Among high dividend stocks, this ASX 200 stock has been facing headwinds for some time. It reported a strong result in the 2024 December quarter despite weather impacts and a planned outage and thus has come in focus.
Stanmore Resources Limited (ASX: SMR)
Stanmore Resources Limited has reported a record-breaking production year in 2024, surpassing its guidance expectations despite challenges such as wet weather conditions and the planned closure of the Millennium operation. The company’s full-year saleable production reached 13.8 million tonnes, exceeding the upper end of its projected range. This success was driven by strong performance at South Walker Creek and Poitrel, with these mines achieving record-breaking saleable production and sales volumes. Despite disruptions in December due to heavy rainfall and a scheduled 14-day coal handling and preparation plant (CHPP) shutdown at South Walker Creek, the company maintained healthy stockpiles to support first-quarter 2025 sales performance.
Financially, Stanmore remains in a strong position, ending the year with US$289 million in cash and total liquidity exceeding US$500 million. The company secured an upsized revolving credit facility of US$150 million, bolstering its ability to navigate commodity market cycles and pursue future growth initiatives. Capital investments in 2024 were substantial, particularly with mine expansions, infrastructure upgrades, and exploration projects, all aimed at enhancing long-term productivity and efficiency.
On the safety front, Stanmore maintained a low serious accident frequency rate (SAFR), reducing it to 0.30 as of December 2024, which is below the industry average. The company reinforced its risk management strategies and safety programs, ensuring continuous improvement in operational safety measures across its sites.
Production at South Walker Creek reached 6.3 million tonnes for the year, with operations impacted by wet weather but offset by strong dragline performance and increased overburden removal. The completion of the CHPP expansion project is expected to boost production capacity to 9.4 million tonnes per annum (Mtpa) in 2025. Meanwhile, Poitrel recorded its highest-ever saleable production of 4.6 million tonnes, benefiting from optimized processing schedules and additional CHPP capacity. At the Isaac Plains Complex, despite weather-related disruptions, record ROM coal production was achieved, with a continued focus on improving plant efficiency.
Looking at exploration and development, Stanmore successfully completed the South Walker Creek expansion project ahead of schedule, enhancing its mining capabilities. The company also advanced environmental approvals for the Isaac Downs Extension Project, with drilling and environmental surveys progressing well. Additionally, a US$5 million exploration program was carried out, including a 3D seismic study at Lancewood and groundwater monitoring initiatives.
Stanmore continues to monitor global metallurgical coal markets, with pricing fluctuations driven by Chinese steel export dynamics and demand recovery in India. The company remains resilient against these market forces, supported by stable Queensland export volumes and increasing supply chain efficiencies.
As the company enters 2025, its key focus remains on ramping up production, optimizing costs, and driving strategic growth initiatives. With a solid financial foundation, improved operational capacity, and strong market positioning, Stanmore is well-equipped to sustain its upward trajectory in the global metallurgical coal market.
Source: Company’s Report
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