Thank you for standing by, and welcome to the Whitehaven Coal March Quarter 2021 production report. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Paul Flynn, Managing Director and CEO. Please go ahead. Good morning, everybody, and welcome. Thank you for taking the time to dial into the March 2021 quarterly production report for Whitehaven. As usual, I'll get on to the highlights and then move through the body of our report and get on to Q&A. The quarter has been an interesting one. We've certainly got some very good results from an open-cut perspective, and we've got some variable updates and also revised guidance for related impacts from Narrabri's difficult period in this quarter and the previous. To the highlights, our March quarter ROM production, 5.5, was a good result, 12% up from the previous corresponding period. The quarter managed saleable coal production at 4.3, 6% up. In terms of total managed coal sales at 4.8, managed owned coal sales at 4.2, and equity coal sales of our own coal at 3.4. All these factors up at about 7% period on period. Coal stocks are healthy at 2.8 million tonnes at the end of the quarter. We have reported, obviously, during the quarter that there's been some challenges from a logistical perspective, and we'll get to that a little bit later on, but strong coal production during this quarter at Maules Creek, in particular, was pleasing given that we actually have had some rate impacts across the board, and Maules has been able to manage their way through that relatively well. Narrabri underground mine production is impacted by continuing geological challenges from last quarter and into this, and associated downtime with wear and tear on our equipment, and given all of that, we have revised the 2021 full-year production guidance, with sales and unit costs also relatedly having to be revised, and I'll get to that shortly. As far as COVID goes, we are still living with that, but we have no known cases. We We haven't had one as yet, thankfully. But we've continued to operate with our distancing and hygiene measures in place. From a safety perspective, 5.92, while that positions us relatively well to the industry as a whole, it's still not our best efforts, so we do need to continue to apply attention to improving our tripper rate for better results as we come into the year-end. I'm over to the page now, onto the tables of results. As I've said, ROM coal production was pretty good at 12% up, and then across those other dimensions at the managed level, saleable coal production, sales per ton, sales of purchased coal, and then our sales overall on an equity basis about that 7% up as well. The interesting part, I think, in terms of this quarter, if you skip over to the equity coal sales and realized pricing table, which I'm sure everybody's focused on. A couple of interesting points to come out of that. We have got a higher proportion of other thermal coal sales during the course of this quarter, and we'll get into the drivers for that. The prices, you can see, have been relatively strong across the way, but our realizations have been affected by a couple of factors, and we've tried to call that out for you a little bit further in the report. So, thermal to the average for gC NEWC realizations for the period, about 15% down, principally driven by two factors: a lag in how we realized our benefits of better pricing in a better pricing market, but we are selling more other thermal coal outside gC NEWC spec than we would have planned to. And that really is a function of Narrabri turning out fault-affected coal, which is, and as I've seen, diluted coal, which is a result of this traversing of this faulted area in the mine. So that is a temporary thing, and as I say, subsequent quarters, given the lags, we'll see realizations picking up over time, but this is a point-in-time observation, 15% down for this particular quarter. gC NEWC, as I say, averaged $89, so that's a big improvement up on the previous quarter, which is nice to see. But as I say, we've got two different dimensions there. Now, the issue here is that if you're selling other thermal coal in greater proportion, it does push you into a very wide spread between the 5,500 market and the 6,000, which we've been studiously trying to avoid. But if we've got fault-affected coal, then we do dip into that market, which is unfortunate given that there is some $30 spread between gC NEWC and the 5,500 market. So that really is the driver for those realizations, and I'm sure the key questions when we get to Q&A will be, "How long does that last, and when are we back into normal coal quality at Narrabri in particular?" And of course, there's just the general lags as we've seen in the rising market. Met coal sales at 20%. The met coal market and pricing has been relatively stable to be at subdued levels. We have got away a few extra cargoes in this period, and so 20% is a little higher than what we've done historically and is higher given that Maules Creek itself only did 17% during that period. So the other mines have contributed to PCI sales into India during this time. So as a result of the changes that we've seen at Narrabri, we have revised our guidance there, and so revised our sales guidance targets of full year down to 17.8-18.3. And there is a related cost impact to our sale, as I say, and there is, as a result, I'll speak to the changes in the ROM production for Narrabri itself shortly. But over at Maules, Maules is doing really well and has had a consistent performance throughout the year and positions itself very well for the final quarter of the year. At 3.7 versus 2.4, we're 58% up, so it's a nice solid performance. De-risked a good portion of the production for the year as a result of that solid quarter-on-quarter performance, and so we're well positioned as a result. We have had logistical challenges, as you know, just with shiploader one and shiploader two, although we've got obviously one back up and running, and the remainder of the work to be done for NCIG to bring full capacity back on will probably be, we're talking probably about the October-November period to see that back on tools. It might be a little bit early, but I think it's worthwhile just positioning ourselves around there. As a result of that, we have had some sales slippage, and so stocks are looking good or high as a result, and at 2 million tonnes of the 2.8 that we've reported, but we will see that the ROM looks way down over the balance of this quarter. So as I say, Maules is doing well and positions itself very well for this final quarter. We'll see it push up to the upper end of its guidance for the full year. And Narrabri, I'm sure, which is the odd person out here in this instance, it is struggling through an area of difficult ground here. At 1.1 versus 1.5, we're 29% down on the ROM totals, which is very disappointing, I'm sure, for all concerned. Coal sales at 1.1 and managed coal sales have been the same number. It's disappointing. We are carrying 500,000 tonnes of stock there, but it is stock which is qualitatively less than what the average of the mine normally produces just because we are traversing these challenging areas, and the big issue here is that having cut a lot more rock and stone and conveyed it out of the mine, gear is suffering from a lot of downtime from outages and wear and tear, and as a result, we have concluded that key aspects of the longwall won't be able to continue on until the end of the panel, and so a mid-panel overhaul is required for certain key features of the longwall, and so that's going to require further outage. Coupled with the slow cutting time in traversing this faulted ground and the outages in terms of time that we need to conduct a mid-panel overhaul of key items, we're essentially. There's about an aggregate of about four weeks lost production in all of that, hence the need to change our ROM guidance for the full year, unfortunately, to 4.5- 4.9 now for the full year FY21. That is most unfortunate. Additionally, the longwall moves from 109 to 110, so that is now rescheduled into Q1 of FY22. We've done our open cuts, albeit on schedule for the full year. They've done pretty well. They were obviously slightly less than period-on-period results for both Tarrawonga and Werris, but they are on plan to deliver their results for the full year and have been relatively uncontroversial, I would say, during the course of this period. They have both snuck away a couple of extra PCI sales in this quarter, hence, as I say, that higher met coal percentage of 20%, so Tarrawonga and Werris have been able to do that, which is good. There was a little bit of deferral of met from last quarter into this, which positives that, but their target of those sales has been into India, which is, I'm sure, will be part of the Q&A session, what's going on with that end of the market when we get to the Q&A piece. As I say, the logistics and weather have played a part in this quarter. Tarrawonga and Werris both have been affected by weather during the period of this quarter, but they were ahead in any event year to date, so they are positioned well for the full year. And as we reported on the 23rd of March, shiploader one was taken offline for some critical repairs that needed to be done. That outage is now over and is back up and running. As I say, shiploader two is definitely going to be later on this year. It's running well that work, but I think the October time is the best time to think about when it might be fully operational. And so the impact of these various changes, unfortunately, from a sales perspective, we're now at 17.8-18.3 as a consequence of all these changes, logistics compression, and principally Narrabri's challenging quarter. I'm over on the development projects, and there's really nothing particular to call out during the course of the quarter for the development projects themselves, so I might just move through that given that there's nothing that has advanced through the period for that. Over on to our outlook for the markets. As I say, the high CV thermal market is pretty good, and you want to stay in that market, and we've unfortunately drifted a little bit further into the 5,500 market than we would like to, or coals based off pricing for that part of the market by virtue of this out-of-seam dilution and faulted coal that we've had at Narrabri, and you are seeing a massive divergence between the high CV market and, of course, that lower rank coals. The met coal market itself, I think, is really quite interesting with the compression of the prime hard coke market and low-vol PCI and also semi-soft pricing, all within a bull's roar of each other at very low levels from a hard coke pricing perspective, and I think this will take a little while to solve itself. So overall, coming to our guidance, just to wrap this up for everybody, the managed guidance now for the balance of the year, now we are guiding at 20.6-21.4 for our total ROM coal production for the year. Maules Creek, as I say, remains unchanged and will probably do at the top end of its guidance. Narrabri, unfortunately, has been the catalyst for this revision at 4.5-4.9, and the Gunnedah open cuts remain unchanged at 3.9-4.1. Coal sales as a result at 17.8-18.3 is the refined guidance for this full year, a consequence of those Narrabri changes. As a result of having an underrepresentation of what's historically been our cheapest coal in Narrabri and the impacts of underabsorption and take-or-pay and also other factors, we're now revising our guidance on unit cost slightly upwards to AUD 73-AUD 75 range, which is not what I'm sure everyone wanted to hear, but it is the fact of not being able to have the normal proportion or the expected proportion of our cheapest coal represented in our cost base. That brings us to the end of the quarter, as I say, good results from the open cut perspective. Another quarter, unfortunately, off the back of the previous one where Narrabri is traversing some difficult ground and revisions to the guidance as a result. With that, I'll hand back to you, and we may as well open up the Q&A session. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Rahul Anand from Morgan Stanley, Australia. Please go ahead. Hi, Paul and team. Thanks for the opportunity. Perhaps if we start with Narrabri, please. So obviously, we've struggled a bit with this one, but if we account for the four-week outage and you've also moved the longwall move to next year, you're still only expecting that 800,000 tonnes of production for the last quarter. I just wanted you to help me understand that number and perhaps put that in context of the target of 7 million tonnes per annum-8.5 million tonnes per annum that you talked about previously once you start going into, I guess, smaller panels off the southern leases, 201 and 202, because they're only about 600,000 tonnes per annum. Thanks. I'll come back with a second. Right. Well, I'm not quite sure I got all of that down, the 600,000 tonnes per annum. Do you just want to go through that part? I didn't get that last bit. How did that relate to your previous statement? Sure. So my understanding was 201 and 202 will contribute about 600,000 tonnes per annum to. Cut and flit? Cut and flit. Yes. Yeah. Yeah. Okay. Yeah. So I just wanted to understand how we can get to the seven to 8.5 million tonnes per annum run rate for Narrabri, even if we include that, considering for almost a full quarter of production in the fourth quarter, the lower end of guidance is suggesting only about 800,000 tonnes of production. Yeah. Yeah. So that's the first one. I'll come back with a second. Thanks. Yeah. Okay. Thanks, Rahul. Yeah. Look, I should have said I'm joined here by Ian as well so he can answer some of these questions. I've got Kevin here, of course, and Sarah as well. So let me just start off firstly by saying look, it's a disappointing result. There's no doubt about it, but the gear is limping as a result of the extra wear and tear. It's not just one feature. There's a bunch of aspects to this which are obviously been suffering as we've labored through not just the planned fault, but then the unexpected fault that we found mid-panel as well. And that's really where all this requirement for maintenance work comes. And we just acknowledge that we can't get to the end of the panel when an overhaul would normally occur. So some of this work has got to be done soon. And it's got to be done soon in areas where there's limited space to conduct this type of work. So it's slow work, and the cutting in this area itself, getting to the areas where it can be conducted, is also slow. And so hence the relatively modest expectations of incremental production from our total today, as you say, arriving at the lower end of the range where you've calculated your additional 800,000 tonnes from. Now, in terms of trying to bridge the 7-8.5, you've skipped over, obviously, panel 10, and you're now concentrating on panel 203. So if I look at 203, and if you're, I don't have the map here to point to, but if you look at 203, 204, 205, they are in correspondingly good areas of shallow ground where we've got high productivity, low costs, and as a result, strong production will come out of those areas. As you say, 201, 202, they are cut and flit. We're proposing that they're cut and flit tonnes, and in a full year, they will produce, as you say, about 600,000 tonnes of that total that range that you've just recounted. But the 203, 204, that type of area, those totals that you've mentioned, 7 to 8, no problem at all. But we are in deep ground, as we've frequently discussed. Our desire, obviously, with the plan that we met now of for Stage 3 back in December was obviously to get across to the shallow ground as quickly as possible and resume cutting at rates which were consistent with where we were in 104, 105. When you go back and you look at those previous years when we were cutting at those levels, obviously, production was well up compared to what we're unfortunately doing at the moment, and costs were well down as a result. So I'll leave it there, Rahul, and see if that answers a couple of aspects of your question. Have you got a follow-up there? Yes, so I guess two quick follow-ups on that then. So Panel 10, you're still expecting that you should be able to produce quite predictably and somewhat in line with past quarterly run rates, especially because you're stepping around the fault this time. That's the first, and second, the longwall step around, is that going to be delayed into Q3 then for next year? Yeah. Look, I think all that we've just gone through in terms of going through this difficult ground, the wear and tear on the equipment, the quality, and the price realization impacts that's having the quality really does speak to the reasons why we've chosen to have a step around in panel 10 to go around this faulted area. We've given the equipment a fair beating driving through these faults, and we're really keen to avoid that in panel 10 and, of course, avoid the dilution associated with traversing that type of ground. But in terms of production rates, it will be for the year. The total will give our guidance at the end of the year, end of the financial year. But, of course, with the slippage of now, the relocation moving deeper into that year, the totals for the full year will be adjusted accordingly. Ian, is there anything you wanted to add to that? No. I think you've summed that up, and that's correct. Obviously, the push out of that move between 110A and 110B will be pushed back in line with the, I guess, the delay in 109 to 110 itself. Okay. Perfect. Okay. One quick question, then I'll pass it on. Just on Maules Creek, coal stocks nearly 2 million tonnes there, mine performing pretty well. If I look at past performance in terms of peak coal sales, you've done 2.6 to 2.7. Is that the peak capacity of the infrastructure to get to port if we assume that the port is working fine? Could you remind me a bit on that as to what the sprint capacity is for the logistics there, perhaps? Yeah. We could certainly, Rahul, do more than that. All the contracts that we have allow us to have surge capacity in them. So we were originally worried, obviously, when the first shiploader went down as a result of the storm damage last year, but we satisfied ourselves that we could get through there with the one shiploader working with two berths. Of course, we've had the mechanical outage for shiploader one, which was pretty annoying. And with the balance of time remaining in the year, our view was that there is a point of compression here in terms of when you can get the ROM and convert it into sales during that time. The floods, which knocked out the line for about a week, a little bit less than a week, have been unhelpful, but that's all obviously dissipated. So we think we're fine for our guidance. As I say, we have surge capacity in our contracts to be able to do that. Okay. Perfect. Able to put a number at all as to what you think it can peak at? No. I haven't got a number here for you, Rahul. Thank you. Okay. No problem. I'll pass it on. Thank you very much for your help. Thank you. Your next question comes from James Redfern of Bank of America. Please go ahead. Hi, Paul. Good morning. Just want to dig into the price realizations a bit, please. Can you please remind us what the lag is to the gC NEWC index? And then also, I guess, given the geological issues at Narrabri, how would you think about the price realizations in the coming quarters, just weighing up, I guess, the lag effect? And then also when you think to be through the faults and so on at Narrabri. Thanks. Yeah. Thanks, James. The gC NEWC index is really the piece of the puzzle which probably lags the least, if I can call it that. It's generally the average for the month, as you know. So to the extent that the prices have risen considerably and quickly, there's always a distortion there in terms of when you see that benefit materialize on the realizations that follow. So call that, if it's the average for the month, the worst is the month, and the least it would be for a sale that happened at the end of the month is minimal. So in that context, if we've got a continual now that we've got what looks to be a relatively steady price path at the moment, then you should be able to see that materialize in the following month. The confusion of this area is that Korean sales, for instance, I'm sure we've talked about this many times, are done on a manual basis. And so to the extent that there's a lag of potentially six months on average, because those contracts are signed during the course of the year, not just at one particular point, on average, a lag of six months, you do need to work your way through that. To the extent that there are other sales, which are other indices, which are some of this fault-affected coal that we've taken on, those ones are relatively short-lag type situations. So there's essentially about a month's lag in those. The quarterly settlements for the PCI and semi, you're aware of. Thanks. And I guess maybe on Narrabri in terms of the issues there, I mean, do you have any line of sight as to whether there'll be more faults in the seam going forward? I mean, obviously, ongoing wetting issues will always be an issue at Narrabri as the depth of cover increases. But I mean, do you have any line of sight to improvement at Narrabri in terms of the productivity and a faulting issue? Yeah. Thanks, James. That's a key question. Yeah. Look, we are doing a lot of work, as you could imagine, to try and minimize the exposure to any further unknown events in the future. So not just the balance of the panel that's left before us in 109, but also in 110 as well. So I might just get Ian to describe to you what we're doing there. Thanks, Paul. So yeah, I mean, we obviously have the mapping from the work that was done in the tailgate and maingate roads. But one of the other programs that we've been putting in, which is a development exercise working with third-party suppliers on what we call geo-sensing technology, which is building on the oil shale gas type of work. And what we're going to do is put a drill rig which drills long holes from where we would take 109 panel off and drill back towards where we are. We're going to do about six of those at a 50 or 60 meter spacing. And using that technology, we're hoping that what that will do is give us better, I guess, answer any of those questions about delineation issues on the existing faults that we're aware of going forwards. Okay. Okay. Great. Thank you. I would say to you that with the material coming out of Narrabri in this next quarter, over this quarter and the stock of the holding and the spread where it is at the current moment, my expectation, I think, is that the June quarter is going to the June quarter discount for the coal associated with the other than 6,000 kcal is going to be about the same in June. So I'm thinking that number's probably close to a 13% discount in June. And I think that'll tail off as we get through into fiscal year 2022 because we go back into 110A and that coal quality improves back in that part of the place. So it'll just be pushing that coal through. To answer the question, I think someone else asked earlier on. Thanks. So just to clarify, that 30% discount to the gC NEWC index, that includes a lag effect plus the issues at Narrabri. Yeah. That is the lag effect. Traditionally, what's happened is that the coal price hasn't jumped 32% in one quarter. It's sort of been going up and down steadily or more steadily than that. And the other part is that the premiums that we've been receiving for the high CV coal and the volume of other coal have typically been constant and sufficient to offset. So that's why we've been reporting those numbers to you in the past. It's as effective as a gC NEWC stock. Okay. Great. Thanks. Thanks, everyone. You're welcome. Thank you. Your next question comes from Paul Young of Goldman Sachs. Please go ahead. Yeah. Good morning, Paul, Ian, and Kevin and Sarah. Paul, first question is on Narrabri. And again, just looking at the mine plan and, I guess, the difficulties you've had again during the quarter, can I just sort of throw something out there? I mean, I know you're leaving longwall 11 for a later date. How much development work have you done on 203? And have you actually looked at similar to what you did in, I think it was longwall 8G, where you left that little section because of the dyke, of actually leaving that northern section in 10 and just stepping around or just stepping straight to 203? So I'm just curious about what development you've done on 203 and just sort of throwing out your thought process around trying to get into that shallow area earlier. Yeah. Thanks, Paul. That's a very good question, and you can imagine that question's occupied the minds of many people internally here for some time. Ian can comment on just the 203 development timelines. But the reality of it is that 11 was an opportunity to do that later, just given that the float is the primary consideration, which is, I suppose, the basis of your question on 203 in particular. We have looked at the various scenarios. I mean, leaving behind 10A, the primary part of the panel is not really the right answer. I mean, if we looked at the step around and you said, "Well, should we step around rather than stepping around, go straight to 203?" That's a question which has been analyzed to death here internally. Given that it is the back end of this panel, the 109, which has been giving us the struggles. Obviously, the previous question from James and Ian's answer is to ensure that in the back end of 10, which we refer to as 10B, after the step around, we don't encounter the same sort of issues. But the key challenge there is making sure that we have enough float to be able to move into the shallow ground as quickly as possible. Our determination was that we couldn't do that any quicker given the development lead time we need to develop 203 fully. Ian? Yeah. Thanks, Paul. Yeah. That's correct. We don't have the float. I mean, the sequence that we have has sufficient float in all of our blocks for probably the next well, goes out for the next five plus blocks. So if we were to do any of those suggestions you've said, that would cause us to get an interruption to longwall production. That technology that I just spoke about previously, we're going to drill the rest of the 109 block out. We're in the throes of setting up to do that now. And as soon as that's finished, we will be going down and doing the same process in 110A and B as well to best set us up for the mining of those panels. Okay. Thanks, Paul and Ian. The next question then is, when is the quarter that you're scheduled based on, I guess, really looking at the profile in 110, longwall 10, when are you moving to 203? Paul, that's at the back end of calendar 2022 now. So we're talking about November, December of 2022. Yeah. Okay. So effectively, we've got another 15 months or so, 18 months of hard yards in Narrabri dealing with geological, geotechnical issues, I should say, before we move to 2023. Okay. Yeah. Look, I think that's a reasonable assessment. They're all hard yards is another thing. We think by the step around, Paul, we've excised the primary portion of the hard area that we've experienced in 109. And in 110A, obviously, you recall in the equivalent location in 109, we did actually have a million-tonne month, which is welcome and extraordinary given the circumstances we find ourselves in now. So to the extent that we're able to better understand whether there's anything unexpected in 110B, we shouldn't be suffering in the same way as we are now, given that we won't be driving the equipment through lots of stone in the meantime. Thanks, Paul. Second question is on your coal stockpile and also, again, back on your coal book and price realizations. Paul, can you maybe just. It's obviously a complex book with five or six major customers or countries you sell to with different pricing structures and lags. So just to keep it really simple, I know you've tried to say that 40%-50% of your book is priced on a lag basis, and a lot of that's the Korean tons. But just to put a number on it as far as the lag is concerned, what roughly would that lag be? Would it be Q minus one or month minus three? Would it be a three-month lag on that 40%-50%? I think it's just an average of if you want to try and land on something. You're only going to get an average of that, Paul. That's fine. That's effectively what I'm after, is just to determine roughly what that lag is on that half of your sales. Yeah. Okay. I'll probably have to come back. I understand. Is Is the hard prices coming in? You'll realize that in the June quarter or September quarter? It's not going to be six months. It's more like three months. Yeah. Okay. That's. Longest is six months for your annual stuff, but that's only 20% of the book. Paul, if you have a look at the annual report where you see the breakdown in the revenue between countries and jurisdictions, it's really the Korean tonnes that have a longer period. The Japanese pricing generally tends to be gC NEWC month, gC NEWC prior month, gC NEWC prior quarter. And that's the majority of the tonnes here. But the incremental tonnes that have come through in this past period, because we're selling more of the other coal, has been the Korean market, which tends to be struck as a year-long contract. So let's go away and we'll come back and we'll hope to. We'll come back with a better answer for that. If you're looking for something that you can simplistically go for one across the whole thing, I mean, obviously, the semi-soft sales on a quarterly basis, so on average, there's six weeks if you said a lag there. The Newcastle benchmark stuff should be no more than a month of lag. But when it rises dramatically, and that's when you've got a stable price path throughout the course of the month, right? So today, you've got an average of 94, but the spot is actually only 90 on a month-to-lag basis. So there's a difference there. And then, as I say, the Korean tonnes, generally, that's a 12-month contract. It's on average a six-month lag. We'll do some math for you and come back. Yeah. Okay. I'll phone through this afternoon. Last question, at least for now, is just on that coal stockpile of 2.8 million tonnes, based on your view on the infrastructure and the port and the rail, and what number, Kevin, and this is really a question around working capital online, what number do you think you can get that to and when? So what's the level you want to get it to? Obviously, probably lowest level as possible and by which quarter? It's a good question. It's a nice balance between product stock to enable blending and product stock to enable smooth use of logistics. So the number we work to is typically around a million tonnes of product and ROM behind that supporting it. So probably somewhere between one and a half to 1.8, I think, would be the final number that you're looking for. So somewhere in that 1.5- 1.8 or 2 million tonnes. That's sort of a number I think that works really well for us across all those. And we want coal at each place. So there's a number for you. Yeah. Great. And you said SL2 at NCIG should be operational early in Q4 of calendar year 2021. So do you think that that 1.5 - 1.8 will be achieved sometime in September quarter? Is that how I into December quarter? I'd say first half. I would say that the schedule at Ship Loader 2 is coming ahead, coming forward. And when projects like that are coming forward, it generally tends to be good news and keep coming that way. So we've said early quarter four. So we'll keep you advised as that comes through. There's a couple of key points coming up in the next month or so. And again, we should be able to give you an update on that in May. Yeah. But the impact of that fall to get back to more normalized stocks will happen later. It'll be later in the first half. It won't be at the end of the first quarter because firstly, the second ship load won't be up. And then by the time it is up, then your lag time in terms of being able to ramp that up and push that stock through at the rate we'd otherwise like to means that you're still going to have healthy stocks at the end of the first half. Understood. Okay. Thank you for that. We'll see you from there. Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Lyndon Fagan of J.P. Morgan. Please go ahead. Thanks very much. Look, the first one is just to try and understand a bit more of what happened in the last three weeks. So I guess you provided guidance on the 23rd of March, and it's only really three weeks ago. I'm just trying to understand a bit more about what happened to lower it again. That was the first one. I did have some follow-ups if I could. Yeah. Thanks, Lyndon. Yeah. Look, it's definitely been dynamic. There's no doubt about that. But it's really just the challenge of some equipment failures, which have occurred over the last three or four weeks. And this is not a new thing. I mean, it's been happening since we've been traversing some of this faulted ground. But the question is, there's only so many band-aids you can put on the equipment until you get to a point where some more fundamental pieces of the equipment can't last for the duration of the panel. And that's been our conclusion. We've been monitoring this all the way along. But this last fault really has given us a difficult time with the gear, which is already impaired to some degree by virtue of having come through these large faulted areas, which were known. But the extra one, which we found in the middle of the face, really has caused us some difficulty. And as I say, we've got some ground to go through now before we can change out some of this equipment. So it's really just the cascading nature of that. It's not one particular piece. It's just a number of them cascading, causing related weaknesses within the longwall itself. The AFC in particular, the beam stage loader, all these items which are bearing a lot of wear and tear. You've just got to get to the end of it and deal with it. Right. Okay. Yeah. Look, that makes sense. And then going back to the previous discussion, so in 18 months, you get to 2023 and beyond. Can we talk about what the ground is like out there? I mean, are you expecting any geological challenges, or is the base case that it's smooth sailing once you're out there? Yeah. Look, the ground there looks very good, Lyndon. That's why we're very keen to get to there. We know it's got the odd geological feature as the same corresponding panels in that eastern flank of the line had, but nothing too exciting. It's obviously very shallow ground. So the secondary support requirements that we have at the moment aren't required anywhere near to the same level. And gas is actually very minimal there. CO2 levels in the face are very good there as well. So yeah, we're wholly expecting that area to be a return to the form that you would have seen us in year 2016, 2017, 2018. As we're just looking at the diagram now, if you go back and have a look when we're in panels three, four, five, six on the northern side, you'll see consistent production there at high levels and at low cost. Can you just remind us a little bit on the coal quality out there? There's no met coal. Is the thermal coal quality any different? There's still PCI capacity in the mine. It's not until you get to stage three that that starts to wane over time. You will see us continue to produce the PCI. Coal quality is pretty consistent across the southern panels. As you get deeper, then you do start to see small increments in ash over time, but that's years away. Okay. Great. And so just to go back to the sort of achieved price discount, it's really not until we get to this area in 18-odd months that we shouldn't be worrying about that. So we should be forecasting some sort of achieved price discount for the next 18-odd months. Is that a fair statement? We certainly won't be seeing the level of it that we've got at the moment. That's for sure, Lyndon. And the reason for that is, as I say, the step around avoids that fault-affected coal. And that's obviously a big driver of this discount that we're experiencing at the moment. So from our current realization adjustments, taking into account what Kevin said about the quarter to come and unwinding the fault-affected stockpile coal that we have on site at the moment, we are predicting an improvement in the discounts as a result of that. Not continuation of the same across panel 10, no. Great. And look, the final question hasn't really been discussed on the call. Just on all the projects, are you able to—was there anything new in the quarter that we should be talking about in terms of progress? I mean, obviously, no FID on anything anytime soon. But is there anything worth highlighting? And also the pecking order, are you thinking Vickery before Winchester or vice versa? Nothing particularly noteworthy has come out during the course of the quarter. I mean, there's work continuing across all the projects. I mean, stage three generally is transitioning more into a more operational sort of orientation to its evaluation now. Vickery is continuing to be refined. There's no doubt about that internally. But we are waiting for the judgment from the judge having held the hearings. We know the EPBC deadline for approval of the project under the statutory rules is at the end of this month, April. But we're not going to be holding our breath potentially for that. Winchester South is just trucking along, but nothing noteworthy after release of the reserves last year. We are working through the feedback from the adequacy review that the Queensland government is going through, but there's nothing surprising out of that at all. That's just really the response to questions from them. All right. Thanks very much. Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Peter O'Connor of Shaw and Partners. Please go ahead. Morning, Paul, Kevin, and Ian. Paul, in December quarter, you talked about the problems that you had, and you mentioned there was the one discrete area of longwall mine which had a fault. And then you talked about the one in a 55 million tonne event where you had the one in late December, which was discrete and unusual. I'm just trying to piece together what was discrete and unusual when we had the December call in January and what's there now. So as I step back, you really need to put a plan in these comments because we're all trying to struggle with where you are in the longwall block and where these features are. So I'm just trying to understand, yeah, the main longwall fault area and what's discrete and different and where we are. And it seems like you're getting a continued area of faulting. Yeah. Look, I mean, the primary fault that we've known about for some time has been the feature of the conversations of the last few panels, Peter. That is known, and we've been open and transparent on that. Of course, the spacing in panel 10 is such that we feel better now to step around that. And we made that call, and everyone's been informed of that. In terms of this mid-face faulting that we found at the back end of the second half of 109, yeah, there's no doubt that that was a surprise to us. It was not evident in the drivage going up either side of the panel, which would have been one of the sources of intel that you would have used to discern whether or not there's a feature there. As Ian mentioned as well, we are drilling up from the maingate, essentially, from the tailgate roads up through the remaining part of 109 to further ascertain whether there's something else that we should be planning for in the balance of the panel that remains. The same work will be done, as Ian's also mentioned, in 110, particularly 110 in total, but particularly in 110B, the second half of 110 after the step around. Given what we've just been through, that would be the area of 110 that you would say would be susceptible to the same conditions. So how acute is this faulting that we've presented to the maingate, tailgate? Is this hundreds and hundreds of meters of faulted area because of that zone? No, no, it's not, Peter. But Ian, do you want to give Peter some color on that? Yeah. Thanks, Paul. And morning, Peter. And sorry, a little bit of what you were talking about there dropped out, Paul, so if I go over something, apologies. So depending on which fault we're talking about, Peter, I mean, sometimes it's been visible both in the tailgate and maingate, and we're able to understand what that looks like and interpret it across the block. And the original one that we talked about that was mid-block around that November period that we weren't aware of, that didn't show up, it went for, call it, about half the block sort of length as we progressed. But generally speaking, they go across the block, not along the block, if that helps. So we've been through one in longwall mine. We're going to step around longwall 10. And we've been through one we didn't expect. And the last three months, we've been in what? An area of just incredibly difficult ground? I think we're all struggling with why it's taken three months and we're still in a deeply difficult area. All right. So maybe I'll give you, so late last year, we had the unknown fault, which took us a while to get through. And predominantly, most of the damage occurred because we were cutting stone. And Peter, you'll probably understand this, but maybe some of the other people on the call for a bit of context might help. So when we know where a fault is, whether it's an upthrow or a downthrow, i.e., we have to make the longwall go up or down, generally speaking, for about every meter of advance, you can only get it to sort of go up or down by about 100 mm. So if we know we've got, for example, a two-and-a-half-meter fault, we need to start at least 25-odd meters before it, ramping up to be at the right height or, conversely, ramping down depending on what type of fault it is. Historically, when we've been sort of understanding the mapping of those, we do what we call the flight plans so that the wall can follow those, and we navigate the faults, and then we come down. In December, we had a larger fault that we knew about, the four-and-a-half-meter fault that we'd got through, and we were ramping down that in sort of very early January. Since then, in February, we've had another smaller fault, a two-and-a-half-meter fault, which, again, mapped. As we would expect, we'd normally be able to go over it. To one of the earlier calls about the accelerated wear and what sort of happened over the last sort of few weeks, a section of that fault was greater than I'll just call it the average that we'd assumed. We're forced to cut that rock because the longwall's not that flexible. And that's what caused the accelerated wear on, I guess, an already limping the longwall through to either the end or the places we've planned to do that maintenance. And the other thing I guess we noticed coming out of the fault sort of in that February period of time was the roof conditions were more difficult to hold them up as we started ramping down as well. And we had a number of bits of stone fall and caused us problems there. So significant amounts of what we call CarboFill, which is a filling material, and also the polyurethane to hold it together. So there have been smaller faults post that that we've been working through that, I guess, in summary, have caused us more difficulty than we had historically experienced getting through. Just on your drilling, if you're drilling transverse holes through the block, if you don't have a full-face fault, what will you find? So you could get the drill hole go straight through and miss a part-seam fault, and you don't pick it up. So I'm just wondering, is that useful? It's clearly better to do it than not, but what's it going to pick up? Peter, what we're planning is, obviously, we're using the UIS longhole drilling, and we will do both where we think we know where structures may or may not be. We'll do floor and roof touches. And also, the geo-sensing technology that we're working with and developing gives us a number of feedback. And I guess into that model that it generates, which should also help us determine whether or not, if there are any faults, what the magnitudes of them may or may not be. Okay, and just to be clear, that fault you're getting mid-face, that's the two-week outage that you had during this quarter just gone? Or the loss of production during the quarter? Yeah. Well, yeah, we're coming out of that. It's caused us a fair bit of angst. Yeah. Okay. Paul, can I ask one for Kevin? Just the cost split, given the cost guidance change, it's quite a market impact coming from Narrabri. What is the breakdown of that hit? You talked about the take-or-pay components and the lack of ability to amortize that across more tons. How much is it just Narrabri? Lack of tons there, and how much does it take-or-pay and any other factors? Yeah, Peter. Oh, sorry. You understand running a longwall operation is largely a fixed cost business, and the volume of tons that come out of it really drive the outcome. So there's two impacts there that come out of Narrabri's downgrade. I mean, if you look at our ROM guidance, we haven't changed the Gunnedah open cuts, nor have we changed Maules. The real issue here is that we're getting less tons as a divisor in the Narrabri cost base, which is really just driving costs up, and then the second piece around that is that in the final quarter, the tons that arrive from Narrabri typically arrive later in the period. We're going to have periods of unutilized capacity on the rail and the port through April, and then as we go and do the repairs, we'll have a couple of weeks of that. That'll be April and May, and really, it's biting that. We're not selling a million tons of Narrabri. That million tons typically comes with around AUD 22 worth of port and rail. Some of that's variable, but most of that's fixed, and that's what's coming to bite us, so the cost guidance going up, we were looking to hold the cost guidance we held. We were right in the middle of that, and this piece of work with Narrabri's downgrading volume is just causing us issues on the fixed costs of Narrabri and then the fixed costs of take-or-pay. Okay. Totally get that. I've got one more. Just given the obvious feedback you're getting from us on the call, and you've met our different shareholders, how do you manage expectations about this issue upwards? How do you pitch this to the board? They must be getting just as frustrated as you are and we are. What's the dialogue like in that direction? Oh, look, I think everyone in the company in its entirety is disappointed. There's no doubt about this more recent area. I think, but by the same token, management and the board are all focused on the areas that we know to be better. And whilst it's difficult in this area in 109 at the moment, there's no reason to think that we can't get a better line of sight on any potential issues in 110. The board will understand that moving back into the shallow ground on the southern panels on the eastern side is obviously going to be a far superior operating environment in which to mine. And they've taken the necessary steps and decisions to move into there as quickly as possible. I think, generally, it's just a difficult thing, as you know, Peter, underground mining can be from time to time. We look forward to getting out the back end of this panel and into 10 and then onto 203. Paul? Paul, can I just jump in? Sorry. Just to clarify too, I mean, we were asking about the faults in February here, which caused us some angst. But just to be clear, we're in a fault now, as we've discussed, which is what's obviously caused. We've had some similar issues, and that's what's, I guess, caused the accelerated deterioration in the equipment. Yeah. Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question is a follow-up from Paul Young of Goldman Sachs. Please go ahead. Yeah. Hi again, Paul and team. A few questions on Maules Creek. I mean, obviously, a lot of questions on Narrabri, and rightly so, but Maules is still a cash cow of the company and actually had a very good March quarter considering it was wet. And so I had a few questions on Maules, Paul. Just on the run rate, if you look in the March quarter, sorry, and if you assume that you hit your guidance, which you're on track for, I guess that implies that you're going to have to ease off from production potentially in the December half just because of that 13 million-ton limit and probably want to do so just because of the coal stocks. Can you maybe just sort of step through that? Yeah. It's a good question. It's a good question, Paul. And part on, again, the difference between the financial year and the ROM production year. That generally naturally occurs anyway, Paul. And the reason for that is just in terms of the timing of when you hit the Braymont zones we've talked about previously. I mean, a lot of coal comes very quickly there, and that adds a lot of volume. But generally, once you're out of it, you do generally see a period of less volume or more normalized volume than that quick flurry of coal once you're outside of the Braymont zone. There's nothing really that compares to the Braymont given the size of it relative to the total reserve. So that will naturally occur in any event in the first and second quarters of the new financial year. Yeah. Okay. Great. And just on differential between semi-soft and 6,000 kcal, it makes sense to push out as much thermal, high-quality thermal from Maules as possible. I know you've got the Japanese contracts on semi-soft you probably have to deliver into. But the question there is, what percentage of semi-soft did Maules produce during the quarter, roughly? And also, what premiums are you seeing for the 6,000 kcal at the moment in $ per ton terms for the ash and the energy premium? Yeah. Yeah. About 17% was the answer to the question on the semi, Paul, just for Maules. So it was a little low, but the overall sales was about 20%. As I mentioned, that's because there was an opportunity to get away a couple of PCI. The PCI market, the interest in the PCI coal has been actually quite strong, strangely, not the semi-soft so much. So India, and it was the primary source of those incremental sales, there were opportunities for Tarra and also Werris to take on a little bit more during the quarter. Premiums are looking pretty good. I mean, there's a 5% energy benefit there anyway, generally. And then in terms of depending on the particular quality dimensions that people value, you've got anywhere between at the low end $3, but on the better end, $5 on top. Yeah. Okay. Great. Last question on Maules, Paul. Any update on the Itochu minority stake? Nothing that I'm aware of. No, Paul. Sorry. Nothing to report there. Okay. Thanks, Paul. Thanks, team. Thank you. Thank you. Your next question comes from Stephen Wood of Eiger Capital. Please go ahead. Hi, guys. Sorry to sort of come in as a slight non-pilot here, but can I just clarify? You've received $76 on average per ton in the current quarter. If we assume the current structures in the marketplace just stay exactly as they are right now, how many quarters does it take, bearing in mind the coal quality issues and Narrabri that we've just been discussing? How long does it take for us to see a material step up in that number? I mean, assuming we're going to see it in the June quarter. And then what sort of number, if the prices in the market just do not change at all, bearing in mind everything we've just discussed, where do we get to by sort of September and December on price? Yeah. Thanks, Stephen. Look, I think, as Kevin's mentioned already, that on the thermal side of it, discounts are a little less, but broadly the same as what we've experienced now in the next quarter, and that, as we've talked about with a number of different people already this morning, that's just a product of those lags that we've mentioned to you. So does that mean next quarter $76 as well? No, that means 13% is Kevin's number. 13% on the average of whatever the gC NEWC is for the next quarter. It doesn't mean a dollar something. Okay. So if we assume the price doesn't change at all from where it is now, what's that 13%? What's the number minus 13%? If you take so the average, let's just assume the average for the month is, well, 94 at the moment, is it? Somewhere around there. Yep. Minus 13%. 94 times 0.87, so that's $82. Yep. All right, and so that's the jump from 76, is it? Yep. Okay. So that's about 8%. Yeah. If nothing changes. That's the convergence of two things there, of course. The realization is improved relative to what we've experienced in this quarter, and the average gC NEWC price is higher than the one we've just experienced in the quarter that's gone by. Yep. Yep. Got that. And so if prices don't change at all, bearing in mind all the discussions we've just had on Narrabri coals, if they don't change at all, do we then squeeze up a little bit higher in the September quarter again because of the various lags we've talked about on the Korean coals? Yeah. Yep. Okay. And I think, Stephen, the other question that's in there is that the way that spread exists. You get, what we get, is a premium over gC NEWC for higher quality coal. The discount to lower really incentivizes you to blend out whatever you can. And that's why having coal stocks on hand at different places with better qualities from Tarrawonga and Maules Creek to blend out the Narrabri and the Werris Creek product is really important to us. And that's why you see the physical price for gC NEWC today in the market being higher than the paper price because producers are doing whatever they can to procure high-quality, high CV coal to sort out that lower quality coal spec. So there's quite a bit of dynamics at play. Yep. So putting into a big brown paper bag everything we've just heard about, the various production issues at Narrabri, it's not unreasonable to go, "Okay. June quarter, up 8%. September quarter, up another 8% if nothing changes in the marketplace. Based on that scenario that you've just outlined, that's correct. I mean, as we look at the next quarter, there's modest production out of Narrabri as we've obviously just acknowledged. So there's a lower proportion of poor quality coal in there, but that's generally in the 13% that Kevin's already acknowledged. When you move into the next quarter, the first quarter of the new financial year, we'll be in a change-out. So there'll be very little of this poor quality coal remaining to be sold. And so the average quality of production and sales during that quarter will jump up. Right. Okay, so I think that sort of 8%, 8% scenario, certainly putting aside for a moment all the issues we've got with coal quality, the prices are going to step up reasonably significantly in the next two quarters, assuming the marketplace stays exactly where it is right now. You mean to say what we have. That's right. Okay. Perfect. Thank you. Thank you. Your final question comes from Peter O'Connor of Shaw and Partners. Please go ahead. And then just a quick clarification. There's too many thoughts going on in my head at the moment. So I'm just being fair. I'm now in late March, early April. You had one in February. You had one in late November, which was the one that was out of the field, and you had the one prior to that, which was the expected one. Is that how I'd recap the last moments? Sorry. I'll start this. Call it November was the one that was unexpected. December into January was one that was expected, a large one. Then there was a February one. Then there's one that we're in now in March. Okay. Gotcha. I strongly encourage you to put a PowerPoint out next time to make it a lot easier. Thank you. Okay. Thank you. There are no further questions at this time. I'll now hand back to Mr. Flynn for closing remarks. Yeah. Thank you, everyone, for the call. If there's further follow-up questions there, you know we're the buyers who look forward to speaking with you, and thanks for your time today. That does conclude our conference for today. Thank you for participating. You may now disconnect.