Morning, everybody, and thanks very much for joining today. I'm sounding a little bit husky, so bear with me as I've got a bit of a croaky voice. I'm sipping a cup of tea along the way. But as usual, we'll go through the highlights, get through the individual components of our solid performance and so on, and get through to our Q&A. But from our perspective, this is a nice way to finish up the first full year of operations with our expanded footprint. Certainly, the June quarter has been a very good result, so I'll just go through a couple of highlights for you. The safety performance on the expanded group has been very good, 4.6. We're very pleased with that, covering both our employees and contractors, but as always, there's more work on that to be done.
The ROM production for a quarter has certainly been good, 10.6, first time we booked a 10-plus million-ton quarter, which is very positive. Rounding out the year at 39.1 million tons for full year, a pretty good result relative to last year, which only included one quarter of Queensland of course. For the June equity sales produced coal 6 million tons, and for the year, 26.5 million tons on an equity basis. The revenue split for the year at 64% versus 36% thermal has been consistent throughout the course of this year. Our FY25 unit costs have come in at AUD 139, subject to audit and so on. The CapEx has come in just under the bottom of our guidance, about 10% less at AUD 390 million. The first deferred payment that we mentioned to you had been made, just reminding you that that has been made.
We mentioned this when we had the last quarter, that the $500 million has gone to BMA, but we've also now paid the first of the contingent payments at $9 million, just subsequent to the quarter closing. From the operational perspective, Queensland's done a very good job, and New South Wales has done very well, although like the State of Origin, Queensland just edged out New South Wales in the totals. At 20 million tons for Queensland, I think that's a great result. The quarter 5.6, very nice finish to the year, 26% up on the March quarter. So that 20 has done a really good result. The equity sales of Queensland have produced coal 3.3 of the quarter, 14.9 for the full year. And that obviously does reflect our 70% ownership of Blackwater since the 1st of April.
The average coal price achieved in Queensland is AUD 208. Cost of operations represents 78% of the PLV. New South Wales has done very well also, so our tons there for the quarter are 4.9 million tons, 5% up on the quarter, and at 19.1 as a solid result, and certainly, when I get to the summary of the guidance, you'll see that we've been saying we're certainly up at the upper end of our guidance on most things, and then the ROM ones are at the bottom end. From the June quarter perspective, we achieved AUD 166 per tonne in New South Wales, with our realizations at 103% of gC NEWC. The table across, I'm not going to go through all the numbers for you, I'll just pull out a few, but you can see the totals there.
10.6, as I mentioned, for the quarter, very solid result, 39.1 total for the year. Certainly a big change, you can see the first full year of operations of our expanded footprint here. The equity ROM coal tons at 8.4 versus 34 for the full year, again, reflects that bigger footprint. Queensland, as I said, done very well, 20 million tons for the full year results. In the quarter, you can see there 5.6 was a very, very solid result. New South Wales at 4.92 was also solid, 19.1 overall, as I say, a nice combination for us to end the year in good form at 39.1. Stocks are healthy, so that'll carry into the new year, so we'll have strong sales in the first and second quarters as a result. I'd say Queensland operations done very well, very pleased with the result.
I think basically the teams at both sites in Queensland have managed themselves very well through the wet weather period, which we saw part of it in March, but then obviously spilled over into the June quarter as well. Progress through the quarter was very, very solid, and a $100 million cost savings initiative has been delivered. There will be additional savings that spill into this FY26, which we'll talk to at the time of giving our full year guidance in a month's time. Blackwater has done very well in the June quarter at 4.1, sales at 2.8, Daunia also very, very positive at 1.5 million tons, 25% up on the last quarter, and sales at 1.3, as I say, a good solid return to productive operations after all the weather impacts.
And I know as we've talked about before, the weather impacts for us were more broadly based on the coast than they were at the mines. We had them at both, but in terms of relative impacts, the ports were impacted more than the sites themselves, and that's manifested itself in terms of the sales outcomes with slippage into this new FY26 year. New South Wales at 4.9, as I say, is a pretty good result, 5% up on the quarter. The open cuts have done very well with good production. Narrabri obviously spent a good portion of this quarter in changeout with an extended longwall changeout of eight weeks in duration, given that we were dedicating some significant maintenance to a lot of the equipment, bringing many of the trucks to surface, almost half of them, in fact, to surface for a birthday.
Managed coal sales at 3.3 was down 7%, but you would expect that given the lower productivity, the lower production obviously borne out by the eight-week changeout. Managed coal stocks are healthy as well in New South Wales, which will be positive for this new year. 19.1, a good result. Maules Creek at 3.6 was that that's definitely a solid outcome, 31% up on March, in line with the nine planned. Sales of produced coal at 2.1, positive as well. As I say, Narrabri has been through its changeout, did well on time, on budget, the significant changeout that that was. We're pleased to have that now moved into panel 204 and moving along, which is good. Gunnedah operations have also achieved a good result for the year. We've got 500,000 tons for them in the June quarter.
Tarawonga did 1.8 for the year, and Vickery did 1.5 for the year. So on both fronts, we've delivered a decent outcome for the Gunnedah open cut operations. Over to the export coal sales and realized pricing. June quarter sales produced coal 6 million tons. June quarter mix, the mix itself, 66 versus 34, slightly different to the full year, but very close. Queensland operations of AUD 208 realized for our coal sales is down from the AUD 221, which we saw in March, and compares to the AUD 232 for the full year FY25. Our operations realized $136 relative to that number. And for the full year, Queensland operations have realized AUD 152, which is 78% of PLV. The sales mix for the full year is 60% hard coking, semi-hard, 38% PCI, semi-soft, and there's a balancing for the thermal product, as you know.
New South Wales achieved pricing at 166 per tonne of produced coal and AUD 193 for the full year operations. The index averaged about $100 in gC NEWC across the period, oscillating between the low at 94 and up to 107. It subsequently went a little bit higher than that, but a solid result achieving 103% of gC NEWC across the quarter, which is a good result. The markets themselves, as you all know, and we've discussed with many of you along the way, remain soft. We've certainly got excess steel affecting Indian raw material consumption. They're certainly taking advantage of those opportunities.
On the thermal side of things also, you've had a relatively soft period, but we have seen improved demand coming out of the northern hemisphere, which has assisted in dragging that price away from that low, which we saw during the quarter of $94, and certainly a little bit better over at the $107-$110 range. But in a period of soft pricing, as you would imagine, our attention has very much been on margin protection and the cost management, and of course, prudent allocation of capital across the business. Longer term, the supply-demand dynamic remains the same, despite the shorter-term impact that we're seeing, and I'm sure we'll discuss as part of the Q&A session. Production costs are coming well, so we're happy with the result of AUD139, slightly below the bottom of our guidance, which was AUD140-AUD155.
Royalties there. We've given you a number for royalties just for your calculations, but we're pleased with this well unaudited, as I say, number, which wasn't as good as the 137 we printed in the first half, but as we said at the time, the weather impacts in the second half. I think we've managed that pretty well only to see a $2 total year impact on that basis. Balance sheet's in good shape with our net debt at AUD 600 million, reflecting the payment, as I mentioned earlier, about $500 million US that's gone to BHP, and of course, now the AUD 9 million that went in the first contingent payment. In terms of capital returns during the course of the last six months, the June quarter, we've continued to move with our buyback, and we've taken a measured approach to that, I must say.
We've paid the dividend, of course, during the period, but in terms of the buyback, we've taken up 4.2 million shares and at a total cost of about AUD 23 million. So we're happy with that, but we do take into account the key marke t and the reduced margins with softer pricing. And as much as we would like to go a little bit further, we're just taking a very prudent approach to how we're balancing the capital and making sure that we are continuing to operate the buyback in a measured and responsible way. Now, we will be resetting the capital allocation framework parameters, as we mentioned before, with the publication of our full year results in August. Excuse me. Onto development projects exploration, not a lot to point out here in this quarter. Narrabri underground just continues to do what it's doing.
Winchester South has the infamy of now being in the Land Court in Queensland, part of the normal process that is the approval process in Queensland, sadly, where merit-based appeals are actually adjudicated within the confines of the courtroom, unlike New South Wales. But we've just only just started that this week, so there'll be another six or seven weeks of proceedings there to navigate our way through all of that. On to guidance, and as I say, we've had a very good quarter, rounded out well. We've been pointing to the fact that our guidance or our performance was indicating a strong performance across most of our guidance metrics. And you can see there the ROM tons at 39.1 at the top end of our guidance from a managed basis.
Sales both at a managed and equity level, certainly the better half of guidance, unit cost just below AUD 139, a very good result. And capital, as I mentioned, CapEx at AUD 390 is about 10% or 11% below the bottom of our range. So responsibly managing our capital, given the subdued pricing environment that we're experiencing currently. So overall, very pleased to wrap up the year, the first full year of our operation, really good result. I think the teams on the ground have done a terrific job during the weather, both in New South Wales and in Queensland. We saw weather in both states and more so in Queensland, of course, but both states had it, and our teams have done well to make sure we've hit our numbers pretty well in wrapping up this first full year.
So with that, again, we'll have our results out in four more weeks with the guidance and also resets of capital allocation framework that I mentioned just earlier. So I might just close out the formal part of the proceedings and move back to the operator so we can open up Q&A. Thank you.
Thank you, sell-side analysts. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Rahul Anand from Morgan Stanley. Please go ahead.
Hi, good morning, Paul and team. Thanks for the opportunity and very good results, so thanks for that. Look, two questions for me. First one, obviously the ROM production was very strong into the fourth quarter, and I noted that the stocks were built circa 17% versus last quarter. Should I be thinking about the Queensland assets now as being well stocked? Because I know you had to build some inventory for ROM coal there, given where you acquired the assets. Is that process now complete and we're going to have a better match going forward, or is there any bit of that effort still left? Thanks. I'll come back with a second.
Yeah, thanks, Rahul. Yeah, thanks. Yeah, good result on the ROM side of things for sure. Part of the building stocks was really reflective of just recovering from some of that wet weather, and so just regaining the momentum we wanted to recover after that period. So there has been a solid production profile, but if anything, New South Wales may have actually put more stock on the ground later in the quarter than, in fact, Queensland has. But the sales profile, as you can see in Queensland, has been pretty strong. So I think it's a good position to be in, and we are turning over the stock into sales pretty quickly. Demand actually is pretty solid for all the products up there, so that's very positive to see.
So yeah, that puts us in a good position for Q1, and there's been a little bit of weather up there around the place as we speak, but we've kicked off the first quarter well, so I think we'll be consistent in our performance throughout the course of the year. But we do want to make sure we manage healthy stocks in Queensland in particular because there is a bit of on-site lending required to manage the various nuances of products and things, and so we're just going through that at the moment to make sure that we calibrate the right stock position, but we feel pretty comfortable where we are at the moment.
Okay, brilliant. Look, the second one's around the new capital returns framework. Obviously, we're going to hear about it in the August result, but I guess the precursor to that is your thought process around how you spend your CapEx going forward and which growth projects you invest in. Obviously, the opportunities that exist are Narrabri Stage 3 low CapEx version and then Vickery, and then obviously, I think at a later stage, perhaps Winchester South. So is there any sort of update in how you're thinking about these three opportunities and how you'd like to sequence them going forward?
Yeah, thanks, Rahul. Yeah, you've highlighted a couple of different uses of capital there for sure. Narrabri Stage 3 has been much deferred, as you know, given the anti-coal sort of vexatious legal challenges that we've been dealing with. Now, they're out of the way, but we are operating in a pretty austere price environment. So whilst there are physical limitations in terms of how long you can push things out, we have recapped that capital pretty productively, and we'll outline that for you in August with the results. But you'll see significant movements of capital to the right, if I can say that. And as I mentioned to you all a couple of times, I think during the course of this year, we're going to stick with this longwall and make it last longer. And so that'll be to the benefit of cash flow.
But there will be things that we need to do from Stage 3. So you'll see in the guidance there'll be some ventilation and other things that need to be dealt with as part of setting ourselves up for success with Stage 3. Now, Vickery, in this price environment, we're certainly taking a conservative position on that, so I don't see that materializing in the short term, and the board has certainly countered into that view. So I think that that's definitely off the table for the next four months, so you shouldn't be too focused on that. And then, but more generally, just given the coal price environment, we want to make sure that we're driving the assets as far as we can before we start allocating material capital to any of the operations.
Now, that doesn't mean we're going to do anything short-term in the sense of jeopardizing longer-term productivity, but it just means we'd like to see, particularly as it relates to the new operations, we'd like to see more come out of the equipment we've got on the ground there before we start dealing with extra capital there. And I think that's just the right thing to do given the relative short period of time we've owned these assets. And as we're coming to understand the assets and the inherent productive capacity that sits in the existing fleet, I think it's the right thing for us to just drive that harder. And New South Wales is no different in that regard. We've got fleet replacements and things out on the horizon, but we'll manage that as and when it comes and build that into the capital forecast.
Absolutely. No, that's very helpful and comprehensive. Thank you. I'll pass it on.
Thank you. The next question comes from Adam Martin from E&P. Please go ahead.
Yeah, morning, Paul and team. Just, I suppose, thoughts on the current macro. We're sort of obviously reading news articles about China coal prices rolling. Any sort of thoughts for your benchmarks? Just any thoughts on the macro there, please?
Yeah, look. It's well. We've been waiting to see signs of China making some changes to its current situation. We've been watching, obviously, the production profile. We can see that's been quite healthy. You can see in more recent times Indonesian supply has come off. And generally, that's, as we've mentioned before, that extra incremental volume out of Indonesia goes to China. And so it's generally a bilateral movement between the two when they wind it back. And this most recent announcement from China, as we thought, there had to be something there. They had finally come out and said, well, they're going through their inspections. I think they've got perhaps more production than what's currently authorized at various places. So I think that's a positive thing.
Now, the manifestations to how they go about it. They've had safety drills in the past or safety inspections in the past to curtail production. The manifestation of the way in which they do it is probably less relevant to the fact that they generally, whatever they say, they generally have done. So now that they've said this, we would expect them to follow it up and there to be a moderation of domestic production that would be consistent with what we're seeing in terms of the windback of Indonesian imports into China as well. So positive signs, I think, on that front. Yeah, I can see there's the futures for the met coal looks pretty interesting that soon, so we've responded to that.
Let's see how that goes, and we want to see the real results on the ground to make sure that the indices start to reflect what looks to be directional positive changes.
Okay, no, thank you. And just second question, just on Blackwater, obviously for the record, production for the quarter under your ownership, is there anything I suppose surprised you with that asset last 12 months in any sort of learnings you could take into FY26 that you can share with us, please?
I'd like Ian to just answer, but I mean, I'll go. Everything we've done there has really just been the basics, back to the basics. We've obviously reshaped the workforce structure quite heavily there, and that's been very good. I suppose, as I mentioned earlier, we're just getting to know what the inherent productive capability is of the equipment on site. There's not been any magical things, I would say, that have come out of it. In fact, it's all been very benign. You would have talked to some of the unit improvements.
Obviously, one of the areas we've talked about was getting the drill and blasted inventory up to speed. And at the transition time, we brought a new supplier on board, so that all happened successfully.
So that's very much been established, so there are no hindrances in that space. We did introduce two new large excavators. They've been bedded in and running well. Just, I guess, the synergies of getting all the equipment working better in fleets and across the site. So as Paul said, it's pretty 101 stuff, but it's been successful to date, and hopefully there's more to come.
Okay, no, that's great. I'll look for more scope. Thank you.
Thank you. Your next question comes from Chen Jiang from Bank of America. Please go ahead.
Morning, Paul. Congrats on a strong result, strong quantity. Just two questions from me, please. So firstly, just follow up on Blackwater. Very strong, well, very strong quarter, ROM coal, 4.1 million tonnes, 82% of ROM yield. If I annualize the Blackwater ROM coal for the quarter, it implies 16.5 million tonnes per annum of ROM rate. So from your answer to the previous question, it seems like it's the realization of the productivity Whitehaven has done to Blackwater over the last four or five quarters. So I guess this is not a one-off there, and how can we rate? I mean, I'm just trying to assess the, is this sustainable going forward, given Blackwater now the productivity has been realized? Thank you. I have another one after this.
Yeah, thanks, Chen. Yeah, look, I mean, we certainly support the enthusiasm that the mine can do, can do more than what it's currently doing. We certainly see upside, and that's a nice glimmer into it in terms of what we've been able to do. But annualizing that would be a little bit. I'd be cautious on doing that, just given that we do have four quarters, and there's weather that impacts particularly the second half of the year as you've seen. So it's a nice, it's a very nice step up on last quarter, but the December and March quarters were around the early threes, and that is just emblematic of the profile of Queensland production generally. But yeah, we're really positive about what we can do here, and the team on the ground, I think, are doing a great job in driving that.
I think the upside is clear to us, but we'll put some guidance out, of course, in four weeks' time, and you'll see what we're thinking in terms of where Queensland can go. Yeah, I'll just caution you on just the straight arithmetic outcome. We're very pleased with the 4.1, don't get me wrong, but it's a signpost of the upside, of course, but I wouldn't say that you should be annualizing that and then banking that number.
So yeah. Chen, I mean, you've seen Blackwater. I mean, it's a bit unique in itself. Just the size of it gives us some flexibility about what coal is left in the pit, sunburnt coal is the term. So that ROM number can vary quite a bit, largely depending on when we want to bring it in and out, and above the discussion Paul had around the seasonality.
Yeah. That's, well, you're just referring. Ian's referring to the fact that big blocks of coal come out in big lumps, and so with the dragline systems there, so as you say, you might have a million tons of coal sitting there ready to go, and all of a sudden it pops out, and so there can be some lumpiness to it, despite the fact that it is a big site and there are seven draglines there, but it does have that lumpy profile to it from time to time. They're very positive indications to the potential of the site, so we're encouraged to keep pushing hard, and the team's doing a good job.
Sure, sure. I understand. Thanks for that, Paul. Thanks for the color. And then another one on your CapEx, unaudited AUD 390 million, which is AUD 50 million below the lower end of your guidance, AUD 440-550 million. I'm just wondering what has changed in the last 12 months for your CapEx. Is that growth deferred to the next few years, or is it sustaining CapEx from a change in mine plan? I'm just trying to figure out what it is, and is that New South Wales or Queensland? Thank you.
Yeah, there's many factors in there, Chen, that go into that. Of course, the coal price environment makes you, we challenge everybody around the group in terms of, is that required, is it needed now, and so on, all that sort of thing, or is there a more economical way to do it? And so that's certainly part of the puzzle. Narrabri, of course, CapEx, we had some CapEx in this year for Stage 3 related matters, but that has slid to the right. So a piece of that will find its way into FY26, and you'll see that shortly. But I think it's just us trying to be responsible in a softer coal price environment and managing all the levers that we should to make sure that we don't do anything short-term because that's not what we want to do.
We don't want to jeopardize anything from a medium to longer-term perspective. But just be responsible with the capital when we know that despite the fact that we hold firm on the view that structurally we think we're in a great place on both the met and the thermal side, and that better prices will be realized in time, all these variables that conspire to deliver a softer price environment today are things that we don't control. So we must focus on the things we can control and setting the business up for that better day.
Sure. Got it. Thank you. That's very clear. Thanks, Paul. I'll pass it now.
Thank you. Your next question comes from Paul Young from Goldman Sachs. Please go ahead.
Good day, Paul. Hope you're well. Paul, a good beat on cost and production, so well done. Just a few questions actually on New South Wales production and cost. The first one, just on Maules Creek, which had a great quarter and ROM production was up year on year. Can you talk to us at a high level? I know you guys are looking at sort of a change in mine plan there and reorientation of the pitch. Can you talk high level on what's going on there?
Yep. Yeah, thanks, Paul. All gone well. New South Wales gone well. Maules Creek, in particular, had a good quarter. And there's a little bit of lumpiness there from time to time, Paul, when the Braymont Seam, that big fat seam, which we love, turns up in the quarter, and it did. And so there's a good portion of that that came and obviously gave us a nice injection of some of our best quality in this quarter. In terms of what we call a Maules Creek Continuation Project, which I think is what you're referring to, that is basically the reorientation of the pit to promote, rather than a south to north type orientation of exploitation of the lease.
Rather, we're turning it so we can go from a west to east, which is across a longer strike because it's sort of, for those of you who remember the mine plan, it's obviously longer to the north than it is to the east. And so if we turn the pit round and proceed west to east, then we're going to have a longer strike and therefore more productivity. So that's the plan. We've lodged our EIS for that. And so we've done that early because we feel like we should get onto that earlier, given approval timelines always surprise us. And it's better to start early. And the sooner we get onto it, the sooner we can actually liberate more of the productive capacity of our fleet, which we feel is constrained while we're going from the south to north through a narrower corridor, if I can say that.
Again? Yeah. I mean, we've got a geometry that we have to work within at the moment. So the turnaround actually optimizes the remaining geometry, but it is the natural feed-in for the approval of continuation, and we'll open that strike length up, and we'll start seeing the productivity improvements that we're looking for.
Great, and when can you, Paul, Ian, share what potential benefits we could see from that over the medium to long run?
I think what we've first prioritized for us, Paul, and we think this is about 2028 we're planning for in terms of when we'll be able to action this thing, so i.e., when we've got an approval to be able to reorient the pit properly. We feel like there's just a better prospect of being able to deliver at least the 13 million tons. Now, for those who are reading the fine print, we have actually asked for a slight increase in the size to 14 million tons, but that's really just to cover spikes because we've got that big seam, and it does come at times in a rush. But we have really been challenged to liberate the sort of productive capacity with the fleet that we've got, with the pit intensity that we have going south to north.
So if we lengthen the longwall, we feel like this equipment can hum, and we'd like to see the numbers, that ROM production numbers, zeroing in on this 13 million ton prize that we've been holding up for some, or we've been authorized, but never been able to achieve given the intensity of equipment in a small space.
Yeah. I get it. All right. That's great. Thank you. And then just on cost, I know that Queensland did all the heavy lifting. There was some low-hanging fruit for it, if I can call that, and you delivered on that, and you'll provide us an update in August on further controllable cost reduction, Paul, which I'm looking forward to. But just on New South Wales, are there any opportunities in New South Wales, or do you think that the assets are running as efficiently as possible? So what I'm asking is, is there going to be some sort of target for New South Wales, or do you think the costs are running as efficiently as possible?
Yeah, Paul, that's a very fair question. I would never say as efficiently as possible. I wouldn't say that. But our attention clearly has been focused on Queensland just to rebase things as quickly as possible and integrate that into Whitehaven, given the opportunity to do that quickly. And so we're doing that. It's not done. There'll be more savings in Queensland in the new year, and we can talk about that in four weeks' time. Having said that, New South Wales has been doing well, but we do turn our minds now to New South Wales, and so there will be a focus on that in this new year, and there is already. And there are opportunities for cost reductions there as well. And so we will build that into our communication to you on guidance for FY26 in four weeks' time.
But we do see upside there, and the teams are very much focused on delivering. They know that Queensland can't do all the heavy lifting here, so they've got their plans. We're going through and challenging each of those plans at the moment, and there is upside there for us. So I wouldn't say we're in our most efficient form, but there are good savings that we can already see that we can realize in this next year or two.
Okay. That's great. Thanks, Paul.
Thank you. Your next question comes from Dan Roden from Jefferies. Please go ahead.
Thanks, Paul, and congrats on the solid quarter. Just wanted to, I guess, unpack FY25, obviously really good performance, particularly out of the Queensland assets, and good cost control. I just wanted to get, if you could, just some color on, I guess, how you've, I guess, managed the pit to margin. When FY25 guidance was set, there was a different coal price environment. Have you, I guess, elected to make different operating decisions in the mines to adjust the strip ratio that you're getting over FY25 and target some different areas that have a higher margin just to manage for the market we're currently in? I just wondered if you could provide some, I guess, commentary there and maybe a little bit of commentary on the overburden in advance.
Yeah. Okay. I might throw you in for a bit of that as well. Yeah, Dan, we haven't done anything different from what we wanted to do in the first instance. So I'll just say that to start off with. The plans that we had and we formulated during the dealing phase, we're executing now. And so there are obvious areas where there were changes that could be made. As I mentioned briefly there before, there's the operating model from the headcount perspective. We've reshaped that at both sites heavily already. There's a little bit more of that to be done. We look very closely at the equipment that's being used and how productive it's been or not. And so we're driving that harder.
We've got, as Ian mentioned, we've actually put a bit more digging capacity to deal with that OBIA question, which I'll get Ian to address in a second, but we haven't done anything, I just want to reassure you, we haven't done anything short-term. We're not diving into low strip ratio areas so we can prop things up. That's not the case at all. We're trying to set this thing up for longer-term success, and so there's nothing short-term that we're doing to try and create a little bit of extra margin right now. We just feel like that would be detrimental to all the things we're trying to do here, and so that's not the culture we want to promote with our new employees as well, so yeah, no, it's just been back to the basics, I think.
The right amount of people with the right gear, trying to drive the productivity as hard as we can. There's been lots of cost-out opportunities as well that we've been able to, I think, as Paul mentioned earlier, there has been some low-hanging fruit, so we've jumped onto that quickly, but overall, it's just the basics getting the basics right. I mean.
Yeah, I think so. Look, I mean, with a dragline operation, there's a sequence there that you've largely got to follow. I mean, they're not that mobile. We did have to make a few changes in and around the wet weather, but that was sort of fine-tuning, just trying to stay off the coal and get a little bit of water in the bottom of the pits.
The overburden advance and blasting, we actually had quite a lot of drill stock, and we opted to fire all of that before the wet season so we didn't lose holes. So that's been managed at an appropriate level that it's all the critical path, everything is fine in that space. And yeah, so I think, to Paul's point, largely we're on sequence for how we plan to do and run the mine.
Yep. Yep. That makes a lot of sense. And I guess just following on from that, and I know I appreciate you probably can't give too much color around FY 2026, but when you bought the Queensland assets, you had guided for Aussie 119 per tonne at Blackwater and 122 per tonne at Daunia over a four-year period. And I think you've previously made comments that you need to adjust that for inflation. But I just wanted—you said—are you still comfortable with that outcome? And I guess you've seen the costs for 2025 was very good and ahead of, I think, largely ahead of where people were expecting it to fall. But are you still comfortable with that kind of medium-term outlook?
Yeah. Yeah. Look, the numbers we gave you for the average of the five years is, as you're quite right in pointing out, Dan, that we need to inflationary adjust that. So we will do that so we can reset that for you to have a look at it. I think that's the right thing to do. We feel very good about the volumes that underpin that. And you can see the volume improvements on both sides have been very, very positive. And so we get the volume improvements that we're looking for with the right cost base. And I mean operating models and headcount and so on. Then the outcomes from a cost per tonne perspective, we feel like we're in the right neighborhood. But inflationary adjustment for sure needs to be done there.
It's just that you can see in the industry, while inflation looks like it's moderating nationally across all industries, and we are seeing something in our sector as well that's still pretty high. And so the cumulative effect of that, even over the last couple of years, has been quite significant. So we will address that and communicate to that just to make sure everyone has that light on the hill that they can look to over that five-year average, which is less than five years now, of course.
Yep. Perfect. Thank you for your answers. I'll hand it over. Thank you.
Thank you. Your next question comes from Lyndon Fagan from J.P. Morgan. Please go ahead.
Thanks very much. Paul, just wanted to ask about the New South Wales pricing. Obviously, some better coal feeding in there, but two quarters in a row, well above 100%. Wasn't long ago, you said on a call that 100% is pretty much the long-term guide. Is there any kind of rethinking of that to help us, or is it just going to be lumpy?
Yeah. Thanks, Lyndon. So New South Wales has benefited from. I know I've spoke a little bit about this. And when I said just flat through the cycle, I was basically giving people a safe and conservative view of the world that they could use on the up and the down. Where prices have come down, obviously, through a period, we get the tail of better realizations manifesting themselves through that average number, right? And then the reverse happens when prices go up. And so we look like we're lagging in an improving coal price environment. So it can be a little lumpy, but structurally, you can see that the realizations are improving by virtue of swapping out essentially Werris tons, which were our lowest quality realizing tons, with Vickery tons, which are at the top of the pops in that regard.
The Vickery coal, we're very happy with the quality that's coming out of there. As we've made the comment a couple of times, it's Maules Creek and some, and we're starting to see that certainly with the quality that's emerging out of Vickery. Now, we're still in the box cut because we're still doing the early mining version, the smaller version of Vickery. As we get across all the seams there, I'm pretty confident we're going to see Vickery qualitatively turn out to be the best fairway. Certainly, the semi-soft looks better as well from what we're seeing as well. Yeah, I'll just caution on that because in the falling price environment, it looks better than what it does in a rising price environment. Inherently, we should be doing GC plus something.
It's going to be modest, but we are obviously showing a better result in the falling price environment.
Great. And then, look, the other one is just on capex. Obviously, you've come in nicely below guidance. You've owned the assets in Queensland now for some time. I mean, is this year reflective of a through-the-cycle type spend, do you think, excluding some of the bigger projects that are coming up? Or do you feel like sort of FY25 was a depressed coal market, lots of savings, and sort of a bit under what you would normally want to spend? I'm just trying to figure out whether there was some initial deployment in Queensland to try and get the assets where you want them to be, or whether this year is, in fact, reflective of future years.
Yeah. Fair question, Lyndon. Excuse me. Look, we've definitely responded to the current price environment by ratcheting things down. We have. I think it'd be wrong for us to suggest otherwise. We'll try to do that in a responsible way. But at the same time, as you say, we've had them now for 15 months, and we're mapping out what we believe to be the CapEx requirements going forward. So the lumpier stuff will outline, say, for instance, Stage 3. You'll get that in four weeks' time, the profile of that. And then the broader lumpier stuff is really about, yeah, it's about fleet replacement, that type of stuff. And so we're mapping that out as to when we think there's the right time for fleet replacements, be that New South Wales or Queensland.
So I'd say the range that we gave you at the beginning of the year was certainly a function of the fact that we wanted to make sure we had time to review everything first. So we squeezed it, and then the coal price environment continued to soften. We reviewed it again. So the go-forward position, it probably looks more like what we gave you at the beginning of the year rather than where we ended up at the end of the year. That's probably the better answer. But as there is, and that excludes things like Vickery, of course, because we've said repeatedly that's off for a while. So whenever that emerges, we'll obviously highlight that separately.
Great. Thanks, Paul.
Thank you. Your next question comes from Rob Stein from Macquarie. Please go ahead.
Hi, Paul and Team. Just the one on the quarter itself. Obviously, very tough quarter pricing. Operationally, you performed quite well. If we just look at cash flow generated in the quarter, did we actually generate free cash flow in the quarter, or was it a drop? And then if you take into consideration, and sorry, that's also including the BMA payment, and then if you take into consideration that there was probably a working capital movement, can you give us any color on that, what that might be for the quarter that's just been?
Yeah. I reckon Kevin, he's been waiting for an opportunity to answer a question, but I might throw it to him, given there's some lumpy stuff in the quarter as you're rightly putting it here.
Thanks, Paul.
You're welcome.
So Rob, we started the quarter about AUD 300 million in net cash, and we finished the period about AUD 600 million in net debt. And in that period, we paid out about AUD 800 million, which when we paid it on the 2nd of April, the exchange rate was about 63 cents. That gets you 800 million. And when we sold it, we also have some tax that we have to pay. So there's about $70-$80 million in tax on that. And as you say, we've got a working capital build. So through that period, I'd say to you that we washed our face at the bottom of the cycle. We met our capital needs. We met our interest costs on funding the acquisition of Blackwater and Daunia.
And so from a capital perspective, my expectation of that is that's a pretty good quarter at the bottom of the cycle when coal prices were where they were. And that's our program moving forward in low coal price environments is to make sure that we get through this thing strongly. But I'd say to you, across the business, the Queensland assets are generating strong cash flow and performing very well. And my expectation is that continues. So I was really pleased with the outcome to get through the quarter with a balance sheet in really good shape and rude health and a business that was performing strongly and a business that was managing costs and CapEx tightly. So I was pretty pleased with it, to be honest with you.
The cash for that second payment is in the bank and will remain there to be paid on the 2nd of April next year.
Yep. And that's the game plan, is to preserve that position and maintain adequate liquidity through this process. And I think we started the conversation. I mean, coal prices have bounced off the bottom on the thermal side. We're yet to see a real bounce off the met side. But the futures are signposting expectations of a better day, but let's wait and see that emerge.
And so, potentially a follow-up, because I guess that's the point I was trying to raise, was that at the bottom of the cycle, you washed your face. If we think about working capital, obviously, there's some big inventory builds. There's been a lot of investment in overburden, which we saw on the site visit, which was pleasing to see productivity rates here. Should we consider that there'll be a working capital unwind, or is that the working capital that's sort of been invested and will stay there, or is there further working capital to go in just to give us a bit of a direction for how cash flow might look in subsequent quarters?
Look, I think I try not to manage working capital down to the last dollar. I just don't think that's productive from a business perspective. The mine produces when the mine produces and marketing sells when markets are there, and the balance sheet needs to be sufficiently flexible to support that operation of the business. As Paul said earlier, I think we think there's a level of stock that you need in order to be really efficient in blending products and delivering into markets and helping with your port and logistics costs. So I think there's been a bit of a build in both Queensland and New South Wales in this last quarter. A portion of that is due to timing. I'm not advocating a huge unwind in working capital through this process because I don't think that's productive from a long-term operational perspective and a long-term marketing perspective.
The sales program was back-ended because vehicles or vessels were pushed out. You've had that vessel queue in New South Wales. You have quite a vessel queue in Queensland. And so we've had a build in both inventories and receivables, but that's just par for the course, Rob. We'll manage through that. I think we'll get some of that back in this next period, and it'll fluctuate from period to period. But as a business, I was just, as I say, really pleased that the focus in the business is on sweating the assets, really valuing CapEx properly, so being diligent in spending it, and in managing costs in a business to a budget, which it's been pretty good to see.
Thank you very much for the additional color. Appreciate it. Pass it on.
Thank you.
Thank you. Your next question comes from Glynn Lawcock from Barrenjoey. Please go ahead.
Morning, Paul. A couple of quick questions for me. Just a quick follow-up to Kevin's comments then. Just the AUD 70 million-AUD 80 million tax payment in the quarter, is that just a catch-up tax payment or standard tax, or is that associated with the BMA payment? Thanks.
Yeah. No, that is a really good question because ordinarily, what we'd expect is we get a bit of a tax shield around the acquisition of Blackwater, but when we crystallize the sell down to Nippon Steel and JFE at the end of March, what that does is crystallize the tax gain on the sale of that to those guys, which crystallizes the need to pay that. You've got to pay 85% of your expected tax bill in a year, otherwise the commission tends to hit you with some penalties, so in that number, there's a couple of things going on, Glynn. There's a value that needs to be paid as a result of that transaction, and then there's an offsetting tax shield, so moving forward, I wouldn't be taking that as a number that you should put in on a quarterly tax payment.
We'll give you some guidance on that, I think, when we come to the full year results, which will help you because it is a little more complex as a result of that acquisition.
Yeah. But it's essentially associated with the sale, nothing to do with further stamp duty on payments for BMA to be made.
No, it's just the sale. It's just the sale.
It's just the sale.
We've settled the stamp duty. There's some rats and mice we expect to get back from Queensland in due course, but it's in the single-digit millions, which is really not worth talking about.
Yeah. And my second question is just on Narrabri, and look, I'm conscious you've only just gone into Panel 204, but just wondering any comments you can make. I mean, Panel 203, obviously, at the edges of the seam gave you problems. Just some thoughts around Narrabri now as we enter 204. We should be back in the shallow ground. Hopefully, we see better rates. You've got a longer panel. So any comments on how it's behaving and when the next longwall move is and what sort of ROM rates we could expect now that we're back in the southern and longer panels? Thanks.
Yeah. Thanks, Glynn. I mean, only just beginning of quarter, but it's nice to see the changeout go according to plan, which is positive. And as you rightly point out, 204, we're expecting a better result this year. And I think, as we've highlighted before, there is no changeout in 204 in this FY 2026 year. So excuse me. So we are expecting a better result. And from our perspective, there's less representation of the various things, the intrusions that gave us trouble in 203. So that's very positive. So yeah, anyone put some color in there?
Yeah. So I mean, look, Glynn, the move went well. It was a big move. And it was on schedule. As Paul said, we nearly did nearly 50% of the chocks, around 90. And not only did we do that, we did the electrohydraulic system and a lot of the sort of comms and all the rest of it that operate the wall. And so the commissioning was good. Ramp-up was good. And initial production is probably the best we've had for the last five blocks. But we have had a bit of a challenge in the sense that we had some mechanical downtime just when we were getting some initial weighting as the goaf was forming. And that resulted in, I guess, coal running onto the face in a number of areas.
So we've had a pretty manual process where the teams have been working trying to clear that up. That's all done now and running. And I guess the positive side out of that, all of the work we've done on the chocks and the longwall health, we call it, is really showing the positive side of the investment in that space. And I think just the broader question, as Paul touched on, so we've got the development up and down each side of the block. And those sort of washouts are, we'll call it nominal, about 50% of what we thought in the previous block. And the other key thing is, in 203, we had the conglomerate immediately above the coal. So that's the sort of material that was forming in the washouts.
Whereas in this block, the conglomerate moves away, and we start to get a sort of about an eight-meter thick interburden of material, which goes better and is less prone to sort of creating those washouts. So I think both the geological conditions are improving compared to the previous block. And definitely, the work we've put into the longwall with the health of the shields, the hydraulics, and understanding some of the sort of challenges we've had around chain and all the rest of those things we've communicated, we've got a far better handle on that. And a lot of money and effort's gone into it during the move to give us a better run this year.
Yeah. So just.
So.
Go on, Ian. Sorry. I'm just going to say that guidance will come out in four weeks' time. So you'll get a sense as to what we're expecting. We are expecting more tons. Clearly, we are. We've got no change out of the year, and we're in better ground, and there's less intrusions. All that adds up to better performance. And so you're right to expect a bit more than that, what you'll see in four weeks.
Yeah. But I assume guidance in four weeks will just be at the group level. It won't be asset by asset, or will it?
No, that will just be at the New South Wales and Queensland level, but you should see more tons out of the area.
The open cuts, you can easily do the math, Glynn. You're a clever fellow, so you can do that, so you'll be able to, I'm sure, work out what Narrabri is looking like in terms of its constituent contribution to New South Wales guidance.
I guess I was just trying to think if we could get back to that six to seven million-tonne per annum ROM rate that we used to see. Or is the longwall older now, and I know you're not going to replace it, but I just wondered, with the servicing you've done to it, are we looking at a healthy longwall again now?
Yeah, we are. We are. The longwall performed really well despite what he said, a couple of wrinkles early on, but it's performed really well. It's nice to see that happening. So the numbers, the six to seven that you're mentioning, you're referencing, those are the numbers in our targets. So that's not. We're not stepping away from that. It's just we're not getting guidance for next year until we put the full guidance package out in four weeks' time.
That's perfect. Thanks, Paul. Appreciate it.
Thanks, Glynn.
Thank you. Your next question comes from Jonathon Sharp from CLSA. Please go ahead.
Yeah. Hi, Paul and team. Just to follow up on Chen's question about Blackwater, because it was quite a good quarter. Can you just take us through and please tell me if I'm wrong, but my understanding is the CHPP capacity there is about 14.8 million tons. So potentially, that is in our forecasting, we shouldn't be going above that. I know you do have the TCP, but I imagine that's limited utilization. Can you just take us through that and tell me if I've got that wrong? Thanks.
Yeah. I think what you're referring to there, Jonathon, is the washed component capacity of the CHPP. Don't forget about the bypass capacity of the CHPP as well. So that gets you into the early 16s to be able to do that. So at Blackwater, we do have actually bypass coal that comes out very good quality from certain pits. And it was nice, actually, when we had you all up there for the site visit. You may recall that we were actually railing out of both facilities, the CHPP with bypass metallurgical coal and obviously loading trains at the same time out of the infrastructure at the CHPP. So we do have collectively a lot more capacity than that, but I think the number you're referring to is just the washed component of the CHPP capacity.
Okay. Great. And just a follow-up question on that. You mentioned when you bought these assets that you're aiming for 14.8. Are you seeing anything different there? I mean, you are performing quite well there quarter on quarter. Are you seeing any more upside to that, to what you've said at ROM production at 14.8?
As I mentioned earlier, the average of the five-year outlook we gave at the time of acquisition, we feel good about that. I think those numbers and of course, to get to that average, you're obviously doing more at the back end of that five-year period. So we remain positive about what we can do here. And the numbers that we've done to date are very good, but we know there's plenty more upside there to be delivered. It just takes a little bit of time to do that. I mean, it's a big ship. And getting all the pieces of the puzzle, because that's a complex system, the dragline system there, with obviously lots of work that needs to go in before the dragline even turns a sort of soil.
You need to get that orchestrated well across the seven drag lines in order to deliver that upside. But we feel pretty confident our plans are working. And the five-year averages that we've given, the physicals on that, we feel very good about.
Okay. Thanks for that. And just a quick question. I had a similar question to Glynn, but you've answered that. On Narrabri, just the AFC issues, I mean, I know you had AFC issues in the last longwall. Are they all fixed now? How's that looking?
Yeah. I mean, we've run through, I guess, a ll of the parameters around there. And we're comfortable that we've got that in hand now, with some of the work that was done during the move was targeted that area as well. And yeah, so we don't foresee that as being an issue in this block.
That concludes our question and answer session. I'll now hand back to Mr. Flynn for closing remarks.
Yeah. Thanks, everybody, for your interest in dialing in today. We're really happy to round out a good year and first full financial year with our expanded footprint. And if there's any further questions that we haven't been able to cover off, please get in touch with us here and also Kylie and Keryn from our team as well. So look forward to catching up with you soon. Thank you.