Ann: FY24 Full Year Financial Results Presentation, page-144

People will talk about these things (coffee and biscuits) for a couple of days and move on to whatever the newspaper will sell them next.

What's left after that is a shrewd businessman who is going to pull every $ he can out of overheads and more importantly out of the operating costs at the mines.

MinRes's mining services division is no ordinary business. In a low iron ore price environment it will become even more critical for miners to move lower down on cost curve and that's what Chris does best. He made a $10 billion business on the back of that. When Rio, BHP, RoyHill have to operate their mines at lowest cost quartile - they come to MinRes.

When Chris says he has several levers to pull: these are some of the examples that people don't appreciate.

a) Mining Service division is underpinned by a fleet of mining equipment, logistics assets all over the country. These include things like locomotives, transhippers, haulage equipment, road trains, crushers, dump trucks - you name it... All these things have tangible value. One could easily sale and lease these back to realise value with absolutely zero impact on revenue/contracts.

b) Services division has crushing plants, screening facilities, roads, rails, port infrastructure all over the country at mine sites. All these have value that can be realised. 49% sale of one such road fetched 1.3B recently. Imagine! Chris has dozens of infra assets that can have similar levers pulled. I know it will hurt him to do that so he wont.

c) Sell down: MinRes has the ability to sell down part/full interest in assets like BaldHill, Mt Marion, Wodgina, Onslow if needed. This will have ZERO impact on Services division revenue/EBITDA. The net debt will be wiped off in totality if that's what it come down to.

d) Oil and Gas: Wont Mitsui love to get their hands to that asset?

e) Debt: The US Bonds are covenant light and repayable in 2027. While optics of 4.2x Ebitda looks bad it is not constraining the business in any way (as it is not a covenant) and there is no repayment in next 2 years. Yes, Chris needs to make interest payments which is a legitimate concern. Debt/obligations can be refinanced! Remember

f) Equity: A 8-9Billion Market cap business will have no problems raising a couple of billion dollars (25% of MC). Again boss wont do it as he is very proud of himself.

g) Cut down capex: The $2B in capex for FY25 can always be cut down if needed. There are levers available if needed. Dont forget that there is 1.3 billion cash coming in from MSIP which will offset most of this capex anyway.


This slide shows how cleverly MinRes operates. Out of 3.3billion that people are crying about - 800m is JV partners share and 1.3B is already being realised by selling 49% of Haul road. That leaves Minres with only 1.4B net capex that will generate 500million in services Ebitda a year irrespective of iron ore price for many decades. And another 1 billion on top of that every year if iron ore prices are at todays level. It wont happen but for argument sake - the remaining 51% in haul road sale will wipe this 1.4 billion out completely making onslow a free asset for MinRes.