Bannerman Energy Ltd (BMN) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to our quarterly webinar for the period ended 30 June 2026. Thank you all for joining us today. For those of you that don't know me, I'm Emma Culver, Investor Relations and Communications Manager at Bannerman. We're joined today by our Managing Director and Chief Executive Officer; Gavin Chamberlain, who will shortly provide an update on Bannerman and the Etango project. Following this, we will jump into some Q&A. For now, I will hand over to Gavin, who is joining us from Namibia. Good morning, Gavin. How we're looking on site at Etango, and I will share my screen so we can run through these updates for the quarter.

Morning Emma, and morning to all the investors and stakeholders on the call. Yes, it's really exciting times, as you know, every time we come to site, we see more progress. So I'm looking forward to taking everyone through the quarterly results and fielding some questions and answers. I think the highlight for the quarter was really our strategic financing progress in terms of the conditions precedent where we've made significant progress. And we still have confidence now that the final CPs and transaction completion should be expected during quarter 3 of 2026. So that's really positive for us, that allows us to move forward along the schedule that we've already planned, and we're feeling confident that we'll actually achieve this. Over and above that as well is we had a strong quarter in terms of cash control as usual. As you know, we have strong discipline related to managing our cash flow. We ended the quarter with $53 million of cash assets and liquid assets of an additional $11.5 million. Keeping in mind as well, we've already committed an additional $36 million to ongoing contracts on site at the moment. And our total spend on the project to date to be sitting at $69 million. And I think one of the really pleasing things is to be seen the actual increase in the long-term uranium price over the quarter, now sitting at $97 per pound, which is obviously very supportive of where we want to go in this business. On the actual Etango early works progress, we will share a couple of photographs now as well. But on the early works, the construction activity has continued to track against budget and schedule. And with over 560 personnel currently working on site, we're extremely pleased to say that we achieved 1.1 million LTI-free man hours on the project alone. So we've previously reported in terms of the safety record for the entire company. But for the project alone, we've already achieved 1.1 million, which is really a good indication of the value that the team on site and the contractors on site are placing on safety and safe construction practices. So as I said, 560 personnel on site, 1.1 million. And I really wanted to share this photograph because it gives you an idea of the camaraderie that's developed on the site. And that's the normal early morning safety talk before people start work. And I really just love the photograph. That's why I wanted to share it, but also to once again highlight the focus on being LTI-free as we move into the further construction. Bulk earthworks has progressed extremely well during the quarter. We're now at 92% complete, and this contract should be finished during the next quarter. What you see in the photograph is the near completion earthworks for the heap leach pad. The other bit of work is on the concrete on site. We've had significant progress during the quarter. The primary crusher is sitting above ground level at this point in time, and that's the photograph you see in front of you. And you would have been tracking this over the last year or so because we started off with photographs of the excavation. And now finally, we're actually getting towards the end of that concrete work. I reckon that by the end of the quarter, we'll be able to show you -- next quarter, we'll be able to show you the completed crusher building. This photograph really gives you an idea of the bulk of the dry plant area. So in the foreground, you've got the stockpile area moving through to the silo at the end of -- in the background in the picture. And it gives you an idea of where the concentrated work is happening on the project. And effectively, this is predominantly focused on concrete work at this point. The earthworks were finished here in the previous quarter. And that is the final silo, which basically is the end of the dry circuit, which is also now progressing significantly above ground level. Very good progress here. And once again, probably the most complex pour on the site, which is going relatively well -- well, it's going very well, I should say, not relatively well. And that's the completed concrete works for the secondary and tertiary screening building. And then outside of the site, we've progressed significantly on the permanent water supply line. That contract is -- Phase 1 of that contract is sitting at 87% complete. And just to remind people, Phase 1 of the contract is the connection to the NamWater reservoir crossing over the river and under the road and then stopping on the other side of the road waiting for the pipe delivery. So the plants are all installed up to the first pump station. And really, that's the end of the summary of the quarter. As I said, a very positive quarter, both from a deal perspective and an ongoing progress against the current schedule. And I think this, if there are any questions that I can field at this point?

Yes. We'll jump in, Gavin. Thanks so much for the update. And for those that would like to look further at the photos, they are on the website in the latest presentation. But Gavin, can you just talk us through the CPs? What is still to be satisfied? How are they tracking? And what gives us confidence that, that's going to close for Q3?

Yes. Thanks. Good question. So on the CP satisfaction, people who've read our previous announcement around the deal would have realized that there were a number of CPs. And in the last quarter, we've made significant progress. So starting off with the CNOL shareholders needed to approve the deal, which was achieved and closed out. We also needed the Namibian Competition Commission approval, which has also been approved and closed out. And over and above that is there were some infrastructure contracts that we needed to conclude and people would have noticed that we signed the NamWater agreement during the quarter. And then over and above that, we've also achieved the asset storage facility lease and our power contract was already signed. So from the infrastructure contract requirement, we've also met all of the CPs. The only outstanding CP at the moment, which has been submitted and is in progress is the NDRC and the Ministry of Commerce approval in China itself. So it's effectively the two remaining approvals from the Chinese Government and regulators in terms of the deal moving forward.

Thanks, Gavin. And just on the NaCC, the Namibian Competition Commission CP, any insight into that? I mean that was one that we thought could take longer. Obviously, very happy to have that one away. Can you just talk through that one?

Yes. And that was actually a significant achievement for us. So we worked on that along with CNOL as partners. And the approval that we got had a couple of provisions required in terms of moving forward. And it was extremely fair in that a lot of the provisions are actually less stringent than the actual mining license approvals. But the good thing about it as well, and I think the message that people should be taking out of this is that CNOL and ourselves have agreed to achieve a 90% Namibian employee ratio within 5 years. So a lot of fear has been around is this going to be another Chinese-operated mine, et cetera. And I've been saying for a number of years now that this is a Namibian mine for Namibians. And the fact that CNOL was party to this agreement and has signed off on those -- on the requirements for both employment and procurement going forward, I think, is a significant step in terms of showing people that we really mean this to be a Namibian mine for Namibians. And I think that the targets that we set, we're actually achieving all of those targets in terms of ratios at the moment. Some of them are challenging. But with a little bit of work, we are 100% confident we will achieve them. And when I say they're a little bit challenging, we need to put systems in place, but we've got 5 years to do it, and it's really around achieving the procurement targets. And they are reasonable, but we need to put a plan in place to make sure we achieve.

Perfect. And staying on the topic of CP, we've got a question here from Glyn. Is there a time line that the NDRC need to respond by? Or is it a case of how long is the piece of string? And have we seen any of these foreign investment approvals into uranium outside of China lately?

Exceptionally good question. And from our perspective, we have confidence. And the reason being is there's been a lot of interaction between the CNOL executive management and MOFCOM, which is really the main, which is the Ministry of Commerce approval. They've already had a number of meetings at a senior level with them. They've responded to questions and answers post the submission of the original document. And as far as we're aware, there are no outstanding questions from MOFCOM. So effectively, they're processing and following the normal regulatory procedure to get to the completion of the approval. But the good news is that all of the questions and answers have now been answered and submissions has been submitted to MOFCOM.

Great. Thanks, Gavin. And we've got a few questions -- a couple of questions coming around CapEx budget. So we'll start off on the CapEx into FY '27, can the market expect expenditure to be similar over the next couple of quarters as we have seen? And what's that ramp-up in terms of expenditure?

Yes. So certainly, for the next quarter, it will be very similar to what we achieved in this quarter. The reasons being is the earthworks contract is coming to an end, so his expenditure will reduce. But we've also placed the 5 long lead items for the mechanical equipment in the dry plant, which will then obviously be supplemented or will supplement the reduction in spending on the earthworks. So for the next quarter, at least, we would -- it's going to be a very similar expenditure. Post deal completion, we will move into significantly accelerated expenditure with the placement of the structural steel contracts, which have currently been adjudicated and will be ready for placement on completion. And that will see a significant increase in expenditure. We are 100% aligned with our September 28 commissioning date based on the late start of the deal being the end of September. Any deal completion before that will probably have a positive impact on the schedule moving forward.

Right. Thank you so much for that one. And on the reimbursement CNOL up to USD 27 million, as of 1st -- from 1st of July up until completion, how is that tracking at this point?

Yes. So our expenditure has been tracking our original plan. So the $27 million is directly linked to the cap of $16 million in terms of capital expenditure, and that capital expenditure was based on getting to the end of September. As we get closer to deal completion, we may choose to accelerate some of the expenditure just to ensure that we get the $16 million cap and then we get the full $27 million reimbursement. We won't be overspending the $16 million. So we certainly will not be giving away any money to anybody.

Right. And just another question on the CapEx. How are you thinking about the pressures on the USD 353 million, the estimate? What percentage impacts are you seeing at this point? And when can the market expect an update? Obviously, I think to this point, we've been saying at end of close, if there's anything outside that plus, minus 10%. But if you can just update everyone on that, Gavin.

Yes. So we're tracking well against the budget at the moment. I think one of the most pleasing things for the quarter was the 5 orders that we placed for the mechanical equipment in the dry plant area came in on budget and in fact a little bit under our original budget. So our strategy of placing contracts with escalation formulas pre-agreed actually meant that even though we had a crisis in the Middle East in terms of the war that's going on there, it never affected the actual pricing for those pieces of equipment. So at the moment, we tracking well. When we talk to the $353 million plus or minus 10%, I do need to stress that the plus or minus 10% is for unknown unknowns, such as the war. For the known unknowns, we have a contingency within the $353 million and we're tracking well against that. So I believe the $353 million plus or minus 10% is secure, and we're confident that we can achieve that number.

Right. And just to clarify a question here from Andrew Hines, on the critical path to construction or for construction. Those 5 contracts in the dry plant area that place because that is determined like that's going to keep that critical path? Or is there anything else that we need to be mindful of to ensure that critical path of 2028?