Welcome, ladies and gentlemen, to Whitehaven Coal's Q3 FY23 quarterly production update. All participants are currently on mute. Following the presentation, we will open the call for questions. To queue for questions, you may press star one on your touch tone keypad. Thank you for joining us today. I will now hand over to Mr. Paul Flynn, Managing Director and CEO. Thank you, Paul. Thank you very much, operator, good morning, everybody, for taking the time to dial in this morning for Whitehaven Coal's March 2023 quarterly production report. As usual, I'll head through the highlights, get into the body of the report, move into Q&A. Highlights for the quarter. Average coal price at AUD 400 was a pretty good outcome. Obviously less than what we've seen obviously in the December quarter, period on period, it was actually a step up on what we saw last year for the previous corresponding. March quarter run of mine production at 4.3, down 12% on the December quarter. We'll go into the details of that shortly. Equity coal sales and produced coal 3.4, down 2% on December. Managed coal sales and produced coal at 4.1, down 4% on December. Cash generated during the quarter at AUD 1.2 billion, and the cash position of the company generally healthy at AUD 2.7 billion. Tax bills have been paid and I'll talk about the dividend and the buyback in a later section of this report. Since the buyback started, we've bought about 15% of the back now of the voting shares available to be purchased and spent just over AUD 1 billion in doing so. We expect the buyback program to resume on Monday, 24th of April. The other highlight for this period is that our board has approved the small CapEx version of Vickery, and I'll talk to that a little bit more just. We have provided some additional information slides for you. We can go through at the end of the formal report. Over the page, just in terms of the quarter's production, as I said, 12% down the December quarter. A couple of features obviously which have been playing out there, which we've announced to the market, which we'll go through. Maules, whilst ramping up over the previous corresponding quarter, did not ramp up to the extent that we would have preferred. I'll speak to the issues associated with manning and so on that's playing out across the industry more generally, but as it relates to us and Maules Creek in particular. Just the tables here, the raw coal production at 4.3 versus 4.8. Managed saleable coal production at 3.6 versus 4. Managed sales of produced coal at 4.1 versus 4.3. Minimal coal purchase during the course of the quarter. As you can see, total sales at 4.1 versus 4.6. We have drawn down stocks during the course on a quarter-on-quarter basis. The equity, the equity numbers there play out generally, you all know, 80% to 82%, depending on variations of saleable and so on. Got all of those totals above at the managed level. Over at Maules Creek, whilst Maules did produce 2.3 million tonnes during the quarter and 9% up on previous quarter, it was less than expected. A few drivers for that, putting weather aside in the month of March, and it was only March that was the weather-affected one. Labor generally is certainly causing us some challenges. Then we have the added challenge of conditioning our pit with limited dumping locations, and we can talk about the detail of that. That's essentially the out-of-pit dump versus in-pit dumping and the need to quarantine and fill our AHS fleet from the manned fleet in the pits. That is causing us some productivity loss as a result of that. It's a process we will need to work through. We suspect we've probably got roughly, in rough terms, about 12 months that we can manage to keep these fleets apart. We are feeling that we are closer to the end of this journey in terms of the development of AHS. It will need to cross the critical threshold of being able to blend manned and unmanned equipment together, which we are starting to do in limited form as we speak. That is on the positive side. March sales there, 1.7 million tonnes in the December quarter, reflecting the saleable coal production volumes. Stocks are pretty meager there now as we've drawn them down during the course of this quarter. Narrabri's tons were lower than the previous quarter at 1.2 versus nearly two, most of which was planned as we run down to the back of the panel, which has now been finished. We were suffering some productivity losses really just as a result of the thinning seam. Again, expected, that's planned, there was quite a little bit of work to require just from an operational perspective, and productivity did suffer as we moved into lower cutting height phase at the back end of that panel. Panel has been completed, so we have commenced the relocation and we expect to be cutting at the end of May in panel 203. Saleable coal production, as you can see, 1 million tonnes for the quarter, down 43% on the previous quarter. The sales of 1.5 million, but 25% down. Again, you can see we've drawn the stocks down there to a good degree. In terms of the Gunnedah ops, I'll move firstly to Tarrawonga. Tarrawonga's coal raw production there at 521 compares to 348. Saleable coal production 540 versus 254. The quarter itself was really quite a decent quarter, but it's obviously the increment over the previous quarter was obviously against a heavily weather-affected one. Those proportional steps up really just a re-reflection of returning back to a little bit more normal operation relative to the weather-affected first half of the year that we had. Sale of coal production for the March quarter, at half million tons is 113% compared to December on that basis. Sales for the quarter at 600,000 tons, again, up on the quarter for the same reasons. Werris, as you know, is coming to the end of its time. 261 versus 416 and saleable coal production at 410 versus 336 is a function of the fact that we've drawn down our stocks during that period as well. We did suffer a geotechnical slippage during the quarter, which was unfortunate given it's close to the end of this mine, so it is a little bit of a disruption. Not particularly major, and we're just working through what the impact of that will be for next year, the last year of Werris's production life. Saleable coal production of 400,000 tons was 22% above the quarter. Again, this is a weather affected periods versus not comparison. I'm moving down to the table for our equity coal sales and realized pricing. Obviously pricing in the quarter from a thermal perspective, you can see the average for the period, $248. Certainly down on what we've seen in the past and our realized numbers there at 280, yielded a 13%, 13% improvement over the average of the index for the period. I don't wanna make too much of that because we are in a softening coal price environment. As we've always talked about realizations, we'll look better when the coal price index is coming down. The JSM quarterly, obviously for the average for the period, 268 and we've achieved 234, so about 13% down. The volumes are very small, as you can see in the balance of the report in the metallurgical side of the business. From a split perspective, the March quarter, we had high CV sales with proportion of total sales of 68%. The mid CV sales at 26% and metallurgical at 6%. The AUD 400 was pretty good, from a perspective on the Aussie dollar perspective. We see the market continuing to maintain itself at around the current levels that we're at. Overall, the metallurgical coal side does look like it's starting to become a little bit more interesting. While 6% of our sales were in the met coal space, in this period, we do expect that to change in the new year given that semi-soft pricing is starting to look pretty decent relative to the thermal coal price, which seems to have found its floor or in around the $175 to $200 mark, which I think is very positive. I do think that will continue to hold there and firm as the northern winter obviously left, was milder and therefore left stocks on the ground for most of the consumers up in the northern hemisphere, Japan included for that matter. Drawing that down now through their summer, we'll see them obviously confront the challenges of restocking. That restocking opportunity obviously is without the benefit of access to Russian coal for our key markets. I think that will continue to see things firm during the course of this calendar year. As you can see, export volumes through the Port of Newcastle have been pretty mild during this period as well. Met coal prices, whilst they have inflated quite nicely and look pretty good, they have softened since the time of this, the end of the quarter. But we do see, as I say, structurally a very tight market playing out over the balance of this calendar year. I'll move over to the corporate and regulatory. We do get quite a few questions about the buyback. For those people asking, we've put a summary together of the buyback program since its inception. As I mentioned earlier, we've spent about AUD 1 billion in the buyback to date, and we've purchased essentially about 16% of the company's voting shares. We've laid that out for you in terms of what we call tranche one and tranche two, in terms of how we played, and then cut that also on a financial year basis for you. Since we commenced the buyback program, we've spent about between dividends and the buyback program itself in aggregate just under AUD 1.8 billion in terms of returns to shareholders during that period. As I said earlier, we'll be recommencing the buyback program now that the quarter's out. Expect that to recommence on Monday. We are getting quite a few questions on the domestic coal reservation policy as well, so I thought I'd throw in some information there. Our commitment there is 200,000 tons per quarter, essentially for five quarters, commencing from the 1st of April. We are now in the first quarter. In the next quarterly report, we will separate out the tons associated with that and report those separately. As you know, we are constrained to a price of AUD 125 per ton, and the AER has finally come out and given what it believes to be its view on a fair margin, being AUD 18 per ton. Essentially what you do is you claim your AUD 125 or whatever the bid price is that you've agreed with the generator, when you've agreed an arrangement with them. To the extent that your costs are, don't allow you AUD 18 essentially margin in AUD 125, then you apply to the AER for a top-up. As I said, we'll highlight those sales separately in the next quarter. Safeguard Mechanism is really just to place marker here for everybody. I know, it's well reported that the government's going through their consultation processes associated with this. We have two facilities, of course, that have long been reporting under the NGERs program and therefore part of the Safeguard Mechanism. I think it's really just a matter of months now before we can iron out exactly what we think the implications are for the coal mining industry and of course, there's likely to be divergences as well, in terms of treatment for underground and open cut mining. I did skip over the logistics part that's down in the development section of our quarterly there. You will note we have internalized, as you probably saw reported in the paper, it's a small acquisition, but we did internalize the contract of hauling coal from our Tarrawonga, in our Gunnedah operations section. From Tarrawonga down to the Gunnedah CHPP. There's $15 million of capital involved in that. That service was previously provided to us by Bis. It just came to us, it was an opportunity obviously to internalize that. We were suffering from underperformance in that area in the past. Internalize that contract, we took that. In fact, we are seeing what was a manning challenge for Bis is actually improving from what I can tell with the applications for new drivers that have come on now that we own that fleet, and it gives them access to a larger organization with more opportunities within it. Now on to Vickery. As I mentioned before, we've highlighted this notion that we're going to have a low CapEx, small version startup of Vickery, transitioning to a bigger version at some later point when the board has a separate opportunity to consider the full version at a later date. The board has only sanctioned what we call the early mining case The objective of early mining being to access revenues earlier and utilize essentially the existing processing and take-or-pay capacity in the business currently. There's about AUD 150 million that will be devoted to this project. The box cut itself represents about AUD 50 million and about 120 of the 150 is capital relates to the big version of the project. Now, whilst we would think that we could get construction started in June, Werris Creek obviously coincides with the advent of the early mining case being approved. We are looking to transition our people to the extent that they can or want to move over to the early mining version of Vickery, as well as utilize the equipment that we have that will be progressively stood down from Werris. We've allocated some money, that 150, for refurbishments of that and redeployment at the small version of Vickery. Now, Vickery Coal, as we've talked repeatedly about, is a very high-quality coal. It will be slightly better than Maules from the thermal perspective, making it probably the best thermal coal you can buy in the seaborne trade. It also has a very strong semi-soft product, which is better than Maules Creek as well. Total volumes, we think under the small version, will be in the 1.2 million-1.3 million tons per annum, matched to the processing capacity of our Gunnedah CHPP. As I say, usefully, we'll be absorbing take-or-pay both on rail and port that will have spare as a result. We have some spare anyway today, but we will obviously have spare with the advent of the closure of Werris as well. That is usefully going to absorb that until such time that the board chooses to consider the big version of Vickery at some point in some time. I have got some slides here at the back of the document, so we'll go through the highlights of that for everybody as well. On Narrabri Stage 3, look, not a lot to report there. The hearings that go through the judicial review challenging the Land and Environment Court at the state level occurred, we were quite pleased with the passage of that hearing. We feel like we've put our best foot forward in defending the claims against the approval by the IPC of the Vickery Extension project. Oh, sorry, of the Narrabri Underground project. The other aspect of that, of course, that everybody knows is the EPBC reconsideration request that has captured a significant amount of projects at the federal level. We've been encouraging of the, of the minister to include Narrabri Stage 3 as part of the first tranche of projects will be considered under this reconsideration requirement. We look forward to that playing out as soon as we can so that we're able to move on without any disruptions to Stage 3 planning, which we don't at the moment have any issues in that regard, but we simply, we don't want to see this process consume available time along the way. From Winchester South perspective, the only real change there period on period is just that the second exhibition period of the project has closed. We've received all the, all the submissions from public during that period. We now have formally sent our response to each of those submissions. The ball is now in the state government's hands in terms of how they would like to process the responses to each of those submissions put in by the public. Overall, I'll just flip the page. Our guidance, as you know, was revised on the 12th of April, reflecting the challenges that we've seen from a labor perspective and congestion at Maules Creek, principally. That did have a related impact, of course, on sales and unit costs in this period. I'm sure we'll explore that further with the Q&A. I will just go through these slides quickly for everybody just on the small version of Vickery. I won't take too much time since I'm sure people wanna jump into questions. Just for everyone's baseline knowledge, this is a very low CapEx, low startup, low-risk startup to our little Vickery project. It obviously utilizes the Gunnedah CHPP latent processing capacity and also take-or-pay obligations that we have on port and rail. It has the benefit of bringing re-revenue forward, and obviously the prices that we're experiencing have been pretty good, that's gonna make a good contribution. There's the obvious blending benefit that Vickery and Maules Creek, for that matter, and Tarrawonga represent across our business, that certainly plays out nicely in blending with Narrabri coal to just to name one opportunity. We obviously do have the opportunity to spread our overhead costs across a broader base with the closure of Werris, and to redirect and redeploy good people across our business is also, and equipment, is also a known opportunity as well. The geography there in terms of the map, I'm sure everybody understands what's going on there, and I've mentioned each of those key points in both the body of the report and the executive summary in the front. It is a low CapEx startup, and there's very little regret capital in it, which is very positive. 100 of the 150 is there's overhaul of... there's infrastructure associated with water management and site-based facilities. The box cut itself, which is necessary for the broader Vickery Project is about AUD 50 million. As I said earlier, regret capital about AUD 30 million there, of the 150 leaves AUD 120 million well spent in terms of the contribution to the Vickery Project when the broader approval is addressed by the board. We've put some assumptions in there just for you in terms of average coal prices that we've assessed over the first three years. Parameters there, which you'd be well aware of, 9:1 strip ratio, and very high-quality coal, which is very positive for us. There is a timeline there with a depiction of where the initial works will start at the Vickery mine site, and there's just a little bit of history for you. I do note one correction there just for those who are very keen watchers of these things. The small version of Vickery actually was approved in September of 2014, not 2013. My apologies. The IPC didn't do it. It was actually directly approved by the department itself, given that it did not have the requisite number of naysayers to mean that it would go across to the then predecessor of the IPC, which was called the Planning Assessment Commission. All right. Over the page, I'll just give you a quick recap on where Vickery sits from a coal quality perspective. Vickery coal, given it was mined in still living memory, if I can say that, of the market, many of our customers are very keen to see this coal return, which is very positive, and you can see why. I mean, the ash is very low. The energy is very good. It compares favorably to Maules Creek, which currently is the high water mark from a thermal coal perspective, but Vickery will be superior to that. As you can see, Tarrawonga is great, but it's small in terms of volumes. You can see there's an obvious blending benefit for us across our business with the Narrabri coal. With Werris actually falling out of our portfolio in a year's time, our portfolio of thermal coal will be 6,000+ during the course of a cycle. What that means generally is hopefully we can stop talking about realizations up and down because in a steady market we'll be a plus, a gC NEWC plus business rather than. That is in a steady state market. As we've noted, we've benefited from a falling coal price from a realization perspective. I know everybody understands this, but I thought I'd just reiterate it just to be sure. Let's just focus on what the board has done here. They have approved just the small version of this and what's relatively modest capital to take advantage of what's otherwise going to be, you know, in the absence of a small version of Vickery stepping forward, increased costs in our business as a result of take-or-pay, latent take-or-pay, obviously overheads over a smaller base in our Gunnedah operations as well. There is quite a bit of a benefit to us in bringing this forward and absorbing these costs which would otherwise be in our business for years to come. That, of course, opens up the opportunity for the board to sanction the bigger version when they see fit. From a management preparation perspective, we think we'll bring that to the board, the full version that is, within this calendar year, so later in this calendar year. Of course, the board, what that does, just for everyone's education, given that we're unable to secure fixed prices for any of the construction packages for Vickery, what's necessary here is an approval that our project delivery team can then take to the market and tender in order to get an appropriate assessment of what we believe to be the full construction of the Vickery project. Given the tightness of the market and the inflation's hand, as you well understand, nobody's doing anything on a fixed price basis these days. We've certainly... The feedback from the market has been with an approval in hand, the various suppliers and constructors will know we're serious. They'll do the necessary work to put proper prices on the table, and that will give the board an opportunity to assess what the full construction costs of Vickery will be. That's one of the important pieces of the puzzle for a future review of the bigger version of Vickery. I've tried to scoot through that relatively quickly. I think, operator, that'll do me for the moment, and we'll open the lines up to a bit of Q&A, if that's all right. Thank you so much, Paul. For those of you who are wanting to ask a question, please press star one on your phone now. You will be placed in a queue, and I'll introduce you in turn. Our first question, thank you, Paul, is from Rahul Anand from Morgan Stanley. Go ahead, please. Hi, Paul and team. Thanks for the opportunity. Paul, I just wanted to talk about Maules Creek first up. Obviously, you highlighted some of the key drivers for the performance there. I wanted to understand what's changed since the time of the site visit. I mean, was this not part of the planning? Has the labor issue led to perhaps the over congestion in the pit? Looking forward at the asset specifically, you talked about the, you know, interchange between autonomy and manned trucks. Does this mean that we'll have a bit of a volatile performance going forward as well? I'll come back with my second. Thanks. Yeah. Thanks, Rahul. Yeah, thanks. I'll try and work my way through that. I'm joined here, of course, by Kevin and Ian as well. They can chime in on any of these questions, dimensions of the questions that I haven't covered off. Let me just start with the labor side of things. Look, labor, as you would have seen, and I'm sure they would have heard, when the site visit was taking place, but labor continues to be a challenge. It's not just labor in total volume, I must say, Rahul, just to get into a little bit of detail, it's not just total volume of people, which is a challenge itself. We are making headway in that regard, bringing people on, but there's a lead time associated with getting those people on the ground and trained up and working efficiently. There is a cost associated with that as well, as I'm sure everybody understands. We're not talking about three and four type percent. It's inflation at a national level plus in terms of what we've got to do in order to find the people to come and work for us. Now, the government seems to be making all the right sounds, the federal government that is, in terms of opening the doors a little bit more fulsomely for labor to come through. We are working through that as well from importing skilled labor perspective. So that is slow, but it is yielding some results. The other dimension of labor, which is quite frustrating, is, you know, absenteeism is causing us a bit of a headache along the way of all our operations. I'm not quite sure, quite frankly, what's going on there, but I do. It was better before COVID, it's worse since COVID. I don't know if people just feel like they can take, you know, their tickle even more. But there's certainly an absenteeism issue that we're seeing. I know the rest of the industry is suffering the same because I talk a lot with our peers about this. So that is playing out. In terms of the operational constraints for AHS, I'll speak to that. I'm sure Ian will chip in here. Look, at a high level, we have made a decision to find some more time for the AHS to play out. We feel like we're at the sharp end of being able to transition to a more fulsome deployment of AHS. For those who went to site, they would have seen one fleet running around. We have actually started a second fleet running around as well. That is we are trialing that, but that is a good step. We also have started limited, I mean, very limited, manned and unmanned interaction. That is a very positive step. We can't keep obviously, persevering with this trial forever. Even though we have found more time, we think it's about 12 months to give Hitachi, you know, a final opportunity to move this over to a commercialized proposition. In the meantime, it means keeping these autonomous fleets separate from the manned. There is a productivity penalty that comes from doing that. The convergence of that obviously is a time when we're transitioning from out-of-pit dump reliance to almost entirely in-pit dumping. Keeping those fleets separate when you're going to be entirely dumping within the pit obviously is something we've got to work our way through when we think, again, there's a productivity cost associated with that. That's the features that we've referenced in our announcement on the twelfth, and that's a little bit more color for you in terms of what's going on there. Ian. I think maybe only to add to that, Rahul, you asked a question about the southwest corner. That is still a priority that we need to get done. As Paul said, obviously we're trying to keep or we have to keep the fleet segregated, which has meant then that that southwest corner, as we I think we explained to you, becomes the next large volume of pit material, to the extent it probably fits nearly two years worth of capacity in there once it's established. Whilst we've been pushing that down and as we've had some challenges in that area, it's tight back to the congestion point Paul's made out and the same geology and a few other aspects there that made that more complex. The other areas that have been available, in pit have been smaller, to the point Paul made with the remaining ex-pit still being tied up with AHS. Sure. Okay. Thanks for that. Look, my second question perhaps, one for Kevin. Kevin, obviously, net cash position pretty strong here, AUD 2.7 billion. Just a quick recap perhaps would be helpful in terms of how are you gonna be thinking about buyback yield and then also potentially smaller Vickery followed by bigger Vickery. I mean, are you gonna start putting some capital to the side for these things and start planning for the future? Thanks, Rahul. I think the AUD 2.7 billion in net cash, there's about, there's probably about a tax bill there from the first half and a tax bill from the quarter you gotta take account of. If you look at the net profit, I think the broker consensus view is falling somewhere between AUD 2.5 billion and AUD 3 billion for the full year. If you take 50% of that's about the capital that we're looking to allocate to shareholders in the form of dividends and share buybacks. The dividend will be decided by the board in August. The buyback, we'll commence that again on Monday, and we'll execute that, taking that towards meeting that metric of about 30% of the NPAT for the year. On the capital front, I think as Paul's outlined, the investment in Vickery over the next year and a half, or year and a half is not substantial. In fact it's really a sensible extension for employees from Werris Creek, and it uses up capacity we've got at the CHPP and across the road and some port take-or-pay. When I look at the economics on that, I'm very encouraged by that. You asked about do we set money aside for big Vickery. I think I'll deal with that in due course when the board makes that decision, when that decision comes to the board. At the moment, I'd say the balance sheet's in pretty good health. We're compliant with the capital allocation framework we've put out to market. Clearly, if we have no further need for that capital at a future point in time, we'll make a decision about what best to do with it. That's where we sit at the moment. Sure. Understood. Thanks for that color. I'll pass it on. Thank you. Thank you. Our next question is from Jim at Barrenjoey. Go ahead please, Jim. In your commentary on the market, you said lower production is supporting the floor for the gC NEWC price at around $175 to $200. That's obviously considerably higher than consensus for long-term prices. What's the key driver behind that high floor price? Is that where you see cost curve support right now? Yeah, thanks for that question, Jim. I don't think I made that leap of joining those two observations, but now that you've raised it, less volume in the market certainly does keep prices healthy. I think the challenge at the moment in the market is really just that there's a little bit more coal and gas and oil laying around in stockpiles after a mild winter. That we can see those capacities have been drawn down and consumed, and that just takes a little bit of time. Of course, summer is coming for the northern hemisphere, so that will continue to draw it down. As I mentioned earlier, being able to restock is in a vastly different world now than it was this time last year. Without the access to Russian oil, gas and coal, you are going to see prices remaining high across all these areas. That's not to say it's not without volatility, but I think directionally, supply, demand in the coal side, in particular in the high CV end of the coal pool of global seaborne coal is going to be very constrained. On the other side, you're saying there, well. Sorry, I'll just add some further comments. Our friends in Japan, of course, are now living in a world where they've, they don't have access to Russian coal. They stopped taking it at the end of March. Whilst they do have the comfort of having some stock on the ground at the moment, their focus is turning to how do I resupply? Directionally, our bigger customers are starting to look for greater duration in their contracts with us. We are working through that with them, and we are interested in signing up longer term deals with them. I know in the past we've talked a little bit about, from 1 to 2 to 3-year type duration deals, that we've done. We now have the prospect of some customers asking us for longer, so even 7 to 10 years in duration. That's telling us that there's a high degree of anxiety in the market of being able to resupply. The other part of your question was really just about the longer-term price, and I think that's a good thing to focus on here. Long-term prices, I'm pretty sure, everyone can conclude bear no resemblance to the current market. In a constrained world where there's essentially limited investment in new capacity, none of those price curves that you've seen from any of the commentators, I think are reflective of that new supply/demand constraint going forward. There's underinvestment in coal, of course, underinvestment in gas and oil, and all these curves are gonna have to be reassessed. You are seeing that from the various commentators come along, so they are actually starting to revise this upwards. Where that lands, I think that's gonna take a little bit of time for these commentators to, you know, the Woodmacs and others to land where they feel comfortable. I have seen some numbers already from credible commentators in the $130 to $150 range. I think that's, to me, that's actually more reflective of where the underlying tightness of the market will be over time. All right. Thank you. Just on Narrabri Stage 3, you've mentioned it is now being reviewed by the Federal Environment Minister after requests from the Environment Council of Central Queensland. Why was Narrabri Stage 3 picked up and not Vickery? What does that review actually involve? How long do you expect it to take, and what's the worst case scenario that can come out of that? Figure was already approved. That was, we didn't have to worry about that. It did capture, now at Stage 3, I think, with 19 other projects that got caught up there. We were encouraging, as I mentioned earlier, of the Minister to include Stage 3 in the first tranche of projects to be reconsidered. The interaction we've had with the central Minister's Department, looks like that's moving ahead, which is good. I can't predict exactly what the timeline would take in order for them to work their way through this because this is new, being reconsidered in this way. We know the government is minded to try and provide some clarity to everybody here pretty quickly, because there's a lot of projects here, not just ours, wrapped up, and, you know, they can't essentially allow this to be a log jam for the system. We do have plenty of time up our sleeve, so it's not causing us any particular concerns from a Stage Three perspective. To the extent that we are getting to a timeline where we think it would be concerning, we'll have more to say about that if that occurred. All right. Thank you. Thank you. Our next question is from Lachlan Shaw at UBS. Go ahead, please, Lachlan. Morning, team. Thanks for the updates. Just a couple from my side. Firstly, just on, I guess, weather and production, productivity and also labor, again, that's been a real headwind for industry recently. Weather forecasts are projected to improve as La Niña eases, and we're starting to see some pockets of labor shortages easing. Could you just comment on how you might expect that those headwinds to fade and improve operational performance in the business going forward on a 12, 18-month view, please? Yeah. Yeah. Thanks, Lachie. Look, from our perspective, it depends on who you wanna point to it for your data points. I mean, they're saying that we're potentially moving back into a drier phase. I don't know. In March, it didn't feel like that. In March, we had quite a bit of a downpour which did cause us a few hiccups. Nowhere near as bad as obviously in the first six months of the year, nowhere near as bad. We do have the legacy of having a lot of water in our pits, and that is causing us ongoing management constraints in that sense. If it moves back into a drier phase, we'll consume that water relatively quickly. Having been through a drier period, quite a significant drought in 18, 19, which broke in early 20, we have made considerable progress in drought-proofing our operations. We feel a whole lot better moving into a drier phase than we were in previous periods. That is an issue. Labor, again, we are seeing progress on the labor side of things, so we are making headway. As I mentioned earlier, there's just a lead time here. When you get the people, you've got to get them in and trained and up to speed, and that does take a little bit of time. The areas where we're making headway, just to give you a little bit more color, we are flying in, flying out people now, which is not our preferred model, but you've got to do what you've got to do in a tight market. We're doing that. We are overseas, as I mentioned briefly, before, looking to bring trades and experienced miners in. We have a pipeline there of, I think the last time I looked, some 40-odd, good-looking candidates, across a range of disciplines, which is very positive for us. We are making headway. It's just there's a lead time. Like I said, the other issue we had been experiencing, have been, and I know it's right across the industry, is actually just people are on the books turning up. That, that is from a manager, it takes a lot of time to be managing excessive sick leave taking, you know, and, you know, as you know, it's pretty easy to get a medical certificate these days on, you know, online. It's, it's causing us ongoing issues. I know this is an industry-wide issue. It's not just a Whitehaven one. Yeah. No, no. Makes sense. Thank you. Second one from me. Just in terms of Queensland, Winchester South, and obviously there's, you know, some industry M&A consolidation going on, Blackwater, Daunia, and others. Can you just maybe outline how you're thinking about, you know, build in Queensland with the royalty, et cetera, versus buy? You know, what are some of the factors that you think might tilt which, you know, where you prefer to be? 'Cause obviously if you buy in the short term, tons in the short term versus build in processes that seem to be getting longer and longer to get approval. Just interested in how you're thinking about that decision. Thank you. Thanks, Lachie. I think you've highlighted all the difficult aspects of that in your summary. It's challenging. I mean, we obviously like Winchester South. We're working hard on that. We think we're actually getting to the sharp end of the state-based approval period. So that feels quite good, but we've just got to push it across the line. We've got to undertake the federal level. As you brightly pointed out, these timelines seem to be elongating as time goes by. You know, we didn't expect to have two exhibition periods for Winchester South. We'd seen others have it, so we directionally we knew it was a risk, but we were hoping we didn't have to go through that. We have. We're on the other side of it now. Let's move forward. The question on buy versus build, I think is a good one. I think you've just got to be cautious on any of these acquisitions opportunities that go around. Firstly, they better fit within your strategic crosshairs, first and foremost, because there's lots of people who'll sell you something, you know, and, you know, it may not fit your strategic parameters. We're very disciplined in making sure that anything we look at fits there. It must compete against not just the opportunity to build a project, because the building of a project subject to approvals is something we can do at a time of our choosing, whereas M&A occurs as and when the vendor wants to do something. Both of those things also need to be considered in the light of the buyback and, you know, and our shares, we still believe being cheap on a relative valuation basis. That seems like a sensible use of funds as well that needs to be considered in any of that dynamic you've just outlined. As I say, on Monday, we'll start buying our shares again. Great. Thank you. Thank you. Our next question is from Peter Williams at Shaw and Partners. Go ahead please, Peter. Yeah. Thanks for your update, Jane. Just a couple of quick ones. What's the expected ratio of met versus thermal coal you're expecting from the Vickery box cut, and the larger projects moving forward? Yeah, that's, I'm glad that you divide that into two pieces. Thanks, Peter. Look, in the early days, we're not expecting much in the way of semi-soft. We may spit out a little bit just to give a couple of customers a taste test. By and large, we're assuming that all goes into the thermal market, very good quality as it is, and blended across our business. Which is very good. We will make sure that new customers have an opportunity to sample the thermal coal as well. Overall, for the project as a whole, you can do 60% at Vickery, potentially. I say potentially. Technically, you can. Potentially, because it depends on what the market wants. It's like Maules Creek. You obviously have the flexibility of being able to move that coal from one to the other, and, quite seamlessly. Vickery will have the stronger caking properties, but it will also have the benefit of being able to move from one side to the other, depending on the spread between those two prices. It can technically go up to 60%. Yeah. Great. No, thanks. Other question I had, this wasn't mentioned in the report, but with the net cash position being so high, where's the company at with refinancing the current and rolling loan? Which I think matures in July this year. In the middle of that process now. It still hasn't been finalized, I take it? No, no. Just in the middle of that process now. All right. Thanks, Flynn. Yeah. As you point out, the cash position, it's not refinancing a debt position, it's refinancing a facility, would be the way I would say it. Yeah. With no expectations to redraw. It's just in the process of being done. We finalize that in the next few months. Yeah. Right. Thanks. Thank you. Our next question is from Chen Jiang from BofA. Go ahead please, Chen. Good morning, Paul. A few questions from me, please. Firstly, just on Vickery. I'm just wondering what's the scenario or your backup plan if the full scale cannot go ahead. I have a few after this. Thank you. Yeah. Thanks, Chen. Yeah, look, I'm not quite sure what the scenario would be that you're entertaining there that the bigger version doesn't go ahead. From what all of what we see, it looks very good to us. It's gonna be a good benefit to our business more generally. The market's definitely short, I think there's no concerns on our part of selling the coal. It would really just be the economics of it, we're well down the path of looking at that already. I suppose, as I mentioned earlier, the key thing for me is just that we are in an inflationary environment. Although some suppliers are actually telling us that that's starting to moderate. We're just not seeing that yet. When we do bring our, the bigger version to the board, it will be basically with two checkpoints. It will be the board to look at it and bless it from a project perspective, subject to a contingency. That contingency would be inflationary impacts on CapEx. Even though the project itself, we would include contingency risk in it anyway, in the underlying capital assessment, we do feel it'd be prudent because of the market we're in, to have a separate checkpoint for a margin on top of that, so that the board can consider that again. As I mentioned earlier, because of the market the way it is, unless you've actually got an approval from your board in hand, people aren't devoting the resources in a tight market to actually do the work to put in proper estimates of what it would be. Say for instance, what it would cost to build, say, the prep plant or to do the bulk earthworks contract or to build the rail corridor infrastructure. People are wanting to see a board-backed commitment before they start deploying the quite extensive investments on their part to actually build their estimates up to something they'd stand behind. In terms of. I think it's really just a matter of time before the board has that type of quality information in front of it before they would, they would feel comfortable about pushing the button. If you said by the end of this calendar year, we'd put that in front of our board, it'd probably take six months to go through the tendering process to get definitive numbers. You're talking about sometime next year, about this time next year before you actually start, we can put to the board definitive numbers that we could rely on. Capital. I'm referring to definitive capital numbers that we could rely on. The OpEx side of things, I think we understand pretty well. Right. Thanks for that, Paul. Seems like you are very confident this project, you know, will go ahead as pending for approval from the board is the only obstacle you are facing? Yeah. Look, Chen, the underlying... I'll just make a couple of comments. The underlying physical demand in the market looks very good to us. Even though it comes back to the point that one of the previous questions was focusing on just about price decks. We are keen to see a few more of the analysts who produce pricing decks continue to do their work because we see, we do see that long-term coal price rising over time, and we are seeing more commentators give that further weight. I think the benefit of the time that we have in front of us just to define the CapEx, we'll see those people start to feel more comfortable about long-term prices being on the north side of $100 rather than sort of, you know, much lower than that in the past. Really, that's just a function of physical constraints in the supply side. I mean, there's very little that can come on from a supply perspective, and certainly nothing that looks like Vickery, nothing that looks like that at 6,400. We've got customers who are building new power stations, so that needs our coal. We feel very good about that side of things. That's not to say the board doesn't have complete discretion to approve or not. That absolutely is at the board's discretion. In terms of the underlying case and the broader benefit opportunity to our business overall, I think we shouldn't lose sight of that because having Vickery Coal at our disposal for blending purposes is another big piece of where the value equation comes from that investment. Great. Good to hear. Thanks for that, Paul. Another question, just a follow-up, on Maules Creek, please. Congestion from limited damping, managing your manned and autonomous fleet. Hopefully, this is a one-off, one-quarter disruption. Just wondering, are you comfortable with the current operation or manpower at Maules Creek? What has been done that, you know, to prevent this happening again? Thank you. Yeah. Yeah. Thanks, Chen. Look, I just want to go back over some of the comments I made a little bit earlier, just so perhaps I need to be a little bit clearer there. I was asked before a little bit about IHS and if something changed. The thing that's changed is we've found a way to give the IHS system another 12 months to try and push it over the edge and commercialize the system. That comes with, as I said, a productivity penalty that we're accepting of at the moment, given that we think we're close to the end of this journey. There is a physical timeline that we really couldn't persevere past. That is basically in 12 months' time. At the very outset, 18, but 12 months' time is where we're shooting for. That is keeping those fleets separate does come at a cost. There is a production outcome penalty that you have to pay there. Now, it doesn't look, and I know where your question is going. I'm sure everybody else is trying to angle for how does next year look like. It's nowhere near as what it is this year because we've suffered obviously in the first half of being well behind the eight ball with the bad weather. The penalty from keeping those fleets separate for another 12 months isn't anywhere near what we've suffered in this year, of course. We will have to take that into consideration when we were drawing the budget up and our guidance for next year. Great. Thank you very much, Paul. That's it from me. Thank you. I'll pass down. Thank you. Our next question is from Caleb at Goldman Sachs. Go ahead, please, Caleb. Good morning, Paul and Kevin. It's actually Paul Young here. Thanks for taking the questions. Paul, first question is on Narrabri. You're just weeks away now from seeing a step change in production from mining in the shallow southern ground. Can you maybe just throw some numbers out there or just remind us of what the production and unit cost benefits you expect from switching across to the southern panels? Yeah. Thanks, Paul. Yeah, look, weeks away, it's gonna be... Well, we'd like to see it as only weeks away, but the end of May anyway is not that far away. There is a lot of anticipation on the outside, no doubt, about moving into shallower ground and more benign mining conditions for sure. So there's a number of different factors that go in there, but, you know, operating the shallow ground, you know, a less intensive roof bolting pattern as we've talked about many times with you about operating the deeper ground versus the shallow. The productivity benefits from going, from operating in an area where we've had, you know, less weight in the roof. You're certainly going to see a big change. We've estimated that the aspects. Well, if you reflect back on the equally shallow panels in the northern side of our mine, and you go and have a look at the costs associated with that, and we'll have to take inflation into account, of course. If you look at that and where we're expecting to go based on our current run rate, we're expecting about 15 dollars Aussie. That's where we're that's what we're thinking the benefit is. It's quite significant. But that, of course, means that you're pushing at the run rates that we achieved in those equivalently shallow northern panels. If you don't do those volumes, of course, then you've got less tons to spread your fixed costs over. That's where we think it goes at an equivalent run rate in those panels. Thanks, Paul. That's helpful to hear those numbers again. The second question is on Vickery. A bit to work through there, so thanks for all the information. Just on a question on unit costs of the starter project. I presume you close Werris Creek, and you don't wash the coal there, so a bit of a benefit there. You're diluting the fixed costs, as you point out, at Gunnedah. Is there any sort of sense of what the unit costs will be across... Maybe the best way of looking at it is across an average of Gunnedah and Vickery? We haven't, we haven't given any guidance on that, Paul. Obviously the small version of Vickery with its CapEx-light footprint is obviously not the best manifestation of what we believe Vickery to be, of course. You know, because part of the benefit of the bigger Vickery will be using a modern prep plant without road haulage down the road and using a train loop straight into the project. There's lots of savings there in that regard. It, it's certainly going to be cash flow positive, putting the CapEx aside, of course, and a large portion of the CapEx I mentioned is related to the bigger project. We think it's a really good way of using up that take or pay, using up that process and capacity of the plant, keeping the people, which is really important given we've been talking about labor shortages and so on, and using equipment that we've got in the business already to be redeployed. Yeah, no, absolutely, Paul. It's super sensible. No doubt about it. Just on that moving equipment, when you move across from Werris Creek, you know, what's the dollar amount or replacement CapEx on that equipment coming across? Just trying to get a sense of what the, you know, savings could be, with the larger projects on mining fleet and excavators, et cetera. Paul, I wouldn't say that the dollars are huge. I mean, it's here but the dollars wouldn't be huge. I mean, we're gonna throw some money at them, give them a birthday. The benefit is not having to buy new because we've got it already. The birthday is cheaper than buying a new one. Of course, not all that gear that we've got at Werris is going to be calibrated for the bigger version anyway. To be able to give it a birthday and use it without any further CapEx is very positive for us. Yep. No, absolutely. When you assess a larger project, Paul, and you put the, you know, I guess, the economic outcomes to the board, I know you mentioned, you know, I guess the, some of the assumptions you might be using and one of those discussion points was around long run price and where that's heading. At this point, like what long run price, you know, would you use when you, when you look at that project when? I guess from that perspective, you know, does it need an IRR sort of hurdle target, as a minimum to get approved? Yeah, well, it surely should. There's no doubt we'd have to have an IRR minimum hurdle. Paul, as you know, we're fully equity funded today. The hurdle that any project that's funded on that basis is significant, and this will be. It'll have to cross that hurdle as well. I think for sure, and I don't wanna be, I don't want it to be, I'll be damned if I do, damned if I don't giving numbers here on long-term coal prices. We think for sure it's well over AUD 100, and we'll wait. There's work going on as we speak which will pan out over the next quarter or two, that we'll be able to point to objective work from other people that underpin that, you know, commentators. If we come out with our own bespoke numbers, of course everyone can say, "Oh, you're just self-interested." We would rather rely on external data points that we can point to to support our own views, which we do have views, but I'd rather rely on arm's length sources for that data. I think it's well north of $100. I can't imagine a world where it says $100 long term, you know, given that there's no supply and the demand is very good. I mean, it's with new power stations come on in very mature jurisdictions, let alone emerging. The issue is, you know, the supply constraints, not the demand. Yeah. Point taken. Paul, can I ask a fourth question? I know you would say this, it constitutes a meeting, so I'll just get that out there ahead of you. In that case. On Vickery and when you assess that, Will Vickery actually compete with potential M&A or are they, you know, are they completely separate decisions? Sorry, which one? Say again. Yeah. Will Vickery, the larger project, when you put that to the board, will it compete for capital with... Yeah. -potential acquisitions or like, is it completely separate decision? All of them have to compete, yeah, on the same page. The Vickery obviously is something we can do without choosing, as I mentioned earlier. M&A happens when others wanna sell. The buyback's relevant, obviously has to be in that dynamic, in that discussion. It will have to compete. As I say, I'm dropping a few breadcrumbs here in terms of how we think about Vickery, 'cause Vickery is not just a standalone investment itself, it's what we can do with that coal across our business. I'm sure, I'm sure you've seen us talk about that, the benefits of blending across the business. I mean, if you take even the $5,500 spread today, you know, if you can drag some coal out of that market into a superior market, the margin difference in that spread is enormous. Vickery at $64 gives you a lot of blending horsepower. Yep. No, I've seen that slide. It looks pretty compelling as well. That's it from me, Paul. Thanks very much. Thank you, Paul. We have one last question. That is from Chen at BofA. Go ahead please, Chen, with your last question. Sure. Thank you. Just a follow-up question, please, to Kevin on the pace of buyback. Thanks for providing the granularity of your buyback in the quarterly. By looking at the total number of shares bought back March quarter, it's roughly speaking like 60% less versus the December quarter, from the total number of shares bought back perspective. I'm just wondering, Kevin, are you happy with the buyback pace in March quarter or do you think, you know, December quarter is a good indicator going forward? Thank you. I think you should be able to do your math based on what we've set out on capital allocation, Jen. The December quarter was, we received approval from the shareholders in the October meeting. We pushed through that. We came into the March quarter. Coal prices were softening over January and February. We naturally aligned that to where we thought the number might finish for NPAT for fiscal year 2023. We know roughly where we're gonna finish for fiscal year 2023, so we know how to close this thing out. Yeah. I think it's just a product of the difference in the first half versus second half- Yeah. ... in that duration. Yeah. You can see it was much higher in the first half and still very good in the second, but less. Yep. All right. Okay, thank you. Thanks, Kevin. Thanks, Paul. Yeah, that's it from me. Thank you. Thank you. Thank you, Paul. We don't have any further questions. Thank you. Yep. Thank you very much everybody once again for taking the time and dialing in. I look forward to catching up with you all in due course. Any questions, you know where to find us. Thank you very much. Thanks, operator. Thank you, Paul. That does conclude our conference for today. Thank you for participating. You may now disconnect.