Onslow Transhipping, page-576

Thanks for getting back to me mate. Please see my comments below:

1: Onslow Mining services -> I'm satisfied with the companies estimates of Mining Services (CSI) revenue on Onslow production tonnage ($280m EBITDA from 140Mt). I have slightly different forecasts for Onslow production tonnage, which I have amended based on your comment as I think my conservatism was unwarranted, TMM should theoretically be 4 x product shipped so I've updated accordingly. Where I have questions is on the remaining make up of CSI revenue. As I mentioned previously, they are forecasting ~1bn EBITDA from CSI at nameplate which equates to roughly 500Mt. Using my figures for FY26, we have 150Mt accounted for by Onslow with the rest of MinRes' business making up ~112Mt on my model which assumes production at MinRes' other mines remains steady on 1H25 figures for FY26. Thus, we've got 500-150-112=238Mt unaccounted for. Based on guidance being maintained at 280Mt, they'll need ~32Mt to come from external clients in Q4 (more detailed calculations in my previous post). That would take us to 90Mt for FY25. Even with the very generous ramp up I have given them for FY26 (165Mt vs 90Mt), they are still 238-165=73Mt short of the 500Mt needed to justify 1B EBITDA at nameplate. Whether they boost production or not I'm not sure but I see it as difficult that they hit that 1B target at nameplate.

2. Pretty sure it will be recorded as positive. It's currently sitting as a current liability but my understanding is that it will be recognized as revenue under amortization in equal installments over FY26-28. I don't have an accounting background so happy to be corrected.

3. I had it as 50%, have updated. The remaining discrepancy is because I have forecast greater than 35Mt shipments.

4 and 5. Yeh I agree tax and depreciation is a tough one. I don't think I'm going to bother getting too scientific, ultimately I think we are both right to expect heavy depreciation and low tax initially as is often the case with such capital intensive projects. EBITDA gives a good enough indication of value IMO especially considering the massive margin of safety at current prices.

Does anyone have a view on the mining services volumes? I can't work out how they are going to get to 500Mt.

Also, couple of other things. I have seen both 140 and 120 as the number of road trains currently procured. Why the discrepancy and which one is it?

Regarding current constraints, in this article from the AFR a year ago, they quoted Chris Soccio as saying the capex to go from 35Mt to 50Mt was ~$1.3B. Do we think they've spent that? I refer to the comment from my original post about our current constraints:

"Also, in the Q3 earnings call (transcript here), there was a line from Mark Wilson that suggested the project in its current form (after haulage ramp-up is complete) is ultimately constrained by loading and unloading capacity, which he quoted was 60 Mtpa. In the presentation from yesterday however, they had unloading @ 43 Mtpa. Thinking about our path beyond 35 Mt without material additional CAPEX and wondering if anyone can offer some clarity on this."

This seems to align with what's currently being reported i.e. we are constrained by truck unloading/ loading of the transhippers, especially considering the positive commentary around the road and the imminent arrival of transhippers 6 and 7 in Q1 next year.

Does anyone have insights into whether the real capacity at the port is closer to 43Mt or 60Mt reported previously and if in fact this is our limiting factor?

Assuming, the CAPEX has already been allocated and pending haulage ramp up, I am starting to think we may be closer to the 60Mt mark after all but I'd love some more conviction in this regard.

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