Rising Costs and Ambitious Projects Pose Execution Challenges for Aurelia Metals

Aurelia Metals Sets the Stage for Growth

Aurelia Metals Limited (ASX – AMI) has unveiled its production, cost, and capital expenditure guidance for FY26, alongside an aspirational outlook for FY27 and FY28. The announcement underscores the company’s strategic focus on expanding its footprint in the Cobar Basin, a key mining region in western New South Wales.

The FY26 production guidance anticipates a slight dip in gold output to 35,000–45,000 ounces, while copper production is expected to rise modestly to 3,000–4,000 tonnes. Zinc and lead volumes are forecast to increase significantly, reflecting the company’s pivot towards base metals. Notably, the ore feed will predominantly come from the Peak South mine, with 530,000–580,000 tonnes planned for extraction.

Federation and Great Cobar – Engines of Future Growth

Federation mine is poised to begin commercial production from 1 July 2025, with mining volumes ramping up from approximately 100,000 tonnes in FY25 to 320,000–340,000 tonnes in FY26. The company aims to reach a steady mining rate of 600,000 tonnes per annum by FY27, maintaining this through FY28. Meanwhile, the New Cobar mine will take over as the primary ore source at Peak starting FY28, coinciding with the commencement of production from the Great Cobar Project.

The Great Cobar Project, a high-grade copper development, is a centerpiece of Aurelia’s growth strategy. First production is expected in FY28, supported by an expanded processing plant at Peak designed to produce separated concentrates. This upgrade is intended to enhance revenue streams and generate robust cash flow for shareholders.

Rising Costs and Capital Investment

Operating costs are projected to increase in FY26, rising to between $275 million and $315 million, driven by higher development activity and increased processing throughput. Federation’s operating costs, previously classified as growth capital, are now included in operating expenses, reflecting its transition to commercial production.

Capital expenditure guidance reveals a sustained commitment to both sustaining and growth capital. Sustaining capital is expected to rise to $50 million–$60 million in FY26, incorporating mine development at Federation and equipment rebuilds at Peak. Growth capital will focus heavily on Federation’s decline development and the Great Cobar Project, with planned investments of $60 million–$75 million in FY26 and continued spending through FY28.

Leadership Perspective and Strategic Outlook

Managing Director and CEO Bryan Quinn emphasized the company’s confidence in its growth trajectory, highlighting the ramp-up at Federation and the efficient execution of the Great Cobar Project. He noted that the combined ore from these mines, processed through the upgraded Peak facility, positions Aurelia to maximise revenue and deliver strong shareholder returns.

While the guidance and outlook remain subject to market and operational uncertainties, Aurelia’s detailed plan signals a clear pathway to scaling production and enhancing profitability in the coming years.