Stanmore Resources Limited (ASX: SMR) is an Australian company producing and supplying metallurgical coals to the global market. The company always tries to take care of the environment and social aspects to sustain the development of the company and its assets. Stanmore Resources was listed on the ASX on 9th December 2009 at an issue price of AUD 0.31 per share.
Financial and Operational Performance
Although the revenue is reduced compared to FY23 due to low coal prices, the increased sales and cost efficiency helped mitigate pricing impacts. Stanmore revenue in FY24 is USD 2.4 billion. EBITDA is USD 700 million, while net profit is USD 192 million. Operating cash flow remains sufficient at USD 408 million, supporting the dividend of US 6.7 cents per share, which is, in total, a distribution of USD 100 million for all shareholders.
Despite cost pressures, Stanmore maintains its FOB cash costs at US$89 per tonne. The company also reinforced its financial stability with over US$500 million in liquidity and a low net debt position of US$26 million, highlighting its commitment to maintaining a strong balance sheet and shareholder returns.
Expansion and Strategic Growth
Stanmore has a few ongoing projects expansion and acquisition.
The first project is called South Walker Creek. Stanmore has finished a major CHPP (Coal Handling and Preparation Plant) upgrade, allowing for increased processing capacity and improving coal quality. The expansion will increase production efficiency and around 9.4 million tonnes per annum production in 2025. Also, the MRA2C creek diversion project was finalised ahead of schedule and under budget, enabling earlier access to lower-cost coal reserves and optimising mine sequencing.
The second project is called the Eagle Downs Project. One of the milestones for the company is the 100% acquisition of the Eagle Downs Project, which allows access to high-quality metallurgical coal assets in Queensland’s Bowen Basin. The mines contain a large amount of premium coking coal reserves and provide long-term development opportunities. Also, the company had secured an agreement to expand the Issac Plains Complex. This expansion ensures a continued production pathway and extra coal reserves for future operations. These strategic acquisitions strengthen Stanmore’s resource base and enhance its market presence when there is an increasing demand for high-quality metallurgical coal.
With these projects, Stanmore has increased its overall saleable coal production for 2025 from 13.8 million tonnes to 14.4 million tonnes, showing the extra mines are providing more mining capacity. The company is committed to maintaining competitive FOB cash costs, which are forecasted to be USD 89 – 94 per tonne. Stanmore’s focus on infrastructure improvements and equipment upgrades will also enhance productivity, reduce costs, and improve coal recovery rates.
Market and Industry Outlook
While coal prices slightly declined in 2024, the demand from India, Southeast Asia, and Europe remains at a high level. The company’s diversified customer base and higher production guidance of 13.8 – 14.4 million tonnes for 2025 are well prepared for continued growth. Also, Australian Prime Minister Anthony Albanese held constructive talks with President Trump regarding tariff exemption, which could potentially increase steel exports to the US, which may further increase Stanmore’s sales performance.
Given this development, Stanmore could see an improvement in demand forecasts for its premium coking coal. The company could benefit from stronger domestic steel production and exports.