Stanmore Resources (ASX:SMR) executives said the company delivered a “record production year” in fiscal 2025 despite what CEO Marcelo Matos described as the most challenging operating and market conditions since its 2022 acquisition of BMC.
On the company’s full-year results call, Matos said site teams safely produced 14 million tonnes and achieved sales volumes of 14.1 million tonnes. He said that performance supported low year-on-year FOB cash costs of AUD 87.80 per tonne, within the company’s revised guidance range that was lowered early in the year. Underlying EBITDA for 2025 was $385 million, and Stanmore ended the year with net debt of $33 million and liquidity of “almost $500 million.”
Safety and operating performance
Matos said safety performance was “solid,” with serious accident frequency rates consistently below the Queensland surface coal industry average. He also cited a 57% year-on-year reduction in recordable injuries. Two serious accidents late in the year were “thankfully limited in their potential,” he said.
Operationally, Matos emphasized a strong second-half recovery following significant rainfall early in the year, saying the business operated at a 15 million-tonne annualized production rate in the second half. He also noted that 2025 capped a six-year period of sequential production growth from the existing asset base, representing a 25% increase since the BMC acquisition.
- South Walker Creek: Matos said the mine delivered record results across metrics and continued its growth trajectory following completion of the CHPP expansion and the MRA2C Creek diversion. He said the upgraded CHPP operated consistently above nameplate capacity in the second half.
- Poitrel: Stanmore reported an all-time record 5 million tonnes of saleable production. Matos said Poitrel is “geometrically constrained,” calling the result a reflection of productivity improvements supported by the Ramp 10 North development and a straighter strike length.
- Isaac Plains Complex: Matos said the complex recovered strongly through the fourth quarter to deliver 2.4 million tonnes of saleable production, within revised guidance.
Costs, EBITDA, and cash flow
CFO Shane Young said 2025 FOB cash costs of AUD 87.80 per tonne were about AUD 1.80 per tonne lower than 2024 despite “non-controllable” cost increases. Young attributed the year-on-year reduction to volume increases at South Walker Creek and Poitrel and to a cost optimization program launched in mid-2025, which he said delivered a combined benefit of almost $5 per tonne year-on-year.
Young said those volume and cost improvements added about $170 million of underlying EBITDA, helping offset lower coal prices, inflation, and wet weather. He characterized the $385 million underlying EBITDA outcome as evidence of Stanmore’s ability to withstand adverse conditions.
On the financial scorecard, Young said the company generated $381 million in operating cash flows and positive all-in cash generation in 2025 after adjusting for lease payments and debt servicing. He said cash generation was supported by a timely reduction to steady-state capital expenditures after key projects were approved soon after the 2022 acquisition and delivered ahead of schedule and under budget.
Balance sheet, liquidity, and capital allocation
Young said net debt was stable year-on-year, supported by strong net operating cash flow that enabled Stanmore to meet its capital allocation commitments. He listed those commitments as including the capital expenditure program, $25 million in stamp duty paid on the Eagle Downs acquisition (which he said “remains under objection”), and $81 million in dividends paid relating to the 2024 full-year results.
Liquidity approached $500 million at year-end, Young said, noting the company increased its bank revolving credit facilities by $50 million late in the year. He added that all $270 million of working-capital-style facilities remained undrawn.
Discussing dividend strategy, Young said the dividend component of total capital allocation has stepped up in 2025 after a period of higher internal capital investment and balance sheet strengthening following the BMC acquisition. He said the board deemed it prudent to declare shareholder returns “above and beyond” stated policy, citing modest net debt and liquidity needs.
Young also said aggregate shareholder returns since the 2022 BMC-related equity raise reached $0.342 per share, which he said was almost 50% of the equity raise price in Australian dollar terms.
2026 outlook: volumes, costs, and FX assumptions
Looking ahead, Young said South Walker Creek saleable production is expected to continue ramping toward expanded capacity, while Poitrel output is expected to normalize after the record 2025 year. Isaac Plains guidance reflects a planned reduction, with output expected to decline from 2.4 million tonnes to 1.6 million tonnes at the midpoint, driven by a shift to maximize dragline utilization by reducing to a single fleet from mid-year and focusing mining in northern areas with better strip ratios.
Management said 2026 production is expected to be somewhat second-half weighted, following impacts from ex-tropical cyclone Kirrily in early January, but said the company is confident in meeting full-year targets barring further wet season impacts. Young said 2026 capital spending should be broadly in line with 2025 steady-state levels, with a small increase due to prior-year deferrals and capital improvement opportunities.
Young said FOB cash costs face inflationary pressures and a higher Australian dollar. He said foreign exchange has become a headwind, noting a move from an average AUD/USD of 64.5 US cents in 2025 to levels above 70 US cents. In Q&A, Young said the company assumed an AUD 0.68 exchange rate for 2026. He added that excluding FX and adjusting for inflation, Stanmore expects costs to remain stable year-on-year.
Project pipeline: South Walker Creek optimization, Isaac Downs Extension, and Eagle Downs
Matos said Stanmore’s key near-term project priority is securing regulatory approvals for the Isaac Downs Extension, which he said is “at least a couple years away” from an investment decision and development start. He said finalization of groundwater modeling and associated studies remains on the critical path for submitting the full environmental impact statement, with delays attributed to weather conditions in the first half of the prior year. He also said stakeholder agreements with native title holders and land holders are key milestones.
Separately, Matos outlined near-term portfolio opportunities, including a “Chase the Blue” strategy at South Walker Creek to prioritize higher-margin reserves in the MRA2C area (E, F, and G pits). He said 58 million tonnes of run-of-mine coal at an average strip ratio of 8:1 are broadly available in the MRA2C area, with the highest margin coal in G and F pits. He said additional preparation works are required in 2026 ahead of planned dragline activity in 2027 and that the strategy could improve margins across the life of mine, though it may involve operating slightly below capacity in the medium term to optimize cash generation.
At Isaac Plains, Matos said the company has taken a “value over volume” approach as Isaac Downs approaches its economic limit, driven by an anticipated Leichhardt seam split around 2028. He said Stanmore will focus mining into the northern area and maximize dragline utilization and productivity to support unit costs. He also said the company optimized mine plans for the Isaac Downs Extension to reduce backfilling requirements for residual voids, which he said would significantly improve project economics.
On Eagle Downs, Matos said ongoing studies are aimed at determining the optimal development pathway and that the company expects to update the market once studies conclude late in the year. In response to questions, Matos said Eagle Downs could be a natural longer-term replacement for Poitrel, but bringing it forward would require strong reasons due to potential overlap and processing constraints while Poitrel remains strong. He said investment readiness is targeted by year-end, with any investment decision dependent on factors including funding solutions, market conditions, and Queensland investment settings.
In Q&A, Matos also said South Walker Creek will benefit from a new Golding mining services contract, including a fleet of 31 new trucks (some already operating and others still arriving), new diggers, and incentives more aligned to productivity compared with the prior contract.
On coal markets, Matos said 2025 was relatively soft for metallurgical coal, with subdued prices amid weak demand and a glut of Chinese steel exports, though Australian supply remained tight due to outages. He said prices rallied at the start of 2026 primarily due to supply concerns from wet weather in early January and have remained relatively resilient through February, with management optimistic demand fundamentals have improved compared with the prior year.
About Stanmore Resources (ASX:SMR)
Stanmore Resources Limited engages in the exploration, development, production, and sale of metallurgical coal in Australia. The company holds a portfolio of 2,000 square kilometers of prospective and granted exploration tenements throughout the Bowen and Surat Basins. The company was formerly known as Stanmore Coal Limited and changed its name to Stanmore Resources Limited in May 2021. The company was incorporated in 2008 and is headquartered in Brisbane, Australia. Stanmore Resources Limited operates as a subsidiary of Golden Investments (Australia) Pte.
