Stanmore Resources : Quarterly Activities Report

14 April 2022

MARCH 2022 QUARTERLY REPORT

Highlights

• • No injuries reported in the quarter

• • All-time record ROM coal mined in the quarter with 1.02Mt mined after moving into the low strip ratio Isaac Downs mining area

• • Isaac Plains coal mining activities completed, with our Isaac Plains dragline relocated and commencing operations at Isaac Downs

• • Opening of new haul road between Isaac Downs and Isaac Plains, with the Peak Downs Highway underpass completed

• • Stanmore on track to complete the BMC acquisition on 3 May 2022, with separation activities nearing completion for the unconditional, fully funded acquisition

• • New US$50 million bridging facility signed with Ascend Global to provide additional liquidity coverage in the event of a larger working capital adjustment payment under the BMC acquisition

PRODUCTION AND SALES

Quarter Ended
Thousands	Mar	Dec	Change	Mar	Change
of tonnes	2022	2021	%*	2021	%*
ROM coal produced	1,024	734	40%	514	99%
ROM strip ratio	5.3	8.4	37%	11.3	53%
Saleable coal produced	565	610	(7%)	428	32%
Total coal sales	538	632	(15%)	523	3%
Product coal stockpiles	121	98	23%	99	22%
ROM coal stockpile	361	96	276%	29	1,145%
* Note: Change is favourable/unfavourable
SAFETY PERFORMANCE

There were no recordable injuries during the quarter. The 12-month rolling TRIFR at the end of the quarter was 4.76 (5.10 at March 2021).

ISAAC PLAINS COMPLEX OPERATIONS

Operational performance from the Isaac Plains Complex was strong, with all-time record Run Of Mine (ROM) coal production for the quarter (1.02mt) driven by the move into the lower strip ratio Isaac Downs mining area. This performance was despite a continuation of the La Nina weather system early in the quarter, with six days lost due to adverse weather conditions and associated delays including power outages.

Saleable production was 7% lower than Q4-21, and below expected levels due to temporary constraints with coal haulage from Isaac Downs to the CHPP resulting from weather events and the transition of haulage activities to a new contractor and to the new definitive haul road. Washing constraints also contributed to lower clean production, however this will be alleviated with the planned upgrade at the Isaac Plains CHPP (from 500 ROM tonnes per hour to 600 ROM tonnes per hour) in Q3 2022, which should allow for the lower Q1 volumes to be recovered over the full year.

Sales volumes were 15% lower than Q4-21 as a result of lower saleable coal production and also timing of vessels slipping into April.

The dragline has relocated to Isaac Downs and undertook opportunistic work to advance the box cut prior to commencing a planned major shutdown. The new mining contractor (EPSA) is onsite and commenced mining operations from early April 2022, which will be supplemented by a new coal haulage contractor (BIS) to move ROM coal from Isaac Downs to the CHPP at Isaac Plains. The CHPP is also currently being converted to an Owner Operator model which will deliver improved operational control and costs to compliment the planned upgrade in Q3 2022. Stanmore acknowledges and thanks Golding, for their services and a successful transition.

The highway underpass work and construction of the flood levee at Isaac Downs are close to completion which will allow operations to ramp up to full annual production rates. EPSA have retained the previous drill and blast service provider, which is a major benefit in the transition process.

Studies have commenced to build a haul road between Isaac Downs and the Poitrel to take advantage of available washing capacity at the Red Mountain CHPP to be acquired from BHP as part of the BMC acquisition, providing us with ample optionality for catching up with washing and sales during the 2H 2022 and benefit from the rapid uncovering of coal with the dragline mining low strip ratios, and further increase production from Isaac Downs.

ISAAC DOWNS CONSTRUCTION

The quarter included a number of significant milestones celebrated by the project team:

•

Traffic on the Peak Downs Highway was diverted to the new road over the bridge underpass structure

•

Final haul road excavation was completed, and gravel pavement placement commenced; the haul road was commissioned with coal trucks commencing haulage under the highway bridge

•

The Isaac Plains dragline was successfully transferred to Isaac Downs with significant civil infrastructure works to build a highway diversion initiated, and subsequently decommissioned after the highway pavement was rebuilt to an improved standard after the dragline walk

•

Works progressing on the Mine Infrastructure Area (MIA) pad and sediment control as well as construction of the main Mine Water Dam

•

The water transfer pipeline between Isaac Downs and Isaac Plains was substantially completed

Figure 1: Coal haulage under the highway bridge now in place

Figure 2: Dragline walking across the Peak Downs Highway with traffic on diversion road

Figure 3: Dragline now in use at Isaac Downs

MILLENNIUM AND MAVIS DOWNS MINE

During the quarter, the Millennium mine continued conventional open cut truck and shovel production and auger mining from the highwall. Millennium produced 165kt of ROM Coal and 157kt of product coal (65Kt coking coal, and 92kt of PCI coal) with coal washed through the Red Mountain Infrastructure Coal Preparation Plant at the Poitrel mine. 133Kt of high-quality coking and PCI coal was shipped through Dalrymple Bay Coal Terminal in Mackay to Japan and Europe.1

Preparation and construction of the underground mine is continuing to schedule, with first development coal expected in Q3 2022.

Figure 4: Augur mining at the Millennium Mine

DEVELOPMENT PROJECTS

No significant activity was undertaken on Stanmore's other development projects during the quarter.

1 All figures are on a 100% basis. Stanmore's share is 50% through the ownership of MetRes Pty Ltd. Note that MetRes Pty Ltd financial performance and physical metrics are not consolidated into Stanmore resources results for accounting purposes.