BNNLF (BNNLF) Q1 2027 Earnings Report, Transcript and Summary

Good afternoon, everyone. Thank you very much for joining us today. I am Emma Culver, Investor Relations and Communications Manager at Bannerman Energy, and we are pleased to report on the September 2026 quarter. I'm joined today by our Managing Director and Chief Executive Officer, Gavin Chamberlain, who will talk through the highlights from what was a company-defining quarter. There was a lot of news, and we're very happy to be on this side reporting on it. Following this, we will answer Q&A. [Operator Instructions] For now, I will hand over to Gavin and share my screen. Good morning, Gavin. Thank you very much for joining us.

Morning, Emma, and good morning to everyone on the call. It's great to have you. As Emma said, this has been a fantastic quarter for us and one that will probably go down in the history of the company as being extremely important.

Great. You can see my screen there, Gavin?

I can.

Should be through now.

Great. It's through. I trust that everyone can see that. And Emma, if you're happy, I'll just jump into the presentation. So what you're seeing in front of you is -- sorry, on the heading slide is just the site present -- the site celebration that we had with the Minister of Mines last week to celebrate our FID. And I thought it was a really good slide to start because I know this is post quarter, but as you can see from all the happy faces there, this was an extremely important occasion for us and celebrated in style both the Mining Minister and the Commissioner of Mines. Right. In terms of the quarter and the reason why we're so pleased is you often have a plan. But when a plan comes together, it always really makes things feel just that much better. So what we managed to achieve this quarter is, first and foremost, is we completed the CNOL strategic investment, which was worth $320 million. And on the back of that as well, we also had a successful AUD 124 million institutional equity placement. The combination of these has been what has been behind our FID decision. I think you'll remember, we've always said that the FID decision for Bannerman has really been around making sure that we understand how we're going to fund the project all the way through to production. And the combination of the deal and the successful fundraise is what's allowed us to make the FID decision. We have a very strong liquidity position as at the end of September. Bannerman itself has AUD 175 million approximately in the bank, but that excludes the cash that sits in the Etango JV and other investments. And then obviously, the Etango JV cash balance is USD 295 million, but that also excludes additional cash that is currently being held in the Namibian subsidiaries. Also, obviously, on site, as you know, I was extremely excited around what is happening on site, but I'm being very pleased to see that we're still tracking on budget and schedule in terms of our early works program. And then I think another pleasing thing has been that the long-term price for uranium has stuck consistently at $97. And that obviously is a positive for the industry moving forward, even though I do believe it's going to move even higher. So post quarter and the end of the highlights, I did touch on that a little bit earlier, but really the positive FID, which was taken on the basis of the Etango design. We allowed a plus or minus 10% CapEx estimate, and we're still forecasting 3.5 million pounds with first production in 2028. Another highlight for us as well was the appointment of Danie van Aswegen. So Danie has been in the mining industry in Southern Africa for a number of years. Originally, he working on the platinum mines in South Africa, both underground and as a project manager and then moving across to Debmarine, where he had an expert position and also ran projects and development work for Debmarine. Danie has been with us for a while now and originally joined as a COO, and we are really pleased to announce his promotion to CEO of Bannerman Mining Resources. He has a strong technical background, a strong project background, but most importantly, Danie is a people person that loves to make points by telling stories. And this really has managed to pull the team together on the back of the change from one MD to another. And we're very, very, very happy with the results and the decision to appoint Danie. And then obviously, the culmination of that was a celebration with Honorable Modestus Amutse, Namibia's Minister of Industries, Mines and Energy, who came out to site, did a visit, joined the ceremony and the flag raising ceremony. So the Etango flag has now been raised on the mine, and we will continue to deliver Etango as we have been doing to date. And we are now 100% ready for full-scale construction. I've just got a couple of slides following this, which show where we were at the end of September. And as you can see, these are the bulk earthworks, which are now 99% complete. And what you're looking at there are the solution dams for the pregnant liquor. This one here was the first structure that we started on the site, which is the primary crusher. And as you can see, the actual structure for the crusher is now completed and the earthworks wall, which creates the access berm behind the crusher is progressing at reasonable speed and is currently tracking on schedule. We've also completed the ore stockpile tunnel, which sits underneath the stockpile. And what you're looking at here to give you an idea of the size, that's the exit for the conveyor as it comes out from underneath the stockpile, and those are the wing walls to ensure that the stockpile doesn't start falling on to the conveyor. And the fine ore silo is moving ahead in line with schedule. And as you can see, starting to get significantly higher. It still has a couple more raises to go, but we should have this completed in early New Year. And then the secondary and tertiary crushing facility, we are one concrete pour away from the point where we'll start installing our structural steel work, and we're very pleased once again with both the quality and the progress on this building. And then the permanent water supply line has also been a really positive local contractor once again, installing the pumps and the pipeline from the main supplier at the Swakopmund NamWater facility heading towards the mine. And what we did have post quarter as well is we actually did the bridge installation as well. And that's effectively the quarter in a summary. As you can see, there's an awful lot that has happened in the quarter, but we are extremely pleased to see the way the team has pulled together to achieve these results. And I'm more than happy at this point, Emma, to take any questions.

Great. Thanks, Gavin. And yes, it certainly has been a big quarter and a lot of progress on site. I think we'll start with -- there's been early works that's been happening on site for the last few years. What changes now that FID has been taken and what can people expect over these coming months?

Yes. Thanks, Emma. Good question. I mean, obviously, I think people may remember, I think, from months or even years ago that we've been talking about being prepared but being patient. And what people will see now is a combination of that same strategy moving forward. So in the background, in preparation for FID, we've been tendering a number of contracts. And over the next couple of weeks, there will be a number of significant contracts that will be placed. So what will that do on site? Physically, what that will do on site, it will change the number of people on site, which will increase significantly. So we will be expecting the structural steel contract on site in the early New Year. And over and above that as well is we've placed a number of mechanical contracts. So we have fabrication on various mechanical equipment happening worldwide at the moment. So you will see a significant increase in the progress on-site with structural steel, and you will also start seeing the delivery of mechanical equipment.

Thanks, Gavin. And as you mentioned in the highlights, FID was taken on the Etango-8 CBE numbers of plus/minus 10%. We just have a question here around the confidence in those numbers, the CapEx and the OpEx numbers. And is there any reviews underway? Is anyone going to be expecting any changes?

Yes. So Emma, that's once again, I think, very much linked to my previous answer in that because we've actually been doing tendering and preparing to place orders, we've got a good degree of comfort that all of the orders that we're currently working on are still within the original budget. We do believe that a 10% contingency on the original capital number is prudent. But right now, we're actually tracking according to budget. And that's been because we've been preparing for FID and preparing to move into full-blown construction over the last 6 to 9 months.

Great. Now that the CNOL transaction is complete, how are you thinking about the remaining 40% of the offtake? Obviously, the 60% is allocated to CNOL as part of that transaction. What's the thought processes around the 40% and strategies? Is that now moving into full swing? Or is management holding back on that?

No. And we will definitely be holding back on that, is we do believe the closer we get to production, the stronger position we have in terms of negotiating any deals with any utilities. We are maintaining strong relationships with utilities. We're updating them on a regular basis in terms of our progress. And certainly, we will continue that process, but we will not really be looking in the market to sell additional pounds until we get closer to production, so potentially 6 months before production.

And a question that's just come in is around the average incentive price of the mine. Has this increased or altered in any way?

Yes. So there's definitely pressure on the incentive price worldwide, driven by effectively what we're seeing in terms of acid costs and diesel costs. So that incentive price, we believe, is probably climbing. From our own FID perspective is we looked at it from a point of view of can we fund our project? And we could. So we've moved forward. But what I do suspect is that the incentive price is definitely going to be climbing. But hand-in-hand with that, what you're going to be seeing is an increase in the actual uranium price. And our 60% deal with CNOL effectively protects us against that from a perspective of what we -- our average sales price will be.

And how is that working relationship with CNOL? Obviously, we have had steering committee happening over this process since Feb of the closing of the transaction. I believe that we've just gone through the first official Board meetings of the JV. How is that relationship? And are you happy with where that is at?

We probably should have put this into the highlights because the relationship with CNOL has been phenomenal and very, really positive. So we've had both our inaugural JV Board meeting, and we also had our inaugural Bannerman Mining Resources Namibia Board meetings, both of which have representatives from both Bannerman and CNOL. And what we found is a continuation of what we found at the steering committee, which is positive support for the processes and thinking that we as the owners and the operators of the project have been putting to the Board. So all of our requests for the Board have been approved. And obviously, the FID decision was also supported by CNOL and had to be taken at the JV level.

And FID has now been taken on Etango-8, and I think this question is going to come many times. Is the expansion option going to be brought forward? Or -- and what's the process of looking at the expanded option of Etango-8?

So our strategy around that hasn't changed. So I don't think it's going to be brought forward, but we would still be looking to commission the Etango-16 in the fifth year of production of Etango-8. So that's still our thinking. We believe that's the optimal point to implement the change, and that's still currently the thinking. There is a bit of study work that has to happen around that, and we're now in a position to potentially kick that off. But right now, our focus remains on delivering Etango-8. So we're not going to jump in immediately and start doing study work on Etango-16 6 because as most of the people on the call will know, Etango-16 is -- the information that supports Etango-16 is well known, and we'll be able to complete the study phase for that in probably anything under 12 to 18 months.

And Gavin, you mentioned that Danie has been appointed as the CEO. With the project now heading into full-scale construction, can we expect more announcements around the executive team in Namibia that will ultimately lead this project forward into ramp-up?

Yes, definitely, Emma. And we've just been through a rigorous process of recruitment for our executive management team, which basically includes the CFO, the Chief Technical Officer, the Corporate Affairs Manager and then obviously, the CEO. So we've made and ratified the decision for the CEO, and there should be announcements coming out in the next couple of weeks around the successful candidates for the other positions. And those people will probably start filtering into the organization during next -- early next year.

Thanks, Gavin. And it looks like we don't have any more questions in what has been a momentous quarter. Any final comments from yourself before we close up today?

No. Apart from what -- as usual, thanking the entire team, this quarter has been -- it has stretched us more than we've been stretched up till now, but we came out of the other side really, really strong, and we're now ready for any challenge that can come our way. And the focus, as I said, right now is on Etango-8.

Thank you, everyone, for joining us today. Please reach out with any further questions. Watch our social media. Obviously, there's going to be lots happening on-site, and we will be sharing more in our next project update in December. Gavin, thank you very much. Have a wonderful day, and we will see everyone next quarter.

Thank you to everyone as well.

Cheers.