Moody's Ratings downgrades GEAR to B2; outlook negative

(Singapore, April 30, 2026) -- Moody's Ratings (Moody's) has downgraded Golden Energy and Resources Pte. Ltd.'s (GEAR) corporate family rating (CFR) to B2 from B1 and downgraded the rating on its senior secured notes due 2027 to B2 from B1. The outlook remains negative.

"The downgrade reflects tight holding company interest coverage and liquidity at GEAR, alongside risks around the company's management of its mining investments, including the liquidity stress at its Ravenswood Gold joint venture. While Ravenswood is legally non-recourse to GEAR, the situation could weaken creditor confidence as GEAR approaches the refinancing of its 2027 US dollar bond," says Yu Sheng Tay, a Moody's Ratings Assistant Vice President and Analyst.

"The negative outlook reflects our view that refinancing risk at the holding company is increasing. Without concrete progress on the refinancing of its US dollar bond over the next six months, GEAR's credit quality could weaken further," adds Tay.

Governance considerations are a key factor in the rating action.

RATINGS RATIONALE

GEAR's credit quality has weakened amid rising refinancing risk at the holding company. This reflects tight interest coverage and liquidity at the holding company level, alongside execution risks related to the management of its mining investments.

GEAR holds a 50% stake in Ravenswood Gold alongside EMR Capital. The joint venture faces a funding shortfall related to out-of-the-money gold hedge settlement obligations. If unresolved, the situation could lead to a default at Ravenswood.

Although Ravenswood is not part of GEAR's restricted group and a default would not trigger cross-default provisions under GEAR's bond documentation, we view that the situation could weaken creditor confidence in GEAR and impede its access to capital. This is credit negative because GEAR must rely on external funding to repay its $506 million bond due November 2027, as we do not expect sufficient organic cash flow generation at the holding company to address this maturity.

These risks outweigh recent improvements in operating conditions at GEAR's core subsidiaries. Force majeure declarations at Stanmore Resources Limited (Stanmore) and Illawarra Coal Holdings Pty Ltd (Illawarra) in January 2026 were resolved by February, with production at both subsidiaries tracking broadly in line with full-year guidance. Metallurgical coal prices have averaged around $236 per ton year in the first four months of April 2026, compared with around $190 per ton for full-year 2025, providing a more supportive earnings environment.

Holding company interest coverage, measured as dividends received over holding company interest expense, will improve in 2026 following higher dividends declared by Stanmore. However, the ratio will remain weak at 1.3x. We do not expect dividends from Golden M NSW Pty Ltd (GM3), which holds GEAR's 51% stake in Illawarra, because GM3's credit quality remains under pressure from high debt service and capital spending needs. GM3 has obtained covenant waivers through the June 2026 testing period.

The B2 CFR continues to reflect GEAR's ownership of metallurgical coal assets with meaningful scale across Queensland and New South Wales, a track record of maintaining operations through the cycle, and exposure to volatile commodity prices.

LIQUIDITY

We expect GEAR to maintain adequate holding company liquidity over the next 12-15 months. Higher dividends from Stanmore, together with GEAR's existing cash balance and a shareholder facility, will help to cover holding company overheads of around $20 million, annual bond coupon payments of about $43 million, and equity contributions to the Ravenswood Gold joint venture. However, this buffer will likely narrow by end-2026, increasing refinancing risk for the $506 million bond due in November 2027.

GEAR has alternative liquidity of about $306 million, represented by its 8% stake in Stanmore and its 7% stake in PT Golden Energy Mines Tbk (GEMS) as of April 2026, which it could divest if needed.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS

We have revised GEAR's management track record score to 4 from 3. This reflects challenges in managing its investments in mining projects, as reflected in the operational challenges and liquidity risks at its Ravenswood Gold joint venture.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Given the negative outlook, an upgrade is unlikely. We could revise the outlook to stable if operating performance at Stanmore and GM3 improves such that earnings and cash flow increase, and if liquidity at the holding company strengthens through higher dividend inflows, asset divestments, and timely progress in refinancing the 2027 notes.

Specific indicators we would consider to stabilize the outlook include interest coverage at GEAR on a standalone basis above 1.0x and consolidated adjusted debt/EBITDA below 3.5x.

Conversely, we could downgrade the ratings if GEAR's cash flows cannot cover interest expense and overheads on a standalone basis; if the company provides additional funding support to subsidiaries or joint ventures that weakens liquidity; if it adopts aggressive financial policies such as high shareholder returns or maintains a materially lower holding company cash balances than historical levels; if credit quality at Stanmore or GM3 deteriorates significantly; or if there is insufficient progress in refinancing the senior secured notes due 2027.

Specific indicators we would consider for a downgrade include interest coverage at GEAR on a standalone basis below 1.0x or consolidated adjusted debt/EBITDA rising above 3.5x.

The principal methodology used in these ratings was Mining published in February 2026 and available at https://ratings.moodys.com/rmc-documents/459824. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement.

Headquartered in Singapore, Golden Energy and Resources Pte. Ltd. (GEAR) is a privately-owned energy and resources company with investments in coal and gold in Australia. GEAR's primary investments include a 59% effective stake in Stanmore Resources Limited, a 51% effective stake in Illawarra Metallurgical Coal, and a 50% joint venture stake in gold producer Ravenswood Gold Mine.

REGULATORY DISCLOSURES

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At least one ESG consideration was material to the credit rating action(s) announced and described above. Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://ratings.moodys.com/documents/PBC_1462204.

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