I would now like to hand the conference over to Chantelle Essa, Vice President, Investor Relations. Please go ahead.
Thank you, operator, and thank you everyone for joining Coronado's third quarter investor call for 2024 . Today, we released our quarterly report to the ASX and SEC, in which we outline our production and sales statistics, as well as other information related to safety, coal, markets, and financial performance. You will note a slight enhancement in format to improve information exchange. A more detailed outline of our financial position and results is expected to be released to the market on the 13th of November with our Form 10-Q. Today, I am joined by our Managing Director and Chief Executive Officer, Douglas Thompson, and our Group Chief Financial Officer and Head of Strategic Investment, Gerhard Ziems. Within our report, you will see our notice regarding forward-looking statements and reconciliations of certain non-U.S. GAAP financial measures.
We encourage you to review these statements in conjunction with our filings with the ASX and SEC. I also remind everyone that Coronado quotes all numbers in U.S. dollars and metric tonnes, unless otherwise stated. I'll now hand the call over to Douglas.
Thanks, Chantelle. In summary, it's been a mixed quarter for us. We're pleased with the strong results achieved by our U.S. business unit. The Northern and Southern Districts at Buchanan have delivered the planned productivity increases and yield blending that underpinned the strong result. We issued a new series of notes that closed oversubscribed and with improved pricing and terms. Our safety results remain better than industry averages, and we've finished the North American annual contract negotiations for next year. But we suffered from adverse geological conditions at Logan, plus mechanical and geological impacts at Curragh this quarter. These impacts were further compounded by a ten-year record rainfall at Curragh in August, and an unfavorable weather outlook for the remainder of the year necessitated a revision of our full-year production and cost guidance.
As we have previously demonstrated, there is upside to our Q3 performance, and we will continue to press for operational and cost gains in the coming quarters. Key metrics achieved in Q3 were: group raw production, 6.3 million tonnes, saleable production, 3.8 million tonnes, and sales volume, 3.9 million tonnes. We remain focused on delivering our Mammoth Underground project at Curragh and the expansion works at Buchanan. Both projects have extremely positive prospects and continue to be delivered from our available cash. At a group level, our total recordable injury rate was 1.13, remaining well below industry averages in both the United States and in Australia. In Australia, the improvement journey is very positive, with a twelve-month rolling average showing a 36% improvement year on year, and in the U.S., we're seeing improving trends.
Turning to page two, you will see our operations and sales summary. On a year-to-date basis, at September, Coronado achieved a raw coal production of nineteen point seven. This is up on twenty-three and up on twenty-two, reflecting improved planning and efficiencies from across all of our operations. The Australian business unit experienced a difficult September quarter. The Curragh complex delivered coal, a raw coal production of two point six, which is down on the prior quarter. As previously reported, Curragh was impacted by unplanned repairs to the bucket wheel and overland conveyor. Production was affected for a two-week period while the repair works were undertaken. In addition, a geological anomaly, two zones of coal thinning, further impacted our raw coal production in the quarter. This has been addressed by additional exploration drilling to better define the geology in the two impacted zone areas.
These events were compounded by the heavy rainfall in August, which was more than three times the 10-year monthly average for the area. Albeit, the mine has greatly improved flexibility post the recovery of historic waste deficits, these events in the quarter were beyond the operating system's ability to recover within the quarter. August adverse weather, and then the La Niña forecast spring and summer in Australia, contributed to the announced change in our financial year 2024 guidance back in September. To best utilize time during the delay in production, planned dragline maintenance was brought forward, which is expected to benefit Q4 utilization and productivity. Due to the improved productivity in our dragline system, an additional fleet can be idled in late October, which will further reduce the mining costs at the Curragh Complex.
The fleet planned to be idle consists of a company-owned shovel, T282 trucks, and associated equipment. Once idled, the Curragh Complex will have removed six fleets from the operation since April of this year. With a 4% increase in productivity across our truck and excavator fleets, that has been sustained since Q1, we do not plan to return these fleets to operation. Our mine site cash costs have decreased by more than $20 million a month from this time last year, measuring Q3 2023 to Q3 2024. This shows that despite our mixed quarter at Curragh, the efforts of our people to follow our plan in a determined and disciplined manner is delivering opportunities for improvement.
This plan is focused on optimizing performance by enabling productivity and removing system complexity. With the completion of the historic pre-strip deficits and the subsequent removal of multiple fleets, delivering quarter on quarter cost-based improvements, our efforts in the quarter turned to focusing on improving productivity from our dragline systems. The system being our draglines, our dozer push, and our cast blast . The dragline system continued to exceed improvement targets, with the ratio of waste moved by draglines compared to truck and excavator now at 47%. This is 3% above our plan for the year and is up from 37% in financial year 2023. The next major milestone in our plan is the enablement of alternate coal source, which is not impacted by wet weather and is at lower cost per tonne than our current operations. And the soon-to-be operational Mammoth Underground offers this milestone.
First coal is planned for late Q4, subject to approval, and I'll elaborate on progress made on Q3 later in my address on this project. Moving to our U.S. business unit, performance remains strong. The U.S. continued to improve quarter on quarter throughout 2024, delivering higher production, sales volumes, and lower cost per tonne. U.S. operations delivered raw coal production of 3.7 million tonnes, a positive and sustained trend. Buchanan's September quarter raw and saleable production was higher as mining activities benefited from running both our longwalls. During the quarter, yield improved as mining conditions improved, and we blended from the Northern and Southern Districts. Buchanan's raw production was up 9.5%, and saleable production was up more than 23% quarter on quarter.
The mine continues to achieve improved skip efficiencies following the maintenance works undertaken early in the year, and the conveyor belt system is working well, and skip counts are at their best rate in the last two years. I'll now hand over to Gerhard, who will take you through a financial update and a bit of a market outlook.
Thanks, Douglas, and good day, everybody. Our September quarter group revenue was $608 million, and the September year-to-date group revenue was $1.95 billion. Revenues reflected a 10.6% fall in benchmark met coal index, combined with lower annual U.S. domestic contract pricing compared to the same period last year in 2023. On our sales volume, in the September quarter, the average benchmark met coal index was $211 per tonne. The group realized price per tonne of met coal sold for the September quarter was $180 per tonne. Sales volumes for the group in the September quarter were 3.9 million tonnes.
Year to date, sales volumes for the group at September 2024 were 11.7 million tonnes, which is in line with the same period last year. And similar to prior quarter, on a year-to-date basis, at September, met coal sales revenues were 95.5% of total coal revenues. Turning to met coal markets, in the September 2024 quarter, we started to see steel markets and raw material demand coming under pressure. The ongoing weak macroeconomic environment and excessive Chinese exports of steel and coke led to a slowdown in hot metal production, and the Benchmark Met Coal Index fell to a three-year low in early September. Then China's stimulus measures, that were announced in late September, initially boosted confidence in the steel markets, leading to a rise in steel and raw materials prices.
After the announcement, the main met coal index moved above $200 per tonne, up to $211. However, the market cooled after that, and steel raw material prices retreated, with the main met coal index retreating to slightly below $200 per tonne levels, today at $199 per tonne. That's pretty stable over the last four business days. During the coming December quarter, we expect positive momentum from India and hot metal production outside China to recover as macroeconomic conditions improve. Trade measures will also potentially reduce the impact of high Chinese steel exports, allowing non-Chinese steel production to rebound. North American annual contract negotiations for FY 2025 are completed.
We anticipate a volume-weighted average price across all grades of met coal of approximately $159 per metric tonne. That is FOR, not FOB, reflecting a price aligned with the High Vol A and High Vol B, FOB, U.S. East Coast average index price between June and September, and forward curve pricing estimates at the time. Just as a side note, for 2024, we had a price of $161. For 2025, $159, so not a big change. This fixed price tonnage contract, or average contract price, covers approximately 40% of anticipated U.S. production and 58% of anticipated U.S. mine cash costs in 2025. On financials and corporate, average mining cost per tonne sold for the group increased to $117 per tonne as a result of lower production.
September 2024 year to date, average mining cost per tonne sold for the group were $111 per tonne. We are quite confident we will come back to revised cost guidance in quarter four, underpinned by recovering sales volumes. At the end of September, the company had a net debt position of $94 million and a closing cash balance of $176 million. Available liquidity was $326 million at the end of the quarter, and we announced a fully franked 0.5% dividend distribution per security, per CDI, with payment on eighteenth of September, reaffirming the company's commitment to pay dividends twice every year.
On 23rd September, Coronado Finance Pty Ltd launched an offering comprising $400 million aggregate principal amount of senior secured notes that are due in 2029. The notes offering closed seven times oversubscribed on 2nd October 2024, so $2.8 billion interest and achieved improved pricing, 9.25% coupon as opposed to 10.75% coupon on the old one and more favorable terms. We believe the successful offering reflects the company's strong credit position, attractive earnings growth potential, and sustained unit cost reduction implied by the development of Mammoth Underground project in Australia and the Buchanan expansion project in the U.S., and then also the anticipated easing of Stanwell commitments in 2027.
Net proceeds from the notes offering were used to redeem the $242 million of outstanding senior secured notes that were due in May 2026. Payment related to fees and expenses of the offering is under balance. The company intends to use the remaining net proceeds for general corporate purposes, providing enhanced liquidity. I hand back to Douglas.
Thanks, mate. I'll give you a brief update on both our projects, starting with Mammoth Underground. The Curragh Underground project, Mammoth Underground, remains on budget and on schedule, subject to approvals. We've completed all the necessary earthworks and S-P it in the June quarter, and Highwall stabilization works commenced in the September quarter in preparation for portal development. All procurement activities are progressing to plan, and all equipment orders are placed and delivery schedules have been agreed. Mammoth Underground will offer Curragh Complex several strategic improvement opportunities. Diversified coal production. The underground mine will continue to produce coal in periods of wet weather, thereby de-risking production continuity, as the two open cuts may be impacted by periods of wet weather. Reduced cost per tonne.
The cost per tonne for Mammoth Mine is forecasted to be in the second cost quarter, which will reduce the overall cost per tonne for the Curragh Complex. Mammoth Underground has substantial high-quality met coal, a reserve base of 41 million long tonnes, with coal quality expected to mirror the existing Curragh North open cut operations, and once fully operational, the project is expected to deliver 1.5 million-2 million tonnes per annum of saleable production in its first phase. Turning now to the U.S., our organic expansion plans of Buchanan remain on budget and on schedule. In the September quarter, underground steel and major component installation was progressed on the second set of skips, and all long lead components were received on site.
Excavation works were completed on the new surface raw coal storage area, with construction starting immediately following with the reclaim tunnel and the screening buildings. Completion of both projects is on budget and on track to be completed in Q2 2025. Ultimately, the increased handling capacity and storage areas will reduce the risk for bottlenecks, allowing our Northern and Southern District longwall equipment to run at higher capacity and improved productivity, increasing production by approximately one million tonnes per annum of incremental tonnage out of the mine. I'll now hand over to the operator to take any questions.
Thank you. 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 Paul Young with Goldman Sachs. Please go ahead.
Thank you. Morning, Doug and Gerhard. Hope you're both well. Doug, first question is on Curragh, just the performance in the quarter. Yeah, a number of sort of one-offs there, and it just seems like you can't get any luck at Curragh at the moment, unfortunately. But just can you talk through specifically around the conveyor and the bucket wheel reclaim, exactly what happened there? And you know, was there any way that you could have prevented that? And is there any sort of comments you can make around general sort of maintenance and sort of approaches at Curragh?
Thanks, Paul. You're right. I feel like somebody kicked a black cat, and I'm looking for that person at Curragh. If you look at the system delivering what it could in quarter two proves what the team has built and what the plan is capable of doing, and we've had these one-offs. Looking at what's occurred on the overland conveyor, yes, it's preventable. The crushing system that we have at Curragh North ROM is part of the original design. Without getting into the engineering of it, there's a design update to that crusher that will eliminate this risk going forward of what happened to it and then subsequently the overland conveyor. So we've got an engineering solution for it, and that's on order and will be delivered to site hopefully by the end of the year and installed in one of our shutdown periods.
So that is a preventable and will not reoccur with this engineering change. On the bucket wheel, a little bit more simplistic than that. We had a number of bolts fail on it. They sheared off. It's part of the maintenance, the ongoing maintenance to those bolts and torquing tolerances on it. We've addressed the maintenance in that area. What we did subsequent to these two events is we did an internal critical controls audit of all of our components of this nature, and then we also got it externally audited as well.
Between those two audits, we've picked up a number of areas of improvement where we'll change some of the engineering about, that we've got there updated through our capital projects next year to get new engineering and control, and then some of our practices that we've addressed as well. As you said, unfortunately, a few one-offs.
This call is no longer being recorded.
Yeah, okay. Thanks, Doug. Sorry, just there, there's a comment from someone on there. Just maybe further to that, just a quick follow-up. Just on the conveyor. Sorry, I press on this, but was that just a rock that cut the belt? And is that what you're talking about, just an engineering change to the shale or anything? Is it related to a piece of rock cutting the belt?
No, Paul, in the crusher design, it's got on the center spindles of it, a portion called a bash plate, and one of those plates has come loose, and it's made its way into the conveyor system and ripped the belt. There's a number of controls like magnets and others that pick it up and prevent this damage. So the crusher is the source of the problem that is being engineered and taken out, and we've got a number of preventative controls post that as well, that limit the ongoing impact.
Okay, got it. And then just on the wet weather, you would've seen your peers in the region, Goonyella and Blackwater, actually do pretty well in the quarter. So I'm just trying to understand how your operation was impacted or same as some of the neighboring operations during that period.
So we had 62 mm versus an average of about 19, the 10-year average that came through. For us, the challenge was we had the two weeks where the overland conveyor couldn't produce, and then we also had, in the southern mine, this thinning zone area in J-Pit, where we had coal that was planning to be released in the quarter. We found that the thinning was to the extent that it wasn't gonna release the volumes that was anticipated. So you had these two events, and then just after that, you had the wet weather event as well. That, and 60 mm is a lot of water compared to what is norm, but it's not beyond the system's capability of coping with. We've spent a lot of time and effort addressing wet weather controls over the last couple of years.
But the compound effect of the three in the quarter, all of them coming in the month of August, is what's blown it out, because you can't do the pre-stripping. And the rain was three days of pretty heavy rain, but we also had two days around it where you had light rain. So we ended up having about six days of production impact, and then you've got to bring the operation back into a staged ramp-up, which is also greatly improved. I need to call it out. We measure this, we measure everything. We generally used to have about one point eight hours for every mil of rain that impacted the mine in getting the operations back to work.
With the work that we've done over the last year and a half, we're down to 1.2 hours in the south and 1.3 hours in the north, roughly, recovery time, post a wet weather event for every mil of rain. That's an average we work on. Our push is to get to 1-to-1 ratio, with the improvements we've made.
Okay. That's good to know, Doug. And then, maybe a question for Gerhard, just on cash flow, Gerhard. I know you're coming out, I think, on the twelfth of August with your full set of accounts and cash flow statement, but your net debt went up close to $100 million in the period. Makes sense. Obviously, your sales were down, your production was down. And then, but I saw in the, you know, in the first half story, you had a $100 million working cap build in working cap in the half. So, the question is, you know, is there anything to call out on working cap? You know, what further build you actually saw in the quarter, if you know that? Thanks.
Yeah. Yeah, on cash, look, cash is a function of EBITDA here and CapEx, you know, so you have sustaining CapEx. You have the growth CapEx in there and the negative EBITDA number, and we will disclose that, of course, in the 10-Q. And that led to the cash bleed, you know, in the quarter. $32 million, about $32 million-$33 million is related to investment CapEx, you know, at Buchanan and Mammoth. So looking at inventories, absolutely. You know, so if you look at mining costs, the main reason mining costs went up quarter on quarter and also year on year is inventory movements, actually. You know, it's, of course, a little bit of that is lower sales tonnes.
But if you look at the inventory movements, that's massive, you know. So, if you look, year on year, for the group, it's about ninety million, so close to the hundred million. If you look at quarter on quarter, it's about eighty million for the group, you know, and most of that is coming out of Australia. You know, so we had massive inventory builds in December last year that we destocked in January, and then we had also big inventory builds in,
... in June this year that we unfortunately couldn't hold, you know, so that pushes back a lot of mining costs. You know, if you look at mine cash costs, which we unfortunately don't disclose, we see the savings that Douglas highlighted, you know, the AUD 20 million per month in Aussie dollars, you know, in the quarter at least. So we see progress, but unfortunately, when we look at mining costs, that's really disturbed by the massive inventory costs that come back into the bottom line.
Yep, understood. Okay. Thank you. Thanks, Doug.
The next question comes from Glyn Lawcock with Barrenjoey. Please go ahead.
Morning, Douglas. Just firstly, on the Mammoth Underground, I'm just sort of a little confused. Last quarter, December twenty-fourth, was first coal. Those words have been dropped from this release. What? And we're still dealing with regulatory approvals, when I thought you said it was a well-defined process that they follow. What's taking time? What's the stumbling blocks to get this approved in first coal?
Glyn, though, we're still targeting fourth quarter of this year. December is our solely focused-on start date. The process we're working through is with DESI. We need a mining method change, as I've described previously. We're fully permitted to mine this coal. That's not what it is. It's an environmental authority approval change from a different mining method. We're going through that process, and our timeline with DESI and the submissions that we started back in May, June this year, and the timeline that we're running to for that mining method change gets us that we will get that permit late November to mid December, and then we're ready to start cutting coal.
Okay, so there isn't a slippage. You just admitted the December twenty-fourth first coal from today's release. That's all.
Yeah. Well, that's still-
Okay.
Our intent. Obviously, you know, we're going through government process, so we wanna affirm that we put it subject to that approval, but that's our firm focus.
Is there an official timeline? Do they have to come back in time for you to get December coal, or, given we've just had a change of government in Queensland and everything else, is that pose risk to you slipping?
Unfortunately, there's always those kind of risks. DESI, we've actually found our experience with them on this project to be quite favorable. Our engagements have been positive, and timelines that they have. So it's a fairly bureaucratic process that this kind of approval goes through. We have set timelines, they have set timelines. Both sides are actually meeting those timelines, and in some cases, they've beaten their delivery dates, and likewise, if we've beaten our delivery dates in, you know, request for information and response to questions and that. So, we're comfortable with that set timeline, but you did call out what we've been trying to flag is, this is in that style of process, but everything to date, we're well on track within our timeline.
Okay, thanks. And then maybe just turning to the business today, you know, obviously, it was a tough third quarter, but where are we sitting today now? Like, if we take Curragh, which has been the problem child all year, are we now back at free cash flow positive today at $200 met coal and are costs now back within the guidance range that we've got for the year?
So from a cost perspective, we're looking at a forecast of $106, and we're sitting at about $111 at the moment in a guidance. So we're within that guidance from a cost perspective. As you describe it, I would rather look at Curragh as a smorgasbord of opportunity. It's got 20 years of life, fully permitted coal. It's got two large open cuts. It's got a potential of another open cut that we've described as X, but we're on the verge of developing an underground mine. The plan that we've deployed probably over the last 24 to 18 months has been a plan of two limbs. One is, how do we drive productivity in the mine? And that's setting it up to be a dragline-led set of operations.
You can see in the results reporting that plan is working. We're getting it to be a dragline-led mine. The dragline system being cost, those dragline is a far cheaper way of moving dirt than truck and excavate. So that's been our push, and once we got that pre-strip behind us, we could drop those fleets off. It was a big burden on it, and also added huge complexity to the operations, and also made it less efficient in the rain because we've got that alluvial material over the top. So once we cleared that of the system, there was a big limb of the plan that we had. The other was removing complexity and addressing some of the backlog maintenance because of COVID.
So we've been diligently working through our draglines, working through our prep plant and our overland conveyor, and we reported to the market where we got a million tonnes over the overland conveyor a while ago, so that's performing where we need it to be. The draglines, we've addressed all of them bar one. We've got one more dragline that's got a major shut next year. That's a five-year shut. And then they are where we want them to be for the next couple of years from their maintenance profile, and likewise with the prep plant. So we've been addressing that limb. The other bit in this year has been taking complexity out. So we split the mine now into three SSC regions.
They're two smaller mines that'll be managed with dedicated plans and teams, that in real terms, are two large open cuts in the context of any other mine in the Bowen Basin, but not having it as a complex that built complexity. The other thing that we've done over the last two years is take control back from our contracting partners. The way it was run previously, the operating model was control outsourced. We've in-sourced it again, so now we control the mine planning. We've got a dedicated, our own mine planning teams, and our contracting partner scopes have been reduced. Over the years, we've been taking these fleets out. We've been reducing, not only that, but the number of people that come to site.
With the fleets that we've taken out, about 550 people are no longer reporting to our operations every day in the steps we've been taking over the year. As we've just said, with the dragline performance exceeding where we expected it in our plan, we expected 44%. We're now sitting at 47%. We're idling up a shovel, and that shovel is, it's old. The trucks are 14 years old. It's expensive to operate, particularly in the wet, because of its load-bearing pressure. It's not great in weather. We initially planned to idle it through the wet weather period while we anticipated the weather that's coming. With the performance across the excavator fleet and the draglines, we're now planning to idle that through all of next year and hopefully beyond.
We've taken these steps in the plan that takes Curragh away from, as in your mind, the problem child, to being the small support of opportunity that we see as a long life, high quality met coal asset that's dragline-led and at the right cost profile going forward.
Yep. No, I appreciate that, Douglas. I mean, you know, there is an opportunity there over the long run, and I guess two years from now, when the royalty falls away on Stanwell, it'll be in a very different business. Just as a final follow-up, just on the quarter, ROM production down 32% quarter on quarter. I mean, that's essentially you lost a whole month of run-of-mine production. Is that all explainable by what happened, you explained, with the answer to Paul's question, or was there some contractor issues regarding mining as well? Because, I mean, you know, it feels like the conveyor belt down for two weeks, why we lose a whole month's worth of ROM.
We've kind of. So the elements that we've called out are obviously the major ones. We had some production issues at Logan, but, you know, fall of ground, well within the system's ability to cope with it. Buchanan had a screamer, and that plan is clearly starting to show what we investing, and the plan we have for that asset is returning handsomely and will continue to return. At Curragh, it's the compounded effect of you lose two weeks that you can't put product to your prep plant. You then get into an area that you've done all the work to expose the coal, and you discover that there's a lensing effect in the geological model that means that the coal isn't in the volume that you expected.
As I said, we've now drawn out that bull's-eye around that bore that was in J-Pit to affirm the geology and the faulting. And then you have a weather event off the back of that, and yes, all of those put together, you start looking at that kind of volume impact on the quarter. Yield in the U.S. is up. Logan is normal, at Curragh was slightly down for the month. That was predominantly because we were washing products from the south versus the north, so that took us a bit of a yield impact in the quarter as well. That wasn't in the original plan.
All right. That's great. Thanks for that. Thanks for that, Douglas. Appreciate it.
No worries.
Your next question comes from George Eadie with UBS. Please go ahead.
Yeah, good day, Douglas and Gerhard. Just firstly, on the U.S. price negotiations, can you help remind me how that works exactly? So you lock in 40% now, but how is the price agreed? It's obviously flat year on year, but maybe some help thinking about this going forward to 2026 and beyond, too, please.
Yeah. Yeah, George. Look, the way that works is, essentially, in the U.S., the steel producers go out and tender for an annual fixed price offerings, and then the met coal producers respond, you know. So that happened last year. This year, that's just the traditional way it works. 40% of this year's volume was contracted at an annual fixed price of 161, and then about 40% of our U.S. volume next year will be contracted at $159 per tonne. I can see, if we, if I provide an outlook for the following years, twenty twenty-six and others, I can see that the volume of annual fixed price contracted met coal will reduce, simply because you, we see higher demand coming out of Asia, particularly India, for certain coals.
So for us, it would be the Buchanan and you know, high vols out of the U.S. The problem with India at the moment is that the Indians don't want to pay for the freight differential that we see between shipping from Australia and then shipping from the U.S. So shipping from the U.S. is about $20 per tonne more expensive than out of Australia. So the Indians don't wanna do that at this stage, you know, but as demand out of India increases and as lack of premium mid vols, basically, the demand goes up and the production goes down, basically, the Indian steel producers will demand more high vols, and in our case, also Buchanan out of the U.S., and will eventually have to pay the freight differential, you know, in following years.
Whether that kicks in to its full extent in 2026, I'm not too sure, but I can see... bottom line, I can see that the volume of contracted met coal sales on an annual fixed price in the U.S. will reduce, and exports will go up.
Yep. Okay, that's clear. Thanks, Gerhard. And maybe just more broader on Mammoth. So not Mammoth, so Curragh and Mammoth together, rather. Just chasing some help, thinking about costs going forward. So I guess the first part is, it's a combination, I guess, of making an assumption around volume growth, cost out of parking this gear, CDX and dragline system getting more volume. You said before, Mammoth will be around second quartile on the cost curve. So is it, I guess, the way to think about it going forward, putting all those parts together and making an assumption on cost going forward? I guess, just given a lot of moving parts, could we maybe get three-year cost guidance or something at the results, for next year or something, given there's so much uncertainty?
Yeah, at the moment, we don't give three years of cost guidance, but in summary, you're on the right path here. So I would look at costs where we can get costs down to in Australia, probably at quarter two, you know. So quarter two, we have demonstrated our mining costs can hit the low eighties, you know, $81 per tonne. That's in a normal quarter, where we are not impacted by rain or any other equipment failures. That's definitely possible.
And then, if you assume, let's say, 11 million tonnes from Curragh Open Cut and 2 million tonnes from Mammoth, you know, the 2 million tonnes would come at a cost, and I think we published that before, at least we talked about it before, come at a cost of between $60-$65 per tonne, you know? So it will bring down. You can do the math now, what it means for all of Curragh. You can see that the Mammoth development will reduce overall mining costs per tonne, you know?
Yeah, yeah. No, that's great. Thanks, Gerhard. And then just I'm looking at the EAR that's submitted online two weeks ago. It has volumes from Mammoth at 2.13 million for calendar year 2025. Is there any risk of that with, you know, potential ramp-up timelines end of the year?
George, the ramp-up of the project has got the first continuous miner section starting in December. Second one gets delivered in quarter one, and then the third one in quarter three. We'll be running three of them as we build the mine out. Now, ramp up for this is you go straight on coal. So the first day we launch through the portal, we're cutting coal, generating coal and generating cash out of the project, which is excellent. Each of these should be able to produce about 800,000 ROM tonnes. We're low cover, low gas, a lovely coal seam.
I'd love to get everybody out there when we've got the project going, so you can see the coal seam, about just over five meters, thick coal seam. It's a highly productive mining that we'll get out of it, as you build the mine. But our schedule that you've seen there has got a ramp-up phase for the first six months, and then we start steady-stating into fourth quarter of next year to deliver that result.
Okay, great. Thanks, Douglas and Gerhard.
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 Daniel Roden with Jefferies. Please go ahead.
Thanks, Douglas and Gerhard. Just wanted to ask quickly if potentially you could quantify the impacts in the quarter from the rain event, the conveyor and the coal seam, each, please?
We don't generally split them out like that because it becomes difficult from a reporting going forward, but let me have a crack at it. The weather event was about 200,000 tonnes of coal. Thinning effect was up to 300,000 tonnes of ROM production that was planned. Then the overland conveyor cost us about 400,000-450,000, because we had a number of mitigating strategies, including hauling coal with trucks during that period, that made that number move around. Then, as I said, because we had to wash coal from the south versus what was planned, we had a bit of a yield impact on what was intended to come from the north to make those shipments.
Awesome. No, that much appreciated. That was great. And I just wanted to understand as well, with the, you called out some wet weather probably into the December and March quarter next year as well, kind of coming through. The six coal fleets that you've parked up at Curragh, are you able to use those, I guess, as flex capacity if you do experience higher kind of rainfall periods, and you can bring them on when it's dry and kind of, you know, sustain production at the, you know, impact of your unit cost? And I guess in that lens, what do you consider to be a focus for the company? Is it maintaining production or maintaining cost guidance, if that's a trade-off?
I'd say our focus is making cash. We want to return as much as we can to our shareholders, so that's how we'd look at all of our mine plans and how we'd manage these events, as they play out. From having a contractor's fleets on site, yes, fleets will be available to us. Unfortunately, where the industry is at, with the pressures on pricing and a number of our competitors having major operational challenges, there's quite a few people out there looking for work, skilled people looking for work. So there is those opportunities, but I'll be honest, that's the last place I'd want to turn to in wet weather. Mobilizing excavator fleets in period of wet to catch up, production, is not what you want to do because it's not productive.
It and it costs you quite a bit of money in those circumstances. With having our four draglines, constant blast and dozer, essentially, our draglines keep operating when the other fleets stop. It's very seldom that you'd stop a dragline fleet in a wet weather event, so we can keep exposing coal through those weather periods, and that's what our mine plan has focused on for this La Niña period, being the spring and the summer that's been forecasted. Intentionally, we've designed to have high coal high, so if the bottom of your pits are wet, and you can't run in them, we can still get back into coal that's engineered to be high early and keep feeding our prep plants.
And then post the weather events, if circumstances prevail, and it does make sense, yes, then we'd use that flex capacity of those fleets, but not our intended plan.
Awesome. Thank you. And just a quick question on the Mammoth Underground's ramp-up profile, so that's you know expected for first coal in Q4. What's its ramp-up profile to get to that 1.5-2 million tonnes per annum run rate?
Here we're gonna be running three continuous miner sections. The first one starts in December, as you called out. Second one arrives in Q1 next year, and then the third one in Q3. Each of them ramp up progressively as we build the mine out in that first half of next year, with a steady state in quarter four next year, is our planned ramp up.
Awesome. And maybe a quick one for Gerhard as well on just the new senior secured notes. So you've got $400 million undrawn. That's offsetting the $242 million notes that are being repaid. And then there's a you know delta of fees and expenses. Are you able to outline the cost of those fees and expenses?
No.
Just to get a sense of how much. Okay.
No. No, but it's not unusual. It's not unusually expensive also. It's within the usual fees the banks charge.
Yep, yep. No trouble at all. Thanks, guys. I really appreciate it. I'll hand it over.
Your next question comes from Lucca Mariani with Nuveen. Please go ahead.
Hey, guys. So quick question on current balance sheet cash. So I assume what we're seeing here on the balance sheet, that's not including the cash that you got from the extra cash you got from the transaction, that transaction?
That is correct. That came in in October, the additional cash.
Okay.
When you look at the cash and restricted cash at the end of September, the $176 million, that's just without the new bond, you know?
Okay, gotcha. And then just a follow-up to that. You know, including that pro forma you're seeing, you know, from last quarter, kind of a $70 million cash burn. What do you expect the cadence of just, you know, that, the cash use going forward to be? You know, is this something that's gonna revert when just when Mammoth comes online, or should we expect less working capital build? Where do you see that going forward, and do you see any issues with liquidity going forward as well?
No, no liquidity. I think the bond should have fixed liquidity. You know, and obviously, we are trying to generate cash at $200 per tonne levels, you know? So, I think the expansions here, they will consume a little bit of cash, potentially at this price level. But there won't be any liquidity issues, you know? So I think you will see a lot of cash sitting on the balance sheet when you look at it at the end of December. That provides enough liquidity for us to develop Buchanan and then also Mammoth.
Got it. Thank you.
That concludes the question and answer session of today's call. I'll now hand it back to Douglas for any closing remarks.
I'd just like to thank everybody for taking the time and joining us. As I said, it's been a mixed quarter. Our plan in the United States is clearly delivering the results we expect, and all of you expect, and we look forward to enjoying the return on that project when it's completed early quarter two next year. Our Mammoth expansion is on track, and we're fully focused on producing first coal in December, and that, as earlier called up, will make a big difference to the life of the asset going forward. Then we've got potential beyond that, when the Stanwell contract easing occurs.
And then the operational capability of Curragh, the two open cuts, with the work that we've done over the last couple of years, gives us that flexibility, and we look forward upon drawing that to its full potential out of the draglines into the future. With that, thanks for your time.
That does conclude our conference for today. Thank you for participating. You may now disconnect.