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Highlights

  • In 3QFY24, SMR secured a five-year mining services contract, ensuring operational stability through 2025 and beyond.
  • Recently, the company has acquired 100% of the Eagle Downs project and the Isaac South designated area, supporting future development.
  • In H1FY24, SMR’s revenue dropped by 11.06% YoY, with a 30% decline in average coal sales prices.
  • SMR has maintained production forecast for FY24 at 12.8-13.6Mt, with improved FOB cash costs of USD 93-98 per tonne.

Stanmore Resources Ltd (ASX:SMR) is an ASX-listed mining company that produces and sells metallurgical coal, a critical raw material for steelmaking.

Activities undertaken in the latest quarter

In the third quarter of the financial year 2024 (Q3FY24), the company recorded 5.8Mt of Run-of-Mine (ROM) coal mined, 3.8Mt in saleable production, and 3.9Mt in total coal sales. Performance at South Walker Creek and Poitrel exceeded annualised production rates, keeping the company on track to meet its FY24 guidance.

During the reported period, the company secured a five-year mining services contract, ensuring operational and workforce stability post-2025. Furthermore, a USD 450 million debt refinancing program was completed by 30 September, and the acquisition of 100% of the Eagle Downs project was finalised.

The quarter ended with a cash balance of USD 322 million and net debt of USD 28 million.

Recent financial performance

In H1FY24, SMR reported a total revenue of USD 1,327 million, down 11.06% from USD 1,492 million in H1FY23, primarily due to a 30% YoY decline in average coal sales prices, despite higher sales volumes. During the reported period, underlying EBITDA decreased by 42.31% YoY to USD 375 million, compared to USD 650 million in the prior period. Meanwhile, basic EPS dropped significantly to 15.1 US cents from 37.8 US cents, reflecting a 60.05% YoY decline.

The company recorded a net gain of USD 96 million from selling the southern portion of Wards Well, which partially offset USD 60 million in impairment and closure costs associated with the Mavis Downs Underground.

Outlook

SMR has maintained its consolidated saleable production forecast for FY24 at 12.8-13.6 Mt, consistent with its February guidance. However, The company has revised its FOB cash cost range to USD 93-98 per tonne sold, an improvement over the previously guided USD 99-104. Capital expenditure guidance remains steady at USD 165-185 million for the year.

Share performance of SMR

SMR shares closed 2.74% higher at AUD 3.00 per share on 14 January 2025. Over the past year, SMR’s share price has dropped by almost 26.83% and in three months, the share price has decreased by 4.46%.

52-week high of SMR is AUD 4.22, recorded on 22 January 2024 and 52-week low is AUD 2.65, recorded on 9 September 2024.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 14 January 2025. The reference data in this report has been partly sourced from REFINITIV.