Aurelia Metals (ASX:AMI) reported a strong December quarter (FY26 Q2), highlighting higher operating cash flow, improving mine performance at Peak and Federation, and progress on several growth projects intended to lift throughput and future output. Managing Director and CEO Bryan Quinn said the company delivered “very positive results” for the quarter and remains within full-year guidance.
Cash flow and balance sheet
Quinn said the company generated AUD 42.9 million in operating cash flow after sustaining capital during the quarter, supported by strong commodity prices and gold production. CFO Martin Cummings reported quarter-end cash of AUD 85.6 million. Including an undrawn loan note of AUD 20.4 million, Cummings said overall liquidity was around AUD 116 million.
Other cash flow items discussed included a payment of AUD 12.2 million related to FY25 tax, plus additional monthly PAYG payments for FY26. Cummings said sustaining capital was AUD 15.6 million in the quarter and elevated year-to-date due to investment in the Peak fleet, but he remained comfortable with sustaining capital tracking to the full-year range. Growth capital was below the midpoint year-to-date, but he said spending is weighted to the second half and is expected to land within guidance.
Operations: Peak plant nearing nameplate and stockpiles rebuild
Quinn said the Peak operation is focused on maximizing throughput and recoveries “to take advantage of the revenues and the cash flows” from the company’s commodity mix. He said development meters are “heading in the right direction,” with attention on fleet availability and having the right planning and personnel to keep equipment operating.
A key update for the quarter was the processing plant’s utilization. Quinn said Peak is “very close to nameplate capacity,” supported by rebuilt ore stocks. He reported 36,000 tonnes of stockpiled ore in front of the mill at the end of the quarter, describing it as something the operation “hasn’t experienced for a while.” He added that the average monthly milling rate year-to-date is at record levels since FY20, and the company expects the average to rise further as it builds stockpiles ahead of upcoming plant expansion projects.
On metallurgical performance, Quinn said gold recoveries reached “all-time highs” for the quarter despite higher throughputs, while lead and zinc recoveries were also “very good.”
Federation ramp-up, grades improving, and reconciliation
Quinn said the Federation Mine is performing well and that ore mining increased 21% quarter-on-quarter, with the company expecting further quarter-on-quarter increases through the remainder of the financial year. He also said grades improved versus the prior quarter and are expected to align with the reserve model.
The company discussed ongoing development and drilling at Federation. Quinn said the decline is being pushed deeper while infill and resource drilling is established from multiple locations. He stated the operation is targeting about 1,500 meters of drilling per quarter and is achieving that rate, with infill results helping firm up stope design and support higher throughput. He emphasized that higher throughput and grades could help reduce logistics costs for trucking ore to the Peak mill.
During Q&A, analysts asked about reconciliation at Federation. Quinn said the ore body is reconciling well “against our revised plans,” and management is not seeing downside relative to its plans. Chief Technical and Business Development Officer Andrew Graham added that reconciliation is positive through the plant, noting strong recoveries and “synergy” from blending Federation zinc ore with Peak zinc ore. On the geological side, Graham said reconciliation is positive, particularly for gold, though he cautioned that gold is difficult to model due to variability. The company expects its next resource and reserve update after full-year results, in the September quarter.
Growth projects: Great Cobar and Peak upgrades
Quinn said development at the Great Cobar copper project is progressing well, with Aurelia’s operator teams delivering a 13% increase in meters versus the previous quarter. He said about three kilometers of development remain to reach a drilling platform and approximately four kilometers remain to reach production. Quinn described conditions as favorable and said the company sees potential upside in the project’s value given copper pricing and expected demand.
At Peak, Quinn outlined three expansion-related projects and their expected commissioning timeframes:
- Tailings and processed water management / thickener project: on track for commissioning in FY26 Q4, with expected improvements in copper recoveries and lower cyanide consumption.
- Tertiary ball mill: on track for commissioning in FY27 Q1; Quinn said equipment from Dargues is being prepared for transport to Peak.
- Crushing and materials handling: targeted for FY27 Q2, with detailed work underway.
Quinn said major overseas components for the water management project arrived before Christmas and are on site, and he expects the projects to enhance current performance as ore stockpiles build ahead of commissioning.
Exploration and additional feed opportunities
Graham said the company’s only exploration market release during the quarter related to the Nymagee project. He highlighted extensions at Nymagee North (about 100 meters up dip and along strike), including the presence of gold that has not been seen previously at Nymagee. He also said the Metropolitan Lens was extended 40 meters up dip with continuity in thickness and grade, and Nymagee Mains showed extensions along strike and 250 meters down dip. The company completed additional downhole EM at Nymagee North and is awaiting results to help focus future drilling.
Graham also discussed drilling at the New Occidental tailings stockpiles, saying all assays have now been received and the company will progress toward a resource estimate, additional metallurgical testing, and a pre-feasibility study. He said permitting has been initiated. In response to a question, Graham said prior expectations were roughly ~2.5 million tonnes at ~0.5 grams, though he stressed the company is still working through the assay-based process and does not want to presume final tonnage or grade. He described a potential concept of feeding material through a scrubber and into the tertiary mill, then into the existing CIL circuit, at roughly 250,000 tonnes per year for an extended period, while not disrupting plans for fresh ore.
On safety, Quinn reported four recordable injuries during the quarter, involving hand injuries and slips and trips. He said management is focusing on hazard identification and behavioral-based safety, noting that injuries largely involved short-term contractors. He added that environmental compliance reporting remained in good shape.
Looking ahead, Quinn said the company remains focused on safely executing its plan toward 40,000 copper equivalent tonnes in FY28, disciplined capital allocation, continued plant feed optimization, Federation ramp-up and mine life extension drilling, and delivering Great Cobar milestones. He also said the company will continue to monitor potential inorganic opportunities while prioritizing organic growth and retaining key talent.
About Aurelia Metals (ASX:AMI)
Aurelia Metals Limited engages in the exploration and development of mineral properties in Australia. The company primarily produces gold, silver, copper, lead, and zinc. It holds interests in the Peak Mine situated in the northern part of the Cobar Basin, New South Wales; and the Dargues mine located in southern Tablelands in New South Wales. The company was formerly known as YTC Resources Limited and changed its name to Aurelia Metals Limited in June 2014. Aurelia Metals Limited was incorporated in 2004 and is headquartered in Brisbane, Australia.
