Metro Mining (ASX:MMI) used its latest investor call to highlight a sharp improvement in profitability and cash generation, pointing to higher volumes, stronger realized margins, and a focus on de-risking the business ahead of a targeted production lift in 2026. Management also outlined plans for capital management, including a proposed share buyback, and discussed operational initiatives intended to reduce variability and support guidance.
Record underlying EBITDA and stronger margins
Management said the company benefited from a tightening bauxite market across 2023 and 2024 and positioned its expansion to capture what it expected would be a firmer pricing environment through 2025. The company reported margins of “over AUD 30 a ton” in the first half, which executives said supported significant year-on-year revenue growth.
The company also highlighted what it described as a strong audit outcome, with management noting a “clean audit report.”
Balance sheet progress and path toward net cash
Executives reiterated that a key strategic goal has been reaching a net cash position. They said the company came “really, really close,” ending the period with AUD 57.5 million in cash against AUD 58.9 million of debt—about AUD 1 million short of net cash—after paying down more than AUD 23 million of debt over the year.
Management framed the near net cash position as important for strengthening the balance sheet and “securing the company,” while also enabling greater flexibility for capital management decisions.
Hedging, tax shield, and other financial items
Chief financial officer Nathan provided additional detail on risk management and tax positioning. He said the company recorded a better foreign currency result than the prior year and has hedged “at least around 75%” of its net U.S. dollar exposure going into 2026 at approximately AUD 0.64–0.65. He described the hedging strategy as a way to “control the controllables,” particularly in light of forward planning and capital management.
On tax, the company discussed recognizing prior impairments and bringing deferred tax assets back onto the balance sheet, supported by what management called a strong forward outlook. Nathan said Metro has approximately AUD 184 million of available carry-forward losses in gross terms. For modeling purposes, he said the company would be expected to begin utilizing those losses through 2026, and he would not expect Metro to be in a tax-paying position until “probably the second half of 2027.”
Buyback plan and capital management approach
Management said the board is not inclined to “sit on cash,” and argued that a stronger and more de-risked operating profile supports returning capital to shareholders. The company also said it views the share price as reflecting “significant undervaluation,” which contributed to the decision to pursue a buyback.
Nathan said the buyback is planned as a non-market buyback, with terms disclosed in the company’s release, targeting the retirement of 5% of shares on issue over a 12-month program. He said additional execution details would follow in the near future.
In response to a shareholder question about dividends versus buybacks, Nathan said management views buybacks as more tax-efficient “until we’re paying tax,” and reiterated that perceived undervaluation makes repurchases more compelling.
Simon added that the company remains open to growth, but said any growth opportunity would need to “stand on its own two feet” and be brought to market with clear rationale. In the absence of a “very live and current growth option,” he said the company intends to continue returning cash generated by Bauxite Hills to shareholders, within the board’s risk appetite.
2026 guidance confidence and operational focus
Asked about confidence in achieving 2026 guidance, Simon said management reviewed performance across 2024 and 2025 and assessed constraints in the new flowsheet. He said each part of the flowsheet has demonstrated capacity at the intended scale, including clearing and stripping, mining and haulage, screening, the integrated barge loader and tug-and-barge system, and the transhippers.
However, he emphasized that the next step is “plugging all of that together” and reducing variability, rather than relying on any single element to deliver more throughput. Management cited two externally driven disruptions in 2025: an “Easter weather event” that led to channel edge collapses (which Simon said reduced output by roughly 150,000–200,000 tonnes), and an inability to load the last vessel in December (about 170,000 tonnes). He said absent those events, the company would have achieved around 6.5–6.6 million tonnes last year, framing the move to 7 million tonnes or more as primarily a variability-reduction challenge.
Operationally, management described a restructured approach that separates short-run execution and planning support, including a “new short run operations strategy” at site and a stronger technical and planning group. The company also said it has collected extensive operational data over the past six months to feed into a logistics and operations analysis, which management said supports “7+ million ton outputs.”
On weather resilience and channel reliability, Simon said the company has already reduced weather impacts through equipment and process changes (including a shift to roller screens and use of its offshore floating terminal). He also said channel maintenance is conducted twice a year and that the channel was widened from 60 to 70 meters during the October maintenance, which he said would lessen the impact of a similar slumping event. The company is also investigating whether it can go deeper during maintenance to improve barge loading capacity and reduce tide-related constraints.
Separately, management noted that typical wet-season holding costs are about AUD 20 million per quarter. Nathan said the cash outlay for the offshore terminal’s dry docking would be additional to that typical burn, with around 75% of the cash impact expected in April and May due to milestone-driven shipyard payments. He added that the full dry-docking cost was included in the current results through provisioning and would not affect margins.
The company also discussed freight contracting as another de-risking lever, with Simon stating Metro’s contracted freight for 2026 is “probably AUD 2-3 in the money” versus prevailing Capesize freight rates, and noting those rates rose through the second half of the prior year.
About Metro Mining (ASX:MMI)
Metro Mining Limited, together with its subsidiaries, operates as an exploration and mining company in China. It explores for bauxite. The company's flagship project is the Bauxite Hills Mine property that covers an area of approximately 1,900 square kilometers located on Western Cape York. The company was formerly known as MetroCoal Limited and changed its name to Metro Mining Limited in December 2014. Metro Mining Limited was founded in 2004 and is headquartered in Brisbane, Australia.
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