Operator: Good day, and thank you for standing by. Welcome to Yancoal Q3 production report. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. You can also submit your questions via the webcast at any time during the presentation. Please be advised that today's call is being recorded. I will now hand the conference over to your first speaker today, Mr. Brendan Fitzpatrick. Thank you. Please go ahead.
Brendan Fitzpatrick: Thank you, Desmond, and thank you to everyone joining us for Yancoal's briefing on the Q3 production report. We have several members of Yancoal's executive leadership team on the call to review the quarter and participate in the question and answer session. The commentary provided today is based on the quarterly production report released on the Australian Securities Exchange and the Stock Exchange of Hong Kong yesterday, 20 October. All financial references in this webcast are in Australian dollars unless otherwise designated. I will now hand over to our Chief Executive Officer, Sharif Burra, to provide the quarterly highlights.
Sharif Burra: Thank you, Brendan, and welcome everyone. The Q3 was an important period for Yancoal, marked by the completion of the Kestrel acquisition, continued operational discipline across our portfolio, and stronger realized pricing, supporting a significant uplift in our cash position. on 1 October, we completed the acquisition of an 80% interest in the Kestrel coal mine. Kestrel is a high-quality, long-life metallurgical coal asset that strengthens our portfolio and increases our exposure to premium steel-making coal markets. It is a meaningful step forward in our growth strategy, and we look forward to working with our joint venture partner, Mitsui, and the Kestrel workforce as integration activities progress. Earnings from Kestrel will commence this quarter. Despite lower production due to planned longwall activities, our cash balance increased by AUD 340 million during the quarter. This reflects stronger realized pricing, disciplined cost management, and continued operational momentum across the business.
Sharif Burra: Kevin will expand on the financial position and guidance later in the call. Turning to production. Managed operations delivered 16.6 million tons of run-of-mine coal and 12.4 million tons of saleable coal during the quarter. Production was lower than the Q2 due to the planned longwall relocation at Moolarben and challenging geological conditions at Ashton. Importantly, Moolarben's longwall returned to regular production in September, providing the foundation for improved output in the December quarter. Across the open cut portfolio, Mount Thorley, Warkworth, Middlemount and Hunter Valley operations all delivered strong performances, and year to date we are tracking ahead of last year's record performance. Looking ahead, stronger production in the December quarter, continued support from favorable coal market conditions, and the commencement of earnings from Kestrel are all constructive for our full year performance.
Sharif Burra: Normally at this stage, I would hand over to David Bennett, our Executive General Manager, Operations, to provide further detail on operational performance and safety. However, David is attending to other matters today, so I will cover these topics. Safety remains a core focus across all sites. Our total recordable injury frequency rate ended the quarter at 7.14, compared with 7 at the end of June. While still below the industry-weighted average, the recent trend reinforces the need for continued targeted intervention activities to strengthen safety performance. Operational performance during Q3 was broadly in line with our expectations. The planned longwall relocation at Moolarben was the primary driver of lower production relative to Q2. Across managed operations, we produced 16.6 million tonnes of run-of-mine coal and 12.4 million tonnes of saleable coal.
Sharif Burra: Moolarben completed the longwall relocation, with open cut operations and the coal handling and preparation plant performing strongly throughout the quarter. The longwall recommenced production in September, positioning the site for increased output in Q4. Mount Thorley Warkworth delivered higher run-of-mine production, supported by strong mining fleet performance and dragline productivity. Saleable coal production remained consistent with the prior quarter. Hunter Valley operations maintained strong momentum, with run-of-mine production exceeding our forecast and coal handling and preparation plant performance supporting consistent saleable coal output. Middlemount delivered improved production, supported by strong mining performance and favorable yields. Yarrabee delivered steady production, with continued focus on coal exposure and mining optimization. Ashton's production was significantly lower due to challenging geological conditions in the longwall roof. Operational focus remains on safely managing strata conditions and supporting future production continuity.
Sharif Burra: With Moolarben's longwall now operating and strong open cut performance across the portfolio, production in Q4 is likely to be stronger than Q3. Kestrel produced 6.3 million tonnes of ROM coal and 4.8 million tonnes of saleable coal on 100% basis in the 9 months to the end of September. We receive our 80% interest from 1 October onwards. The operation continues to perform well, resulting in a longwall relocation being brought forward, which will affect coal production in the back end of Q4. I will now hand over to Mark Salem, our Executive General Manager, Marketing and Logistics, to provide commentary on the coal markets.
Mark Salem: Thank you, Sharif. Attributable sales were 9.0 million tonnes, lower than Q2 due to reduced saleable production and the timing of shipments. Thermal coal markets strengthened during the quarter as geopolitical tensions, supply disruptions, and weather-related constraints tightened seaborne markets. Higher liquefied natural gas prices reinforced coal's competitiveness in the global power generation mix. Demand across Asia and Europe remained resilient, with coal-fired generation supporting energy security and cost management. Australian producers benefit from favorable operating conditions and strong export performance. Against this backdrop, pricing for lower energy thermal coal strengthened relative to higher calorific value products, reflecting increased buyer preference for Australian supply amid uncertainty surrounding Indonesian exports. Thermal coal indices increased during the quarter. The API5 index averaged USD 99 per tonne, up 3% from Q2. The Newcastle 6,000 index averaged USD 136 per tonne, broadly unchanged from Q2.
Mark Salem: Metallurgical coal markets also strengthened. Chinese steel producers increased imports ahead of the seasonally stronger consumption period, while domestic supply constraints and export disruptions in Russia and Canada further tightened seaborne availability. Metallurgical coal indices moved higher. The Platts Low Vol PCI index averaged USD 180 per tonne, up 12% from the Q2, and the Platts Semisoft index averaged USD 149 per tonne, up 4%. Demand across major steel-producing regions remained broadly stable, with resilient productions in China, Japan, and Taiwan partially offsetting softer conditions in India and South Korea. Our realized prices increased during the quarter. Thermal coal averaged $160 per tonne. Metallurgical coal averaged $229 per tonne, and our overall realized price averaged $170 per tonne. Recent benchmark price increases have not yet been fully reflected in realized pricing, and further uplift may flow through in subsequent quarters.
Mark Salem: I will now hand over to Kevin Su, our Chief Financial Officer, to address the financial position and guidance.
Kevin Su: Thank you, Mark. As Sharif noted, our cash balance increased by $340 million during the quarter. This reflects stronger realized pricing, disciplined cost management, and a continued operational momentum across the business. The cash balance benefits from favorable timing of payments and receipts, unlike last quarter, when the timing was unfavorable. There was also a positive impact from unrealized foreign exchange gains on our USD cash holdings. We completed the Kestrel acquisition on 1 October. The upfront cash consideration of USD 1.85 billion was funded through a combination of available cash and initial utilization of the USD 1.2 billion five-year syndicated acquisition loan facility. Payment of the upfront consideration, partially seen the USD 40 million deposits and other provisional adjustments for the negative and working capital. Our USD 200 million committed working capital facility remains undrawn. Our operational guidance for 2026 remains unchanged.
Kevin Su: Attributable sellable production is likely to be delivered in the upper half of the 26.5 to 40.5 million tonnes range. Higher diesel prices have returned as a headwind, placing operating costs towards the upper end of the guidance range. Cash operating costs should fall towards the upper end of the range of $90 to $98 per tonne. Capital expenditure will be skewed to the Q4, with less than $400 million spent year to date. Full-year capital expenditure should fall within the guidance range of $600 to $750 million. Stronger realized pricing, favorable market conditions, and the commencement of the earnings from Kestrel are constructive for our financial performance in the final quarter of 2026. I will now hand it back to Brendan to coordinate the question and answer session.
Brendan Fitzpatrick: Thank you, Kevin, Mark, and Sharif, for outlining the drivers of our Q3 performance. We will now move to the question and answer session, starting with questions from the phone, then moving to questions submitted via the webcast. Desmond, could you please initiate the phone question process?
Operator: Thank you. As a reminder, to ask questions on the phone, please press star one and one and wait for your name to be announced. There are currently no questions from the phone line. Please continue.
Brendan Fitzpatrick: Thank you, Desmond. I will come back to you shortly to check again. In the meantime, we will start with some of the webcast questions. Unsurprisingly, Kestrel is featuring in a number of the questions submitted so far. While we did not have operational control through the Q3, Kestrel will form part of the portfolio going forward. So let us look at some of the questions coming through on that topic. Something high level to start with. Will the Kestrel staff be managed by Yancoal or by a third party? Sharif, can you please elaborate on the operating structure going forwards?
Sharif Burra: Yeah. Thanks, Brendan. We are currently in the process of integrating Kestrel into Yancoal. The intention is over time, that it is operated similar to all of our other operations. We had the great benefit of being able to go up to site the first couple of weeks of ownership and get to meet the team and the people on site there, and very impressed with the culture, great management team, and certainly the mine was producing well. So the intent is through the integration process, to bring it into the Yancoal family and to run it as we do our other mines.
Brendan Fitzpatrick: Thank you, Sharif. Kestrel is an operating mine. It is in production. What can we say at this point in time, given the early stage of the integration process with regards to the production profile this Q4 and then going into the forward horizons?
Sharif Burra: Yeah. Thanks, Brendan. The mine has been producing well. It certainly continued to produce well through the short period of time we have had it. There will be a longwall move brought forward as a result of their production profile, and that longwall move will be at the back end of this quarter. With regards to production profiles going forwards, we are currently working through the budget and five-year plan process, including the Kestrel asset, and we will be able to provide that information, some of that information in terms of guidance at the end of this year.
Brendan Fitzpatrick: Thanks, Sharif. That leads into the next topic. With regards to an update on the cost and CapEx profile for Kestrel post-acquisition and any plans for expansion of production from the current level, is there anything we can say at this point in time, or will we have to wait for the full year results in February before we have any forward-looking commentary?
Sharif Burra: Yeah. Look, we will wait until February. We are obviously working pretty diligently through some of the opportunities at Kestrel. We will take our time. It is a very high-performing underground mine. It is running very well. The intention through the integration process is to work closely with the team at Kestrel and build off the strong base that they have developed there together.
Brendan Fitzpatrick: Thanks. Delving further into the Kestrel acquisition and the various financial metrics, one of the questions coming through is asking for some insight into the various financial metrics regarding the acquisition. What was the return on investment for this acquisition, or how does it compare with Yancoal's weighted average cost of capital or the assumed realized price for the Kestrel products? What can we say in regards to this? Perhaps, Kevin, I will turn to you to see what is available as an initial comment.
Kevin Su: Yeah. I am probably going to just maintain the position. As we announced the Kestrel transaction on 14 April, the presentation we published, in ASX and Hong Kong Stock Exchange. We do have a few simulated numbers there. However, the question asked about ROI, about WACC, the expected return, and the price assumption, they were not discussed publicly. It is a very Yancoal internal assumptions. For that reason, I am probably going to just refer back to the presentation we posted previously.
Brendan Fitzpatrick: Thanks, Kevin. Quite understandable. I believe we have got one question coming through on the phone line. Desmond, I will turn to you before returning to the webcast questions.
Operator: Certainly. We have a question from the line of Mark Charles Paterson from Bell Potter Securities. Your line is open. Please go ahead.
Mark Charles Paterson: Good morning, gentlemen. Hello?
Brendan Fitzpatrick: Hello, Mark.
Mark Charles Paterson: Good morning. Just obviously, Brendan, regarding the cash flow, which is what the market obviously looks at, and we have charted pretty much since back to 2023. Obviously, in Q3, you had a strong met coal position and obviously price coming through there better than thermal. Obviously, that has been reversed in the current spot prices, obviously up API5 115 compared to 99, 150s for NEWC. Obviously, we have now got Kestrel with the low ash, high coking coal price coming through. How should we look as a sensitivity on a percentage contribution going forward for each API5, NEWC, and the met coal so we can sort of get an understanding of obviously sensitivities of where those prices are moving and obviously impact on the company?
Brendan Fitzpatrick: Okay. Mark, appreciate the appetite to understand the product mix going forwards. If we look at the product mix currently or pre-Kestrel, we have been fairly steady state, circa 85% thermal products and 15% metallurgical coal products being the low vol PCI and the semisoft. in the April presentation pack, we put some pro forma charts in showing the product mix going forwards. Kevin, if you just want to highlight some of those numbers that we provided previously, it will be indicative. There will always be period-by-period variations in any specific timeframe, but it is a good reference to use at this point in time.
Kevin Su: Sure. As Brendan just mentioned, we have put in some high-level indicative numbers for the pro forma coking coal portfolio, which is going to be increased from 16% to 22% based on the 2025 number. In the previous communication, we also mentioned for anything other than coking coal, the thermal coal, we have API5, gC NEWC. We generally follow the public statements as all the coal produced largely in Hunter Valley will be using gC NEWC. All the thermal coal 100% produced by Moolarben, they are all thermal. They tend to take API5. Hopefully, those numbers will give you a high-level indication about how much percentage attributable to the coking coal API5 and the gC NEWC.
Brendan Fitzpatrick: Thanks, Kevin. Mark, was that sufficient? Is there anything further you need?
Mark Charles Paterson: Yes. Just on the thermal, on that 85%, is that split more towards the API5 rather than NEWC? Because obviously API5 has been relatively strong in the last four to five weeks or so.
Sharif Burra: Well, Mark, if you look at the flow of coal from our assets, if you look at Moolarben, that is majority API5. That will give you a flavor of the materiality of the size of where that comes. Predominantly the Hunter Valley sites are NEWC index. It will be reasonably close.
Brendan Fitzpatrick: Yeah. One final observation is Mark Salem and his team do a great job optimizing the product mix. They use the blending capabilities across the different assets to best meet the market needs and the customer appetite. So there is always some variation to the product profile as we look at the market conditions. Having mentioned that, Mark Salem, perhaps I could hand across to you to see if there is any additional comment you would like to make on how we are seeing the current market conditions and how we are adapting our product profile to suit those market conditions?
Mark Salem: Yeah, sure. Thanks, Brendan. Yeah, look, it is an ongoing exercise in terms of optimization of our revenue and our product mix. We are continually working with the mine sites, in a very close way in terms of where significant price movements exist, how we modify the way we prepare the coal and the way we blend the coal, always in an attempt to optimize. That reflects back on the comment you made, Brendan, in relation to how the blending and how coals can change from different categories, in relation to Mark's comments about API5 or gC NEWC. It depends also on the arbitrage that does exist and the markets available and how we prepare those cargoes. But in essence, I think the comments that were made by both Kevin and Sharif should give Mark a good guideline of where those coals basically sit against approximate indices.
Mark Salem: The intricacies are always very delicate and very involved. That is probably a good guideline.
Brendan Fitzpatrick: Thank you.
Mark Charles Paterson: Sorry, just one final question, one quick one. Just on the Kestrel price. Obviously, that is a low ash hard coking coal price, which I think when you announced the acquisition was USD 146.5. My understanding that is obviously a discount to the hard coking coal, which is sort of USD 280. So it is above that USD 225 level where you start paying contingent payments over the top of what you paid already. Do you expect to occur in Q4, any contingency price because of that price increase?
Kevin Su: Mark, based on what we have publicly announced, the contingent payments will be triggered on a full year basis if the hard coking coal index is above USD 225. This is on annual basis, so we are not able to simulate only based on Q4. We will need look at the whole year, basically, for the next 12 months to see the potential impact, Mark.
Mark Charles Paterson: Okay, perfect. Thank you.
Brendan Fitzpatrick: Okay. Desmond, I do not see any other questions on the phone line at the moment. I will move back to the webcast. On that topic of cash movements, one of the topics coming up is the cash balance. We have people noting that in previous quarters we have put the end of quarter cash balance in the quarterly production report and observed that that was not provided for this Q3 period. What comment can we provide on the cash balance at the end of Q3 and linking that back to the cash balance increase we did report being the AUD 340 million? Please, Kevin.
Kevin Su: Yep. Thanks, Brendan. That is a very good question. Normally, we tend to always put a cash balance for the quarterlies. This time we intentionally not putting it as this might be confusing due to the settlement of Kestrel. From acquisition settlement funding schedule perspective, we need to start drawing the acquisition facility on 29 September, and we also have a two-step settlement as there will be a debt settlement internally for Kestrel as well. So those big cash movements might unfortunately confuse people if we are using that. That is the reason why, when this quarterly was drafted, we intentionally tried to normalize these one-off items and focus on the operation cash movement, which is the $340 million. Thanks, Brendan.
Brendan Fitzpatrick: Thanks, Kevin. So ideally, once the cash transactions and the debt profile is normalized, we can return to a reported cash balance at the end of the quarter, as has been past practice. But as noted, just was not practicable for this specific period. Speaking of cash balances, loans, and the like, we have a question here saying, now that we have taken on the $1.2 billion US loan, how is the board balancing loan repayments against CapEx and dividends going forwards? Is the current dividend policy remaining in place, or will debt repayments take priority in the short term? Perhaps Kevin, again, one for you to provide some views.
Kevin Su: Yeah. The loan, we have not fully disclosed all the commercial details of the loan. But we have done all the simulation in our modeling to make sure the current guideline of Yancoal's dividend, which is 50% NPAT or 50% free cash flow, whichever is higher. We, after all this simulation, we are not compromising better guidance we previous communicated with the investors. So we will keep the same discipline.
Brendan Fitzpatrick: Thanks, Kevin. And I believe you were talking about some of those pro forma numbers that we provided for the debt position back in the April presentation. The indication was it was far from a stretched balance sheet. If anything, we had gone from having a lazy balance sheet to a reasonably utilized balance sheet. Perhaps a fair observation to make, that there is no urgency to quickly pay down the debt. It will be a matter of balancing the preferences.
Kevin Su: Yeah, this is correct. Also, please bear in mind, Yancoal's existing portfolio has no interest-bearing liabilities. With Kestrel, even with this AUD 1.2 billion acquisition facility, the overall gearing position is very modest.
Brendan Fitzpatrick: Right. Earlier in the call, we did touch on the forward-looking projections, and we made the observation that a lot of the guidance and the forward-looking projections will come through in the February result, the full-year result in February. With regards to capital allocation and cash flow and CapEx, is there any indication on the CapEx spend on the multi-year horizon? If we look at it specifically in the September quarter, can we clarify what the September quarter spend was and where the funds would be allocated in the final quarter of the year? Does that include or exclude Kestrel for the Q4 CapEx profile?
Kevin Su: Thanks, Brendan. We have provided our guidance on CapEx on a full year basis, which is AUD 300 to 715 million. We have spent AUD 400 million up to the end of Q3. We will still be aiming to spend the other CapEx within the range. We do not do multi-year forward-looking guidance. We would encourage investors to wait until February next year to look at the 2027 forward-looking CapEx guidance. The current guidance does not include Kestrel.
Brendan Fitzpatrick: Thanks, Kevin. That is worth clarifying. All the guidance numbers provided are exclusive of Kestrel, the production figure, the cash operating costs, and the CapEx. They were all set pre-Kestrel. We are mindful of that, and when it comes to the full year report, we will provide figures against the original guidance and clarify what is inclusive and exclusive of Kestrel on the full year 2026 performance. Going back to the topic of Kestrel and coal quality, there was a reference earlier to the benchmark price and the circa AUD 500 million of contingent payments. Could we please clarify which benchmark we are referencing when we are talking about those contingent pricing payments?
Kevin Su: Thanks, Brendan. I just mentioned is the premium hard coking coal index, which we called it, and you can find this reference in the announcement we made on 14 April.
Brendan Fitzpatrick: Right. Kevin, am I correct to say that there is a price realization component as well? So it is the index price and then a price realization factor that becomes relevant, our revenue generation and therefore contingency payment.
Kevin Su: Well, that is a very good point. The USD 225 hard coking coal index price, what I mentioned is what is supposed to be the trigger. However, when we pay the contingent payments, we will need looking into the realization factor to figure out how much applicable to the Yancoal Kestrel portion.
Brendan Fitzpatrick: Thanks, Kevin. Turning back to operational specifics and looking still at Kestrel, being the newest asset in the portfolio, it is where the lot of the interest is lying for the investors on the call. The longwall move that was mentioned in Q4, Sharif, can we give some indication on the utilization for Kestrel through Q4? Perhaps how many weeks the longwall move will take, how many weeks of production we anticipate? They are asking for a projection on production from Kestrel, but I am mindful that we do not provide asset-by-asset production guidance.
Sharif Burra: Yeah. Thanks, Brendan. Given the recent good production, the longwall move has come into this year. It will start in and around early December. It will run through into the early weeks of next year. The longwall ramp up and get away again. The only other thing I guess I would say is there is a step-around in the next panel, which is a short move. But there are some good long panels, as most people would appreciate longwall move frequency is related to panel lengths. And if you have a look through some of the material previously provided, you will get a good idea of where the frequency lies on those panel lengths.
Brendan Fitzpatrick: Thanks, Sharif. One of the investors asking, when we provide our 2027 guidance, will there be a separate guidance for Kestrel versus the rest of the business? Mindful that they are also asking about longwall moves. You have just touched on that. The reason for the question is, there is a five-year plan later this year. Will we get five-year guidance in February or just annual guidance? So, I will make an initial observation there. Yancoal's practice is one year of operational guidance on a forward-looking basis. One of the main reasons we do this is the assets are running at a fairly steady state profile. We do not have significant step changes in the production horizon over, say, the next five years. And fortunately, Kestrel is a similar asset. It is operating at a fairly steady state basis.
Brendan Fitzpatrick: Notwithstanding the longwall moves and the like at not only Kestrel, but Moolarben and Ashton, the combined production guidance at the group level is likely where we will be going forwards. However, we will evaluate all the guidance thought processes as we head into the next full-year result in February. Still on the topic of Kestrel and the transaction, this will no doubt be one for you, Kevin. Could we clarify whether the Kestrel acquisition is expected to result in one-off, non-recurring accounting considerations? And if so, will it be recognized in Q4 2026? And potentially even can we clarify under which line item on the income statement? And do we have any sense for the magnitude of these one-off items, if they are to occur?
Kevin Su: Thanks, Brendan. We just completed Kestrel acquisition. The team and our consultant has been working on the acquisition accounting. There is one line, actually, we also shared previously, happy to share this again, is the stamp duty, we need, just as a part of the transaction, is going to incur, and we need to recognize and include them in our accounts. The valuation is being done. We assume the valuation is between maybe around AUD 150 to AUD 200 million. Be conservative. Other than that, we have not foreseen any other accounting entry going to be caused by, or any significant loss caused by this Kestrel acquisition. But as said, we have to go through a proper process working with our consultant, work out all the acquisition accounting entries. Thanks.
Brendan Fitzpatrick: Thanks, Kevin. I have just about exhausted the webcast questions. Desmond, I will come back to you to see if there are any additional questions coming through on the phone lines.
Operator: As a reminder, if you would like to ask a question, you can press star one and one. There are currently no questions from the phone line. Please continue.
Brendan Fitzpatrick: Okay. I have the final webcast question in front of me. If any participants would like to ask another question, I suggest you start typing. Otherwise, we are moving to closing comments after this final question. What can we say about the relatively weak coal sales volume in the Q3 period, given it was below the sales volume produced during the quarter? So what we are looking at there is the sales volume was 9.0 million tonnes compared to attributable sellable production of 9.4 million tonnes. I will hand over to Sharif for comment.
Sharif Burra: I think as a first port of call, obviously the Moolarben longwall move, Moolarben underground coal is all bypassed. So obviously that is a large driver of that. Mark Salem, happy if you have any further comments you wanted to add.
Mark Salem: Thanks, Sharif. Yeah, look, very simply, we had a lot of sales and shipments that were in the queue at both the ports of Newcastle and Gladstone. Unfortunately, at the port of Newcastle, ship loader 10 was down for maintenance, and then we had an unexpected disruption to ship loader 709, 710, and 79 respectively. That resulted in two ship loaders being out, and that caused a bit of a queue to occur at the port of Newcastle. So we had a quite a number of sales that actually sit. The sales have actually been made, it is just the timing of the actual shipments. Similarly, at the Port of Gladstone, which impacts our Yarrabee, there has been a queue evolving over the month of September, which resulted in a couple of shipments also slipping. So we have not lost the sales.
Mark Salem: It is just a function of timing of when the sales will occur, and we are monitoring those queues very carefully through our year-end position as well.
Sharif Burra: Thank you.
Brendan Fitzpatrick: Thanks, Mark. That is a good observation about the timing effect. If I look back to the Q1 production report, we had 10.8 million tonnes of attributable production and 11.6 million tonnes of sales. So the production and the sales always normalize over time. It is the periodicity and the reporting in a three-month period that tends to be the difference.
Brendan Fitzpatrick: Okay. Mark Jacobs, hopefully you are still online. We have one final question coming through relating to the Moolarben. The reference here is stage 3. I assume it is the open cut 3 extension. What are the risks to having that extension signed, and any views on legal challenges or relevant conditions that people should be aware of?
Mark Jacobs: Yes, thanks, Brendan. The Moolarben open cut 3 extension project, we are expecting to get referred to the Independent Planning Commission within the next week or 2. The department advises that it has finalized its assessments. I think that it is realistic to expect similar conditions on Scope 3 conditions to what were imposed on Hunter Valley operations. I will note that those are reporting obligations, they are not constraints. As far as the question of legal challenge is concerned, what I can say is that the application has been rigorously assessed by both our legal team, the department's legal team in its assessment report, and will equally be assessed from a legal perspective from the Independent Planning Commission.
Mark Jacobs: The fact that there will be a public hearing means there is no risk of a merit appeal, but there is always a potential of a judicial review appeal if somehow everyone has made a legal error.
Brendan Fitzpatrick: Okay. That is very useful, Mark, and for the benefit of everyone listening in, worth clarifying that that open cut 3 that we are referring to is approximately 30 million tonnes of production. It would extend the production profile at Moolarben, but we are not talking about a significant step change in the production output at any point in time. That concludes all the questions on the webcast. I will hand over to Sharif for the closing remarks.
Sharif Burra: Thank you, Brendan. At the three-quarter mark, Yancoal is well positioned going into the final quarter of the year. We have completed the Kestrel acquisition, strengthened our cash position, and maintained operational momentum across our portfolio. We are targeting increased production in the December quarter, looking for improved realized pricing, and aiming to keep our operating costs manageable despite higher diesel prices. We look forward to speaking with you again when we release our Q4 report in January. Thank you for joining us today. Have a great day.
Brendan Fitzpatrick: Thank you. Desmond, could you please conclude the call?
Operator: That concludes today's conference call. Thank you for your participation. You may now disconnect your line.
