Speaker #2: Thank you for standing by, and welcome to the Coronado Global Resources September Quarter 2026 Investor Call. All participants are in a listen-only mode. There will be a discussion of results, followed by a question-and-answer session.
Speaker #2: If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Chief Executive Officer and Managing Director, Barry Van der Merwe.
Speaker #2: Please go ahead.
Speaker #3: Thank you, Travis, and good morning, everyone. Thanks for joining us today. Nothing is more important than ensuring our people return home safely every day.
Speaker #3: While we continue to work through initiatives to improve both our TRIR and severity rate, we recognize that there's much more to do. Through our leadership development program, continued focus on critical controls and management verification thereof, risk assessment and management, as well as frontline engagement, we are committed to building a strong safety culture.
Speaker #3: As of 30 September, the group TRIR was 1.42, up 6% from 1.34 for the June quarter, and we continue working to drive this trend down.
Speaker #3: When we spoke in July, I outlined our reset plan. We discussed changing the mine plan to improve productivity and cost, reducing execution risk, establishing appropriate inventory buffers, improving operational stability, while prioritizing margin over volume.
Speaker #3: During the September quarter, we started to see some benefits of that work. Current-run production reached its highest quarterly level in six years. Strip ratios reduced, mining costs reduced, inventory levels increased, product quality and mix improved, and earnings rose.
Speaker #3: These are all leading indicators that the reset is working. If you look at the business today, current run production is no longer the primary issue.
Speaker #3: It produced 4.2 million tons during the quarter, the highest since September 2020. The opportunity and work now is to convert that into saleable, high-margin met coal tons through improved CHPP throughput, recovery, and operating consistency.
Speaker #3: The revised current mine plan is delivering the outcomes we expected. Open-cut mining performance has improved, strip ratios are reduced, and lower waste movement in the south has translated directly into lower costs.
Speaker #3: Mining cash costs were also reduced by approximately $18 million quarter-on-quarter, as a lower strip ratio of coal in the south reduced overburden movement and improved productivity.
Speaker #3: This will help us to invest in waste mining in the North next year, and continue setting it up for increased productivity. We also built inventory during the quarter.
Speaker #3: Current run inventory increased by 600,000 tons, to approximately 830,000 tons, at the end of September. As part of the reset strategy, these inventories improve system stability, provide continuity and flexibility ahead of the wet season, and create future saleable production as CHPP performance continues to improve.
Speaker #3: We are starting to see improving reliability and runtime of the CHPPs, and some benefits are flowing through into higher value metallurgical coal production, as is evidenced by the 200,000 tons more HCC production quarter-on-quarter.
Speaker #3: There's still good opportunity remaining in the CHPPs, with targeted improvement of about 10% in uptime and rate, as well as a yield uptick to be achieved over the coming months.
Speaker #3: This work is focusing on automation of raw coal reclaimers to achieve improved feed rates, updating the plant control logic to optimize sequence, performing key critical equipment repairs, improving maintenance workflows, and updating operating guidelines and trigger action response plans.
Speaker #3: We are adopting a programmatic approach to plant improvement. Our open-cut mining is delivering close to the required level, and the CHPPs are catching up to unlock the inherent value.
Speaker #3: On Mammoth, progress remains slower than what we had hoped. The mine continues to be impacted by extensive faulting in two panels, and, as a relatively new underground operation, we continue to build our understanding of the geology.
Speaker #3: While this has affected development rates and production outcomes during the year, we remain hopeful in the long-term potential of this asset. The operator, Eclipse, has implemented the detailed improvement program with our support, and their significant focus on improving productivity, development rates, and operational consistency, together with associated management changes, is helping to drive the plan.
Speaker #3: While further improvements are required, Mammoth remains an important source of potential future upside for our business. Turning now to Buchanan, the most significant factor affecting group performance during this quarter was the geological fault encountered in the south long wall.
Speaker #3: One of the two panels operated at this mine. The resulting roof conditions reduced run production by approximately 700,000 tons relative to the June quarter, and materially affected production of premium low-vol met coal products.
Speaker #3: The disruption also increased operating costs through additional support requirements and void for activities, while reducing the operation's ability to recover fixed costs across the production base.
Speaker #3: This issue has now been successfully worked through, and learnings have been embedded for the future. This should be viewed as an isolated event that is not expected to recur at the same scale.
Speaker #3: The operation is progressing through the faulted area. Longwall advance rates have returned to normal, and we do not view the quarter's performance as representative of the asset's underlying quality, capability, or long-term economics.
Speaker #3: Despite these challenges at Buchanan and Mammoth, and with more opportunity remaining in the current CHPPs, the group generated approximately $44 million of EBITDA earnings during the quarter.
Speaker #3: This was our strongest quarterly earnings performance since the June quarter of 2024, and a substantial improvement on the $7 million delivered in the previous quarter.
Speaker #3: The improvement was driven by three to four key factors. Firstly, realized pricing improved as benchmark metallurgical coal pricing strengthened, and our product mix continued to improve.
Speaker #3: The PLV index was up about $10 per ton quarter-on-quarter. It's currently up a further $20 per ton, loading well for the December quarter.
Speaker #3: Secondly, the current resets are delivering lower costs. Lower strip ratio mining and improved mine plan execution reduced waste movement and improved productivity. Mine cash costs were down about $18 million quarter on quarter.
Speaker #3: Thirdly, there are early benefits from improved plant uptime and operating stability, resulting in greater production of high-value met coal and reduced reliance on lower-value thermal coal sales, with 200,000 tons more HCC produced quarter-on-quarter, contributing to a 2% improvement in the group's realized price relativity to the index.
Speaker #3: Lastly, we built a further 600,000 tons of ROM stock at current to improve system stability and set us up for the wet season. These outcomes provide further evidence that the reset strategy is moving the business in the right direction.
Speaker #3: As we are in the final quarter of the year, and the reset program is starting to embed, we are updating our FY26 guidance. We expect saleable production of between 14 and 14.5 million tons, and mining cash costs of between $105 and $110 per ton for the full year.
Speaker #3: This revision does not reflect a deterioration in the underlying quality of our assets. The open-cut mining system, at present, is performing better than it was six months ago, and Buchanan had an isolated geological issue.
Speaker #3: Overall, ROM production is stronger and more resilient. Inventory levels are appropriately higher. The product mix is improving, and mine plan execution is also improving, with costs reducing.
Speaker #3: Rather, this revision reflects the impact of a slower ramp-up at Mammoth, predominantly driven by geological conditions referred to earlier. The ROM impact at Buchanan during the September quarter, and the time required for the reset plan—in particular, CHPP performance—to fully translate into saleable met coal production, as well as our deliberate decision to not bypass coal that can later be washed to yield higher margins.
Speaker #3: Also, a stronger AUD and higher diesel costs, which are outside our control, have materially increased our costs. Sandeep will unpack this later. We focus on margin, not total product tons, and as I said before, we are not chasing a total tonnage number at the expense of mix.
Speaker #3: In September quarter, we produced 3.4 million tons, saleable production, down 700,000 tons quarter on quarter, yet EBITDA improved materially. By year-end, we expect to have more than one and a half million tons of ROM inventory at current, setting us up well for the wet season as well as overall system stability, into the new year.
Speaker #3: Before I hand over to Sandeep, a quick word on markets. The met coal market remained constructive throughout the September quarter. The Australian PLV HEC benchmark averaged approximately $248 per ton during the quarter, compared with approximately $238 in the June quarter.
Speaker #3: Pricing has strengthened further since the quarter end, and we expect good flow-through of higher prices into December. While near-term market volatility will undoubtedly remain, the medium-term outlook continues to be supported by steel demand growth in India, constrained global supply growth, and the lack of significant new met coal developments globally.
Speaker #3: We continue to believe the outlook for high-quality metallurgical coal remains attractive. I'll now hand you over to Sandeep to discuss the financial performance, liquidity, and balance sheet.
Speaker #2: Thank you, Barry. The September quarter represented a step forward financially, despite lower production and operational disruptions at Buchanan. The most important outcome was a significant improvement in earnings.
Speaker #2: As Barry mentioned, group earnings increased from $7 million in the June quarter to approximately $44 million in the September quarter — our strongest quarterly result in more than two years.
Speaker #2: This improvement was driven by higher pricing, lower mining costs at current, improved product mix outcomes, and the build of unsold coal into inventory.
Speaker #2: Including our decision not to bypass ROM production, as low-value thermal coal. Coal revenues increased to approximately $558 million in the September quarter, compared with $506 million in the June quarter.
Speaker #2: The Group realized met coal pricing increased to $184 per ton, compared with $171 per ton in the prior quarter. Australian realized met coal pricing improved to 75% of the PLV benchmark, up from 72% in the June quarter.
Speaker #2: Reflecting continued progress in product mix optimization. On costs, total mining cash costs at Curragh were around $18 million, lower than the June quarter.
Speaker #2: Reflecting the lower strip ratio under the revised mine plan. On a per-ton basis, group mining cash costs increased to $113 per ton, because our fixed costs were spread over fewer tons.
Speaker #2: Mainly at Buchanan, the unit cost rose to $132 per ton on lower volumes. The revised full-year cost guidance of $105 to $110 per ton reflects around $5 per ton from lower volumes, and around $7 per ton from the stronger Australian dollar and higher diesel fuel prices.
Speaker #2: While earnings improved significantly, cash flow continued to be affected by several timing-related and one-off factors in the quarter. Port congestion at present resulted in vessel loading delays of between 10 and 14 days.
Speaker #2: At quarter end, approximately 600,000 tons of coal was held at port awaiting shipment. Those delayed vessels represented approximately $50 million of revenue, with most vessels already having sailed now in October.
Speaker #2: We also continue to invest heavily in inventory. Current ROM inventory increased by approximately 600,000 tons, to around 800,000 tons at the end of September.
Speaker #2: We also carried the semi-annual interest payment on our senior secured notes and paid our annual insurance premiums in the quarter. And lastly, the geological disruptions at Buchanan impacted production volumes and, consequently, revenue and cash generation.
Speaker #2: As Barry outlined, much of the inventory build was deliberate, although CHPP constraints and port congestions also contributed. Having these levels of inventory supports system stability, improves operating flexibility, and positions the business to benefit from future improvements in plant performance, while providing an inventory buffer ahead of the wet season.
Speaker #2: Adjusting for these items and excluding the prepayment arrangements, the underlying business would actually be cash flow positive in the quarter. The underlying financial performance was stronger than the cash flow results may initially suggest.
Speaker #2: Liquidity strengthened materially in the September quarter. Available liquidity increased by $57 million in the quarter to approximately $155 million at the end of September.
Speaker #2: This was supported by the $75 million Glencoe prepayment arrangement, completed in August, and reflects management's continued focus on maintaining adequate financial flexibility while the reset program progresses.
Speaker #2: Net debt reduced to $553 million compared to $606 million at the end of June. It is important to note our net debt measure excludes the liabilities relating to Glencoe and Stanwell prepayment arrangements.
Speaker #2: We have no significant debt maturities until our senior secured notes mature in October 2029. Capital expenditure for the year is expected to be around the bottom end of the $150 to $175 million guidance range.
Speaker #2: We remain focused on liquidity preservation, cash generation, and balance sheet repair. The business may not yet be exactly where we want it to be, but the trajectory is clearly improving.
Speaker #2: As operational improvements continue and inventories are converted to sales, we expect stronger earnings and cash conversion moving forward. I will now hand back to Barry for some closing comments before we move to questions.
Speaker #3: Thank you, Sandeep. We made good progress in the September quarter and achieved some results in the areas of open-cut mining and cost, building the required inventory levels, and improving product mix.
Speaker #3: The CHPPs and Mammoths still need some work, which is taking a bit of time, but we have a plan and we're executing on it.
Speaker #3: We are looking forward to the benefit of higher pricing flowing through to the December quarter, which will be supportive of cash flow, together with strong production and good cost management.
Speaker #3: I remain very excited by the potential of our long-life, high-quality assets and the potential we are unlocking. Travis, please open the line for questions.
Speaker #3: Thank you.
Speaker #1: Thank you. If you wish to ask a question, please press *1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press *2.
Speaker #1: If you're using a speakerphone, please pick up the handset to ask your question. The first question today comes from Vikas from Primus Asset Management.
Speaker #1: Please go ahead.
Speaker #4: Hi, good morning. Can you hear me?
Speaker #2: Yes, thanks, Vikas.
Speaker #4: Hi, hi. Thanks, Barry, thanks. Thanks for the update. A few questions from our side. I understand there's some unexpected operational disruptions in Q3. How are we positioned for Q4, or at least so far, quarter to date?
Speaker #4: Can you provide an update on the recovery of those funds? That’s my first question. Secondly, regarding the inventory build you mentioned, how much is further expected in Q4?
Speaker #3: Just say that last bit again, Vikas?
Speaker #4: The inventory build-out, which you are looking to do—how much has already been completed so far in Q3, and what is further expected in Q4?
Speaker #3: All right. I mean, on the first part, thanks for that. So, we are obviously focusing on the third quarter here and unpacking that.
Speaker #3: So we'll report on the last quarter, the December quarter, when that occurs. But I think if you look historically, the December quarter is usually a strong production quarter.
Speaker #3: And then, with the guidance that we've put out today in terms of sale of production, as well as we guided quite a bit on where the inventory's at and where we expect the inventory to end, that should give you a good idea of what we're envisaging for the last quarter.
Speaker #3: Which is running well so far, so that's on that build. That bit in terms of the inventory builds at current—so, as we stood at the end of September, as we said, about 830,000 tons of inventory, and then anticipating that to be about one and a half million as we get to December.
Speaker #3: And as we follow the mine plan, that'll just drop out.
Speaker #4: Understand. And on your mining cost, I'm still going through the numbers, but from what I have read and what I'm seeing and your comments on, it was about 18 million lower year on year.
Speaker #4: Can you elaborate on how I should read through—sorry, $18 million lower quarter-on-quarter? How should I compare those numbers for the September quarter versus the June quarter?
Speaker #3: Look, maybe that sounds like a bit of a detailed modeling one. Maybe you catch up with Chantelle afterwards so we just make sure we cover that one properly for you, Vikas, if that's all right.
Speaker #4: Understood. And.
Speaker #3: Thank you.
Speaker #4: One more question is on hedging. Are you looking to do any sort of hedges, given where the met coal prices are, and lock in some yields?
Speaker #2: No, nothing on coal pricing as yet. FX, we sort of consider from time to time from a short-term perspective, but no long-term hedges.
Speaker #4: Understood. Okay, I'll get back to you. Thanks.
Speaker #3: Thank you.
Speaker #1: Thank you. The next question comes from Glynn Lowcock from Barrenjoey. Please go ahead.
Speaker #5: Morning, Barry. Barry, could you just talk a little bit about Mammoths and the faulting? You said there's faulting in the two panels you're currently in.
Speaker #5: I mean, what drilling's been done, and is it just a case of—you drill, and you've just missed the fault? And do you have any sense of the sort of medium-term outlook for faulting?
Speaker #5: Thanks.
Speaker #2: Yeah, that's good, Glynn. I mean, we have looked at that quite a bit over the last couple of weeks. So, as it goes with mining projects, you do a feasibility.
Speaker #2: There's a certain drilling density going with that, and all of that was done appropriately. But there are gaps between these holes, and because there are gaps, you do find things in between that you don't expect.
Speaker #2: And I think what's occurring, especially in the North Main section where the guys are, is it's a mains development getting to the northern part of the mine, which sets it up for the future.
Speaker #2: The faulting just continued for longer, and it was more complex than what was anticipated. Faulting in the south was less intense, so I think the teams learned a lot going through this.
Speaker #2: We've got some plans from an equipment point of view going into next year, as to kind of using some different equipment—hiring that in at times—to better navigate this kind of ground as well.
Speaker #2: And then, as I touched on in the discussion piece, there have been some changes in the management of that mine made, to also make sure we cover and respond to the faulting appropriately.
Speaker #2: I think it's safe to say that, if you look at the productivity outlook for Mammoth compared to what we originally thought when the investment was approved, it will be a bit less.
Speaker #2: But we still hope for, as I said, that it can be a good asset if we learn to deal with these conditions properly.
Speaker #5: Yeah, that's great, Barry. So, I mean, I think it was originally 2 million tons per annum. I mean, what are you thinking? Are we 10% lower, 20% lower?
Speaker #5: Do you have a sense?
Speaker #3: Look, I think we are working to get to a 1.8 million ROM ton position. That's what I think is doable. If we do it well, Glynn, that's what we're targeting.
Speaker #5: Okay, no, that's great. And then maybe just one for Sandy: what is the aggregate, then, if you add in the Glencore and prepayment balance?
Speaker #5: How much is that now in total, on top of what you've disclosed?
Speaker #2: Just verify that, Glynn. What do you mean, in aggregate?
Speaker #5: Well, I mean, you've obviously got— you said the net debt excludes the Glencore and prepayment balance.
Speaker #2: Oh, okay.
Speaker #5: So, what is the Glencore and prepayment balance that we'd have to add on top of the net debt you've disclosed today?
Speaker #2: Yeah, so the Glencore balance probably remains at just under $75 million. But if you look at the other prepayments that we would have received from Stanwell, that added another about $45 million in the quarter.
Speaker #5: Okay. And we've got it from the half-year finances for what it was then?
Speaker #2: Yes, correct.
Speaker #5: Yep. Okay. And then, Barry, you've given us a taste for '27 today. When you've said you're aiming to get back to 16 to 17 million tons.
Speaker #5: Do you think you'd be at a similar cost? I just note that the '26 guide originally was for $1,500 million of costs. If you took the midpoint of volume and the midpoint of costs.
Speaker #5: You've been pushing $400 million a quarter, a little bit less in the third quarter. Does that mean we're sort of thinking '16 to '17, but a slightly higher C1 than what was guided for '16?
Speaker #5: Or do you think, with all the benefits you've got coming through—you had the $18 million down in Q3 at Currow—so you were a $385 quarter, but you need to get it down to sort of three, I don't know, what's 1,500? 1,500 divided by four.
Speaker #5: So, you need to be down sort of below $350 a quarter to hit this guidance you gave us this year.
Speaker #2: Look, I mean, we're going through the budgets now, and there are many moving pieces to it. So, from a volume perspective—and I talk kind of waste BCMs—the whole plan is to drop it in the south, make the south cheaper, and then reinvest some of that, and maybe a bit more, in the north.
Speaker #2: So, still working through that north piece. Depending on how much waste we mine in the north, that may add a bit to cost. So that's the one bit that I just need to get more clarity on as we move forward.
Speaker #2: But then offsetting that, we've done a lot of work on the procurement arrangements, the mining services contracts with the likes of Thiess and Golding, which should give us a benefit.
Speaker #2: I don't want to I don't want to be too overt on the cost at this stage. I'd rather kind of work through it properly and not spitball it, Glynn.
Speaker #2: But I think we've got the opportunity to balance out the need to mine a bit more waste in the north, with savings that are coming through the improvement program.
Speaker #2: And then I think the big game changer in terms of cost per ton per saleable product ton is getting that 10% improvement in rate and hours from the CHPPs.
Speaker #2: Maybe a slight yield uptick because we've got a more stable system. All of that together should leave us in a decent spot with cost per ton next year.
Speaker #5: Yep, no, that's great. And maybe if I could squeeze one final one in. Just, Sandip, I think you said in your commentary you'd be cash flow positive in the quarter?
Speaker #5: Even if you backed out the Glencore prepayment—I think it was what you said—could you just maybe unpack that a little bit more?
Speaker #5: I mean, you talk about $50 million of lumpy cash flow in the quarter, but $40 million of that is capex anyway. So it's really only $10 million.
Speaker #5: So, it's a bit of a line-ball decision. Were you sort of indicating that if you hadn't had the inventory build as well, you would have had a positive cash flow quarter?
Speaker #5: Or is it, even with that inventory build, you think you were still positive? Thanks.
Speaker #2: Maybe if I, like you said, break it down for you—if you look at the cash balance, the way it ended, we were at $155 million at the end of September.
Speaker #2: You take off the $75 million that we got from Glencore, that'll take you down to $80 million. So, if you see where we were at the end of June to where we ended, that's $20 million less.
Speaker #2: But some of the things that were probably one-off, lumpy cash flows in the quarter were that we had some additional capital spend for long lead items that got delivered in Buchanan.
Speaker #2: So, if I was to sort of normalize that from a run rate perspective, you'd probably add about $15 million to cash. And then you had the biennial interest that we paid in the quarter as well.
Speaker #2: If we were to sort of pay that on a monthly basis, I'd probably normalize that at about $10 million as well. And then similarly with insurance as well, that's another $15 million.
Speaker #2: So you very quickly get to about $20 million positive. And then the inventory piece, if we were to sort of load the inventories at port onto ships, like I mentioned, there's about $50 million of revenue now.
Speaker #2: You'd probably say that, from a working capital assumptions perspective, that will flow into October. But we do have arrangements with our customers where we have the ability to sort of pull that cash flow forward.
Speaker #2: So, even if you assume another $40 million cash flow into the quarter, you very quickly get to about positive $60 million of cash.
Speaker #2: In the quarter.
Speaker #5: Okay, that's excellent. Thank you so much for the detail. Really appreciate it. Thanks, all.
Speaker #2: Good.
Speaker #3: Thank you.
Speaker #1: Once again, to ask a question, please press *1 on your phone. The next question is from Stephan Hansen from Macquarie. Please go ahead.
Speaker #5: Thank you. Hi, Barry. Hi, Sandip. Glynn asked about mammoth faulting. I was wondering, could we talk a bit about Buchanan, the fault that you found there, and just, I guess, your understanding now of that fault and whether there's any risk that that fault is carried through into any other panels that might affect production in the future?
Speaker #2: Yeah, Stephan, thanks for that. So that Buchanan, as I said, I think the quantum of this is isolated, and I don't expect it to recur.
Speaker #2: When you look at that mine, the ground in the south, in that south panel, is more faulted, and the roof conditions are a bit tougher than in the north.
Speaker #2: I think what occurred here is the team got into the failing roof. Part of the trick in the South is to not stop. If you stop, things get worse very fast.
Speaker #2: So the team pushed on and tried to get through that. In the process, the situation just worsened, and we got into a challenging position.
Speaker #2: We did invoke and deploy new void-filling products and technologies as part of that, so we had to pivot a bit to do things a bit differently.
Speaker #2: I think if you take those learnings, then the teams developed a very good TAR plan, as well as how exactly we deal with these conditions when they occur.
Speaker #2: Which is something that we haven't had as formalized in the past. So I'm confident that if we get into it again, we'll go through it differently.
Speaker #2: We will encounter roof conditions again in the south; that's just the nature of it. But I think we are very well equipped to mitigate the impact of that in the future.
Speaker #5: Okay, thanks. And the Longwall move, can you tell me, is that in the North or the South? And how long will that take?
Speaker #2: Yep. So we've got one coming up in the north next month. It'll be somewhere between the 15th and the 20th of November. And we achieved that in the US in about 7 to 10 days.
Speaker #2: The team's ready. They've actually already started putting in some of the shields in the north. We're moving to the—we used to have 700-foot panels.
Speaker #2: This is our first 1,000-foot panel, so that'll hopefully help us a bit into next year as well. But it is kind of—it started to happen.
Speaker #2: And it's a fairly quick process. The guys are very well-practiced at it. As you get into next year, we'll move the south in February, March.
Speaker #5: Okay. Okay. Great. Thanks very much.
Speaker #2: Cool. Thanks, Stephan.
Speaker #1: Thank you. The next question comes from Daniel Roden from Jefferies. Please go ahead.
Speaker #4: Hi. Good day, Barry. Thanks for taking my question. Just a quick clarification: on the indicated calendar year '27 guidance of 16 to 17 million tons, does that include the conversion of the 1.1 million tons of stockpile, by any chance?
Speaker #4: And if it does, does that imply the underlying run rate at 15 to 16?
Speaker #2: Look, in terms of that inventory level, we've got the strategy to carry a bit more inventory as a matter of course. At the end of December, that will be more because we're preparing for the wet season.
Speaker #2: So I would see us carrying between 600,000 and 800,000 tons of ROM, kind of generally. But you should expect that at the end of next year, we should rebuild again to quite a high level.
Speaker #2: So, you should see that number pretty much as a mining delivery run rate.
Speaker #4: Yeah, thank you. And you've called that the surge PP program. That is part of the calendar year '27 recovery. Does that, I guess, does that need any capital? And would that capital sit inside—or would that sit implicitly inside—of that $150 to $175 guidance range?
Speaker #4: Or is this an additive kind of opportunity that you're looking at?
Speaker #2: Sandip, do you want to talk about CapEx? What do we generally expect for CapEx? Just generally.
Speaker #3: Yeah, look, I don't think there's any sort of major capital projects planned for next year. So, capital from a guidance perspective, obviously, we'll firm this up when we come out with guidance in February.
Speaker #3: But it should be at similar levels to 2026.
Speaker #4: Yeah, okay. Thanks for that. And maybe just another one on the prepayments. I guess with the layering between Glencore and Stanwell at the moment, maybe the precedent payments there, and how should we think about—I think personally, I understand the Stanwell repayment mechanisms pretty well.
Speaker #4: But just how do we think about, over the next 12 or 24 months, the repayments of those prepayments, and what are the conditions for those to start being settled?
Speaker #2: Yeah, sure. So, just sort of splitting them up, the Glencore, as we sort of disclosed to the market previously, $75 million prepayment, obviously, attracts an interest rate of about 14%.
Speaker #2: And we settled that by delivery of coal over the next 12 months. The Stanwell one is a little bit more tricky, and as you said, you've sort of gone through that in terms of the disclosures we've made.
Speaker #2: So that's obviously over a longer period of time as well. And if you think about the prepayments that we are getting from Stanwell at the moment, that's linked to our liquidity levels as well.
Speaker #2: So as our liquidity levels improve and go over $200 million, we'll start to see that prepayment reduce. And then once we get to $250 million, that prepayment from Stanwell will stop.
Speaker #2: But then that gets repaid as part of our commitment to provide coal to Stanwell over a longer period of time, up to about 2040–2043, depending on their nominations.
Speaker #4: Yeah, okay. Thanks for that. I'll head over. Cheers.
Speaker #1: Thank you. The next question is a follow-up from Glen Lowcock from Barrenjoey. Please go ahead.
Speaker #4: Hi Barry, and Sandip again. Sorry, Sandip—just going back to your excellent cash flow breakdown, when you ended up at about $60 million positive for the quarter.
Speaker #4: But I had to take off. I do have to take off the $45 million in Stanwell, though, don't I?
Speaker #3: No, but then there's still 15 left.
Speaker #2: Yeah. And.
Speaker #4: Yeah, yeah, yeah, yeah. But I just—I'm still not saying it's not positive, Barry. I just wanted to make sure it wasn't underlying. It wasn't underlying sixty.
Speaker #4: It was an underlying $15 positive, not an underlying.
Speaker #2: Please, that's right. If you—that's correct. I mean, the other way to look at it is to say if Stanwell paid the right price for the coal, then kind of the business potential is actually the 60.
Speaker #2: But you're right. I mean, at some point, if we have more cash, that has to go back to Fairgain.
Speaker #4: Yeah, no. I mean, it would be nice if you could get them to pay the right price, but that horse has bolted.
Speaker #2: We never give up, Glen.
Speaker #4: That's what we like to hear. Thanks again.
Speaker #2: Thanks, mate.
Speaker #1: Thank you. That does conclude the question-and-answer session. I'll hand the conference back to Barry for any closing remarks.
Speaker #2: Good. Thanks, everyone, for dialing in. We'll continue on this journey of the current reset program. I'm looking forward to the price tailwinds that we'll see wash through in this last quarter, and then somewhere in October, we'll put out the quarterly financials.
