Regis Resources Limited (RRL) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Regis Resources Investor and Analyst Briefing [Operator Instructions] I would now like to hand the conference over to Mr. Jim Beyer, Managing Director. Please go ahead.

Thanks, Ashley, and thanks, everyone, for joining us today. Unfortunately, this is a call that we had to [indiscernible] us. For those that don't know my name is Jim Beyer. I'm the CEO, Managing Director of Regis Resources, and we're here to briefing on the surprising and disappointing Section 10 declaration made by the Federal Minister for Environment and Water, Tanya Plibersek, on Friday morning in relation to McPhillamys. Look, I think this might go for a bit, but I think it might be helpful just to provide some history on the projects, we'll take you back to 2012 when Regis acquired McPhillamys with a view of progressing the project towards being an operational open-pit gold mine. Since then, the company has continued to progress the usual project development milestones, deliver against the relevant regulatory requirements at each stage with the expectation, we secure the approvals under each step and the project would be viable, be suitable for development as an operational mine. In line with this approach, in 2018, the New South Wales government issued Regis with what's called the EAR, Environmental Assessment Requirement, which outline the issues that needs to be considered by Regis when developing our EIS, the Environmental Impact Statement. This is all as per the standard process, as required New South Wales and is part of their Aboriginal heritage as a consideration. We commenced the development of the EIS submitted that to the New South Wales government, was subject to lengthy consultation periods, as I think a lot of you would be aware, with a range of stakeholders and also with 3 amendments. EIS was reviewed by the New South Wales Department of Planning, Industry and Environment between '20 and '22. And then it was referred to the next step in the process, which was a referral to the Independent Planning Commission, IPC, for their review and approval. This was undertaken in 2022. During this process, there was significant engagement with an range of stakeholders, including 13 registered Aboriginal stakeholder groups, including the Orange Lands Aboriginal Land Council, the OLALC, who are the statutory body who have authority to speak to the area in which the McPhillamys project is located. That's under the New South Wales Aboriginal Land Act of 1983. During this process, OLALC provided submissions on the project. Now to be clear here, OLALC was neither for, nor against the project, they were neutral. However, OLALC submissions stated that McPhillamys would not impact any known sites or artifacts of high significance and that impacts on the Aboriginal heritage could be appropriately managed and mitigated. Now I don't want to speak for another party, but I'm sure OLALC didn't come to this conclusion likely as I commenced work in 2019, conducted investigations into the heritage of -- over a number of years, visiting sites and surveys with multiple staff members and consultants. Now these results and views and impacts, their view was that they could be properly managed. And that view and those positions were provided into the IPC process for consideration. Now in amongst this process in 2020, October 2020, the group lodged a Section 10 application, citing that the area of the site was of particular importance, including in areas denoted as [ springs ]. Since their application, there have been multiple rounds of procedural fairness or what's called procedural fairness in consultation held by the Federal Department. And during this, the applicants have often changed arguments and raised new arguments, which has protracted the process. It's worth noting that this view or perspective was also provided to the New South Wales, to the government's IPC process and was discussed at open hearings as well as we understand private hearing -- private meetings. In March '23, the project received approval from the New South Wales IPC and the subject of Aboriginal cultural heritage was considered in the IPC statement of reasons. After this, in May of '23, Regis received -- was granted another key statutory approval for the project being the federal environment approvals under the EPBC Act of '99. So just to recap on the process front, we received approval for the project from the New South Wales State government, and we received approval from the federal government, and that was even reviewed and approved by Minister Plibersek's delegate and office. The project was reviewed by the body who has statutory authority to speak to the area, who found any risks the cultural heritage could be managed or mitigated and that there was no area of high cultural significance. Regis then had every confidence that from a regulatory point of view, McPhillamys was an approved project with no significant showstoppers from the government perspective. And so Minister Plibersek's declaration was a huge shock to us and not a decision that we felt was in keeping with past precedent, particularly given the already extensive investigations into Aboriginal cultural heritage issues. Put simply, the Minister and the Section 10 decision is the only party to date, including the Local Aboriginal Lands Council, has determined that there's any item of heritage significance in the declared area that's is sufficient to require extensive protection and a blanket ban on significant activity in the area. The multiyear decision-making process of both the New South Wales government, state government, including the IPC and the Federal [ EPBC ] Act, have now been effectively overwritten by the Minister. And the decision has made the project currently unviable. We have no tailing storage facility location anymore. To be clear, Regis informed the Minister that a partial declaration similar to the one performed here would mean the McPhillamys in its current configuration would not be viable. It's not as simple as being able to not stopping the mine and protect areas consider worthy of protection. While the Minister commented that there were multiple locations and potential options for the TFS, that was all part of our assessment process, where we filtered and considered the factors of safety, geotechnical impacts, groundwater impacts, heritage impacts, environmental impacts, including forestry, [ blue box ], animals, Koalas, et cetera, and this was deemed to be the viable -- alternative viable location. And we note, given the [ result ], the -- we note that this is something that we did explain and there was -- over the years of assessment. Now given the technical complexities associated with the design of a tailings dam combined with the onerous environment and heritage requirements, other locations, as I said, were deemed unsuitable. To advance an alternative TSF-like solution will require further extensive investigations and studies along with the restart of the federal and state approval process, which could take between 5 and 10 years, ultimately, with no certainty of an alternative being realized. Regis considers the Section 10 declaration shatters any confidence the development proponents Australia-wide, both private and public, can have in project approval timelines and outcomes. We'd also note that much of the area declared is freehold land and ultimately owned by Regis. No third parties have any rights or abilities to use that area. The implications of this decision is not limited to the resource industry, but also developers of infrastructure, renewable energy, property as well as tourism operators, farmers and owners of freehold land more generally. The decision highlights the increasing risk of investing in Australia. And I note that there are a number of similar comments being made within the industry over the weekend and today. Turning to what next for Regis and for McPhillamys. Well, the first thing is we'll be revisiting the $190 million carrying value that we have on our books for the project. And I note that later this week, we have scheduled our full-year accounts, which we will be releasing on Thursday morning. We'll also be reviewing the ability for us to continue to report the project that's having ore reserves, given the limitations and restrictions we now have been placed under. We're also considering and assessing the legal implications of the declaration and the associated wording, and we're working to understand our legal avenues, and I prefer not to comment further on this. But what I will say is that unless there's a change of the declaration, I don't see it's possible for us to deliver the McPhillamys project to the Board for an FID, certainly not in FY '26. As I stated earlier, any other TSF location was deemed unsuitable. And for us to reevaluate alternative options will require us to restart the whole approvals process, and we see us taking -- could take at least 5 to 10 years of additional work. Given what we've seen here, you can go through an extensive process to satisfy all approval parties and still be overwritten. I'm not sure what confidence this gives us or anyone for that matter on how this could be considered a viable process. And even if we did go through the -- as we -- as I mentioned, they go through and seek out an alternative tailings dam process, what this process that we have just experienced tells us that even that will not give us any certainty as it can be overwritten. Of course, at this point, we also must be now considering any ongoing expenditure commitments for McPhillamys. This is not a good scenario for the company. As I said, we consider the Section 10 declaration shatters any confidence that development proponents Australia-wide, private and public, can have on project approval timelines. This is not a good outcome for the country either. All right. I'll now throw it back to you, Ashley, and we'll do my best to answer any questions.

[Operator Instructions] Your first question comes from George Eadie with UBS.

Jim, given there's like a federal election next year, have you spoken to the opposition yet? Are they supportive? And could this may be a wait-and-see story for 12 months or whatever the next federal election is?

Look, I guess there's a number of factors in here, not the least of which is the timelines and the time frames, which you've got to, I guess, for one of a better description, appeal the decision. We have requested the Minister's statement of reasons, which is supposed to be the detailed explanation of why the Minister has landed on the decision that she has. Once we have that, we can understand a little bit more clearly as to what the reasons are and what our avenues are. In terms of thinking about timelines to the next election and the opposition, that's not what our focus -- our immediate focus is on. We're trying to understand more closely what the immediate opportunities are for us to, I guess, try and crack the decision open so we understand where we might be able to take it.

Yes, sure. And it might be a bit early on, but I'm sure you've run scenarios over the last few years for this project, things going wrong, I guess. So I guess my question is, does the strategy maybe change from here with [ Duketon ], the only operating asset that you're in charge of now and resources getting quite low at the end of the decade? Should we, maybe after this anticipated big exploration, pivot there? Or is inorganic options now of greater interest potentially?

Well, certainly, look, our immediate focus is to get some clarity on just how long -- if at all, right, if at all, there can be a recovery on this project. I certainly -- I think any view that this is just delaying the mine is -- needs to be carefully considered. So we've got to understand that. In terms of, certainly, what does this mean for our business? Well, it means that I don't think this means a change in strategy as to how we look to drive and operate Duketon. We still need it and want it to be the cash generator that it's moving into and setting it up with the underground mines as part of our -- of building a sustainable production site there that can take us out to the end of the decade. In terms of M&A, look, we've always been looking. Of course, we've just got to understand, unfortunately, there's something that we've considered a reasonable value, which is now not. And we're just sort of still working through what that means. But we've always, and I said always, been looking for alternative applications for our investment money, be that M&A. McPhillamys was a key asset and still is a key asset that we hold. It's obviously got a much more significant question over it now on value. But that doesn't mean that we walk away from it at this point in time. It also means that we make sure that we're looking for other opportunities out there as well.

Your next question comes from Andrew Bowler with Macquarie.

Just comment -- just on your comments about the other TSF locations not currently being viable and just sort of noting your due diligence in terms of environmental and safety considerations, et cetera, is that more a function of the other TSF applications that could be viable, but this year cost or the capital -- the upfront capital to develop those into viable options is too much? Or is it that they're just not viable at all in terms of location and you not [ owing ] a land, et cetera?

Yes. Look, I mean, these are complex processes that you run through, and a lot of this work was done a number of years ago. Some of it relates to where and what catchment areas are you building a tailing storage facility. Does it meet the safety requirements that you want? There's very significant, as we know, under the Church of England, [ Tailings Dam Authority ], things that you need to make sure you've taken into account. The geotechnical stability that are key drivers and key filters. Physically, you can draw pictures on a map, but then you've got to go and have a look at it and see whether it meets the safety requirements as there's multiple factors. At the moment, we don't have an alternative. There were -- over the years, there has been different things that were looked at, and they're basically being batted away on the basis of everything from impacts to groundwater, to heritage, to environmental. So right now, we haven't got a viable alternative to the tailing storage facility that we've got. And as I said in the release and on this call, to find something and find a replacement, assuming that we can, could take 5 to 10 years. I'm assuming that we can.

And in terms of your expenditure commitments, talking about obviously reviewing those, are you expecting to make a decision on that before you exhaust all your legal options? Or is that something that you have to wait a little while, at least until you are getting to the nitty gritty of what your options are legally?

Sorry, was that a question on the expenditure of McPhillamys? I just missed the first bit.

Yes. Yes. Like we [indiscernible] on that near term or what [indiscernible] your legal options?

Look, I mean we've sort of -- we're at a pretty -- we passed through quite a significant milestone gate a couple of -- a month ago or so, a few weeks ago, really. It's a little bit of a blur. But back when we put out the IPC -- not the IPC, the DFS results, too many 3-letter acronyms, and so that's been a sort of a natural stop and take-a-breath point for us, which is what we're doing now. We've actually been talking about what are the things that we needed to do in the lead up to getting things ready for FY '26 FID. I guess what I can say is as we look at this and if it stands, then as I said earlier, an FID decision in FY '26 is just not practical. We don't have a site for a tailings dam. So it makes it pretty hard to [ fall ] with the project without that. What we've got to do, this is -- yes, we considered this risk. But to be honest, when you look at the story and how we -- when I say we considered the risk, we considered the risk of a granting of a Section 10. But when we ran through all the logic and all the reasoning and all of the process and all of the other considerations, all the other statutory bodies, call it what you will, the government, the state and the feds, the EPBC, the Minister's own department; at all considered this, we thought, clearly, the probability on this was very low. So we haven't got acres of plains laid out in front of us as to what to do. So we were a little bit, as I said, shocked. But as we have to do on the -- we've got streams that are starting to run now, one on, well, where do we stand from a -- what are our own -- the avenues from a legal perspective. And this -- we got to wait, there's more information for us to get to understand that. We should get that in the next month. But in the meantime, we take a look at what other expenditure we were planning. There's still quite some time. There was optimization work. This field environmental monitoring work that we've got to look at and consider. So it's a bit early for us to make any kind of broad statement on how it's going. But we won't be ordering long-lead items or anything like that at the moment.

And just a point of clarification. I mean, you talked about -- looking at the $190 million carrying value, I missed it in your opening remarks, did you say you're going to look at that in your upcoming financial results in a couple of days' time? Or is that something a bit later?

Well, it's now something that we're aware of. So I think like it would be -- what the decision is unclear at this point, but we have to make a decision one way or another, so we can't say, "Oh, we've got this issue." and we'll let you know in a little while, what's going to happen. We have -- we believe we've probably got enough info -- well, we believe we've got enough information to do a good assessment of it. What the outcome is we still haven't finalized. But I guess the next opportunity to say why we're likely to settle is on Thursday when we put the accounts out.

Thank you. Your next question comes from Daniel Morgan with Barrenjoey.

Jim, I share your and your team's disappointment. Just trying to understand it a little bit more. Is it fair to say that this decision -- and I guess you're trying to understand as well, but it's about the cultural significance of the springs, i.e., there is not a physical artifact that is being protected, i.e., we're not talking rock caving, carvings or art or anything of that matter?

No, that's correct. I mean it is limited as to what we can go into. But the way it is described in the area that we are familiar with it is, I guess, arguably coincidentally, the footprint of the tailings dam, of the tailing storage facility and it takes in the springs. Well, the springs that are variable springs, even the work that we've done there, so the springs run when -- after rains, and they dry up, and they're not consistent, but also there's an area over the creek that runs through our property and out into other properties and Council land and the like. So it's an area which has -- what's the way to describe it. It's an area that has natural formations, not caves, not a [indiscernible] type of thing. But it's an area of -- it's deemed by those individuals as having some significance to them. There's no artifacts to our knowledge that is part of that.

And can you give us a sense on how much of the tailings dam footprint is impaired by this decision, i.e., in simple terms, if this is smack bang in the center of mass of the tailings dam, obviously, it's the non-startup? But if it's on the edge, maybe it just reduces the capacity, if you follow my logic, of that potential tailings. Maybe it goes from 10 years to 5. Do you know what I mean? Like can you give us some sense of where this is with orientation of the tailings dam footprint?

Yes. I think if you had a look at one of the diagrams that have been one of the aerial plans that we have of the site, and you can draw a line around the edge of the tailings dam. That's exactly where it is, the footprint of the tailings dam.

Right. So that you couldn't possibly reduce its scope, get into production and then look to sanction another tailings dam that has more capacity that could be approvable. Is that what you're saying?

No. Our interpretation of it at the moment is it takes out the whole tailings dam area. There's no -- it's not -- no, it's not -- it's not like a swing pool where there's a section in one corner that's been identified as relevant, and we could build a brick wall around it and let the pool fill up around that. It is the whole pool. And important point there, Dan, it's just the pool. The [ ore ] body itself, and that's not covered as part of this declaration at this point.

So I'm curious, I mean, looking at the Minister Plibersek's public comments regarding this that she's not -- her decision does not prevent the mine from being developed, I'm just curious as to how that works. If there's not a tailings dam, is it a misunderstanding of what's involved and what a mine -- into what's involved in having an operating mine?

Look, as part of the process and an answer to a query, we indicated that there have been 4 areas -- over the years, there have been 4 areas and multiple number of different scenarios that have been considered and for reasons that vary from safety to geotech to protected trees and forests and animals and also heritage protection, geotechnical reasons, those areas were discounted and discontinued, I guess, and we landed on the one that we had. I guess, it would be great if someone give us another area that was approved, but that's not -- there's nothing there. There's no -- we went through a process and landed on this one that we've got. And that took years, it took years to get to this point. So I think it was a slightly -- it was information that we have provided as part of a query, but it wasn't really understood. It's probably the -- perhaps it wasn't understood that it was talking about the options and the scenarios that we looked at to land on what was considered to be the best, safest location for it because all the other options just didn't -- frankly, didn't stack up.

And all of those options, if you were to seek to advance them, I imagine that you could well run the risk that there could be a Section 10 issue with those down the road as well. Is that fair?

Yes. Look, I think that's one of the things that I try to, yes, make a point of. We feel that over the years, we've gone through and we've engaged with, as we've said, 13 reps, average representative groups. We've gone through the various heritage processes. We've provided the growth of various Aboriginal groups. Heritage groups have looked at it, it's all been considered -- this -- these issues were considered by state and okayed. They were considered -- elements of it were considered by the department responsible for the EPBC Act. And notwithstanding all of those approvals, now with this one decision, those approvals have been effectively discounted to zero. And therefore, I would look at it and say, we spent another 4 or 5 or 6 or 7 years going through another process to try and do this. I'm not sure what I see out there that stops it from happening all over again. The decision, it's just -- it's concerning. Obviously, we'll try and figure out what we do. But there's no quick solution to it. Unless the decision gets reversed, there's no quick solution to this, and there's no ongoing certainty. That's why one of the reasons why I think this is -- this issue is not just McPhillamys. This issue is more -- is just, if not more, as relevant to the broader industry. It concerns me significantly.

And so last question before I pass it on. I'm sorry, I'm -- just a lot of questions that I've had on this. But on that broader industry point, how far and faster that's going up various industry body flagpoles? Because it strikes me that this would be extremely concerning for the mining industry and just about any project development, anyone who's trying to put forward -- or even existing mines, perhaps as a part of that question, do you have -- does this pose a risk for Duketon and Tropicana, going forward, as part of a broader industry problem, where you could have activists who are antidevelopment, seek to weaponize this?

I don't think the word there is they could seek to. I think it's -- that's future tense. I think we're dealing in present tense with that now. So to answer your question, yes, the various representative groups, [ AMEC, ] New South Wales Mining Council, they've already come out and made comments on this over the weekend [ out of ] New South Wales Mining on Friday, I think, because there's another -- not a Section 10, but [ problems over ] silver mine, who experienced some issues as well. . Safe to say that this is as part of the -- leading to this over not just months but years, I've been engaging with various ministerial advisers and ministerial departments to keep them informed and -- both at state, not WA, but New South Wales and federally. I think the New South Wales government has been very supportive of the project and saw that the project had gone through its approval processes, so it seemed to be that they were comfortable. So yes, the short answer is there are a number of the representative bodies, [ AMEC, MCA ], all that, that are aware of it. I know that some of them have already come out and expect that they'll probably make some more commentary on that. In terms of Section 10s across, then, I guess, that's for industry and investors, I guess, to interpret what this means. I can say that over the months, the Section 10 is sort of listed in its -- notoriety is not quite the right word for it. But for its relevance to us and McPhillamys, I get more and more questions from international investors as to their core comments about their concerns as to where these and other elements of sovereign risk are going. So yes, it's definitely something that I think is an industry we should be very concerned about. I don't really want to make comment on what other Section 10 applications might be out there for other parties. I'm sure they're well truly aware and -- across what the potential issues and outcomes might be for them, and I'll leave them to comment on their own.

Your next question comes from Alex Barkley with RBC.

Thanks, Jim, for the call after the disappointing news, obviously. You mentioned before a potential timeline around that legal challenge. Obviously, we're [ waiting ] a bit of info [ from ] you. Just sort of wondered what that might be? And if there was, I don't know, a window where it has to occur? And then a second part, obviously, ramification for others in the industry, could be industry bodies or other miners. Have they sort of reached out around that legal response as well off of help around the process or anything there? Obviously, a lot of people are sort of hoping that this decision might be changed. Yes. if you can just talk about that process.

Yes. Look, the first thing that we have to do, I mean, there's elements of this, where it is something that's under legal consideration. So we need to be somewhat cautious of what we what we say. However, my understanding of the process is the opportunities to appeal or query this are actually quite limited. The first thing that we need to do is we need to be able to see what the Minister's statement of reasons are. And I think just because we disagree with something doesn't necessarily mean that's a valid point to argue. There is -- you've got to make sure that due processes follow. So -- and we've been -- and that's why there's an extensive process of procedural fairness that is followed on this. But having said all of that, ultimately, this sits with the Minister. So our ability to legally challenge that is something that we need to understand the details around the decision a little bit more to have some clarity on that. And probably, that's where I prefer to leave it. In terms of people reaching out to offer help, I certainly had a few notes of commiseration to be the [ flight ] ones. Just a serious concern from others that understand what the repercussions are more for the industry. So I think people are just sort of leaning in a little bit now, as I say, in understanding what -- this seems, actually, a little bit more significant than what they might have thought of it to be. So obviously, we'll take offers of support wherever we can get it. But in terms of -- we've got to knuckle down now and wait until we see the details of the decision, and then we'll go from there.

Your next question comes from Matthew Frydman with MST Financial.

Jim, thanks for your frankness on the call. Just a couple of questions. Firstly, you've suggested that you're going to review the spending commitments on McPhillamys. If I look at your recently issued FY '25 guidance, you said you'd be spending $15 million to $20 million on the project in the year. Can you remind us what's in that, what can be turned off quickly if you need to? Would there be any sort of ongoing carrying or carrying maintenance costs with the project as it sits in limbo? I'm conscious of the fact that you're still hopeful of a better outcome. So I don't want to sound too much like a liquidator or anything quite just yet. But I'm guessing, if there is stuff that you can turn off, it's actually not going to be a material drag on the business and it may actually unlock a bit of cash flow that can be deployed elsewhere.

Yes, that's probably reasonable. I mean we've got -- we see that we've got obligations, both I guess, legally and morally that we want to continue to meet and follow around the project and the work that's being done in the Blayney area. There's obviously some immediate works that we will just park up, and that would relate to things like more optimization work and trade-off studies and all those sorts of things that we were heading into. That would be a handful of million dollars over the next 12 months. But the rest is we can't -- we've got to make sure that we don't cut off our nose [ despite ] our face in this process, but we have to. So it's what we ultimately do and where we end up in part will relate to "All right, how does this whole understanding the decision, understanding our legal position, understanding what the timelines could be from there," and then we'll be able to sort of lay in more clearly on a "What's the right cost to cut for the project while we work our way through," once we know what we can work our way through.

Yes. Okay. Got it. So of the $15 million to $20 million, maybe there's a little bit that you can [ hark ] up straightaway, but still to be determined around exactly what the path forward is sort of longer term?

Yes, that's right. I mean this thing is 2 days old, right? We just don't -- we don't want to decide in hasten [indiscernible] leisure. We need to think [indiscernible].

Yes. At the risk of kind of [ skirting ] that frame of mind again, but is there anything that sort of springs to mind in the project that can be readily monetized or sort of any form of recourse in your mind in terms of reimbursing some of the costs that you've incurred as a business? I guess, any sort of positives that you can -- or can take out from here or rather sort of any considerations that are going to form that carrying value assessment of what value still exists in this project, even assuming that we can't build a mine here?

Look, it's probably a little bit early to make any comment on that. I mean I don't want to say I'm too particularly frivolous, but I'm happy to sign, come in and give you a signed copy of the section on the DFS that talks about the tailings storage facility and all the work around that. But apart from that -- for a fee. But apart from that -- yes, I mean it's a bloody serious -- it's a serious situation. It is -- this has huge ramifications for our team, for our -- the investment of the company, and I don't want to sound like I'm being frivolous. But sometimes, it's just so disappointing that all you can do is try to make a joke about, something, just to break it. But no, look, there's nothing immediate. I could point to, to say we could easily monetize this and off we go. We've just got to think carefully about that.

Yes, I understand. And I know I'm sort of asking some pretty specific questions only a day or 2 into it, so I appreciate that. Maybe kind of back to the more philosophical discussion. I mean, Jim, you've had a career in the industry, you worked in multiple commodities, multiple projects. Having gone through this process now, in your understanding of the law as it sits, do you see any part of the industry which might be immune to this kind of decision in the future at a high level? Is it just because McPhillamys is a brand-new project? Or is it just because it's in New South Wales that maybe has brought added scrutiny? Or as you suggest, is this really industry-wide problem in your mind now, going forward?

I'll put my [ AMEC ] hat on here, and I would say that I think what this has done, and unfortunately, with a poster child for it, if you like. But unfortunately, this has highlighted what is potentially going to be a growing issue for the industry. It can happen to anybody that's got a plan to start, being under construction or in operation. It's quite significant and concerning. It's not new. The -- I think the act has been around since 1984, I saw something. So it's not as if it's new, but what we're seeing is that it's -- and I'm not making a comment about the Regis and the McPhillamys one in particular, but the risk is going forward that this could be seen as a -- the intent is lost somewhat, and it's been weaponized as any development, which is a real concern. I mean there's a genuine -- as a company, we have a genuine concern, and we work -- like to work closely with the traditional owners on the areas and the lands in which we operate. So it's not -- we take -- we see that as a very important part of our business and the opportunities that we bring to the group. So it's with a bit of a heavy heart that I can't make an adverse comment about where this could go, but that's probably a reality.

Your next question comes from David Coates with Bell Potter Securities.

Thanks, Jim, and good morning. Very supporting and concerning decision. So just a follow on a little bit from that. I guess, I've got sort of [indiscernible] as something that, I guess, are unpermitted projects, may be vulnerable too, but some of your comments are kind of indicate that established operations could also be vulnerable in this kind of claim as well. Is that what you think the implication is?

Yes, there's no limitation on where an application can be made, as far as I understand. There's no native title. native title was -- this is all farming country and has been for -- since 1800. So I don't think there's any restriction on where it applies. I mean the interesting thing that's a little bit more unique element for us is that this is freehold land, right? This is not crown land. I think there may well have been a number of applications over crown land. But this is freehold, and this restricts -- runs a risk of restricting -- we're still trying to evaluate what the implications are but -- because obviously, we -- while we've been going through this design and prepared process, we've been leasing the land for cattle and other use. And at the moment, our interpretation is all of that's got to stock. We can't let anything over this particular area of property, which is -- it's a concern if you're a freehold landholder. And something like this is identified somewhere. So there is -- is it something that whether you're in -- you could have been in production for 50 years or 5 minutes or be any time away from being in production, it's a risk.

Okay. And my other question, I suppose, just to be clear, this is like a freehold land, it's been farmed for decades. There's -- [ freehold ] that's been cleared and [ trampled ] by -- from the head of cattle and sheep and that sort of stuff. Is that an accurate characterization?

This is all cleared freehold farming land, rolling hills, reasonable farming country, has been -- this part of the world has been -- I mean we're talking Orange, Blayney Bathurst. It's not the great outback. This is farming country. And this has been farming property that's been used for farming up until we bought it, and it's actually been used for farming since we bought it.

And the heritage area matches the footprint exactly of the [ entire plain ], is that correct?

Pretty close to it. There might be [ poles ] around the edge, [ poles ] along the wall. There's no way we could put a tailings there. I mean the question -- I think it was -- not sure, I think it was Dan that might have been asking, could we start and relocate? We can't start, we can't do anything.

I suppose, but it's a different message exactly like one question the [indiscernible]. And look, final one, and you have touched on this [ EBITDA ] just in practical terms kind of what this means for the company over the next 12 to 18 months and from what you've said, so first, there's a potential write-down on the carrying value, which makes sense, assessing the legal options. But also in terms of I guess, cash flow and then also -- and I suppose it's pretty early days in the refinancing of your current [debt food ]. At one point, was going to be tied after financing [ filings ]. Do you have any thoughts on how that's going to look?

Well, obviously, with the project being as it stands today, being pushed out, being -- well, indefinitely, it's just nothing there at the moment -- pardon me, notwithstanding any possible line of appeal or [ coping ], if you like, our business -- the rest of our business actually remains pretty much the same as it was. And our cash flow generating capacity remains as it was. And it means that in terms of -- the one thing that it does mean is that the work that Anthony Rechichi, our CFO, is being lined up with, being charged with going and figuring out how we were going to fund and the options for that, he is now probably trying to figure out what to do with his free time because that's just -- our reality is our business right now is cash generating at Tropicana, cash generating at Duketon and looking for something to do with it.

Your next question comes from [ Jonathan Mitchell ] with [ Shaw and Partners ]. That now concludes our question-and-answer session. I'll now hand the conference back to Mr. Beyer for closing remarks.

All right. Thanks, Ashley. Thanks, everybody. I do appreciate you coming in and listening to the background. I'm sure there's probably a couple of things there that I've somebody raise an eyebrow with me and talk to me over. But obviously, as a company, we're very disappointed with the way this has gone, but things flow one way or the other. It's not the disappointment that's really taken us back, it's the absolute surprise as to how all of the work and efforts that our team at McPhillamys has done over the years, all of the approvals and all of the consideration has been given to these issues and have been, I guess, acknowledged and approved to proceed, and we get this quite surprising, a very surprising outcome that goes against the [ grain ] of everything else, all other decisions that have been made. I think it's -- look, I'd just take the opportunity to thank the McPhillamys team for all of the great work that they've done to get us to this point. And we'll continue to work with them. And thanks, everybody, for your questions as well. As always, if there's any follow-up, please, we're more than happy to do our best to answer your questions. Thanks again. Have a good day.

That does conclude our conference for today. Thank you for participating. You may now disconnect.