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Stanmore Resources Strengthens Balance Sheet and Increases Production After Major Acquisition

Australian coal producer Stanmore Resources reports strong financial performance in 2023:

  • Reduced debt: Successfully reduced debt associated with its mid-2022 acquisition of two BHP Mitsui Coal (BMC) metallurgical coal mines by 48% to $240 million by February 2024.
  • Strong cash position: Held $446 million in cash at the end of 2023 and maintained a net cash position of $126 million after paying a special dividend to shareholders.
  • Profit: Achieved after-tax net profit of $472 million, down from $727 million in 2022, despite higher revenue of $2.8 billion compared to $2.7 billion in 2022.
  • Increased production: Achieved full-year saleable production of 13.2 million tonnes (mt), a 43.5% increase compared to 2022, driven by the acquisition of BMC mines.
  • Revised production guidance: Increased 2024 saleable production guidance to 12.8-13.6 mt due to the inclusion of the Millennium complex.

Key Points:

  • Stanmore’s strong financial performance allowed them to significantly reduce debt and improve their balance sheet.
  • The acquisition of BMC mines in 2022 significantly increased production capacity and contributed to higher revenue.
  • Despite a decrease in profit compared to the previous year, Stanmore maintained profitability and rewarded shareholders with dividends.
  • Stanmore is investing in expanding the South Walker Creek mine to further increase production capacity.
  • The company primarily exports metallurgical coal to Northeast Asia (50%), India (20%), Europe (21%), Southeast Asia (5%), and other regions (4%).

Additional Details:

  • The company paid $486 million in coal royalties to the Queensland government in 2023.
  • Average sales price for met coal was $214/t in 2023, down from $290/t in 2022.
  • FOB cash costs were $86/t in 2023, below guidance and compared to $83/t in 2022.
  • Stanmore expects FOB cash costs to be $99-104/t in 2024.
  • The company is expanding the South Walker Creek mine to increase run-of-mine production to 9.4 mt/year by mid-2024 and saleable production to 7.0 mt/year by early 2025.

Overall, Stanmore Resources is in a strong financial position with a focus on growth and shareholder value creation. The company is actively expanding its production capacity and remains a key player in the Australian metallurgical coal industry.

Source: TheCoalTrader, AI generated