I would now like to hand the conference over to Mr. Marcelo Matos, Executive Director and CEO. Please go ahead.
Thank you. Good morning, everyone, and happy New Year. Thank you for joining us, as we present the December 25 quarterly activities report. With me here is Shane Young, our Chief Financial Officer. I'm pleased to say, we had a very strong finish to the year, with a high level of stripping and pit preparation in the third quarter, providing the foundation to deliver strong coal flow and record operational results in the fourth quarter. This performance saw us achieve full year saleable production of 14 million tons at the midpoint of the revised guidance, and total sales of 14.1 million tons. A fantastic result, given the adverse weather and subsequent operational challenges in the first half of the year.
Additionally, although we usually don't provide run-of-mine coal guidance, I thought it would be interesting to point out that despite all the wet weather impacts early in 2025, we delivered 20.5 million tons of raw coal mined for the full year, which is actually ahead of our original plans and enabled us to finish the year with over 1.5 million tons of raw coal inventories across the business. And this will help mitigate potential wet weather impacts in the current season, which, as we all know, has already been taking place. During the quarter, we unfortunately recorded two serious accidents.
While these accidents were classified as serious due to the need for hospital admission, and we never take any harm to our people lightly, it's reassuring that both instances were far from being incidents that could lead to a potential fatality. Our overall safety culture and performance remains strong, with our twelve-month serious accident frequency rate holding at 0.33, well below the industry benchmark. The market began to see some green shoots, late in the quarter, with the premium hard coking coal price finding support back above $200 per ton in December, for the first time since late 2024.
More recently, supply concerns have intensified following the passing of the ex-tropical cyclone Koji in early January, causing supply disruptions and driving prices further up to around $250 per ton for premium hard coking coal and $173 per ton for PCI as of today. Record production and sales, coupled with these improved market conditions, supported strong cash generation during the fourth quarter, with the business reducing its net debt position by almost $60 million over the quarter. I'll now move into the body of the report with a brief summary of the performance of each asset. Starting with South Walker Creek, we saw continued sequential growth in run-of-mine production, with the ongoing ramp-up towards our expanded capacity.
This translated to full-year records across all metrics, as a second half-weighted production profile was supported by the upgraded CHPP, delivering consistently above expectations and above nameplate capacity throughout the second half. Full-year saleable production concluded at 6.6 million tons at the midpoint of the guidance range, which remained unchanged despite the wet weather challenges early on. This caps off a strong year following the successful completion of the capital investment phase early in the year. Poitrel delivered an exceptional quarter to close out an exceptional year. We saw all-time records for both saleable production and sales, which each concluded at 5 million tons for the full year.
This standout performance demonstrates the benefits of the investment into the Ramp 10 North in earlier years, and is also a reflection of the operational acumen and excellence of our site teams. For the fourth quarter specifically, the strip ratio reduced significantly as anticipated after elevated stripping in the September quarter. This provided a baseline for the second-highest quarterly raw output on record, with operational performance also supported by record dozer push volumes and mine plan optimization to deliver high-yielding costs. Poitrel ended the year with almost 1 million tons in raw inventories alone, containing a mix of thermal and met coals. Turning to Isaac, the Isaac Plains Complex, which I want to remind you, was the most severely impacted asset by the wet weather early in 2025.
It's been impressive to see the recovery of our teams that our teams have managed to achieve in the second half to ultimately deliver against the revised guidance range. Raw production totaled 2.2 million tons for the second half, comprising almost 60% of the full year total. Furthermore, December was a record-breaking month for the CHPP, with the highest-ever monthly feed of 425,000 tons. This was achieved despite additional constraints on prime digging unit availability, geotechnical challenges within the Isaac Downs South and the Isaac Downs North overthrust pit areas... and the completion of mining activities in Pit 5 North.
Looking ahead, the Isaac Downs Extension project is progressing as planned, with the focus remaining on the approvals, work streams, and the submission of the EIS in the first half of 2026. While we are tracking on schedule for all baseline studies within our control, groundwater modeling and impact assessments incurred weather delays early in 2025, and remain on the critical path. We will continue to update the market on our progress on this front, and we remain very motivated to advance this critical life extension project for the Isaac complex. Time now to hear from Shane on the fourth quarter financials.
Thank you, Marcelo. Looking at the corporate section of today's update, Stanmore finished 2025 with a strong cash and balance sheet position. This was underpinned by the successful execution of our fourth quarter weighted operational plan. Total cash as of December 131, improved to $212 million, which is after the scheduled half-yearly debt repayment of $35 million. As a result, net debt decreased to just $33 million as at year-end, from a total of $90 million in the prior quarter. If we look over the full year, net debt increased just $7 million year-on-year, which is after $60 million in dividends, $85 million of capital expenditures, and $24 million paid in Eagle Downs stamp duty, which remains subject to an objection process.
This is a remarkable outcome and demonstrates the resilience of our platform, which generated positive operating cash flows despite cyclically low market conditions. Off the back of this operational strength, we also took the opportunity to upsize our bank revolving credit facilities during the quarter, which now total $200 million in undrawn credit. When combined with our closing cash balances and our working capital facility, Stanmore finished 2025 with total liquidity of $482 million, a strong position for the platform to enter 2026. Moving on to a comparison of full-year production and capital expenditure against market guidance. As Marcelo previously highlighted, the strong finish to 2025 delivered full-year saleable production of 14 million tons, landing at the midpoint of our revised guidance range.
Capital expenditure for the year totaled $85 million, also at the midpoint of our latest guidance. Notably, this range had been reduced by $25 million earlier in 2025 to support cash preservation. FOB cash cost performance relative to guidance will be reported as part of our full year results next month, but it will finish within our expected guidance range as well. At that time, we will also release guidance for 2026, which will incorporate known impacts from the weather events experienced earlier this year. Aside from those potential weather impacts, we expect South Walker Creek to continue to produce towards its expanded capacity, while Poitrel is expected to deliver another solid performance. In contrast, Isaac Plains output is expected to decline sequentially year-on-year, as parts of that mine approach their established economic limits and mining activities are optimized to maximize cash generation.
This step change was anticipated in our mine plans, with the economic limit being geologically defined as mining activities approach a split in the Leichhardt Seam around 2028. As we work through the approvals required to commence the next phase at Isaac Plains, the Isaac Downs extension, our focus will remain on value preservation and cost optimization at that mine. We look forward to providing further detail on 2026 guidance, along with our full year 2025 financial results in February. With that, Marcelo will now look to provide a quick update on markets and conclude today's prepared remarks.
Thanks, Shane. During the quarter, we saw prices for premium coking coal improved to, from $190 per ton to $218 per ton. As noted in the report, this improvement was underpinned by stronger demand from China, following a recovery in domestic netback pricing, along with a normalization of Mongolian imports that increased the import appetite for seaborne coals. Indian demand also improved over the quarter, with buyers beginning restocking activities after operating with relatively low inventory days throughout the year, and in preparation for Queensland's upcoming wet season. This expectation has been validated, with supply scarcity becoming paramount after the recent passing of ex-tropical Cyclone Koji in early January.
The impacts from this weather event are understood to be widespread around the Northern and the Central Bowen Basin, highlighted by the Moranbah weather station, recording nearly 160 millimeters of rain in a single day, compared to 116 for the entire month of January last year. Nonetheless, we remain well-positioned, supported by strong operational readiness, the implementation of lessons learned from last year's extended wet season. Overall, the improved market conditions are a welcome shift from last year, and we are encouraged by positive structural developments in demand landscape, including policy clarity from India regarding anti-dumping duties on coke imports and reaffirmed safeguard duties imposed on steel imports. That concludes the prepared remarks for today's call. I'll now hand over to the moderator so we can take your 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 Brett McKay with Petra Capital. Please go ahead.
Thank you, and good morning, gents. Happy New Year! Just a couple quick ones from me. Just on the strip ratios, obviously pulling back quarter-over-quarter as expected, but they are seemingly lower on average over the last number of quarters. Just any kind of outlook around that strip ratio profile, sort of stepping back up across the asset base, to a more normalized level? Or could we see this sort of lower set of numbers going forward for a quarter or two to come?
Hi, Brett. I think simple answer is no. We don't expect these very low levels going forward. I think Q4 was anticipated, as we said, back in Q3, that was anticipated to be a very low strip ratio quarter, given that we've done a lot of that stripping in Q3 and was also a quarter that was expected to have a strong coal flow, right? I think we always said that was a year with a strong back-ended profile, given all the recovery work. So going forward, I think expectation is to go back to a more normal level as far as Poitrel and South Walker are concerned.
And what we've indicated in the past was that that's gonna be around the 8.5, for example, for prime strip ratio for the two assets. Where Isaac is as we've also indicated in the past, strip ratios are just going up. Unfortunately, it's the profile of the pit we're mining, and as we said before, we're gonna be reaching challenging economic conditions around 2028, so we are setting ourselves up in Isaac to make sure that we have the right cost structure going forward, given the increased strip ratios.
Yeah. Guess on that point there on Isaac and sort of the next question, I guess, Marcelo, is if you've got an update on the timeline for the extension to come online. I know we previously just spoke about aligning the existing operations with the incoming coal from the extension. Do you still feel like that's the realistic target, or is there a sort of shift into maybe spreading the remaining life at Isaac Downs out to match that updated timeline?
Brett, I think at this stage, nothing has changed. Okay, I think it is possible for us to, let's say, obtain the approvals needed to start the development of the project and start ramping up in a way that minimize discontinuity, okay? So when I say it's possible, obviously will depend a lot on the approvals work stream and us not having any undesired surprises. Having said that, keeping Isaac Downs running at similar rates until that transition takes place, it's gonna be uneconomic, okay? We're just going deeper. We're gonna be seeing seams splitting, which will have also cost implications.
So I think we are setting ourselves up, focusing on the dragline, making sure we are not just, let's say, set ourselves with a number of trucks and excavator fleets to mine coal at the highest preparation, which will be, let's say, uneconomic, if to keep those volumes at the, you know, unchanged. So, we are providing guidance shortly, right in February, when we do the full year results, and you guys are gonna see that that's already starting to be reflected at this year, and towards the end of life at Isaac Downs, which is probably around 28, which is where the economic limits are.
I don't wanna just, you know, bring forward the discussion in February. I think, we are also going through a process of understanding the implications of this weather event, and so that when we provide guidance for Isaac, for example, for 2026, we are taking consideration not only the setting ourselves up right from a cost standpoint, but also the wet weather implications as well.
... A good segue into the obvious question, if you can provide an update on exactly where things are at currently. I mean, you've got a pretty healthy end of year ROM inventory position. Are you washing coal and selling coal at the moment? And has mining restarted at any of the sites yet?
Yes, mining has restarted. Yes, we are mining and selling coal. It's a recovery process, right? Not very different than what we've been through last year. Last year was just a difficult year because we were, as we explained before, we were hit three times. As we were recovering from the previous event, we were hit again, so it just makes things very, very, very hard. Hopefully, this year will be different. So we were hit once, and it was pretty, you know, it was a pretty harsh one. As I said, we were fortunate to have finished 25 with healthy inventories. Obviously, these inventories are being now consumed while we were in recovery mode. Not all mines are recovered at the same pace.
Usually, and as, as, not different than in the past, Isaac usually struggles a bit more simply because we have a less flexibility and, and less active pits. South Walker and Poitrel, they are already a bit ahead compared to Isaac from a recovery standpoint. The port, if you look at DBCT, the port has closed for almost a week, okay? So that will affect significantly the January shipments, hence our decision to declare FM. I mean, we know that we were prevented from performing obligations around some individual shipments as, as per... As contemplated under the contract. So I think we thought was the right thing, not only for us, but for our customers, to be able to more objectively try to remedy and mitigate some of those impacts.
But the event now is concluded. We're actually lifting a FM and now we're trying to readjust the shipping program to cater for that. So yes, we are mining, yes, we're shipping. January will be a significantly lower month than what we expected. That's gonna have probably gonna have a flow-on impact on Q1 as a whole, okay? So not very different than last year. Probably there will be a reprofiling of a production and shipments during the quarters to be able to adjust to this recent event. That's what we know for now, okay? So nothing that we cannot recover from, in our view, with a reprofiling needed to adjust to the potential impacts.
How far from fully understanding the impacts and having that recovery plan in place are you? And would you expect to release that update to the market in the nearer term, or would you prefer to sort of wrap it all up into the 2026 guidance later in February?
Look, the impacts for now, they are well understood, provided, of course, that we are able to dewater the pits, you know, in line with our plans, and get back into the coal flow and all the sequence between washing and shipping, you know, in line with the plans. I think they are well understood as long as we are not hit again, right, Brad? So the wet season is not over yet. So fingers crossed we don't get another, you know, another Q1 like we had back in last year. But as I said, we will have a smaller Q1 for sure. I don't think that's anything that we are unable to recover.
If we look at Poitrel and South Walker, you know, as long as, you know, we get back to coal mining as we're planning, we shouldn't have any constraints to wash and ship the coals we need because we have enough washing capacity. South Walker was always, is always a concern because we need to use all the washing hours we have. So we need to make sure that we don't run out of coal feed, okay? And that the plant has always coal, enough ROM in front of it, which so far is the case. So hopefully that doesn't change, you know, for the rest of the wet season.
All right. Thanks, Marcelo. So can I just clarify, were you planning on putting a specific update out once everything's sort of been fully captured and is presentable, or, or do you think that that's just gonna roll into that FY 2026 guidance update?
Yeah, hi, Brad. It's Shane here. Yeah, that we'll, we'll plan to release guidance along with our financials at the end of February. I think, you know, obviously it'll, it'll need to be processed in terms of any impacts on costs as well, and, so it's better just to wrap it up all into one.
Okay. All right. Thanks, Shane. Thanks, Marcelo.
Thanks.
Thank you. Your next question comes from Tim Elder with Ord Minnett. Please go ahead.
Yeah, good morning, Marcelo and team. Thanks for taking my question. Just a quick one about Eagle Downs. How, like, just wondering if you can provide an update on how those studies are progressing and whether the recent increase in-
... net coal prices is kind of enough for you to, to look at accelerating that project, or if the priority is really just, the Isaac Downs extension?
I don't think anything has changed on Eagle Downs, Tim. We've been working on a pace of FID readiness by the end of this year, okay? That hasn't changed, and I don't think that short, I mean, this recent spike in coal prices justifies us rushing that work stream. I think it's a big project with, we need to have a long-term view, and a good level of confidence on the attractiveness of the project. So I think, you know, work is ongoing. Nothing has changed. On your point around priorities compared to Isaac extension, Isaac extension was always top priority for us. It's a low capital project.
It will be an attractive project whichever way we look at it, and we said that before. I think we just need to make sure that it has the right level of resourcing efforts and happening in time to minimize the discontinuity, as we said. So yeah, I think it's always priority for us. With Eagle Downs happening unchanged in terms of work streams.
Thanks.
Thank you. Your next question comes from Glyn Lawcock with Barrenjoey. Please go ahead.
Oh, Happy New Year, gentlemen. Just a quick, high-level question, Marcelo and Shane. I mean, obviously, lower volumes, higher costs, but you've also had a 25% jump in the price. I mean, at a very high level, I mean, are we looking at a net positive or a net negative impact on the business, given all those inputs? Just your thoughts.
If prices stay as they are today, I would say that despite any expected cost inflation, let's put it like that, including a potential cost implication as a result of a volume adjustment in Isaac, for example, I think we'll still have a net positive if prices stay where they are, for sure. I think it's, I mean, they are significantly higher today than they were, right, for the average of last year. So I... Yeah, I think simple answer is probably it's a net positive if they stay as they are. Where that shifts in terms of what coal price that shifts, I think it's something we need to look at.
But, yeah, I think we hopefully, Glyn, let us wait to February when we'll provide guidance, and then we can have that chat in more details as well.
Yeah, no, I appreciate that. Appreciate that. And then just on Poitrel, I know you've talked a little bit about it in some of the earlier questions, but you've just called out another solid performance. So you've made a comment that strip ratio is going up. Is there anything else at Poitrel that we need to think about as to why it can't repeat another 5 million ton year?
Poitrel finished last year with strong run. It's not different this year, but we are now starting to... Let's say, we haven't-- we are not depleting yet, but we're starting to transition mining Poitrel towards the north part of the mine. It was always contemplated in the life of mine. So we just had a few years that were the overlapping of Ramp 10 North, which we just developed recently, and the southern pits still happening at the same time. And that explains a bit of this two very, very high years. We're gonna now start to transition more towards the northern part with some of the north, the southern pits depleting. So that explains a bit of us getting probably back to a more normal level.
So, maybe I'm just jumping here, you know, to the end of February, but no, I don't think we're gonna be providing guidance, that we're gonna be doing a similar year to this year for Poitrel. We're at 5 level. Still gonna be a pretty robust year, but not at the 5 million level.
Yeah. No, understood, understood. I don't wanna jump too much in advance. And just, Marcelo, you called out on the call, you said the water studies are the critical path for Isaac Downs extension. What, what date do you need that by? I mean, obviously, you, again, you commented that you'd like to, nose to tail would be perfect, but, like, what's, what's your current date for the water studies so we can, I can sort of track your critical path? Thanks.
Look, the delay that we faced last year was actually drilling the boreholes and all getting onto site during the wet season. That was the key issue we faced. We are now already acquiring data, and we just need to get all the data acquisition and then all the groundwater modeling done. So that's - it's just a sequence of work that's happening as we speak. But there's another area which is actually quite critical as well for Isaac, which is how we design the pit to minimize backfilling in the end of life. So, in Queensland now, there's no restrictions about leaving non-use mining areas, okay?
Depending on how you look at post-mining use of pit lakes and so on, you would. I mean, if it's not used, we would need. We have a regulatory requirement to backfill. So we spent actually a lot of time in the past six months working internally and with the departments here in Queensland to try to work a plan that minimizes backfilling, which obviously improves the economics of the project. I think that was worth it, the time spent on that, you know, I think it will pay in the long term, but it needed a bit more time.
So that brought some small delays around concluding the plans and the work streams for the submission of the EIS. But things are on track now. I think we are looking at submitting everything by the end of this first half.
Okay, that's great. And then if I could just squeeze one final one in. Just, you've obviously not hid the fact that you're looking to do and add more mines to the portfolio. Just what's the latest you can help us understand with the Anglo sales process from your perspective, where that might be at?
I'm a bit constrained about how much I can speak publicly. I think as far as I know, we restarted the process, and parties seem to be involved, and they seem to want to get to an outcome sooner than later. And what we hear from rumors that probably even hopefully before they complete the Teck transaction. So these are the rumors, but yeah, there's only as much we can talk about that.
No, no, that's, that's perfect. All the best in your endeavors on that front. Thanks very much.
Thank you. Once again, if you wish to ask a question, please press star one. Your next question comes from Craig Chapman with Nampac. Please go ahead.
Hi, gentlemen. Just given the results and the healthy inventory and everything else, is there gonna be a likely return to dividends?
Hi, Craig, it's Shane here. Yeah, look, I mean, we've paid our dividends consistently over the last couple of years. I know that with the directors, the board took the decision at the interim to hold off, but on final basis, dividends have been paid to shareholders each year. I think the board will strongly consider that again when they meet in February ahead of our results release at the end of February. So we do have a dividend policy that allows for 50% or targets 50% of cash flows after debt service to be returned each year. But there's flexibility within that policy as well to consider the market outlook, to consider the cash position and liquidity position of the business, and other factors at play as well.
And that's been proven, as it was last year when the dividend was declared in the same time last year.
Okay, thanks.
Thank you. There are no further questions at this time. I'll now back to Mr. Matos for closing remarks.
Thanks, everyone, for your questions and for joining today's call. Thank you to all our employees, contractors, for their hard work and the commitment to safety discipline during the quarter. Look forward to continuing to engage with our shareholders when we release our financial results for 2025 next month. Have a good day. Talk soon.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.