I would now like to hand the conference over to CEO, Garold Spindler. Please go ahead.
Thank you, Kaylee. Good morning, and thank you for joining Coronado Global Resources' first quarter 2026 investor call. I'm Garold Spindler, Interim Chief Executive Officer, and with me is our Chief Financial Officer, Barrie van der Merwe. Today, I will provide an overview of our first quarter's performance, outline the progress we've made following the completion of our expansion program, outline our latest plans to improve operating performance and cost, and discuss how the business is positioned as we move through 2026. Barrie will then walk you through the financial performance and our liquidity position before we open the call for questions. Following the completion of our expansion program over the past two years, Coronado entered 2026 with materially higher leverage. As we have previously outlined, weaker metallurgical coal markets through the past 18 months placed pressure on earnings and required mitigation measures.
As a result, management have commenced a comprehensive operational and financial reset focused on restoring sustainable cash generation through operating performance that will provide resilience through the market cycles. We will be supported in this work by AlixPartners, a well-credentialed turnaround consulting firm. Across the group, the focus has been on increased overburden removal and underground development, full recovery, productivity movements, and capital discipline. The reset includes targeted Curragh Mine plan optimization, improved fleet productivity and utilization, and further optimization of the Mammoth Underground. We have also progressed contract and contractor reset across mining, maintenance, and services, which is expected to directly lower the running cost base and improve cash generation. While reported production volumes in the quarter were lower, overburden removal was at expected levels at Curragh, and production at Buchanan was better than prior quarter's performance, reflecting the contribution of the capital investment.
At Curragh, the strong overburden removal and improved mine planning enhanced coal recovery capability and pit inventories, setting the operation up for increased production through the remainder of the year. At Buchanan, the business successfully absorbed recent expansion capital following the resolution of early commissioning challenges, delivering solid production performance and more than doubling prior quarter EBITDA despite two longwall moves in the quarter. These outcomes reinforce the strength of our portfolio following the completion of the Mammoth Underground and the Buchanan expansion. Capital expenditure is moderating, allowing the business to focus on cash preservation. Another material step forward is to bolster our cash generation when liquidity is weak was the reset of the Stanwell thermal coal arrangements. Under the revised structure, no rebate applies, and during the quarter, the new agreements with Stanwell contributed approximately $50 million in cash.
This change structurally improves Coronado's cash generation profile and provides a meaningful liquidity facility aligned with the cyclicality of the metallurgical coal market. While requested cash flow in the quarter reflected the timing of production and sales, the business is now materially better positioned than it has been at any point in the past two years. Safety remains our highest priority. The quarter followed two tragic fatal incidents late last year and in early January. Our focus continues to be on supporting affected families and teams, cooperating fully with authorities, and strengthening our safety systems through a frontline supervisor development program, leadership engagement, and a review of our systems, processes, and applications across all sites. Turning now to first quarter 2026 performance. At the group level, the first quarter reflected planned maintenance activity, delayed coal recovery early in the year, and operating circumstances.
As a result, ROM production, saleable production, and sales volumes were lower quarter-on-quarter, noting that the December quarter is historically our highest and the March quarter our lowest. Unit costs were temporarily elevated due to lower throughput and fixed cost absorption, aligned with the usual quarterly organizational rhythm. However, realized pricing strengthened materially, supported by improved benchmark pricing, a higher PLV, and increased export exposure. Q1 production outcomes reflected normal early year phasing across the sector with operational run rates and unit cost performance trending back to levels that will see us achieve our full year guidance. Export sales increased to approximately 74% of total group volumes, and the uplift in PLV pricing delivered an 11% quarter-on-quarter increase in group average realized metallurgical coal pricing to around $165 per ton.
While reported cash flow in the quarter reflected production timing and sales mix, the business is now structurally better positioned than it was entering the year. At Curragh, starting with Australia and the Curragh complex, Q1 production outcomes at Curragh were impacted by planned prep plant maintenance, delayed coal recovery early in the year, and a temporary pause at Mammoth following the tragic fatal incident in January. Strong overburden removal and improved mine plan execution increased pit inventory levels and materially improved coal availability for the remainder of the year. With a major two-week CHPP shutdown completed and E&I expansion infrastructure fully commissioned, Curragh is now better positioned to capture operating leverage as run rates increase. The improvements implemented over the past few years have enhanced the site's resilience and recovery capability, reducing the impact of external disruptions and supporting more consistent performance through 2026.
The mine leadership team responded quickly to changing circumstances and navigated a complex first quarter with exceptional responsiveness and resilience. The U.S. operations. Turning to the U.S. at the Buchanan complex, we saw a continuation of strong momentum exiting 2025, with Buchanan's results continuing to show the high-quality asset that it is. Buchanan delivered higher sales volumes, higher saleable production despite two longwall moves, and an 18% increase in realized metallurgical coal pricing quarter-over-quarter. With both longwalls now operating and expansion infrastructure fully commissioned, Buchanan continues to demonstrate the quality of the asset following expansion and is positioned for strong, consistent production and returns through 2026. Logan reflected the ongoing structural challenges in the U.S. highwall market and is now fully idled. With the business continuing to ship existing inventory as required by sales commitments.
This was a difficult decision, but it was the right decision to preserve cash, protect the balance sheet, and avoid uneconomic production in a structurally challenged market. We will pursue opportunities where available to sell Logan. The metallurgical coal market entered 2026 with increased strength following the recovery that began in late 2025. PLV, HCC, Australian prices averaged around $200 per ton in the December quarter, moved higher into January, and then stabilized around $220 per ton through March, with some volatility driven by geopolitics and energy markets. In April, the PLV Mid index has found support around $230 per ton. Outside of China, steel production is expected to gradually improve, supported by stronger Indian demand, trade barriers against lower Chinese steel, and ongoing supply side discipline.
Overall, Coronado's diversified portfolio with low cost PLV-linked production in both Australia and the U.S. remains well-positioned to benefit from favorable pricing for higher quality metallurgical coal products. Q1 reflected normal early year phasing for the sector, which is factored into our guidance, and we see Q2 performance naturally stepping up from here. With that overview, I'll now hand over to Barrie to walk you through the financial results in more detail.
Thank you, Garold, and good morning, everyone. Financial performance in the March quarter reflected the period of required operational activity early in the year. This included the completion of the major plant shutdown at Curragh and two longwall relocations at Buchanan. These activities are a normal and necessary part of the mining cycle, and while they temporarily reduced production and earnings in the quarter, they were undertaken to position operations for strong delivery through the remainder of the year. Stronger realized pricing helped mitigate the impact of a stronger Australian dollar and high diesel costs late in the quarter. Importantly, the Stanwell reset transaction that closed late last year has significantly improved the company's cash generation profile heading into 2026, delivering approximately $50 million of cash benefit during the quarter in the form of prepayments and rebate forgiveness. Realized pricing improved meaningfully on a per ton basis.
Group average realized pricing increased by 9.1% to approximately $133 per ton, driven by a higher contribution from PLV and increased export production. This does not include the benefit of about $10 per ton associated with the highest Stanwell payments, which is credited to the balance sheet and not the P&L. We will explain more about that with the March quarter financials that's coming out in May. The Australian dollar averaged about 70 cents against the U.S. dollar during this quarter, which compares with the guidance assumption of 68 cents. Despite this headwind, the uplift in realized pricing more than offset the FX impact and cost pressures at the operating level. Noting that Buchanan has no exposure to movements in the AUD and limited diesel exposure.
As a reminder, a one-cent movement in the AUD/USD exchange rate equates to approximately $15 million of full-year cash flow, highlighting the importance of recent price strength and ongoing cost improvement work in a stronger currency environment. Our volatility in global energy markets may continue to place pressure on fuel prices. Our price planning is aligned with current market forward curves. As production rates pick up, coal recovery accelerates and productivity initiatives take effect. Unit cost performance is expected to be at levels required to achieve full-year guidance for the rest of the year. The Q1 impacts reflect the planned phasing of operational activity early in the year and do not alter the company's full-year production or cost guidance subject to exchange rate movements. Available liquidity at the end of March was $120 million of cash on hand.
The cash level remains at approximately the same level today, reinforcing the improved stability of the company's liquidity position. In addition, the short-term working capital funding levers outlined in the FY 2025 full-year results presentation, estimated at approximately $95 million, remain fully available and have not been utilized in the quarter. We also did not pull any net short-term cash levers or so-called one day wonders at quarter end to achieve the cash balance, and it represents underlying cash in the business, noting that inventories were drawn down during the March quarter and will require some rebuilding in the June quarter. As seen in our report, we're actively assessing strategic options for the Logan Complex, including potential disposal. This is intended to minimize ongoing idling and holding costs and is expected to be cash accretive relative to an extended care and maintenance scenario.
As a result of Logan being fully idled now, its remaining carrying amount will be impaired in the upcoming quarterly financial result, which will result in a non-cash pre-tax charge of approximately $160 million, still subject to audit review. As Garold said, in April, we started a structural, operational, and commercial reset focused on strengthening cash generation and improving the balance sheet. With a major expansion phase now complete, this reset is centered on restructured mine plans, productivity improvements, contractor and fleet optimization, and improved risk-sharing with contractors. These initiatives are being implemented within the existing asset base and operating footprint and do not require incremental capital expenditure. As volumes recover following the March quarter, these actions are expected to support improved operating leverage, stronger cash flow, and continued balance sheet improvement through the remainder of FY 2026.
Looking ahead, forward pricing remains supportive with the PLV HCC benchmark prices around $230 per ton into mid-2026. This, combined with operational execution, stronger production, the continued focus on structural, operational, and commercial reset, and the absence of large-scale expansion capital, Coronado is well positioned to deliver progressively stronger cash generation and balance sheet improvement over the rest of the year. We'll release our quarterly financial statements for the period ended March 31 to the market on May 12. With that, Kaylee, we're happy to take questions. Thank you.
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 Daniel Roden with Jefferies.
Good day, guys. I just wanted to get a bit of additional color if we can on just the impacts at Curragh from the wet weather, and you've cited that they're likely to take, you know, a few quarters to kind of unwind. How is that gonna be characterized over the next couple of quarters? Is that increasing, obviously, stripping production, but is that, you know, impact to ROM? Is that translating into unit costs? Like, how should we expect to see that come through over the next couple of quarters, please?
We've prohibited, just as a matter of discipline, the reliance on weather as an excuse. But admittedly, the first quarter, it rained in, you know, unseasonable and record amounts, and everybody got impacted. For us, the impact, because the property is reasonably well-drained, very well-drained, in fact, by the Mackenzie River going through it, we did not have any issues with machinery breaches or, you know, submerged equipment. The biggest problem was associated with retained water in the coal pits, the lowest part of the operation. Coal recovery was impacted, but because the mine drains well, the upper benches continued to operate, sometimes at a reduced capacity because of road conditions, but continued to operate. We did in fact enjoy some pretty good dirt removal, particularly from the draglines.
It's a simple issue that if you have removed the dirt and the coal is left, you've got a lower ratio and more productive quarters ahead, just simply from a mathematical standpoint.
Yep. No, no.
Hill, the other thing to just think about is then Mammoth and the fact that, you know, after the fatality on January 2, we basically only got going in mid-February. That was, as it goes with mines, it's not an on and off situation. It needs to ramp up and get in, you know. You need to kind of account for that when you think about how the next three quarters will look too.
Yep. No, actually, thanks for the question. My follow-up question there, which is, how ramp back up, like, what's the timeline there, I guess, was, you know, ramping up from the fatality was probably a little slower than expected when we talked about it in February. You know, is that kind of. Are you seeing a trend and ramp up back towards those 2 million ton run rates that we're expecting and seeing back in December?
We expect that, yes, we are.
Okay. Cool. I might hand it over. Thank you very much, guys, and I'll queue back up.
Yeah.
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 Glyn Lawcock with Barrenjoey.
Morning, Garold. Excuse me, sorry. Just going back to the Mammoth question, just you said you're ramping up to 2, but when do you think you'll get to 2 million tons at Mammoth? Thanks.
I think the run rate of 2 million tons a year we can achieve sometime this quarter.
Okay, that's great. Maybe just as a whole, I mean, obviously now you've left behind a very tough quarter, as you said, the pricing lag. You're now picking up a $35 a ton tailwind on price at the POV level. Is the business today, as you sit here, generating positive free cash flow now?
Do you wanna answer that, Barrie?
Yeah. Thanks, Garold. I mean, Glyn, if you talk about that 235 level, you know, the underlying business would make money. The one call-out that I did say when I spoke was we need to rebuild a bit of inventory. So the business would generate cash, but we'd need to reinvest a bit in inventory because you'll have seen we sold about 500,000 tons more than what we produced. I don't think that's unusual. I think that tends to happen. At 235, we're pretty happy.
Okay, $235, you make positive cash, just not this quarter, potentially 'cause of the inventory build.
Correct.
A couple of other quick ones if I could. Just Logan, now that it's sort of idled at the mine level, you're just running out the inventory. Should that be like a cash neutral business over the remainder of this year? Just trying to think what sort of dollar spend goes out the door pre any revenue comes in. Thanks.
It depends on pricing and the idle costs and whatever we do in terms of selling the property. It is unlikely, absent the revenue from the inventory, to be cash neutral. There will be idle costs associated.
Okay. A little bit of cash leakage at Logan. Just final question, maybe just could you help us understand the fuel sensitivity a little bit better at Curragh? Like, can you give us a sense of the diesel consumption or what the increase in $1 million spend from diesel has been now that you've probably had a month's worth of higher diesel costs?
Barrie, I'll turn that over to you.
Thanks, Garold. Glyn, it's mainly a Curragh thing with the open pits there. We use about 10 million liters a month, about 120 million liters per annum. The spend, call it pre-Iranian conflict, was about $80 million per year. Our spend. That's based on our pricing is linked to the Singapore Gasoil, and that was at $130 per barrel. The forward curve is sitting more at about 190 currently. That'll increase our spend to about 120. You know, if you look at forward pricing, about 50% increase, about $40 million, which is about, what? $2.50 per tonne, you know. It's a big number.
It's a big cash flow number. On the unit cost guidance, not a big impact. If you think about what it means for price, you know that probably consumes about, on a PLV basis, $3.50-$4 of that $35 per tonne increase in price that we'll enjoy in the second quarter. The impact of price still far outweighs that.
Yeah, no, fully understood. Thanks very much.
Thanks, Glyn.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. That concludes the question and answer session of today's call. Pardon me, we do have a follow-up question from Daniel Roden with Jefferies.
Sorry, guys. I'll just bump in and ask a quick follow-up on, maybe just for Barrie. You know, I guess in the quarter you've outlined the $26 million of the Stanwell prepayment drawn down. I just wanted to ask a quick question on the, I guess, the mechanism behind that. I think it was $8.6 million a month. You know, I guess you know how quickly and aggressively would you be able to draw that down, you know, given that you are in the ratio where you can perceivably draw down maximum amounts. I assume it's a monthly limit on that drawdown.
Can you articulate, I guess, what the conditions are around that, you know, I guess prepayment thresholds are around that and yeah, I guess just trying to understand, I guess the liquidity mechanism going forward?
Oh, that's good, Daniel. I mean, the $50 million we talk about in the quarter is, it's got two components to it. The first is the rebate forgiveness, which is about half of that. You know, so say $25 million is rebate forgiveness and then the other $25 million is prepayments for coal. The mechanism of that is less of a drawdown and more of a trigger. That prepayment, which is driven by Stanwell basically pay us the full price for coal as opposed to the discounted price, is triggered when our cash balance is less than $250 million. Under those conditions, Stanwell pays a higher price and we get the prepayment. If we go above $250 million, that stops, and we don't get the prepayment amount.
You know, it depends on our cash balance. If you look at where we'll be sitting in the second quarter, and likely the third quarter, we would be receiving that benefit.
Yeah. Okay. I guess I'm just trying to understand the rates that you'd be able to draw down on the prepayment. So if I was taking that $26 million over the quarter, divide that by three, it's $8.6 million a month, which implies about $104 million over the year. Were you able to draw down more than that $26 million in the quarter? And you know, I'm just trying to understand the rates that you're able to draw that down. Like, you know, next quarter, could you draw down-
I get what you're saying.
Yeah.
Yeah. I mean, the rate's really driven by our deliveries to Stanwell. It's driven by the tonnages that they nominate. If you look at this year, they nominated about 2.8 million tons, 2.7 million tons for the year. It'll pretty much be straight line driven by the tonne deliveries to them.
Yes. No, no. Gotcha. Crystal clear. All right. Thank you, guys.
You bet.
Your next question comes from Rob Stein with Macquarie.
Hi. Just a quick one from me. Look, there's been a bit of press speculation around asset sales and whatnot, and I mean, the comment just before around looking for a buyer of Logan. Just strategically, how the portfolio's positioned going forward. You know, is there still a benefit of having, you know, a U.S.-based, Australian-based met coal operation coexisting under the one vehicle? How are you thinking about, you know, the assets, each individual asset's position going forward? Then what is the future for Coronado under that scenario where you do start to split the portfolio up?
Well, the market advantages of Curragh, particularly in today's market, are fairly evident. The broad range of high quality coals. I think the real benefit here is the value of Buchanan. Buchanan is a very high quality, low vol coal, and traditionally it's gone to Brazil and to Europe, and neither of those markets are reflecting the resilience that India, Korea, Japan, currently is. Because we're capable of producing Buchanan at a very low ash and a very low moisture. It is an excellent PCI coal and finds a market, finds a perpetual home in the, in the Asian basin without very much problem, without any problem at all. It's a sought-after coal, and when Australia was embargoed several years ago, it enjoyed strong sales even into China. We don't like
We are blessed with the quality of Buchanan's coal, particularly something that really nobody else has. Nobody else has a reserve in the Pocahontas seam of that quality and that extent. It will continue to enjoy a profitable presence in today's market.
Just on Curragh and its volatility, associated with, you know, pricing and the like, is the asset too volatile to have in a standalone vehicle? Does it need to be absorbed in a bigger company? Like, how should we think about that? Because obviously, looking at the value upside once Stanwell rolls off, well, sorry, once we get out to a few years' time, it's there to see. We're at the mercy of pricing in some respects. How do you think through, you know, continuing to maintain a constant operational mindset through that revenue volatility?
Frankly, if you looked at the pricings or the cost structure of Curragh as it has been over the past several years, it would be valid concerns. That's a price structure we cannot continue to stand and are working quite hard to reduce. At a reduced pricing structure, the quality, the deliverability, and the quality of the infrastructure is such that it enjoys a very good home in an Asian market and a very reliable cash generation. We've got some work to do there. We recognize that, and that is what the reset and the work we're doing with the outside consultants is currently designed to achieve.
Perfect. Well, thank you very much for that.
Your next question comes from Fintan Collins with UBS.
Thanks, guys. I'm just wondering if you could provide a little more color on the recent media reports around the process having commenced through the strategic ownership options at Curragh. Just wondering how we should think about this process overall in the context of, you know, portfolio and strategy going forward. Thank you.
Major tool we've had to manage costs at Curragh, because Curragh is largely run by several contractors, is through the mine design, and that has proven to be an imperfect tool. We're currently looking at expanding the inventory of tools we have to manage the cost, and including sharing risks with the contractors, and sharing the benefits perhaps of lower costs and a more considered view of the mine plan and how we implement it. We're going to be using new technologies in order to do that, including AI, an often misused word, but one that does have applications here. Did that satisfy the question or answer it?
Oh, just rather specific-
Are you asking about the AFR article as well, that came out earlier this week about Curragh and the process to sell it?
Yeah, correct. Whether or not you'd consider.
Yeah
a sell-down there.
Yeah. I mean, on that one, that's kind of, you know, press speculation is press speculation. We don't comment on any press speculation. I would from your perspective and everyone on the call, just treat it as such. It's press speculation and if there was something to say, we would have said it and we would have announced it, but there's nothing to say.
Okay. Thanks, guys. It's very clear.
Thank you.
That concludes the question and answer section of today's call. I'll now hand back to Garold for any closing remarks.
I wanna thank you for the attention and attending this session. We look forward to further communications with the market and wish you well. Thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect.