterly report, which was due on Friday.
Given that we're announcing today, we brought that forward and we can ask questions, have a question and answer session about that if you prefer. But I suspect most in looking at that will realize that the quarter has been a good one following June. We're on track to deliver our plans. So September occurred as we expected it to, with production of 5.3 million tonnes, 5% up on the June quarter. But of course, if they'd like to ask any questions about that later on, we can. But I'd like to focus on the big announcement of the day. Now, given that this presentation does have some forward-looking statements in it, I draw your attention to the disclaimer.
So if you read that in detail, please, I think that will stand you in good stead for the context in which some of the statements are made later on in this document. So let me get over to the transaction overview. This is a very exciting day, as I said. It's highly attractive, this acquisition. It's gonna transform Whitehaven into, you know, a long-life, low-cost metallurgical coal producer. We've agreed terms, as we've said in the announcement today. Our aggregate consideration is $3.2 billion. That's comprised by upfront consideration of $2.1 billion, which will be payable on completion. We're expecting that to be in the June 2024 quarter. In addition to that, we've got deferred consideration of $1.1 billion.
That comes in three separate tranches. As it stands today, that's $500 million on the first anniversary, $500 million on the second, and $100 million on the third anniversary. Obviously spread out over three years. Now, to the extent that there's a good pricing environment continues as we're seeing at the moment, we have agreed an upside sharing arrangement with BMA, and that consists of contingent payments up to a cap of $900 million over a three-year period. That is capped at $350 million per annum. And so it will be spread out over that period. So potentially, $350 million, $350 million, and then $200 million over a three-year period.
Now, the basis of that incentive upside sharing arrangement is struck on the basis of average realized prices being over thresholds. Those thresholds are in the first year, $159 per tonne in the first full 12 months, and then for the second 12 months and the third 12 months at $134 per tonne. And so, of course, that's spread over a 3-year period, as is the deferred, and so obviously, the NPV of both those streams is obviously much less than the face value of what you observe there. But I'd have to say, you know, to the extent that that $900 million gets paid in full, that would be fantastic for all our shareholders, if that was to eventuate.
Clearly in the backdrop of prices that we're launching this announcement today, that looks like it's possible, but obviously, they will need to be discounted back with the time value of money, as would the deferreds, to get up to the NPV assessment that we gave it. So the funding is largely, you know, we've had cash on our balance sheet, of course, as you know, but we've got strong support in vendor finance, and then future cash flows from the business will be paying for the balance. So it's a very attractive basis on which to purchase, these significant assets.
Of course, in addition to that, we will be bringing in a debt facility of $900 million, which we firstly have in place as a bridge facility first, and we will refinance that out for longer-term debt over the coming, over the coming months. So the acquisition for us is an exciting prospect. It doubles the output of our business and without having to put additional equity from our shareholders into the business. Quite a unique opportunity, and I'll cover across the strategic rationale shortly. But perhaps I'll just concentrate on what we're actually buying just for you briefly, and I'll get into the detail of that later. But briefly, both Daunia and Blackwater, obviously, metallurgical coal mines, both open cut, located in the Bowen Basin, arguably one of the best met coal basins in the world.
Daunia, in particular, obviously, adjacent to our Winchester South development. Daunia, a relatively young mine, like Maules Creek, 2013 started. It's got another 17 years. It's a truck and shovel operation, which is very similar to our own. Produces about 6 million tonnes per year, 80% of that being hard coke and 20% being low vol PCI product. Blackwater is probably one of the largest, mines, coal mines in the country, with a strike of some 80 km. Been operating for 50 years, but it's certainly got another 50 years in front of it. Enormous, reserve, resource base there, and I'll talk about that a little bit further. Slightly different stage, style of mining there. It's got seven draglines, a large fleet, and a truck and shovel operation to complement that.
Raw tonnes there, about 14 million tonnes-15 million tonnes per annum. The product splits there at hard coking coal, about 65%-70%, and 25%-30% semi-soft coking coal. Historically, there's been a small fraction of thermal that may come out of that as well. But both mines export for the long term to customers in Asia, which is obviously a similar story to our existing business. And the export terminals that they use, Daunia, are obviously through DBCT and then Blackwater through RG Tanna at Gladstone. The backdrop for the announcement is today, obviously, a nice setting, if you like. Moving into met coal, and we'll be a predominantly met coal revenue business.
We look at the prices today, your split would be about 70/ 30, 70 met, 30 thermal off the basis of spot pricing today, which is quite compelling. Split of reserves across the two basins, Gunnedah versus the Bowen Basin, about 50/50, more or less. Now, flipping over, if we think about the little bit of a history lesson of Whitehaven, if we look at the transition of our company over time, listed in 2007. Whitehaven has successfully grown its business through acquisitions and development over time. If we look at the period when we bought Vickery, say, for instance, that was in from Rio Tinto in 2011. Whitehaven, Aston merged in 2012. Obviously, Maules Creek came with that. Also purchased from Rio Tinto.
Six years later, Whitehaven purchased Winchester South from Rio Tinto. In the meantime, we obviously ramped up Narrabri and also Maules Creek. So we're no strangers to operating large-scale mines and bringing them on in our business. Now, obviously, the advantage in this instance is that we're acquiring well-capitalized and well-run assets. So it's been very pleasing to see that these assets on our visits have been well-constructed and very well-maintained. So the stewardship of BHP and Mitsubishi, in this instance, puts us in a very good position to continue to enhance these assets. This is obviously the largest acquisition that the company has undertaken, but again, we've got plenty of history in terms of ramping up and managing large-scale assets.
Looking at the business from a quick snapshot here, you can see there's obviously significant diversification and change in our geographical footprint, but we'll continue to export through Asia, as I mentioned earlier. The acquisition does give us critical mass in the metallurgical coal space and turns the company into a metallurgical coal business, as I said before. Looking at a ROM basis, we're about split between New South Wales and Queensland, about 20 million tonnes each side, on a ROM basis. Recapping on the transaction details, $3.2 billion acquisition involved in with upfront consideration of $2.1 billion, $1.1 billion, as I mentioned, in deferred payments, and up to $900 million on the contingent revenue upside sharing arrangement.
We have paid a $100 million deposit, which we deducted from the upfront payments on completion. As I said before, given the fact that the deferred payments and also the contingent payments are spread out over three years, the NPV of those obviously is much less than the face value of those just simply added up. We do expect the transaction to complete in the June quarter of 2024, and so we'll be working very closely with BHP to make sure a smooth transition during that period. In terms of closing the transaction, we will be seeking regulatory approvals and merger control approvals as well, but we don't anticipate any particular hurdles in that regard.
Of course, we'll be going to debt markets to replace the bridge, the $900 million US bridge, with longer-term debt arrangements. On the day of completion, we put this slide in here so you can see what we're doing with the money. We have executed a binding acquisition facility with Bank of America and Jefferies for the $900 million. Cash flows of the business obviously going to be funding a significant portion of the vendor finance. So we will replace that bridge over time with longer term, a longer-term debt profile, which will be very good for our business, rather than being currently equity-funded as we are without any debt in the business at all.
For those who've been watching the September quarter release, you'll see that we had about AUD 2.45 billion on the balance sheet. When we close the deal, we'll be directing $1.47 billion, as you can see, into the deal. And overall, setting ourselves up with what we feel to be a sensible, conservative, and strong balance sheet. The gearing, the gearing itself, even including the $900 million bridge facility, but then converted into a longer-term facility, puts us about the gearing levels about 20%.
Our target leverage, as we've said before, about 0.5x EBITDA at the bottom of the cycle, but we are comfortable to send that up to 2x EBITDA for short periods, off the back of an acquisition. Importantly, in this particular transaction, we have had very strong inbound interest from parties wanting to join with us. There is a very good and interesting joint venture opportunity that we will be pursuing over the coming months. We see strong, as I say, inbound interest from global steel producers wanting to or expressing interest to team up with us. We'll be looking at that closely.
Of course, that will obviously take a fair load off the company in terms of meeting its overall funding requirements for the business, which is something we're very attracted to. In terms of the strategic rationale for the transaction overall, as I say, compelling and transformational is how we would describe this for us. We're pivoting to metallurgical coal, there's no doubt about that, which has been the core of our pillar of our strategy for many years now, and we're definitely going to have a better balanced business as a result. As I said, the backdrop of pricing at $360 for the met coal pricing, $140 for the thermal, is exactly the right context, I think, in terms of why we think this change in our business is very positive.
It's highly earnings accretive, which I'll go into a little bit further, and there's considerable upside not baked into this deal that we'll, we'll also speak to a little bit further along. It strengthens our quality of our portfolio with more long-life assets in attractive locations, which gives us geographic and operational and product diversity, and also scale benefits as well. And of course, our thermal business remains strategically important to us as we continue to provide the much-needed products to support global energy transition and, as our customers seek to meet their emissions reductions targets. So this is a highly attractive and immediately earnings accretive acquisition, and I think this graph, you know, describes this pretty well.
If we look at the price that we paid here from a value perspective, if we look at the EV/EBITDA based on 2023, we paid an implied transaction multiple of 2.5x. And if we look at the average for peers last year in FY 2023, peers being met coal producers, that was 2.7x. If we look at this year, in FY 2024, obviously forecast for FY 2024, and we look at a broker consensus position based on our implied transaction model, that's 2.9x. But if we look at the average of our peers at the moment, metallurgical coal companies, as we listed there in the footnotes, it's 3.6x.
I see a number of comments from brokers today, on us in recent times, centering around the 2.5x-2.7x for the Whitehaven, the Whitehaven multiple. So we feel we've priced this at a very, very sensible position relative to where we've been. But the reality of it is, we've changed ourselves into a metallurgical coal company, and the 3.6x should be the yardstick against which we're measuring ourselves. So on that basis, we bought this at a significant discount to the average of our met coal peers, which is pretty, pretty exciting, given that we haven't put any new equity into this at all. And so that's really important. I think we're in the right neighborhood.
We've been very disciplined on value, and we've paid what we believe to be a very sensible price. And as I say, this is immediately accretive for our shareholders. So if we look at the acquisition and we look at the EPS accretion, you can see there that even on a relatively conservative basis, on consensus pricing, this is going to be the accretion is 70%, which is pretty handsome in and of itself. Off the basis of spot pricing today, that obviously jumps up significantly to 160%. So quite extraordinary. But we have looked at this from many ways, not just EPS accretion. And EPS accretion and I suppose the valuation are two things. EPS on itself, you could chase that, but if you pay the wrong price, then that's not a good answer.
I think we've paid a very sensible and prudent price, and the accretion looks amazing, particularly when there's no equity in the business being additional equity being put into the business. So aside from that, we think there's a range of different opportunities to make even better returns out of this than what it immediately implies from this slide, and I'll talk to that a little bit further. But we think this is a very sensible allocation of capital, the right decision for all our shareholders. So moving across, I just want to draw out a few themes here in terms of areas where we're focusing to deliver further value over and above what the base case implies for the acquisition.
I just wanted to list out a couple of areas where we're targeting for further opportunity to drive greater value and better returns along the way. If we look at Blackwater first, the optimization, there is latent capacity in the dragline fleet there, so we think there's further opportunity to add more pre-strip in there and use that latent capacity in the dragline mining part of the business. And advance the strip and then advance the coal and ramp up the volumes of product out of this business. So I think that is quite a significant change.
There is the option, obviously, to increase the processing capacity that then goes with that, up to 18 million tonnes raw in feed, and then also an opportunity to blend the products to become 100% met coal, given that there has been a thermal fraction in this in the past. Then the integration of Blackwater South, which is another enormous area at the bottom of this chart, which is outside again of the value proposition we've paid for, but there's probably 20%-30% of the resources of the total 1.8 billion pool of tonnes there that sits in that area, which is upside for us. At Daunia, I'll just cover off quickly. Obviously, with autonomous haulage there, there is targeting further upside there.
We're at 6,600, well, 6,600 annualized production hours per truck is certainly what we would be targeting going forward, and they are doing well with their ramp up of the autonomous system there. Of course, Daunia is located adjacent to Winchester South, so there's a whole range of synergies there, which we've looked at, but not priced into this deal. Product blending, labor sharing, technical expertise, the autonomous haulage itself, and obviously the shared infrastructure would be areas that we'd be looking to drive further value. But this does transform Whitehaven into a met coal producer. As I said earlier, at spot basis, there's 70% of the revenue is going to be from metallurgical coal sales. It repositions us as Australia's leading ASX seaborne metallurgical coal company and reweights us significantly in that regard.
So that 70-30 split is very compelling on the consensus pricing, as I mentioned, 63-37. Historically, you can see where we've come from. On the average of our 10 years, our revenue share has been 70% metallurgical, 83% thermal. So a big change. From resources and reserves perspective, a massive jump in resources, less so in the reserves, but in the case of Blackwater, there's an enormous potential there to just put a few more drill rigs in there and convert more of these enormous resources that are there into reserves. So we will, that will be a focus for us. Blackwater, as I said, got a 50-year life, we believe at least.
Daunia has another 17 years out to FY 2040, but with Winchester South sitting adjacent to it, I think that 17 years is probably not the right way to look at it, given that we've got a very good reserve sitting next door. So increases in both our footprints here and lots of long life potential with these assets coming into our group. Of course, there's scale. Scale for itself is interesting, but not always the answer, and we certainly shouldn't do a transaction just for scale. But I just note these differences here. The doubling of our raw production of 40 million tonnes is very significant. Our skill base, in terms of the human capital we have in our business, goes from about 2,750 up to about 5,300 people.
There will be significant procurement benefits available to us off a bigger base, and of course, the autonomous haulage opportunity is there, not just for adjacent next door, but also across the balance of our business, potentially as well. And then there's geographic changes and then also commodity changes as well. So quite a big change for our business here. With the addition of hard coking coal, semi-soft coking coal, and low vol PCI into our mix. We've never had those before, but now we have exposure to those markets. Of course, we've had semi-soft and Blackwater produces a very good semi-soft as well. So that part of the market we feel we understand, but it does bring new products into our markets and gives us more exposure to the growing areas of India and Southeast Asia in particular.
It spreads our risk from a customer perspective as well. We've definitely got more exposure. We've got about 40%-45% of our business involved in three customers currently in the business that we have today, but that will, that will diversify greatly, which is a de-risking attribute for, of this deal for us as well. And all of these products sold by Daunia and Blackwater have been subject to long-term contracts with with high-quality customers. So that's, that's again, another important piece of the puzzle for us. In terms of de-risking our logistics footprint, as you know, all our tonnes come from the Gunnedah Basin, all through the Port of Newcastle. Good as that is, that is all your eggs in one basket. We're moving to four to six operating mines, and we're moving from one to three ports.
So again, de-risking our business. And then there are, there's some financial markets benefits as well. I'll skip the page. Right. So diversification as well through our business here. Metallurgical companies do, definitely do trade at a premium to the thermals I mentioned there, earlier. I think we all understand that. This transforms us into a metallurgical coal company. We know, we know from our existing stakeholders that banks and institutions, they're all strongly motivated by a greater weighting to metallurgical coal in considering their, their ESG considerations around us. And we think that this, this change in our business drives, you know, vast improvements to us in our business. That means better funding, optionality, it means an increased pool of equity investors, potentially, and a, and a lower cost of capital for us as well.
So I think our ESG credentials broaden out, which is a very positive thing here, and we'll continue to do the things we've done in terms of supplying our high quality, high CV thermal product. We'll keep growing that business as people swap out old power stations for new. But then we have this new dimension to our business now, supporting greater economic development through the supply of metallurgical coal into these high-growth regions and segments that we've not been deeply penetrating in the past. And so as our business continues to grow, this is going to be an attractive, attractive proposition for us.
As everybody knows, metallurgical coal is critical to steelmaking, and the steel market has been growing and is predicted to continue to grow and will only grow further, and the pressure on price grow higher as greater demands for metallurgical coal, not just for the normal things we expect, steel to be used for, but of course, all the construction of renewable energy infrastructure required with our energy transition will drive further consumption of metallurgical coal. And as we know, the hard coke market, in particular, is certainly constrained. It's structurally constrained in terms of the capacity that can come on to respond to the anticipated demand. And that couples nicely, if you look at our thermal business as being, we are in the most structurally constrained component of the thermal market as well.
So that gives us two, two exposures to very structurally constrained elements in the coal sector. So just over at the assets, and I'll just go over these, give you some highlights here as well. Daunia, 170 km from Mackay, it's about 160 km away from DBCT. As you know, it's in the Bowen Basin. It's a very well-built, well-capitalized asset. In visiting it, we can see that. That's obvious when you get there. They spent $1.5 billion in building it, and now, as I say, it's attached to DBCT, which is a port we've obviously been attempting to get our way into from Winchester South. So now we'll have a position there, which is very good.
Strip ratio of 7.4:1 , CHPP yield at 80%, and, as I say, 17 years of life there. Now, for each of the two assets, we're going to give you some data here, which reflects on the past and also the recent, the recent past, but also average of history pre those three years... We're also going to give you some forward-looking numbers as well. We think that's important, so you can get a bit of sense as to how we think about these assets. Now that we've done our due diligence on them over the last months, we feel that's been very thorough, and we, we know these assets a little bit better. So as you can see, we've given you three years in terms of 2021, 2022, 2023 actuals.
The average of the five years preceding that, which is FY 2016 to 2020, so you can see where these assets were prior to those three years. What we're giving you there is our expectation, the five-year average at the top here from a raw coal perspective, saleable coal production, unit costs on a cash basis, and CapEx. So we're gonna cover off those things for you so you can use these in your models. So if I get into doing this, so you can see there, raw coal and saleable coal production have been below their historical averages over the past three years. There's been a number of reasons for that. COVID impacts, both direct and indirect, as we all understand.
Labor constraints, as I think we all understand as well, and notably also in this instance, there's certainly been significant weather to contend with, and we're also familiar with that from our perspective. And we've, in particular, in this instance, what's also been there is during the 2022 and 2023 year, the full deployment of AHS here, they've seen the dip that came from the first implementation of that right across the pit, but you can see them improving there now and ramping up further this year, which is very positive to see. Over to the products here. You can see the Daunia hard coking coal products command a price of around 90% of the premium low vol hard coking coal price, and the PCI product's about 97% of the low vol PCI index.
On an average basis, if you looked at a spot today, there's a blended outcome there of about $270-$280 per tonne. 80% of the volumes go out, as I say, under term contracts with index links, pricing, mechanisms, and we expect lower unit cost production as the AHS from other efficiencies roll out. So we think it's gonna be about the $122 level on a five-year average basis, and we factored in about $100 million per annum in terms of CapEx there. And part of that will go to the extension into the Pandora Pit, which will happen during that five-year outlook period. So say, well capitalized, good infrastructure, and the autonomous haulage system here at the mine is very interesting.
It has had a lot of money over and above the construction cost spend of it, so $2.3 billion in total U.S., including $100 million just on the autonomous haulage itself. That looks very prospective for us, and so we feel that we've got very good infrastructure here with these assets to be able to to ramp it up further, including optimizing that AH system, and extracting more hours out of the fleet. Rail and port, won't belabor this too much. Obviously, DBCT got contracts for 4.7 million tonnes. Of course, we were chasing a presence there with Winchester South, but this brings this to us quickly. Over at Blackwater, a little bit of some numbers here. That's 70 kilometers, more or less, away from the town of Emerald.
You've got hard coke and semi-coke soft pro products there. Strip ratio there is about 12:1, CHPP yield 86%. There's a significant, as I say, resource base here, quite a significant 1.8 billion tonnes, 212 million tonnes of reserves. We will be drawing that out to put more of that into the reserve bucket, but plenty of life left in this asset for, we believe, another 50, 50 years. Over to the stats. On the page, no surprise that you'll see that recent past performance hasn't been reflective of where it has been further behind those couple of years' disruption with the COVID-related impacts and labor, on top of that, severe weather, as I say.
Those are the impacts we believe can be overcome, and certainly, those difficulties at the Blackwater mine, in particular from COVID and manning, have manifested itself through lower inventory, if you like, strip ground. Blackwater is dealing with that in this current year, so we'll watch that closely during the period of the signing to settlement just to make sure that when it gets to the completion date, it gets handed over in the form at which we expect it to be. But, I think for certainly getting back to the five-year averages, historically, would be, would be very positive, but it's slightly below that, given what we can see in the current mode of operations.
So moving just across, the semi-hard coking coal gets about 85% of the premium low-vol hard coking index, and the semi-soft achieves about 75% of that same index. Now, we all know those can vary from time to time. The average of the product splits today at spot will get you about $280. The cost expectations around volumes, we'll certainly see that come down, but we do acknowledge the inflationary impacts that are embedded in both these mines, no different from any other in the industry at the moment. We've given you a CapEx number there. It's about an average of $168 per year over the next five years.
There's about 100-130 in sustaining, but there is some development CapEx in there as well. Port infrastructure going through Gladstone, RG Tanna, 315 km distance to get to port. That's still less than what we ship from the Gunnedah Basin down to Newcastle. So have in place long-term contracts here with port and rail, with Aurizon. Aurizon doing both pits. Both contracts for those will be novated across to us. Now, importantly, we did want to just make some comments just here on rehabilitation. We know that there's been a focus on that. We certainly put a lot of focus into during the due diligence phase, particularly in Blackwater, given its age.
The site itself, having been and had a look around, is certainly well managed and well cared for, so there's even though there's a fair bit of work to do based on the fact that it's been operating for some many decades, we feel that it's in good shape, and we've taken a very detailed look at what we think the expectations are for rehabilitation going forward. The current estimated rehabilitation cost there is $640 million. That's the RC number. We have received a confirmation from the Queensland Government that we'll be able to enter the Queensland Government scheme there, so and get the full $450 million, which covers both, by the way.
In our instance, we've got $642+ million at Blackwater, plus Daunia at $92 million. We'll be able to offset to some degree or, or absorb in the system the $450 million available under the scheme, and the balance of that we'll find through our normal financial guarantee package with more traditional finances. With that, I'll hand over to Kevin to lead us through capital allocation strategy.
Yeah. Look, thanks, Paul. And, I'd start out by saying that, you know, our strategy has always been to own and sustainably operate large, long-large, long-lived, cost-efficient mines that support the economic development, and the global energy transition. So we've been seeking to increase our exposure to metallurgical coal over time, and this transaction is actually, in one step, helps us achieve that, strategic objective. We constantly monitor markets. We've been looking at this for quite a while in how met coal works and how met coal trades relative to thermal, and we think in our business, the met coal will smooth out some of the volatility that thermal coal brings to our earnings, and give us longer terms.
We're pleased with the strategy or we're pleased with the progress we're making to deliver on the strategy, because we think this acquisition is the right investment for the long term. You know, two very good, well-capitalized, well-run, long-lived assets in the heart of Queensland's best coking coal basin. We think that's good. The board really went through this with great effect. Took probably the best part of this process, started when BHP announced it back earlier in the year. And the board has been involved in this process for a long time.
We looked at the risks and the rewards of this transaction versus stay as is, and came to a conclusion that diversification and growth in this part was not only aligned to strategy, it was the right thing to do for the business in terms of the risk of the business moving forward. In all of that, board and management were well attuned to the conversation around the capital allocation framework. You know, as a group, we've been talking about capital allocation since we came out of the COVID crisis in 2020. We've been very aware of stewarding cash in the business and providing returns to shareholders, creating a strong balance sheet. If I take you to the next slide, where you can see the capital allocation framework, you can see how we've worked this.
So we said we want to keep our business solid, so maintain and optimize operations. We want to retain cash to make sure we've got balance sheet strength, because that's important. We want to give returns to shareholders in the form of dividends and buybacks. And during this payment period, you know, we expect to maintain franking dividends within the target payout ratio of 20%-50% of NPAT generated from Whitehaven's New South Wales business. That's our existing operations. The bridge facility we've got in place expires on 30 June 2024, so we're in play seeking to replace that expeditiously, but it does have a restriction on dividends and distributions while that bridge is in effect. And we're motivated to change that into something more long term.
Similarly, our buyback is on hold during this period, but I'm confident the board will reconsider both of those things once we've bedded this down and we've brought that financing and sorted that financing out. So, what I would say to you is the other thing you should really consider when you look down into using surplus capital is that the addition of these two assets into our portfolio will cause us to look at all of the projects that we've got going. And over the next period of time, we'll be looking at that capital expenditure and reassessing allocations to that, as you'd naturally expect us to do.
Of course, you should also recognize that we did not consider raising equity for this acquisition, and that makes perfect sense not to do that, given we've just bought back 20% of the stock. So I think the deal structure here with vendor-provided finance, the price participation, I'd be delighted to pay BHP the $900 million. I really would be, because it would mean that the prices we've received in the three years of this are well and truly above the conservative prices that we've used in assessing this valuation. So if I turn the page, let's talk a little bit about that. What you see here is metallurgical coal prices for prime, low-vol, hard coking coal and semi-soft coking coal. You can see where they are today, and you can see where long-term pricing is.
So throughout this analysis, we've had a look at an awful lot of providers. We've been through a bunch of analysts that provide information. We've looked at broker consensus. So in the September quarter, the met coal complex Platts price averaged $166, which was down 9% on the quarter due to the steady supply of Russian coal, right? Although we're seeing strength in October. But prices for premium-grade met coal and for PCI coal are holding up here really strongly. So prime, low-vol, high-hard coking coal index averaged $264 in the September quarter, 9% higher than June. So what you have seen in the gC NEWC versus the hard coking coal market is more a reversion to what we've seen historically and relationships and ratios between a gC NEWC.
Now, what I would say to you is that owning a met coal, or owning two met coal mines in Queensland with great access to port and rail, quality products, exposes us to a higher margin. Probably exposes is not the right word, but opens the opportunity for access to higher margins over the coming years. So we're confident in the market dynamics of the met coal market for the reasons Paul talked about. And we're very confident of those same reasons for the thermal coal market. And as this transaction completes, we'll be well placed to leverage those coal markets and really deliver long-term value for our shareholders. So having said that, I'll go back to Paul, and let Paul close us out and move on?
Yeah, thanks, Kevin. So I think the corollary of all that is that we believe that this is an exciting and compelling proposition that transforms the company for all our stakeholders, and we'll be delivering excellent value for our shareholders, not just now, but into the long term. As Kevin mentioned, we have focused very much on all the alternate uses of capital relative to what we believe to be an excellent deal, that's not just a very prudent value, which is immediately accretive, but it's a compelling way to deploy the capital of the company as well.
We're looking very much to bringing Daunia and Blackwater teams into Whitehaven's business, and becoming a contributing and reliable member of the local communities up in Queensland through what is gonna be, you know, long-lived assets, where we can create real relationships and partnerships over time. We've done a lot of work already to ensure a smooth transition and an efficient completion of this transaction, and we thank our shareholders for their ongoing support, and also thank Whitehaven's team, you know, our team of people, who've worked very hard on this transaction to bring it about, including the team, our professional advisors, and the very strong support from our board and management.
With that, I'd also like to thank BHP and the BMA team in particular, and so BHP and Mitsubishi, who have worked with us during this process, and thank them also for their stewardship of these two very good assets. We're very pleased to be able to sign up today. So with that, I'll bring the discussion to a close, and we'll move into the Q&A session. Thanks, operator.
Thank you, Paul. Sell-side analysts, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Rahul Anand with Morgan Stanley Australia. Please go ahead.
Oh, hi, Paul and Kevin. Thanks for the call and congratulations on completing the transaction, especially, the financing side looks pretty good, so congratulations. Look, I just had a few follow-ups. You talked, perhaps if I take the first one up, Paul, you talked about rehab and how, you know, you've been able to confirm the numbers with the Queensland Government and also sign up to that $ 450 million facility there. I just wanted to check, in terms of assumptions, are you able to provide any sort of color in terms of how these numbers might look different once they come onto your balance sheet? That's the first one, and I'll come back with another couple, if that's okay.
Yeah. I'll talk to you with some of the assumptions, as you say, Rahul. Thanks for that. Look, this is clearly an area which is important to us, and I'll contain this discussion to Blackwater because, you know, Daunia is a new mine. You know, it's only as old as Maules Creek, so I think the issues there, we can put that to the side because it's a much smaller piece of the puzzle, relative to Daunia. As I said, Daunia, I was very impressed. It's clearly there's quite a lot of open ground, there's no doubt about that, but it's been well-maintained, and so that was also heartening to see. We looked very closely at the rehabilitation efforts. Now, the best thing to say is that they are subject to two vastly different rehabilitation frameworks.
You know, one being a legacy mine from a different era, in a sense, in terms of different regulatory era, whereas Daunia is very much subject to the contemporary sort of rehabilitation framework, which we recognize with our more recently constructed mines. So there is a bespoke set of arrangements for Blackwater, which has allowed them to operate consistently in terms of their rehabilitation efforts. When we looked at what they were wanting to do and required to do under their regulatory framework that applies to that mine, we looked at that and we thought, well, let's just be a little bit more conservative than that, because things can change over time.
Just because you've been allowed to do X amount of work in previous years, doesn't always mean that you're going to be allowed to do the same pace of work in the future. So in that instance, we took quite a conservative position, and in fact, we took a position that will actually increase the rate of rehabilitation work they do by a multiple of four, as it turned out. So that was quite a big change over and above what they were planning to do, but that was just our perspective on that. That's not because it's required, that's just that we wanted to build into our assessment a buffer for risk if things change.
But there's an existing framework there, they're operating within it, and we look forward to getting on the ground and operating in the way that we would like to do that. But there's no issue with their environmental management to date. It's just that it's a big mine and it will take some time, but we've got plenty of life with such a big mine to build the rehabilitation into the run-of-mine process, rather than just spending money as an ad hoc exercise, an adjunct to the operations of the mine as a whole.
Okay, sure. Thanks for that, Paul. And then the second one was around, obviously, you pointed out the vast resource base available at both mines. I just wanted to zero in perhaps on Daunia, just given the average run rate there, highlighted is 4.9 million tonnes. You've contracted 4.7 million tonnes. I just wanted to understand, is there any volume upside here that you can bring into both these assets? And if that's possible, then why be under contracted in terms of your rail and port? Obviously, I believe that's related to take-or-pay, but a bit of color there would be great in terms of optionality.
Yeah, what we've done there for you, Rahul, is we've just. We've obviously given you what we think you need some forward-looking information. So we've given you an average, you're referring to the salable production there. And obviously, that's well aligned, as you say, to the port considerations being on a product basis. So the average of the next five years under our stewardship, we're saying 4.9 million tonnes, but they will have port capacity there at 4.7 million tonnes. What we've highlighted there, in particular, as it relates to the product numbers is, which is not baked into our existing model and the price that we paid, is clearly one of the upside aspects here for us is to run that fleet harder.
I mean, they have, they have done the hard work in implementing AHS there, and it's, and it's a compelling proposition, and we acknowledge, having been through this ourselves, we understand the challenges implied in that. And when you first launch it on a, on a site-wide basis, and so we can see that there's been the production challenges that come from that during that transition phase, but they're ramping up pretty well. And so we think, you know, rather than, you know, say, for instance, 5,500-5,600 hours per truck, and if you get it up to something, you know, in the order of 6,500-6,600, as we quoted, there's significant upside, which then relates to obviously significant upside volumetrically of product as well.
Excellent. That's really good color. Thanks for that, Paul. Look, just one final one from me, is around the JV partnership potential. Now, obviously, you, you've had that model across assets, in your portfolio, so I guess just curious to know whether you've had any sort of initial conversations with any of your parties at the moment, and what type of interest level are you seeing in that? Obviously, perhaps also, you know, get some of the new parties involved from India, given the ramp-up there as well, that's required for steel production.
Yeah, yeah. Look, I think you've almost answered your own question there, Rahul. It's the inbound interest has been strong. Obviously, this process involves two well-established mines that have, you know, high-quality customers. And those high-quality customers, with a change of control, were obviously interested in, you know, securing the volume. So the inbound inquiries have been very good in perspective. We like that model, as you know, and so we will be looking very closely at it, and it does, as you say, traverse jurisdictions, which are outside where we've had equity participants in the past. So we're keen to explore that further. So, you know, obviously, today's a very important day. It puts us in the right position to be able to have those discussions.
So we'll circle back round and explore that in more detail. But the interest levels have been very strong.
Okay, brilliant. That's all from me. Thank you very much, and congratulations again.
Thank you.
Thank you. Your next question comes from Paul Young with Goldman Sachs. Please go ahead.
Good afternoon, Paul and Kevin. I guess the first point is, good to get this deal done. Paul, first question's on the, on the EPS accretion and the multiples, which look pretty attractive. But I'm curious around, you know, what you, what price to NAV, you think you might be paying with the improvements? Because, you know, obviously, EPS accretion is a good metric, but, you know, I know you guys think on a, on a NPV basis, certainly when you're stacking up projects. So, consensus long run, what price to NAV do you think you're paying with the improvements? And, and, and also, what payback do you think you can achieve a consensus long run, as far as number of years are concerned?
Yeah, look, I think all of those questions are very good questions, Paul. The challenge there is obviously when you're trying to bridge the gap with a purchaser, how do you bridge that gap with them? And that's why we put the contingent upside sharing in there. So as you can see, we've paid what we believe to be a very reasonable price off conservative pricing. We haven't stuck our necks out here on price at all, and I'm pretty sure with the information we've given you here, you can back solve into the price deck that we've used. And so, you know, in terms of your analysis and focus on NAV, and the value here, I think it's of...
If you look at overarching price that we've paid, we've paid well under the comps, for our comparative companies, or our peers, being anybody in this space that's 50% plus revenue, from a metallurgical perspective. We're well inside that. As you can see, 20% discount to the comps that we've lined up here in those presentations. We've quoted them in the footnotes to the slide for you. So, I'm pretty sure you can see from the accretion without at broker consensus pricing, which we all acknowledge is very conservative, is looking very good at 70%. On today's spot, it's 160. But we think it's a compelling deal, and from a price perspective, we've—I think we've been very disciplined.
We certainly, from the feedback, not paid the highest. I think it's a broader proposition of providing a simple, clean exit to the vendors that put us in a good position to win the day.
Okay. Thanks for walking through those numbers on NAV. Next question is around what—maybe what Kevin alluded to as far as capital allocation and maybe reaching the growth pipeline. I mean, huge opportunities to invest further in both of these assets. You know, brownfields growth, obviously very high returning, and if I look across your portfolio and I look at Vickery being more greenfields, and certainly Narrabri Stage 3, with the big CapEx increase recently, which I just struggle to get the numbers to stack up on Narrabri Stage 3, particularly with the risk profile of those longer panels, Paul. So, I mean, I think, I know the deal doesn't close for another year, but surely this puts-...
You know, so raises the question mark around now, where I say, Shane, actually pulling back on capital there and just doing the turnaround series. Just curious around your thoughts around how you rejig the pipeline from here.
Yeah, yeah, it's a good, it's a good point of focus, Paul. What this does, firstly, I mean, there's only five months closing, firstly, just so it's, so it's not very far away, so we've got to get our skates on and making sure that we are effective, and efficient and, and seamless transition. But, but the reason... But, but with this scale, the business has jumped significantly in funding scale. So our capacity to do the things you've mentioned, had, will grow considerably. And so, as you say, I mean, it's, we're doubling the business, and on a spot basis, I think our EBITDA triples, which is quite considerable.
We're not suggesting that those prices remain forever, of course, but the funding capacity of the business and its ability to invest is significantly stepped up. Both those opportunities you mentioned, both Vickery and Stage 3, they're both compelling propositions. So perhaps we need to circle back with you and have a look at how you're viewing Stage 3, because that is an important development. But our first priority is to make sure that we bed down this acquisition, so we will look at all those opportunities. We've obviously got early mining going at Vickery, and so that's... We're very positive with that. That will continue on.
But we'll reassess the priorities once we've had a look at, you know, the competing needs for capital in the business, and we'll make sure that the ones with the greatest returns get the love, essentially. And the only other point that I'll make to you there is that we have the flexibility to run early mining at Vickery for some years, and that's the way we've put it together. But the Vickery proposition is a very good blending opportunity across our business, particularly with Narrabri. So that may be some of the areas that your modeling may need to look at, but we can work with you on that at some later date.
And I'll probably just add one more thing to what Paul said. I think we get through the period of retiring the vendor-funded vendor finance consideration, and I think the opportunity for... We'll continue the dividends to shareholders through this period out of the existing Whitehaven business. That's what's in that commitment there. On top of that, you get through the vendor financing and the return, the opportunity for returns to shareholders are quite exciting.
Paul, I look at this and I go, I think it's a lovely deal where you get access to 20 million tonnes of met coal, pretty much where a portion of that is financed by a vendor who has handed these assets on or put them into the hands of people who they're confident is gonna look after those assets in that Basin and look after those assets with their people, look after those assets in that community.
Hmm. Okay, thanks. I'll stick to the two questions around back. Thank you.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Chris Drew with Jefferies. Please go ahead.
Afternoon, Paul and Kevin, and congratulations from me on this as well. It's a fantastic transaction. Just as a follow-up to the prior question, while we're on the subject, does this reprioritize Winchester South for you relative to Vickery? Is there anything that you can do to perhaps accelerate that project? And is there any more detail you can give on perhaps the, I guess, sort of development synergies with Winchester South now that Daunia is in the mix? Thanks.
Yeah. Chris, thanks for that. That's a good question also, given that we are, we're an opportunity-rich company. Now look, naturally, Winchester South probably has at least a couple of years in front of it. Now, we are very close, we feel, to receipt of the evaluation report from the Coordinator-General, so we're anticipating that before too long. And, so we'd like to see that squeezed out quickly. And I, and I... Well, what I'm talking about in the next month or so is what we're expecting. But, you know, inevitably, approvals in Queensland, you have to allow some time for some court time associated with people who don't necessarily view coal mining the way we do.
And then, of course, there's the EPBC overlay as well, which needs to be pursued. That also has its own nuances from that perspective. So if you sum that up naturally to us, that has a couple of years before we're fully approved and able to go, if that was the decision of the board. That period gives us plenty of time to reconsider all the priorities that we're talking about here and the competing uses for capital, and the returns that we'd like to generate for our shareholders.
And of course, as Kevin's mentioned, meeting the commitments, meeting the commitments that the vendor finance arrangements require, which by that time, in two years' time, you'll have repaying that vendor finance will obviously increase the equity base of the company considerably by doing that. But that will allow us plenty of time to make sure that the choices that you're alluding to can be considered in the light of a bigger and more financially stable and robust business.
Thank you. And then, perhaps the second question is on the cash cost guidance, pointing to quite a material step down from recent years for that guide and sort of of the order of 20%, which probably isn't really what we're seeing elsewhere. Can you help us kind of bridge that gap? Is that, is it sort of a smooth downward trajectory, or is it just a big step down quickly as the volumes recover and there's lower royalties in there, or, or perhaps just, yeah, help us bridge that gap in terms of that cost guidance versus the FY 2023 numbers?
Yeah, look, that's a good question. I mean, we've anticipated some of this, and that's why we've spread it out the numbers the way we have. We don't think, of course, the recent time with COVID is a fair backdrop to which to be assessing how neither of these assets are gonna perform, particularly in the case of Daunia as well. It's not just COVID, then it's the AHS rollout, which has caused the immediately past years to be depressed from a volume perspective versus where they go. And the volume, obviously, as you know, volume begets better volume begets lower cost normally. And we think there's plenty of opportunities to bring those costs down further in this business. So obviously, we're a... How do I describe it?
We hopefully are relatively viewed as a relatively efficient miner, and certainly we know in our business in our existing business, within the mine gate, we're very competitive relative to our peers. We obviously have a burden of distance getting from our pits to port, but in that sense, we're pretty good inside the mine gate. Obviously, BMA has their own approach in terms of how they manage these assets, but pulling them out of that big business into ours, I think there's definitely going to be opportunities for savings.
So, we could see quite a bit of that when we've gone through the numbers, and in fact, when we went up to site and what we thought were very productive site tours to see whether those opportunities were real or not. So we feel pretty confident that there are cost savings in here, but the volume, the volume is gonna be a big driver there.
I'd chip in there, Paul, and I'd say, look, Chris, we are going to take these assets over with the employees that are coming across, so that gives us a full workforce. Our expectation is that we will manage these assets, the cost in these assets down over time. So I wouldn't be expecting to see a major step down on day one simply because that would be inconsistent with the manner in which we've contracted to acquire these assets. I would expect us to do better in terms of being a little bit more leaner and more nimble. I'd expect less corporate overhead in the organization, and I expect as we unlock some of these capacity constraints that we see in the business, we'd expect volumes to grow and therefore unit costs to come down.
I'd be thinking this takes time, doesn't take year one to begin with.
Yeah, I think that's right. And I'll just finish off my comment there just on the other end. So Daunia, we can see certainly that's had the hit from the implementation. That will continue to ramp up. So more volume, more hours, we'll be getting more volume and more sales. Fantastic. At Blackwater, the biggest issue there we can observe there is, they have plenty of capacity, plenty of good gear, but our observation is there that in recent times, the effect of COVID, manning, and so on, certainly has, you know, had seen them stripping less than what they would have liked.
In this period, we know, well, not because of the sale, they were in any event addressing that issue themselves. In fact, on a very good trajectory to try and recover a lot of that ground to put the mine in a more balanced position over time. So, we were tracking that very closely in this ensuing signing to completion period to make sure that that work leaves the mine in a balanced position that we would prefer to see it. Now, we have some arrangements in place between us to make sure that those considerations that they're motivated to deal with those things through the course of this next five months. So we think that will return back to a normal.
So the cost distortion that you see there, or that you may be inferring there, if you're looking at their numbers, although they're grouped together, might be hard to discern on a mine by mine basis. But we see that putting the mine back in a position where that cost, the balance between stripping and product will be better aligned.
That's really helpful. Thanks, guys.
Thank you. Your next question comes from Glyn Lawcock with Barrenjoey. Please go ahead.
Afternoon, Paul and Kevin. Paul, I'm just a little confused on the timing. You sort of said it'll close in five months, but you say deal complete in June quarter. Are you just thinking early the June quarter? I'm just trying to bridge what happens between now and deal closure, and I assume... Who owns the cash? Do you get access to 100% of the cash once the deal closes, even though you've got trailing payments as well? Just if you could help me understand. Thanks.
Yeah, thanks, Glyn. Yeah, look, we think it'll close early in that quarter. We think it will. But just to give us some flexibility, we agreed amongst, you know, the vendor and ourselves, that we'd give us, give ourselves some time in terms of, how that plays out. But we, we're fortunate, we're fortunate, Glyn, in the sense that we don't actually think we run foul of too many, approval requirements that a bigger organization would require. So we think the timeline for approval, there's not too many snags there. Clearly, we don't have a FIRB, not a FIRB problem. We don't have regulatory approvals in various jurisdictions because our big met coal presence in, in various distri- restrictions for merger control, perspectives that might cause, you delays.
There's ministerial consents and things like that that need to take place, but that can certainly happen within these periods. So we think from a risk perspective, we think that it's earlier in the June quarter than later for sure. But as the deal is struck, no, there's no earnings attribution to us post or as a result of slippage. If it slips a little bit, then that doesn't accrue to Whitehaven. But by the same token, we don't think there's too many things that get in our way in that regard.
Paul, just so I'm clear, let's assume you close early June quarter, let's call it April. You will get access to 100% of the cash flows from those two assets from April, even though you haven't paid, you've got, like, trailing three-year contingency payments plus follow-up payments. Is that correct?
Yeah. Yeah, that's right, Glyn. That's right. Those payments, those payments, as you say, 35% of revenue above those thresholds that we've marked in the pack for you, you can see. We hope we're in a situation where we pay those things. But that will happen, that will happen, as soon as we've got the keys.
Yep. Okay, so you get 100% of the cash, and then the cost of the $900 million bridge loan, has that been disclosed?
No, we haven't, but it'll be standard terms. You know, when drawn, there'll be a standard process or price attached to it. It will be SOFR-based plus a margin, and if you want to understand the margin, you should think about the margin is between 3%-5%.
Sorry, I missed that, Kevin. Three to?
3%-5%. So it's not an onerous bridge.
But unlikely to be-
Okay.
The position going forward, in any event, the bridge will be refinanced out.
Yeah. So, Glyn, the program there is to refinance out the bridge, give certainty and length of tenure in the debt structure, and certainly the inbound inquiries over the day have been interesting to observe, let's put it that way.
Yeah. Now that you've got it, people want to loan you the money, whereas before it was a bit of a guess. And then just while I'm, while-
Yeah, go on.
Well, there might have been a-
Yeah, sorry
...line to a different candidate in the contest, and so—if their candidate obviously hasn't found favor at the end, they still wanna do some business. So that's driven some inquiries on the inbound side.
Yeah.
Yeah, and then just a final one, just around all the cash flows. You say contingent payments up to $900 million, but then you say the annual contingent is up to 350 × 3. That's $1,050,000,000 .
Ah.
Which one supersedes the other?
No, no, it's the total cap is $900 million. The annual cap is $350 million. So if you look at that, it can be $350 million, $350 million, $200 million.
Or it can be less.
Okay. Okay.
The total number is $900 million. That's the cap. Sorry, it's not 3 x $350 million. Sorry.
Yeah, no, got it. Thanks very much for that. Appreciate it.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Paul Young with Goldman Sachs. Please go ahead.
Yeah, hi, gents, again. Question, Paul, on Blackwater, just your view on the ability to get in there and actually improve that operation. I know Stanmore's had a pretty successful time at South Walker Creek, and there's a good profile there and, you know, that asset just didn't attract any sort of attention or couldn't attract capital within the BHP portfolio. But with Blackwater, Paul, I mean, they pulled back on volumes in the last three years when China put the ban on Blackwater coal. A lot of that was going to China. It's now had to been sort of diverted to other markets. They've taken a value over volume approach by pulling back on volumes because the market has shrunk for Blackwater coal. You've got BUMA in there.
I understand they're actually doing a very good job as a contractor. But, you know, you like to really do owner-operator on Blackwater. So I guess the question I have on Blackwater is, you know, how much conviction do you have to go in there, you know, turn that sort of around or create value by what? Doing a volume over value strategy or, or, you know, replacing the contract and going on owner-operator? I'm just curious, I know you've said that you're gonna increase the wash plant throughput, but, you know, how much conviction do you have on the strategy you have is... You know, should have been employed by BHP?
Yeah, look, I'm not sure, Paul. I'll get Ian. He's sitting here, and is chomping at the bit to answer a question here, so I'll just make a couple of marks to start off with. I'm not sure of the reason for... Or your point there as to why Blackwater, you say, has had lower volumes coming out of it. I'm not sure I agree with that, but that doesn't really matter too much. Having looked at the product and the sales and the realizations of it, that product sells well. So I'm not finding any sympathy with the notion that there's not a market for that product. Not at all.
That's certainly not the case from what we've seen in studying these things now for a good while. And certainly the customers who've been taking it in big volume are very, very keen to ensure that with a change of control, they don't lose access to it. So that's actually very, very assuring from our perspective on that side. But having been across the site, there is plenty of capacity for upside. In fact, it's the bigger asset, of course, and it's got an enormous fleet and enormous latent capacity there. So the challenge is, well, you don't want to boil the ocean there. There are so many other areas where you could get volume out of, and with the gear that's there, you can.
The contracting opportunity there with the Downer services now buying BUMA people there, they're doing a very good job, and I would see no reason to want to look unfavorably towards that. They've actually been doing a very positive role there, and given the size of the operation, there's no reason to think that that wouldn't form a part of the future. Ian?
Yeah, so Paul, just building on that, you know, one of the beauties of Blackwater is there are a number of pits there, so you have a lot of flexibility as to where you want to go mine. But the crux of it is to get the sequence so the draglines can be fully utilized, and that's the latent capacity we've been talking about. BMA have been working on trying to pick that up, and there's been some changes, and there are ongoing changes as far as the pre-strip fleet and increasing the size of that. So that's a journey. It takes you a little while to get that in place.
And then we believe from, you know, a detailed look at the mine plans and modeling, that there are opportunities to, do some different things there, work on different horizons that the dragline are in, you know, make it even more efficient, move dirt with dozers, and, all of that will help get the cost profile down and then, give that extra opportunity for the additional volume that we've mentioned, the 18-odd million tonnes, if that's done. But back to the BUMA question, you know, we, we, we're hearing good things about what they're doing, and to be frank with you, we've got plenty to do when we get there.
And so I think that's something that will continue as we know it, you know, while we get our feet under the desk and see how that progresses.
Yep, fair enough. Okay. Thanks, thanks for that detail. And then on to Daunia. You know, Stanmore's missed out, but there are huge synergies between Poitrel and Daunia, and my understanding is there's a fair few synergies between Poitrel and Winchester South, so that, you know, you've got the Red Hill wash plant just to the north there as well, and the shared load out makes huge synergies across the board. Is it possible, Paul, that, you know, there's also a joint venture to do, and these aren't easy, but with Stanmore? You know, you know, you spoke about equity investors from offtakers. What about, what about the synergies with Poitrel?
Well, well, first of all, I'd say, Paul, let's, let's just let us bed down this one to start off with. Don't want to get too far ahead of ourselves, but you're right. You're right, the opportunity is interesting for sure. And, you know, Poitrel has a relatively short life remaining. We understand that, and the processing capacity goes with it. Alongside that sits Daunia, and so we understand the conceptual opportunities that sit there, and obviously, we've got a big reserve sitting just to the immediate south of both those operations. That's very valuable.
So the opportunity is there for sure, Paul, but I wouldn't put it, you know, right on the table right now or front of mind, quite frankly, given that, you know, we've only just signed the thing up. We've got a very hurried period to obviously do all the necessary planning to effect a smooth transition, and then and get our feet under the table with the newly acquired assets. We're very excited by the prospects of this. We think there's plenty of upside, as you're just highlighting, and but we're in the right place to maximize the value of those types of things that you're mentioning.
Yep, again, understood. Last question, Paul, is just on the rail and port costs between RG Tanna and DBCT. Anything you can help us there with respect to the rail costs and port costs separately in dollar per ton basis between operations?
Yeah.
I would say to you that the rail port cost down to RG Tanna, it's got a good contract with Aurizon. It's got a good contract with RG Tanna. It's a bit like NCIG down there at RG Tanna because you've got stockpile capacity, so you dislocate railing from or you disconnect railing from shipping, so we like that. Off the top of my head, I think the total costs out through RG Tanna and down that railway line might be in the order of about $23 a tonne. It's about 300-something kilometers to there. I think the Dalrymple Bay conversation, we're a lot closer. Yeah, 4.5. So we like-
Okay.
We like the, we like the Dalrymple Bay because it's close. We've been looking to trying to get into Dalrymple Bay because of Winchester South for probably the best part of three years now. So this, this, this delivers that footprint, that foothold.
Okay. All right. Thank you again. That's, that's it for me. Appreciate it.
Thank you. That takes us to the end of our allocated time for Q&A. I'll now hand back to Mr. Flynn for closing remarks.
Well, thanks, everyone, for taking the time to dial in today. You know, I know it was short notice, so apologies again for the dysfunctional nature of that, and its impact on your day. Look, I know there's, there's gonna be more questions on this. This is, this is a very big day for us. You know, I think it's, it's a transformational, highly accretive transaction where we paid a reasonable price to transform our business without extra equity. And I think it's... We'll be very happy to engage with you all to follow up questions and so on, but, I look forward to doing that over the coming days and weeks. So thank you all for dialing in today.