Coronado Global Resources Inc
ASX:CRN
Coronado Global Resources Inc
ASX:CRN
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Thank you for standing by, and welcome to the Coronado Global Resources First Quarter Investor Call. [Operator Instructions]
I would now like to hand the conference over to Chantelle Essa, Vice President, Investor Relations. Please go ahead.
Thank you, operator, and thank you, everyone, for joining Coronado's First Quarter Investor Call for '25. Today, we released our quarterly report to the ASX and SEC, in which we outlined our production and sales statistics as well as our other key information related to safety, coal markets and financial performance. A more detailed outline of our financial position and results is expected to be released to the market on the 9th of May with our Form 10-K.
Today, I am joined by our Managing Director and CEO, Douglas Thompson; and our CFO, Barrie Van Der Merwe. Within our report, you will see our notice regarding forward-looking statements and reconciliations of certain non-U.S. GAAP financial measures. We encourage you to review these statements in conjunction with our other filings with the ASX and SEC. I also remind everyone that Coronado quotes all numbers in U.S. dollars and metric tons unless otherwise stated.
I'll now hand over the call to Douglas.
Thank you, Chantelle, and thank you, everybody, for making the time to join us today again. Overall, we had a solid quarter in a particularly challenging met coal market at the moment. We executed to plan and the improvements that we've been mentioning in prior quarters has been demonstrated by our ROM production being on plan despite weather events in both regions. Our costs reduced significantly on the quarter, and we've seen cost reductions on prior year that are flowing from the efforts put in through last year. And we will deliver material volume increases in H2 as our high-return Mammoth and Buchanan growth projects are on schedule.
Given the extended market conditions, we are working through a series of steps that are expected to optimize liquidity. These include a restructured or a new ABL facility, and we'll elaborate on this further after I've closed off a discussion on our key performance overview, which I'll turn to now. Key metrics in Q1, the group ROM production was 5.8, saleable production was 3.5 and sales volumes was 3.4. And at a group level, our total recordable injury rate was 0.95, remaining well below industry averages for both the U.S. and Australia.
If you turn to Page 2, you see our operations and sales summary. The March quarter is on plan. The fluctuation that you see from the prior quarter is seasonality industry typically experiences at this time of the year. And then also our planned shutdowns that we've undertaken as we complete works in the first half of the year in preparation for the increased production rates that is expected in the second half of the year from our growth projects. We did choose to prioritize met coal export production over thermal domestic production to maximize realized price in the quarter and stockpiles at the end of last year helped in this regard.
We did see a few external delays to sales volumes. However, nothing that cannot be recovered in the quarters to come. The issues I'm referring to is a co-shipper delay here in Australia, some railing delays in the United States due to the weather events that occurred over there and then a mechanical delay right at the end of the quarter associated with the port. As mentioned, we're working through a series of steps to optimize liquidity.
Focusing first on the actions that we have within our control. In Australia, we reviewed our contractor services across the 3 mines. As completed in 2024, the productivity drive that we did through our business reduced truck and excavator fleets and reduced our costs materially at a mining cost level. Our plans also have an additional truck and excavator fleet going into idle in Q2 this year. And in the United States, we are phasing our development works at Buchanan, resulting in reductions in labor and in mining costs, we will be idling our surface operations at Logan. And across the group, we will be rephasing sustaining capital expenditure.
The growth projects will contribute increased lower cost production, and this is why we've continued with these projects. And we are well advanced, as I mentioned earlier, in restructuring or replacing our current ABL. So moving on to the operations specifically for the quarter. If we turn to the Australian business unit first, we've achieved ROM production targets despite the effects of major weather events as reported by others in Queensland. This demonstrates the resilience that we have invested in that we've been speaking about over the course of the year with the changes that we've made at our Curragh operations. And the quarter was also better than the same time last year despite the weather events and also having fewer digger units deployed this year, 45% less digging capacity in truck and excavator.
This is a testament to the productivity improvements that we've made at the operations. And as I said, it's a significant improvement in our cost profile. The Mammoth underground mine ramp-up remains on plan with now the ROM stacker conveyor and the permanent ventilation fans complete and the second mining unit went into production as planned in early April. In the June quarter, we'll see continued delivery of additional mining equipment as further panels are commissioned.
Moving to the U.S. business unit. We had our planned longwall move in the quarter, and we had shutdowns at Buchanan. The U.S. continues to make incremental improvements every quarter, delivering higher ROM production and saleable production than the same time last year despite these additional shutdowns. And the shutdown was another major milestone in finalizing the expansion project where the underground conveyor works have now been completed to accommodate the second set of skips.
Our Buchanan project is now 90% complete and remains on budget and on schedule. The underground works are practically complete and only final checks remain. And in the shaft, structural and electrical steel installation and hoist construction work continues. And final surface infrastructure is progressing, including conveyor works and hoist house testing. The project completion date still remains within the June quarter, and it's great to see the progress that our team has been making.
I'll now introduce and hand over to Barrie Van Der Merwe. I think I'm one of the few that can pronounce Barrie's surname correctly in our team, and Barrie will talk us through our financial position for the quarter.
Thank you very much, Douglas, and good morning, everyone. I'm very pleased to have joined Coronado recently. It's a company with long-life assets in Tier 1 jurisdictions. We have long-term customers in key markets and our products are sought after in an industry that has a very healthy long-term demand outlook. I interacted with a lot of people in the company since joining and I'm impressed by their capability and the healthy organizational culture.
Having worked in the mining industry for the last 23 years, I've learned that commodity cycles and volatility is part of life in the industry. And while we are going through the tougher part of the cycle in met coal right now, it will turn and generate strong returns in a business that has very high levels of operational leverage. As management, our job is to manage the controllables.
As Douglas outlined earlier, the March quarter performance is a good example of how we are doing that by setting up the business to be more resilient as well as the actions we are taking in response to the low price environment. The March quarter is historically our lowest production quarter. In addition to the impact of rain, more than what we planned for, we also had planned downtime to get ready for the additional production from the expansion projects. Therefore, production rates before considering the expansions will increase for the rest of the year, while the cost base will be lower due to restructuring the business, as Douglas described earlier.
The PLV index also improved from a low of $166 per tonne on 20 March to $190 per tonne yesterday, signaling improving market sentiment. This is $5 a tonne higher than the average price index for the March quarter. Every $1 change in the index is worth $8 million to $9 million of revenue and cash for the rest of the year. The average Australian dollar exchange rate for the March quarter traded in line with our guidance assumption of $0.63.
The completion of the Mammoth and Buchanan expansions in half 1, as Douglas said before, will mean that the half 2 CapEx cash flows will be materially lower and production will step up in half 2. In the March quarter, we had already spent approximately 45% of the full year low end of CapEx guidance. And by the end of April, it will be about 55%, all driven by the expansion project capital, while we will be within our total capital expenditure guidance for the full year.
As we outlined before, we expect Mammoth to end the year at an exit run rate of 1.5 million to 2 million tonnes and Buchanan expansion at around 1 million tonnes. Our mining cost was $76 million lower than the same time last year, largely driven by removing 5 excavator and truck fleets from Curragh. On a per tonne sold basis, this is a 10% year-on-year improvement. The seasonal profile of our production, ramp-up of expansion projects and further cost reductions of up to $100 million announced today will see cost per tonne reduced further in 2025.
We continue to pursue all options available to us to maximize our liquidity and financial flexibility during this downturn in met coal markets and this time, global macroeconomic uncertainty and volatility. We also continue to work on the restructuring of the ABL with current lenders and have well-progressed options in place to replace it with a new facility from other parties that we are in discussions with. We are actively engaging with government at Stanwell about the timing of payment of royalties and rebates in the near term, which would make a material difference to our cash flows if that can be agreed between the parties.
At March quarter achieved prices, our monthly Stanwell rebate amounts to approximately $7 million and state royalties approximately $10 million. At 31 March, we had $325 million in total liquidity, made up of $229 million of cash and $96 million under the ABL. In order to extend the covenant testing waiver from 30 April to 31 May, $22 million of guarantees drawn under the facility will be cash backed and the lenders have the right to change the committed term of the facility at their election. We believe that the actions we are taking on cost reduction and financing facilities is appropriate and will be adequate once in place. We will keep the market updated on material developments.
I will now hand the call back to Douglas for an overview of the market.
Thanks, Barrie. And as we've stated in our report, we continue to see steel markets and raw material demand coming under pressure. The tariffs continue to add uncertainty to the market. India's met coal imports is running about 40% below what's expected for imports this time of the year. And China steel sector continues to face structural challenges from the domestic real estate market and rising trade barriers. And we've seen an erosion of the price floor in seaborne coal over the last quarter.
Tariffs have spurred reselling by mills and traders at heavily discounted spot prices. Having said this, the outlook for H2 has potential, supported by several factors, the expected recovery in global steel production outside of China, increased tariffs on Chinese export steels and the continued outlook of supply rationalization and then the continued strong indices we're seeing in steel production and demand out of India.
On the back of this and the fundamentals we see in the market over the long term, we believe that the long-term outlook for seaborne met coal remains very positive and as a result for our business with our long-life assets that we've invested in and setting up for the future.
With that, we'll now hand over to Mel, who will take us through some questions.
[Operator Instructions] Your first question comes from Paul Young with Goldman Sachs.
Doug, a fair bit going on at the moment, of course, with the market backdrop and also the -- what you've announced today on the potential refinancing and cost reduction. So a few questions on that, please. First of all, just on the asset-backed loan, the ABL and potential refinancing there and looking at other counterparties. Can you maybe just elaborate on the options you're looking at there? What potential sort of cost implications there might be for interest, et cetera? And also just within that, it just seems to me just very high level that you just need to get through to the end of 2026, of course, which you're trying to do when the Stanwell rebate falls away. So I think one other question I had on the refi is, have you -- and are you -- or are you looking at a prepayment for delivery of coal post '26, just to get yourself through to that period?
Yes. Thanks, Paul. It's Barrie here. Thanks for the question. I mean, so as we said in the release and when I spoke, we are looking at all options and some of those parts are well throttled in some of the examples you've quoted of things that can be done. So we're keeping all those options open in order to get the liquidity position shored up. When you look at the ABL, I mean, the alternatives we're looking at are still ABL in nature, but we're looking at something that's kind of better suited to the business and kind of allows us a bit more flexibility than what we've got at present.
There's a couple of good options afoot. They're quite advanced. I think you should expect that the cost will be more than the current ABL. I mean in part, that's driven by where credit markets sit. It's driven by where the met coal markets sit. But I think the cost compared to benefit of having the liquidity is palatable. But since we've got a couple of options afoot, we have the ability to negotiate that and get the best outcome possible for the organization.
So as those things crystallize, we'd be able to say more and we kind of come to market with announcements on exactly what they are, what the tenure is and what the cost implications are. But I think importantly, in considering liquidity versus cost, currently, liquidity is a key priority for us.
Paul, just building on that, getting through to '26, everybody agrees and can see that, that step change in the business is so material. That's what will drive a lot of the strategy and the investment into the business is what's coming. What we are working through and diligently trying to do and taking our time about, frankly, to ensure we get it right is that whatever agreements we do to be this additional buffer we need as liquidity because we've got a lot of levers and we can talk to those. I think it's part of your question of what can we do in the business and what are we doing in the business that's in our control to get through this downturn period.
I do not want to put another millstone around the business' neck. This has been a contract that we inherited. It's a contract that we'll honor. This is a supply contract, but it is very burdensome on the business, and we want to make sure that we can get to the other side of it as quickly as we can and as best we can. But there's opportunities within that as well that we will explore and those discussions have started.
I think turning to what your second question was around the cost reductions. What we've done is we have a plan, and we've been saying it all along, we have a plan, we're diligently executing on our plan. And I think the report in each quarter shows particularly the growth projects are on plan, delivering results, the productivity improvements that we've been driving our cost out, particularly at Curragh and the simplifying of the operations with now these 3 mines are demonstrating the results of that plan. We have pivoted our plan in the first quarter because we could see that the pricing environment and recovery was going to take longer. So we started cost outing across our business. And that firstly was where we got contractors and looking at flexibility of services being provided.
The first half of this year has a large amount of work associated with the ramp-up where we are doing shutdowns. Some of that shutdown and sustaining capital work we reviewed to push out of this high capital-intensive period as the mining equipment gets delivered to Mammoth, and we finish off the project in the U.S. You heard Barrie's quote on the financials. We've pretty much spent all that growth capital where we're standing at the moment. So we phased some of that. And then in the U.S., phasing the development capital because we've actually got quite a good buffer on our development work at Buchanan. So phasing that will help with costing. It's pushing some of the costs out of this first half of the year where we're still heavily investing.
And then idling the surface works at Logan, high-cost operations have had a number of challenges, particularly with the weather at the end of the year in this first quarter was challenging. So we made the decisions that we will idle those probably for the rest of this year and then reassess where we at. Those take large chunks of cost out of the business, and it's some of the levers that we've pulled internally to address our cost base. And then beyond that, having the buffer liquidity will offer us is the breathing space we want to have the surety to get to '26 as you described.
Just talking through some of the cash flows again, I noted that your net debt went up $100 million quarter-on-quarter. No doubt there's some working cap release interest in Barrie's sort of thoughts there. But if I look at your overall cost base, interesting actually just in the quarter that the Australian actually mining costs went up quarter-on-quarter despite volumes going down. So that's a bit of a head scratcher for me, to be honest. But looking at your overall cost of the business, they're running about $1.6 billion a year, and you've announced $100 million cost out.
So call it, a bit over sort of 5% cost out. And I know that that's a big effort because it's not easy making these decisions and things are moving pretty quick, although the Aussie dollar met coal price is still, in my view, pretty healthy. And I know we've spoken about the decision not to high-grade Curragh because you just basically -- it's value dilutive or destructive doing that. But is this as much as you can do? And I guess that's the question meaning that this decision what you've announced today isn't a high grading of Curragh, like you'd go harder if you really needed to. And maybe the question really is, is this a plan you've announced today a set up for coal prices staying where they are? Or is it actually preparing for a further reduction in coal prices?
It's preparing where we're experiencing coal prices pretty much through the first quarter of this year. So we've had some relief, obviously, with pricing coming up. And to your point exactly, we spent a lot of effort and time setting Curragh to be a productive dragline mine. What we don't want to do is get ourselves into the situation that we destroy value there. We have taken advantage of our stripping ratio in our plan this year, but it's not value destructive in the sense that you're describing.
So to cut to the chase is, are there other levers that we can pull? Yes, there always are, and we will deploy those if we need. But what we're seeing in [indiscernible] planning that we've done, this gets us to where we need to be. As of last night, we had $200 million of cash in the bank. So we've got significant cash reserves. We're working on getting the additional buffer by ABL that will work for us. As you guys know, we haven't drawn on that in the past because it hasn't really worked for us. We're working on ensuring that we've got a tool that works for us as we go forward and then putting as many of the levers that we have within our control within the business.
Your next question comes from Glyn Lawcock with Barrenjoey.
Just when you talk about the new facility, are you looking to get it upsized as well? I mean I assume that's part and parcel of what you're trying to achieve because it doesn't feel like right now with the cash burn in the coal price, just renewing the similar size is sufficient.
Glyn, if you look at that, so the starting point when we consider these things is the cash position currently. So as Douglas said, we -- as of yesterday, still sitting at $200 million. So you can see kind of the benefit of that CapEx that is starting to -- the expansion CapEx that's starting to drop out. I think in terms of ability to execute some of these transactions speedily, kind of retaining the current ABL structure is preferable, which kind of does put you in that $150 million bracket.
But under the notes we've got, there's some other baskets that can be accessed if we choose to upsize that. But when we look at it kind of the current position on cash where we sit right now, the volumes going up with the expansions coming in, CapEx dropping off the savings washing through the rest of the year. If you then put an ABL of $150 million on top of that, some of the other initiatives we're looking at that we spoke about on the call, we do get to a position where we become quite resilient and going to be able to get through the cycle well. I think what's important to keep in mind is it is -- the liquidity position is kind of most challenged kind of Q2 and a bit into Q3 as we end of the expansion projects. And then there's good relief in cash generation even at current price levels.
I mean, Barrie, I guess maybe another way to ask the question then is if I look at the March quarter and conscious volumes will lift, costs will come down, but your total dollar spend, while your mining costs were $113 and your total dollar spend was $153 a tonne, including all your royalties, freight, SG&A, et cetera. And then you've got your CapEx on top. I mean that would suggest you need a PLV price of $255 a tonne just to cover the mining costs. If you think about the second half of this year then, where do you think you can get the business to on a PLV cash breakeven? I mean we're sitting at USD 190 today for PLV. I mean I think the market all thinks about PLV as the benchmark. So where do you think you can get the business to -- it doesn't feel like you can get it down to USD 190 breakeven, but where do you think you could get it to?
Glyn, we don't want to get over our skis and start talking about guidance changes and the like. We don't see pricing improving a lot for the rest of the year in our assumptions. We're taking a position in the work that we've done that the pricing stays relatively where it's at. If there's any price increase, it's probably going to be marginal. So it's the cost out that we're doing. As Barrie said, 90% of the project is done, most of the CapEx is going to drop out. Our realizations are probably a little bit better than what your math is doing. But I don't want to start talking about breakeven prices in that now. I think we'll stick to where we've given guidance at this stage around our pricing. And our challenge is this heavy cost -- this heavy capital period that we're in at the moment.
Okay. And then maybe just a final question, if I could. Just you talked about discussions with the Queensland government. Any -- how do you think they're progressing likelihood of maybe a royalty holiday until prices recover or anything like that? Anything you can help us understand?
We've met with the Treasurer's office earlier this month, and we've had discussions with Stanwell. We'll progress those and respect where we're at with them in discussions. But I think we all agree we're not going to see the government change royalties. So let's park that. Are we going to see some relief in payment timing and the like? Well, those are the discussions that we're having with them at the moment to see if we can get some relief in the short term. As soon as we have an outcome, we'll be communicating.
Your next question comes from Chen Jiang with Bank of America.
A couple from me, please. Firstly, just a follow-up on your -- on the ABL and your senior secured bond. If you can remind us the debt covenants, especially any restrictions from the covenants that will limit your capability to raise extra funds either from debt market or equity market? That's my first question.
Thanks for that. So I assume you're asking under the notes, are there, what's the covenants and restrictions, right?
Yes.
So on the notes, there's no maintenance covenants. So there's nothing like leverage or debt service cover in the notes. So that's a very good position to be in. The notes allows for the ABL that we've got for a $150 million ABL. And then it allows for some other buckets of debt on top of that. It does have kind of a debt service cover trigger that you have to overcome to add additional debt. But even if that's not available, then the buckets are still there. So the notes allows a lot of flexibility in raising funding to an adequate level for us to manage our current position.
Right. So just to follow up on your answer, you mentioned there is a restriction for raising extra funding from the debt market. Is my understanding correct? From your note.
Yes, there is a debt service cover trigger. But even if we don't meet that, we still have access to -- there's a general bucket of $50 million debt you can incur and then an equipment financing bucket of $50 million that you can incur. So at a minimum, there are those 2 buckets available in any event, irrespective of where the debt service cover sits.
Yes, sure. And what kind of debt services, if you can elaborate on that, please?
Yes. It's -- I mean it's all in the -- it will be in the SEC disclosures that we make. It's a bit of a look forward pro forma type calculation. But as is usual, it's kind of a pro forma 2x. But as I said, currently, that 2x won't work on a pro forma basis where we stand. But the 50 plus 50 is still available, and that's adequate for us to kind of navigate that together with the ABL. It gives us a lot of flexibility. We're also in a position where we're not envisaging anything where we have to go and ask noteholders for consent or relaxation.
Okay. So 2x, I guess, 2x based on EBITDA and then you're -- so you are relying on your ABL to provide liquidity over the next 6 months?
We -- in the first instance, we're relying on the cash that we've got available at present, which kind of will then -- and we kind of keep on saying this, but it's important that kind of we work through the phasing of the capital. So at the end of April, there's $200 million in the bank. In the bank, we spent 55% of the capital for the year. The production will go up. So the first thing is the cash in the bank and the business cash generation. And then there's the ABL that we're looking at restructuring with current lenders and then looking at the other options we've got on the table. So that's the way we'll manage through this. And then as I said, the notes allow us for access to some other buckets as well. And on top of that, we're pursuing all other alternatives to improve the liquidity position and get it to the place that we want it to be.
Sure, sure. And then another question for your CapEx. If I read your quarterly correctly, I couldn't find any CapEx released for this quarter. Given your projects are progressing well, if you can provide any insights for your CapEx for the March quarter? And also how should I think about your CapEx guidance? Are you tracking well to achieve that guidance?
No, that's all good. I mentioned it in the notes. I know it wasn't in the release itself. I mean, so the comments I made when I spoke earlier was in relation to the cash spend of capital. So we -- at the end of the quarter, we spent 45% of the lower end of guidance. So that's just over $100 million in cash CapEx. End of April, that was 55%. So that's like $125 million of cash CapEx. The guidance, we're on track to achieve the guidance. I'm just noting that the cash CapEx that I've used the percentages on and the accounting CapEx that we use for guidance are usually a bit different due to accruals, et cetera. But we're on track to achieve the CapEx guidance with most of the expansion CapEx now behind us.
Okay. Got it. So even you already spent 45% of the cash CapEx of the full year guidance, I guess your CapEx is very first half weighted.
Very much. It's very first quarter weighted actually. So if you look at cash CapEx let's say, the cash CapEx for the full year is heading to that lower end of guidance. As I said, the accounting number will be a bit more. But if you say at the end of April, we spent $125 million of cash CapEx, then there's only about $100 million left for the rest of the year for the coming 8 months. So we've spent 55% in 4 months.
Right. Okay. All right. And then maybe last question on your cost, if that's okay. So by looking at the cost, I know March quarter always have a higher cost, but it's tracking 15% above the midpoint of your guidance. And given your growth CapEx coming, that will lower your cost for sure. But what are the levers from the current operations, especially by looking at even Curragh, the cost is much higher. What are the levers you can -- to improve your cost position and improve the margin?
Yes. So if we look forward to that, you're right, the volumes that comes off Mammoth and Buchanan, that will make a big difference in the denominator. As we said today, we're pushing that and pulling that cost lever very hard. In that $100 million that we've put out today, the U.S. operations do play a big part in that because you can imagine having reduced Curragh's cost a lot over the last year or so, we focused on the U.S. in the first instance, while we're still doing work on Curragh, and we touched on that in the release.
But in the U.S. operations, lowering the cost base, there's phasing of development at Buchanan. There's at Logan idling that surface operation, which is actually a cash accretive option that we're executing there. So those are the kind of things while we continue to optimize Curragh and as Douglas said, there'd be another truck and excavator fleet coming out of Curragh as well in the remainder of this year. So it's continuing to push that and drive the productivity and cost down. I don't know, Douglas, do you want to build on that?
No, I'd also say that as we've reported previously, the costs associated with the underground project and also the incremental tonnes are a lot cheaper than our cost of production at the moment. So those help bring the overall cost of the operations down as those volumes come on in the second half of the year and it ramps up, particularly setting up '26's cost profile.
Your next question comes from Daniel Roden with Jefferies.
I just wanted to, I guess, just get a bit of better understanding around the reprofiling and rephasing of the CapEx over 2025. Where about would that rephasing sit? I think the obvious one that I can think of would be obviously that you've reaffirmed the, I guess, ramp-up profile there. How do you see that rephasing and what does that look like?
So it's a combination of some of the development capital we mentioned that at Buchanan now that we're rephasing that because we've got quite good buffer on our development there. That will push costs out of the year. That's one. And then from a sustaining capital perspective, in the first half of the year, we're doing a bunch of work. You would have seen our results, about 15 days in the first quarter, we took infrastructure down to do repairs. In July, we'll be doing some common infrastructure that we're going to do earlier.
We phased out of this period of heavy investment. So that will be about 6 days of operations, but common infrastructure, what I mean is a 250-tonne bin and our reject bin that we're going to be doing some work on setting up for the future. So that we phased that out a bit and then some of the prep plant upgrades at Curragh, we phased CapEx out of this key investment period. And then likewise, at Logan and at Buchanan, we phased some of that capital that will not only just push out of the year, but also push into later in the year to take some pressure off of the period that we're in at the moment. So predominantly around development and stay-in-business capital that's getting phased at the moment.
Yes. Okay. And yes, I think the commentary in the quarterly report was a bit light on how Mammoth is progressing. So I just wondered how many continuous miners are on site? How are the operations, I guess, going so far? And just a bit more color there.
Really well. I keep on saying to pull the project off on the time line and on the cost that we set in December last year is pretty much unheard of in Queensland. So I give full marks to the team for their run to the line and get the project up and going. So we're deploying 3 continuous miners through the year. The first one went into production in December. It's through the first quarter been going through and building out the mine. So in the first quarter, we've built and portaled all 4 of the portals. So they're all connected now. And that gives us the ability to establish a number of key things to set the next quarter up being through ventilation.
So we've now got permanent ventilation fans installed and the mine has been ventilated as per design and then also build the underground conveyor system and then the surface stacker for the ROM, and that's now complete as well. And that enabled as the mine has been built out to have the second continuous miner go into production, and that occurred in early April as planned. And then the third one will go into production in July as planned, and that's all going to plan. Equipment is getting delivered on schedule.
So in general, going very well. We're pleased with it. It's obviously early days in the projects as we go through the ramp-up of the mine, but managed to pull a good crew together, well-experienced people at now to run, which is augmented obviously, our experience out of the U.S. and starting to lift our heads and look at options that will present themselves in '26 that once we get out of primary development and doing the drives and building the mine out, then because of the coal thicknesses and the mining method, we do secondary mining where you come back and take the floor out. And that will probably give us a nice uplift in low-cost additional volumes in '26 that will come out of Mammoth.
So a lot of very positive signs coming from this project for the long term of Curragh. So we're excited. I'm so excited. My focus is getting us through the next 6 months, but I'd like to start the team looking at Mammoth too because it's a very low-cost opportunity to bring on some more tonnes probably from '27, '28.
Yes. Okay. And maybe just a bit of a low one, but you mentioned the stand negotiations that are taking place at the moment, just seeing what options are around there. And I think it would be pretty rational to, I guess, rephase the rebate if that was on the table. But when do you expect to be in a position to update the market around that? Do you have an expectation there?
There's a counterparty there, and this is an important client of ours. It's going to be a client of us for a long time. So we want to be very respectful of them of the discussions that we're having. They see the value in it for us and them. So I wouldn't want to set a time line to that, but we are talking to them with earnest.
Your next question comes from [ Colin Tan ] with [ MLP ].
I just got a couple of questions on your liquidity position again, please. Your ABL facility seems to have this requirement where you have to maintain a minimum cash balance of at least $100 million against the facilities. Is that requirement still in place, i.e., if we think about your current cash balance of $200 million, really $100 million of that is being set aside for the ABL facility. Is that the right way to think about it?
Yes. So thanks, Colin. So the facility doesn't have the $100 million requirement, but the waiver under which we are operating currently has that $100 million minimum requirement. So we're working with the lenders to restructure that and looking at the other options under which the preference would obviously be to not have that. But that is in place under the waiver, which is on foot till 31 May, as we said in the release.
Okay. Got you. Do you see any risk of the ABL lenders given the current situation, actually would like to reduce the exposure to the company in the near term as part of this -- your ongoing discussions around getting the waiver removed and all that?
Look, I mean, we -- as we say, we're in discussions to restructure that facility. Our objective as a management team is to restructure that for the benefit of the business. I think where we're fortunate is we've got these other options that we are pursuing. So we expect to be in a position where we could make some choices about what type of facility and structure works best for us. I think fair to say that a lot has changed in the financial markets over the course of the last month, I mean, since the frames liberation Day speech and every counterpart has to do what they have to do to manage their risk. So I can't speak on their behalf in terms of kind of their strategies and what they may want to do. But we've got options, and we're pursuing those options.
Got it. That's helpful. Last question from my side is you earlier mentioned that prepaid financing is one of the few options that you're currently exploring. Would prepaid financing be allowed under your existing ABL financing documents? Are there any restrictions there?
No, no, there isn't. And those prepaid structures works under the ABL financing.
And they're also allowed under the existing ABL. Got it.
Your next question comes from Nathan Martin with The Benchmark Company.
Douglas, just a clarification question. You mentioned the idling of the surface operations at Logan as part of the $100 million of savings you guys are targeting. But I believe there are somewhere around 4 or so underground mines there at that complex as well. Is that correct? And if so, what kind of production should we anticipate from those mines if you do idle the surface operations through the remainder of the year, as you mentioned?
Yes. To the point, you're exactly right. In the Logan complex, there's five mines, surface operations, and then we've got the four underground. The four undergrounds will continue operating, no hindrance. The performance at this stage year-to-date has been good, and we see no stopping of the underground mines going forward.
Okay. Appreciate that. And then just, I guess, maybe a follow-up on the transportation side. You called out some of the heavy rains and weather we've had here in the U.S. and impacting operations. Are you guys through most of those impacts at this point? Are you still catching up on shipments? Any color there would be great.
I think the industry in Queensland is catching up on shipments. Looking at the ports yesterday, I think there were 19 boats on anchor, 3 of them had coal in front of them, and I think 16 were still waiting. So I think the industry is getting and it's quite seasonal going through the period or after the rains, readjusting mine plans and the run to the end of the line, particularly some of our peers who have June reporting, unlike us that have December reporting. So I think that will be recovered and get pushed through the system probably by the end of June. We obviously get caught up in some of that because we co-ship and the like. The disruptions in the U.S. were quite quickly recovered. This relates to the...
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Thanks, Mel. I'm not quite sure what happened there. Maybe Mel didn't like my answer and hung up on me. But -- so I was talking to the weather impacts in the U.S. Look, it was related to very heavy rains that occurred while the melt was occurring in areas like West Virginia, it impacted some of the rail infrastructure, but it was recovered fairly quickly. And we've seen already a huge recovery in our on-site ROM stock build and product stock that we were trying to get to port.
So most of that in the U.S. has been flushed through, particularly that impacted our Logan operations. We came through that largely unscathed, and you'll see that in the results. And then right at the end of the month, yes, in Australia, we had a ship loader that had some mechanical issues. I'm not sure if that's directly related to the weather or something else, but it meant that we had about a 60,000 or 70,000 shipment just slip out of the month that was reported in the quarter that came from Curragh.
Your next question comes from [indiscernible] with [ Arkkan Capital ].
So first question, I want to get a sense of what the CapEx run rate is going to be after kind of the growth projects are finished in, I guess, mostly first half of this year and going forward? And then second question is how much -- the Stanwell contract, how much of a cash burn is that versus if that contract wasn't there?
I'll take the first. So I think we went across the kind of in-year FY '25 CapEx a bit, but I'll just run through that again to make sure we have that well lined out. And so at the end of the quarter, we spent 45% of the bottom end of guidance. So that's about $100 million that was spent. At the end of April, that became 55% of the low end. That's cash CapEx, right? So that's about $125 million. In terms of cash for the rest of the year, from April onwards, we've got to spend about $100 million. The accounting number will be within the CapEx -- in the guidance range of $230 million to $270 million.
When you look beyond that, the business kind of including the expanded operations in Mammoth and Buchanan would need a staying business CapEx level of about $150 million a year on a go-forward basis. And then there'd be a bit of development required at times for box cuts and some underground development, which I'd say would be kind of a $20 million to $30 million per year, but there's a bit of flexibility on timing of those. So this year is [indiscernible] in terms of capital and then we'll start seeing the benefits of those volumes and the cash flows coming through. On the Stanwell piece, Douglas, can I handle that one?
Okay. So from a cash burn perspective, the Stanwell step change in '27 is driven by 2 things. One is we've got a rebate. So for every tonne of coal that we sell export, we pay a proportion to Stanwell for that coal. And that drops off and completely stops at that stage. At the moment, as Barrie said, at the present pricing, it's about $7 million. It is index linked, so it moves with the market. So now that we're in a down cycle, but it's still about $7 million a month.
So if you're calculating the burn on that, it's about that quantum. And then we also provide 3 million -- it's a volume-based contract, but about 3 million tonnes of product to them a year, and that is at a highly discounted rate, but not a number that we disclose to the market on the confidentiality of the contract that we have with them, but it is highly discounted. And in '27, when 1/3 of that rolls off, we get it back and we can sell it into the export market. And even if we kept it as a thermal product and got the yield gain out of it, it would attract a much higher price. And lots of the stuff that we put to the market in recent times to give a quantum of what that uplift is, is based on us selling it as a thermal product. So it's a material change in the business once that contract rolls off.
And we do -- just to add, we do disclose that Stanwell rebate separately in the quarterly. So you can pick up the line item there. And then you go back and want to see how it behaves at different price levels. It's all in the public domain. So that will give you a good idea of how it moves in response to prices.
Got it. So just to clarify, so the first portion, which is the rebate, you're saying it's about $7 million a month, so roughly, call it, $84 million a year that potentially could be saved going forward, plus, I guess, the undisclosed ASP discount, correct? And then I guess I'm roughly new to the story, right? So maybe if you can give just a very, very quick, I guess, explanation as to why there was this Stanwell contract because it seems pretty punitive, right? Did you get a chunk of capital because of that upfront? Or what was -- I guess, what was the rationale for that?
No. The contract that is afoot was in place when the previous owners owned the asset. When we bought the asset, we inherited the contract and the obligation. And it stems from that Stanwell owned the coal resource in the beginning and gave access to the previous owners or the owners actually prior to that access to develop the mine. So it's a contract that's lived on through the different ownerships that we've inherited, and we're carrying it through to the end of its present form. No worries. And offline, we can talk you through some more of that detail and get you up to speed with the greatest pleasure.
That concludes the question-and-answer section of today's call. I'll now hand back to Douglas for any closing remarks.
Thank you, Mel, and thank you, everybody, for joining us today. If you've got any further questions, please reach out to Chantelle and the team, and we'll answer those. And then also for those that are coming to the Investor Day at Curragh on the 5th of June, we look forward to taking you through and showing what we've done out of the mine and the investments we've made. And if anybody else is expressing interest to join, it is filling up, but please reach out to Chantelle. We'd love to show you what we're doing. Thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect.