Stanmore Coal Reports 27% Production Surge and Secures Debt Refinancing to Boost Financial Stability

Production Recovery Accelerates After Weather-Related Setbacks

Stanmore Coal's June 2026 quarter operational results showed a strong recovery from first-quarter disruptions, with ROM coal mined rising to 5.1 million tonnes, a 27% increase from 4.0 million tonnes in March 2026. This improvement was driven by proactive mine sequencing management aimed at maximizing output following significant wet weather impacts earlier in the year. Year-to-date ROM production of 9.1 million tonnes remained consistent with the prior year's 9.2 million tonnes, reflecting the frontloading of weather delays into Q1.

Saleable production reached 3.3 million tonnes in Q2 2026, up 3% from 3.2 million tonnes in Q1 2026. Year-to-date saleable output of 6.5 million tonnes is tracking well within the company’s reaffirmed full-year guidance, indicating confidence in meeting annual targets. Closing ROM coal stockpiles increased 67% quarter-on-quarter to 1.2 million tonnes, a strategic build to mitigate risks to second-half 2026 saleable production and provide a buffer against further weather disruptions. Total coal sales for the quarter were 3.4 million tonnes, with an average realized sales price of US$154 per tonne, slightly higher than US$152 per tonne in the previous quarter.

Favorable Market Conditions Bolster PCI Coal Pricing

During Q2 2026, market conditions favored Stanmore’s product mix, especially PCI coal, which constitutes the majority of sales. Steelmakers' focus on cost efficiency combined with tight seaborne supply supported improved Australian PCI pricing relative to premium hard coking coal. This pricing strength benefits Stanmore due to its product orientation toward PCI coal.

The average realized sales price rose to US$154 per tonne in Q2 2026 from US$152 per tonne in Q1 2026 and improved significantly from US$132 per tonne in the prior-year quarter. CEO Marcelo Matos highlighted that ongoing cost-efficiency priorities among steelmakers and supply constraints contributed to this pricing environment. If sustained into the second half of 2026, this could enhance cash flow and provide greater capital allocation flexibility amid operational stability.

Debt Refinancing Cuts Costs and Removes Scheduled Amortisation

Following quarter-end on 30 June 2026, Stanmore Coal secured binding commitments to refinance its senior corporate debt, marking a key capital management achievement. The term loan was increased to US$250 million with a bullet repayment structure, eliminating US$70 million per annum of scheduled amortisation under the previous arrangement. Funding costs declined by 1.00%, reducing cash interest expenses on the refinanced facility.

Additionally, the US$200 million revolving credit facility’s maturity was extended, enhancing liquidity certainty during operational recovery. The refinancing was oversubscribed, reflecting lender confidence in Stanmore’s asset quality and management’s performance. This strong demand signals positive market sentiment regarding the company’s recovery and cash flow outlook after first-quarter weather impacts.

Safety Performance Remains Strong Amid Production Increase

Stanmore Coal maintained excellent safety standards in Q2 2026, recording no serious accidents. The rolling 12-month Serious Accident Frequency Rate stood at 0.51 as of 30 June 2026, well below the industry average of 0.84 for surface mines per Resources Safety and Health Queensland. This achievement is notable given the increased operational intensity from production ramp-up and accelerated stripping at South Walker Creek.

The company completed integration of Critical Control Management into its Principal Hazard Management Plans by 1 June 2026, complying with updated Queensland legislation. Management emphasized that strong safety outcomes were achieved alongside the 27% production increase, demonstrating parallel progress in operational efficiency and safety culture.

South Walker Creek Prepares for Second-Half Production Growth

South Walker Creek, a key asset, maintained steady ROM and saleable production despite scheduled annual shutdowns of the coal handling and preparation plant (CHPP) and one dragline, both completed on time and budget. Stripping and pit preparation activities advanced ahead of schedule to support a planned second-half production increase. Enhanced truck and shovel fleet performance resulted in higher waste movement, with the strip ratio rising to 9.1 from 8.7 in the prior quarter, reflecting intensified stripping relative to ore extraction.

Management affirmed that South Walker Creek is well positioned for the remainder of 2026, with disciplined operations and proactive maintenance underpinning sustained production rates. CEO Marcelo Matos highlighted the accelerated stripping and pit preparation as part of the strategy to ensure a strong second half, supported by 1.2 million tonnes of closing ROM stockpiles providing operational flexibility.

Isaac Downs Extension Advances with EIS Submission

In June 2026, Stanmore submitted the Environmental Impact Statement (EIS) for the Isaac Downs Extension to the Department of Environment, Tourism and Science and Innovation, progressing the project's approval process as planned. The 3D seismic program at Isaac Downs Extension began during the quarter and was over halfway complete by quarter-end, on track for late July 2026 completion. This seismic data is vital for mine planning and resource definition to support development studies and permitting.

Infrastructure planning and design continue alongside approvals. The company has not disclosed timelines for EIS assessment or approval decisions. Exploration expenditure across Stanmore’s portfolio, including Isaac Downs Extension, totaled approximately A$5.5 million in Q2, supporting ongoing resource definition and extension. Advancing this project is a strategic priority to extend reserves and future production capacity beyond current operations.

Eagle Downs Development Studies Target Q1 2027 Completion

Eagle Downs, an underground coal mining development project, is accelerating development studies with completion targeted for Q1 2027. Surface infrastructure designs were finalized during the quarter, while underground study work is set to resume in July 2026, indicating a temporary deferral pending surface design completion. Environmental approvals progressed with a minor amendment regarding underground panel alignment finalized during the quarter, advancing the regulatory pathway.

Ecological surveys for infrastructure linking Eagle Downs to existing facilities have been completed to assess environmental impacts and permitting needs. The company has not disclosed capital cost estimates, production targets, or timelines for production decisions. The Q1 2027 study completion suggests a potential production decision in late 2027 or early 2028, depending on market and financial conditions.

Liquidity Strengthened by Cash Flow and Refinancing

Stanmore Coal’s financial position improved through operational recovery and refinancing in Q2 2026. Total cash as of 30 June 2026 was US$138 million, with net debt at US$72 million and total liquidity of US$408 million, including undrawn debt capacity. This liquidity supports capital expenditure, debt servicing, and strategic capital allocation during the targeted operational stability phase.

During the quarter, capital expenditures were US$27 million, with term loan principal repayments of US$35 million and interest expenses of US$10 million. The company extended its US$70 million GEAR working capital facility by 24 months to 30 June 2028, incurring a one-off extension fee of 1.25%. The senior debt refinancing reduces funding costs and eliminates scheduled amortisation, enhancing future cash flow and capacity for growth investments or shareholder returns, subject to board and market conditions.

Lancewood Exploration Campaign Commences After Fault Model Update

Exploration at Lancewood progressed in Q2 2026 with drilling preparations completed and rigs mobilized in early July 2026. Updated fault modelling, based on the 2025 3D seismic program, was finalized in June, yielding encouraging results that confirmed known geological structures. This update enables mine planning redesign and supports technical evaluation of Lancewood as a future production asset.

The company has not disclosed the drilling campaign’s scope, size, or timeline, nor the expected timing for drilling results or resource updates. Exploration spending across the portfolio totaled approximately A$5.5 million in Q2, supporting resource definition and extension. The Lancewood drilling campaign forms part of Stanmore’s organic growth strategy to expand its reserve base and sustain long-term production growth beyond current assets.