Metro Mining (MMI) Q3 2024 TU earnings summary

Executive summary

• Achieved record quarterly production and shipments of 2.13 million WMT, with a monthly record of 780,000 tons in September, supporting the 7 million tonne expansion ramp-up plan.

• Expansion ramp-up completed, with all major flow sheet components operating above budgeted rates, positioning for 7 million WMT per annum in 2025.

• Site cash costs reduced by 26%, significantly improving margins and validating the expansion strategy.

• Strong demand from the alumina sector, especially in China, and tight bauxite supply are driving favorable market conditions.

• Strong operational cash flow of $29.3 million and $16.9 million cash at quarter end, with $11.7 million debt repaid in Q3 and $28.3 million YTD.

Financial highlights

• Site unit costs reduced by 26% to $23/WMT compared to Q2 2024, driving a $14/WMT EBITDA margin for the quarter.

• Operating cash flow for the quarter was nearly AUD 30 million, enabling a junior debt repayment of AUD 12 million.

• Net cash from operations was $29.3 million for the quarter; cash and trade receivables totaled $34 million at period end.

• Cash balance at the end of September stood just under AUD 17 million.

• No on-balance sheet tax losses recognized, but AUD 250 million in off-balance sheet carry forward tax losses exist.

Outlook and guidance

• On track to meet the lower end of full-year shipment guidance of 6.0 to 6.4 million WMT, weather dependent.

• Quarterly contract prices expected to increase further in Q4 2024, with strong market demand and tightness in the bauxite and alumina value chain.

• Anticipates achieving or exceeding 7 million WMT per annum run-rate in 2025.

• Cash burn during the wet season is projected at AUD 15-20 million.

• Cash tax payments likely to begin in the second half of 2027, possibly earlier if price environment remains strong.