I would now like to hand the conference over to Mr. Mike, sorry, Slifirski. Please go ahead.
Thanks, Lexi. Good morning, ladies and gentlemen. We will be speaking this morning to 29Metals' September quarterly report, which was released to the ASX this morning. The call and parallel webcast is being recorded and will be available for replay via the 29Metals website and also the Open Briefing website. 29Metals Managing Director and CEO, Peter Albert, our COO, Ed Cooney, and CFO, Peter Herbert, will lead you through the highlights of the quarter before we open the call for your questions. I'll now hand over to Peter Albert to commence the presentation. Thanks, Peter.
Yeah, thanks, thanks, Mike, and welcome, everybody. Thank you for joining us this morning. In this last quarter, we've made significant progress on a number of key milestones at both Golden Grove and Capricorn Copper. The Capricorn Copper team has been focused on phase one of the restart at the mine, while at Golden Grove, the team focus has been on the de-bottlenecking activities to support acceleration of production in the coming next quarter, quarter four. I'll come back to some specific activities shortly. As always, the safety and well-being of our people is our primary focus. The total recordable injury frequency rate continues to fall and is now at 7.7 for the group, although we did have one last lost time injury during the quarter. Now to some detail. First of all, let's talk about Capricorn. We restarted operations ahead of plan on first of August.
This does seem like a little, a long while ago now, but worth remembering this major achievement by the team, following the extreme weather event, allowed us to restart operations in, in the last September quarter. During the first phase of restart, we were mining at the Mammoth and Greenstone mines, producing contingently at approximately 50% of normal total ore production as a result of a sub-level cave, Esperanza South, ESS, being offline due to the extreme weather event in March. Milling is operating on a campaign basis with approximately two weeks on and two weeks off. The fundamental enabler for mine and mill restart was our ability to produce clean water from the low pH mine-impacted water from one of our holding structures, which was full as a result of the extreme weather event in March.
You will remember that as a result of the weather event, we lost the water treatment plant and the workshop warehouse. So what we have done was to create a relatively basic but effective interim water treatment facility from two existing small ponds or dams adjacent to the larger water-holding structures. By adding lime and flocculants to the water, we're able to adjust the pH and precipitate metals out of the water. Inevitably, at startup, this system had teething problems, but through trial and error and addition of sophisticated dosing and control systems, we now have a reasonably robust system. The success of this solution, great example of the ingenuity, tenacity, and skill of our people on-site and across the wider 29Metals team.
The clean water we produce is used effectively in all of our underground mining equipment and in the operation of both the process plant and the paste plant, paste plant. There are multiple advantages with this system. Firstly, we're no longer bringing in fresh water to run the operation, demonstrating our ability for the mine to eventually move into a negative water balance situation. Secondly, it uses the water held on-site and therefore helps our overall water management and reduction strategy. And thirdly, the water used then gets locked up in the tailings that are stored in our tailings facility and in the paste that is pumped back underground, further assisting in water reduction. The other key effort at Capricorn has been our broader water reduction strategy. We now have 18 evaporators installed on-site, a number of which are floating units on the surface of the Esperanza pit, so-called E-pit.
Water reduction has been significant, with more than 3.5 meters drop over the quarter in the E-pit. In addition, we've been able to remove some of the water in the sublevel cave, ESS, to enable inspection of the higher levels of the decline. Unfortunately, in July, we did have an unseasonal 52 millimeters of rainfall, which had a short-term negative impact, as well as some short-term warranty issues affecting some of the new mechanical evaporator units. These warranty issues have been resolved, and we're seeing good progress in water reduction. The ability to treat and bulk release large volumes of water during the coming wet season remains a subject of continuing again, engagement with the regulator, DES.
The proposed bulk treatment of wet season release is not dissimilar to the water reduction strategies that applied in previous wet seasons, which supported a significant reduction in water levels before the start of the 2022/2023 wet season in November last year. In addition, large pumps for dewatering ESS are in progress of being delivered. These will enable greater removal of water from the mine. As mentioned previously, we have pumped enough water out of ESS at the moment to inspect ground support in the mine. While we have known that rock bolts will need replacement, we're pleased to see that the fibrecrete that we've been able to inspect is in good condition, and we don't anticipate requiring refurbishment or replacement.
As part of our water management strategy, we had applied to DES late last year to increase the authorized level for water held in the E-pit. As I mentioned, this application was made last year, prior to the extreme weather event in March, and it followed a detailed update to water balance modeling for the site by external experts. And while not directly related to tailings management, the application and its progress was intended to inform our approach to further approvals associated with tailings management, including potential to return to tailings deposition in the E-pit for a short period as we transition to the planned new long-term tailings storage facility. Unfortunately, DES has decided to refuse this application, and we are moving promptly to appeal that refusal.
In addition, we have had engagement with regulatory stakeholders and government, including at ministerial level and some of the senior ministerial team and bureaucrats who I met with yesterday to improve confidence in the path going forward and ongoing engagement with DES. In parallel, this decision does not impact our immediate plans for operations and recovery, and we will now be proceeding with approvals to support ongoing recovery activities and approvals related to tailings capacity. Copper production through the reduced period of operation at Capricorn in the September quarter was 1,100 tonnes, which were transported and sold directly into Glencore's Mount Isa smelter. Pleasingly, the last milling campaign at the end of September and early October continued to demonstrate improved consistency of operation and good production, which, if sustained, will support higher production outcomes in the December quarter. Moving to Golden Grove.
The key focus has been on the final installation and commissioning of the large underground fans to support development and production at Xantho Extended, a very rich ore body called Xantho Extended. The fans were commissioned in September. In addition to the fans themselves, significant underground ventilation reticulation has been modified to ensure maximum volume of air delivery to Xantho Extended. Development and production from fans at Xantho Extended is now ramping up consistently. For the quarter, we achieved a nearly 20% improvement in development meters at Xantho Extended at 673 meters, noting that a significant component of this improvement was in the latter half of the quarter, with a record 287 development meters recorded in September. Really pleasing progress in what is 29Metals' highest value ore body.
Overall production of Golden Grove was in line with our plan, with 5,500 tonnes of copper and 8,600 tonnes of zinc. In quarter four, with improved access to high-grade ore sources at Xantho Extended, we have three production stopes ahead of us, each of around 25,000-40,000 tonnes and each with planned end grades of approximately 15% zinc. We remain confident of zinc production for the year, achieving the lower end of guidance as previously guided. Like zinc, all other parameters remain within previously stated guidance. Costs across the group were well controlled, despite materially higher activity, higher production, and continuing inflationary pressures. Capricorn Copper is obviously a bit anomalous at the moment, so to focus on Golden Grove, we have maintained our efforts on cost reductions and productivity improvements.
C1 unit costs at $3.26 a pound U.S. were 25% lower than the prior quarter, with AISC costs showing a similar trend. We are focused on cost out and productivity initiatives across the business, which, combined with anticipated metal production growth from Xantho Extended, is expected to further improve unit costs over coming quarters. On exploration, as reported previously, we are very encouraged by the conversion drilling campaign at Cervantes at Golden Grove, with some tremendous results released over the year. These results will feed into our conversion analysis, leading to a revised resource and reserve statement expected to be reported in February next year. At Capricorn, we have committed this year to two holes of it. In this, this year, this quarter, actually, this coming quarter and quarter four, the two holes of an initial five-hole program.
This program is targeting the definition of a potential new ore body at Capricorn, which, if proved up, would be a brownfields mine development in close proximity to existing ground development. At the corporate level, of course, a very successful AUD 151 million dollar entitlement offer in late August, which was overwhelmingly supported by our existing institutional shareholders. My thanks and appreciation to those investors and for their long-term belief in not only the copper market, but importantly in our assets and the management team to deliver on our commitments. Through the entitlement offer, we also secured a key covenant relief from our senior lenders through to December 2024, such that our next covenant test is June 2025. Again, thanks and appreciation to our syndicate of lenders for providing their support.
Of course, you'll be keen for an update on the insurance claim for the Capricorn Copper event, and since the last quarter report, we've received an interim progress payment of AUD 24 million coming within six months of the event. We continue to work with our insurers to progress our claim, including addressing the insurer's assessment that the underground component of our claim is not supported. In relation to this underground component of the claim, we're working through the issues raised and with the insurers. I'll now hand over to Ed Cooney to talk a little bit more detail about our operations. He will then hand over to Peter Herbert to talk in more detail about our financial outcomes. Over to you, please, Ed.
Thanks, Peter, and morning, everyone. Well, Peter spoke to our safety metrics and production outcomes for the quarter, so I might progress directly beginning with progress against our recovery plan at Capricorn. So we've made good progress implementing the key water reduction initiatives, and while we have now successfully commissioned a significant increase in the number of evaporators on site, our focus has shifted to maximizing the runtime of these units as they are key to sustainable long-term water reduction. Peter made reference to a circa 3.5-meter reduction in the water level of the Esperanza pit, and to put this in context, the pit level increased by approximately 8 meters following the March event, in addition to filling the workshop area and the estimated 500 megaliters that inundated the Esperanza South underground.
The Bureau of Meteorology has recently declared the commencement of El Niño. Lower rainfall across Northwest Queensland would be a net positive with regards to the site's water balance, with lower surface runoff into the site's regulated water structures and the additional installed evaporative capacity. But notwithstanding this, we must be prepared for possible heavy seasonal rainfall. And to this end, project execution is underway to bulk treat water stored in both the Mill Creek Dam and workshop areas in anticipation of release during the upcoming wet season. Engagement with the regulator regarding the potential for increased wet season releases remains constructive and ongoing. And to further improve protection of the Esperanza South underground to extreme rainfall events, enhancement of the surface diversion structure is also well progressed, with all- weather access established and larger pumps also procured.
The interim water treatment solution has caused some teething issues as we recommenced operations earlier in the quarter, affecting both the mine and the mill. Additional filtration has been installed, along with further refinement of how we control the lime dosage. With the improvements implemented during the September quarter already observed during the most recent mill campaign, we do anticipate higher plant runtime and metal production for the remainder of the year. Rehabilitation of Esperanza South underground will also commence in the coming weeks, with an additional development jumbo recently mobilized to site.
Looking ahead, progress continues to be made on a number of future capital projects, with completion of concept studies and commencement of stakeholder engagement for a new long-term tailings storage facility during the September quarter, and a focus on preliminary design groundwater studies in the December quarter to support future submission to the regulator. Concept designs for a new fit-for-purpose water treatment plant were also commenced. Moving on to Golden Grove, commissioning of the booster fans has resulted in an approximate doubling of the volumetric air flows in Xantho Extended ore body, which has met the design intent. The site team achieved record quarterly development events of more than 670 meters, with a focus on key priority headings associated with planned December quarter high-grade sources.
Mining and processing performance was also good, generally, with volumes increasing by 20% and 9%, respectively. The proportion of copper ore relative to zinc ore and mill feed at Golden Grove increased to 58% from 49% quarter on quarter, with a corresponding reduction of zinc ore and feed by about 10%. Copper feed grades increased to 1.5%, contributing to circa 30% more copper metal. However, zinc grades were lower, contributing to lower zinc recoveries and zinc metal production. With multiple high-grade zinc ore sources now coming online, both the proportion of zinc ore and mill feed and zinc grades are anticipated to be higher in the December quarter.
And while the December quarter production is expected to be a material step up from prior quarters this year, we are well placed to deliver based on the continued improvement in development performance, supported by the installation of the booster fans and the high-grade stopes in our plan, and the similar performance delivered in the December quarter of last year. I'll now hand over to Peter Herbert to discuss financial outcomes for the quarter.
Thank you, Ed, and good morning to everyone on the call. I'll start with revenue outcomes for the quarter. 29Metals unaudited revenue of AUD 101 million in the September quarter was in line with the June quarter result, with higher copper sales quarter on quarter at Golden Grove. Lower zinc and precious metal sales at Golden Grove, with production weighted to the December quarter, as just discussed. And AUD 9 million of sales at Capricorn Copper, following the partial restart of operations, including the impact of the teething issues just discussed. Looking forward to the December quarter, Golden Grove sales are expected to increase, with the weighting of production outcomes to that quarter. In particular, production from the high-grade Xantho Extended stopes supporting that production increase.
Capricorn Copper sales are also expected to improve, assuming the improved mining and milling rates, as seen at the end of the quarter, can be maintained. Copper, as a percentage of total revenue for the quarter, was approximately 58%, an increase on the prior quarter result of 45%. This increase reflects higher copper sales at Golden Grove in the quarter and the partial resumption of operations at Capricorn. Commodity prices were largely flat in Aussie dollar terms, with lower prevailing U.S. dollar commodity prices offset by a declining Australian dollar during the period. Turning now to costs. At Golden Grove, site costs for the September quarter of AUD 81 million were approximately 4% higher than the prior quarter of AUD 78 million. This is despite material increases in mining and milling activity of 20% and 8% respectively.
Selling costs were lower by approximately AUD 2 million, to AUD 18 million, with lower concentrate volumes sold during the period. Capital is tracking to the bottom end of the guidance range, reflecting opportunities identified to defer or reduce capital spend, including reduced procurement commitments associated with TSF4, and the delayed completion of booster fans, which had a flow-on impact to the rate of development activity. At Capricorn Copper, the increase in site costs from AUD 1 million to AUD 19 million reflects the partial resumption of operations, albeit at run rates below the March quarter, given the continued suspension of Esperanza South. However, Capricorn Copper unit costs remain elevated due to the teething issues discussed earlier. These are expected to reduce in the December quarter, in line with increasing production levels.
Overall, recovery costs continue to track in line with expectations, but to the lower end of guidance, with the timing of the commitments being aligned to progress on key regulatory pathways. Thus far, 2023 has been a challenging year overall for costs, with significant effort being applied to identify and execute cost containment opportunities. This has been reflecting in the leveling out of site costs at Golden Grove in particular, over the last two quarters, despite increasing activity levels. Notwithstanding this, group unit costs remain too high. Improving unit cost outcomes will come from executing our plan to deliver high production, including in the December quarter, and continuing to find further opportunities to streamline and simplify our business, with planning underway for 2024, building on the progress achieved this year. Turning now to the balance sheet.
29Metals finished the quarter with unaudited cash of AUD 227 million, an increase in the June quarter position of AUD 127 million. This increase in cash reflects AUD 144 million in net proceeds received under the entitlement offer, and a receipt of AUD 24 million in an initial progress payment for the Capricorn Copper insurance claim in connection with the extreme weather event. As previously reported, the insurance claim process is ongoing, with activity in the quarter focused on advancing the loss adjustment process for the surface component of the claim, as well as 29Metals' response to insurers regarding the underground component of the claim.
On a net debt basis, the group had unaudited net debt of AUD 50 million at the end of the quarter, improving on the position of AUD 120 million at the end of the June quarter. Net debt is after $10 million in principal repayments during the quarter, higher than previous quarters, and as agreed with lenders concurrent with the waivers received in connection with the entitlement offer. While liquidity post-completion of the entitlement offer is strong, the business is focused on improving operating cash flows expected in the December quarter, in line with rising production in both operations. Finally, stamp duty, in connection with the acquisition of the Golden Grove IPO, remains outstanding, and we maintain a provision of AUD 26 million in our accounts for that amount. Thank you very much, and I'll hand back now to Peter Albert.
Thanks, Peter. Thank you, and so let's see, that's the end of the formal presentation side of things. So happy to go to Q&A from here.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Rahul Anand from Morgan Stanley Australia. Please go ahead.
Hi, team. Thanks for the call, and good morning. Look, my first one's in relation to Xantho Extended. Just wanted to get a bit of an understanding. I mean, you've talked about 15% zinc grade going forward in the following quarters. Is this basically selective mining or like what is driving this high grade of zinc, and how should we think about that going forward?
Yeah, morning, Rahul. Eddie here, I'll take that one. It's, it's really linked to just the stope sequence, so not selectively seeking to high grade. They're always in the plan for this year. Some delays obviously to booster fan commissioning and development, so ideally they would have been a little bit earlier in the plan, but notwithstanding, still falling in calendar year 2023. And in terms of, you know, grade distribution throughout the ore body is not, not necessarily uniform, so we will continue to have some stopes that are, you know, higher grade, higher NSR in the sequence as we progressively extract more and more of the ore body.
How's the broader ramp-up going, Peter, there, in terms of Xantho Extended, in terms of the proportion of the ore body, where it sits today and where you end up perhaps by end of year? I'm just trying to think about perhaps, you know, calendar year 2024 versus your plans of having, Xantho Extended, and what proportion it ends up being.
Yeah. So, this year, the Xantho Extended ore tonnes would be sort of circa 200,000-300,000, which I think we've disclosed previously. And our intentions are to obviously continue to ramp that up progressively. I think in our May outlook, we stated sort of a doubling to about circa 600,000 tonnes from Xantho Extended in calendar year 2024.
That remains to plan?
Currently, yes.
Okay, brilliant. One more then on Esperanza, just the refusal that you've received. If we assume that you have achieved your nameplate, how long can you delay this issue in terms of your tailings map and sort of how you deposit tailings going forward at site? How much time do we have here to fix this issue?
Well, first of all, thanks, Rahul. Peter, first of all, it was a refusal for additional water volume within the E-pit, not to do with tailings. So just to clarify that. And I should say that the refusal was quite a surprise, not only to us, but to all our consultants that prepared the documentation. And indeed, feedback from the regulator was actually our submission was actually technically very sound. So it was refused on a, I guess, a precautionary principle, they claim, which has more to do with contingency and risk.
With that, we're obviously, and I stated in my notes, going to immediately appeal that, and we've also immediately engaged with other government departments to address this concern. So, that's well, you know, well underway, let me say. In terms of tailings, yes, of course, the subsequent intention is to return to putting tailings into that facility. That was not part of this application, but it will be in the near term.
And that would return us to doing what we have done in the past, because that facility has been used for tailings deposition in the past, and we will be looking to continue with that, not only application, but ultimately the ability to do that and to see our way through to the long-term tailing storage facility, which, as Ed mentioned earlier on, is progressing in terms of documentation and work associated with that, and then submission to secure that long-term tailings longer-term tailing facility. Bit of a long-winded answer there, Rahul, but you know, there are various sort of pieces to that puzzle, so to speak.
No, I completely understand, and obviously, Esperanza's part of your medium-term plan was being considered as a possible option in your medium-term plans for the tailings, and that's why I wanted to understand, I mean, when do we have some sort of visibility on this, in your opinion, to gauge if there's gonna be, you know, something more, more serious that we need to address, here? That's all.
Yeah, thanks, Rahul. Continue the question and conversation there. So, we are focused on continuing our operations at Capricorn with the plan that we have in place, because our commitment and our belief is that that will be the outcome. We're well focused on ensuring that we get the right approach from the relevant authorities to ensure that takes place. So we're, I can't give you a, you know, a definitive, "It will be on such and such a date," et cetera, but we remain confident of an outcome here.
Got it. Okay. Thank you very much.
Thank you. Your next question comes from David Radclyffe from Global Mining Research. Please go ahead.
Hi, good, good morning, Peter and team. My first question is on low zinc prices and then thinking about Golden Grove and how you manage this. Historically, the mines sort of switched to more copper-rich zones where they can during these sort of times. So is this starting to factor into your plans for the short term, although it doesn't sound like you can do much, maybe in the very short term, but when you think ahead to 2024?
I can kick that off. In terms of a production perspective, I mean, our focus really is on the highest grade reserves, Xantho Extended. So that has high zinc grades, but it also does have some correspondingly pretty high copper grades, particularly in some areas. Yes, we do have some flexibility in the rest of the ore body. Scuddles, for example, has some reasonable copper ore sources. Those sorts of things are absolutely something that we evaluate, you know, as we go through the budget process for 2024.
Okay. Then maybe following on, I mean, obviously, Golden Grove had a good quarter with tonnage up, unit costs are down, but then when you look to 2024, and, you know, you're talking about potentially lower All-in Sustaining Costs, and you're talking about cost out. Have you got a dollar millions number for the potential from the cost out initiatives? Or really, is the lower asset just primarily driven by the expectation of high grades?
I think it's a bit of both, but in terms of the cost out question, part of your question, we're going through planning for 2024 at the moment. I think you'll see that reflected in guidance when we come to put that out for, you know, for 2024, formally early next year. But yeah, clearly, the levers in the business are clear. As Ed spoken to, we have a very good idea as to what's gonna drive value in this business around increasing tonnages from Xantho Extended, and that's the best thing that we can do to really drive that result. But, you know, we've, we're taking this both off the equation cost and production.
Okay.
Sorry, David, I just just to add to Peter's comments there, and of course, we're going through the process for next year right now, but we'll reflect on Peter's earlier comments in terms of, notwithstanding higher productivity levels and activity across the business, and the costs, absolute costs so maintained, and therefore, having a good impact on unit costs. And we would seek to lock those in and build upon them next year.
Okay. So sorry, just trying to push a little bit here, just to try and think whether next year is another year when you think about the C1, including TCs and transport of sort of that AUD 400 million+ side? Or whether you can actually think you can break back down into that sort of AUD 300 million level.
I think we're going through the process today, so I don't want to kind of speculate on that.
Yeah.
But, I mean, suffice to say, we'll be and clearly, some of those things you mentioned, you know, TCs are subject to where, you know, the benchmark goes, of course. So, you know, some things, you know, we have to wait and see how the market evolves, albeit it's relatively encouraging sounds recently on that front, but, you know, a bit of water to go under the bridge there.
All right, brilliant. Thank you. I'll pass it on.
Thank you. Your next question comes from Daniel Morgan, from Barrenjoey. Please go ahead.
Hi, Peter and Tim. First question is just, it appears, although not 100% clear, that sales or shipments lag production. Can you just confirm this, and can you talk to this, you know, impact on revenue and cash flow? Thank you.
Apologies, Daniel. I'm not sure I understood the question there. It was a question about the timing of shipments?
Yeah, it's 'cause you've given us production, but then you've also given us payable sales. It would appear to me that you had lower shipments than production in the period, and therefore, lower than normalized revenue and cash flow. Have I got that right? And, you know, what was sort of the ballpark impact of that on your cash flow?
Ah, right. Thank you. Yeah, you'll see that flow through the cost line of the stockpile adjustment at Golden Grove, primarily. So, I think it was AUD 6 million flowing through there. That's effectively the, you know, the cost of producing that material. So it's a proxy, but less than what we can sell it for.
Okay. And just on Golden Grove, TSF4, when do you need approvals for that in order to, you know, execute on it and make sure that there's not a production impact?
So we're aiming to submit that imminently. That gives us a pretty reasonable runway through calendar 2024 to get approvals and then move into construction or deposition sometime in 2025.
Right. So, not an issue in your mind right now for your production plans? It's still that that's not an issue.
It's not an immediate concern, but we certainly do want to get the application in as smartly as possible.
Just the update in Capricorn Copper on the tailings approval.
You mean for the long-term tailings approval there, Daniel?
Uh, yes.
Ed might want to talk to that, but that's a little bit behind the TSF4 at Golden Grove, but not too far behind. That's all coming together, and looking to get that approval in somewhere, probably very early in the first quarter of next year.
Similar question: When do you need that before that becomes an issue for production at Cap Copper? I know you're trying to restart, but, you know, production, but might you need to shut that back down again if you don't get that in a timely manner at some point next year?
No, well, obviously, there are a lot of few moving pieces there, Daniel, in terms—both in terms of deposition in E-pit, left on the existing tailings storage facility, paste underground. So as quite a number of levers to pull in terms of providing us with a runway to get the life of mine tailings storage facility, not long-term tailings storage facility in place. And we would anticipate that, you know, that's gonna take some months, may take us through most of next year. And right now, that planning is, it sees us through in terms of keep sustaining the operation through that period of time.
Okay, and last question in the region. Sorry, this is Cap Copper. Obviously, Glencore has indicated they're gonna shut the Mount Isa mine. I emphasize mine, not smelter. But you know, does this have an impact, if any, on your operational plans? And you know, what happens if the smelter was to close? What is the impact on your business from that?
Thanks, Daniel. I'm glad you asked the question. Yeah, of course, a pretty sad turn of events for Mount Isa and the workforce up there. From our perspective, of course, that clearly, from a strategic Northwest Queensland business perspective, puts a lot of focus on Capricorn Copper, and there's a very significant government understanding of the importance of Capricorn Copper in the scheme of what's happening at Mount Isa. So, you know, that works for us.
It's a pretty sad event in terms of Mount Isa, of course, but there, for us, that's a, you know, that's an outcome which is- it can only be seen as positive in terms of the government's desire to provide support for existing and potentially new operations in that environment. Where our understanding is that the smelter itself, there's no plan to shut that down. So that's fine. That's great, and we will continue to provide feed approximately 100,000 tonnes a year to that smelter, and they'll be very pleased to receive it, I am sure. In the past, of course, we have exported our concentrate through Townsville to other parts of the world, primarily Asia.
That is not our preferred solution, but that is always a solution if we had to go back to doing that.
Thank you. I know you've got a lot on your plate. Sorry, related to this question. A lot on your plate with regard to your own operations, but could the mine at Mount Isa be an opportunity under a, you know, a company with a lower cost structure, such as yourselves? Is that something that's contemplated, or you've got too much organic things that you're working on?
Yeah, thanks, Daniel. Of course, always open to these opportunities that present themselves from time to time. I can't say we're looking at that right now, but of course you know, there are opportunities where these things are thrown up by other parties. So that's probably best leave it at that, Daniel.
Okay. Thanks for all your answers.
Thank you. Your next question comes from Peter Cooper from Teami nvest. Please go ahead.
Good morning, Peter and rest of the team. Just a very quick question in terms of forecast for the end of December. Are you able to give a forecast for your available level of cash and the associated net debt number that would come with that?
I think we can... We've disclosed previously the amortization schedule, so there'll be a further AUD 10 million of amortization in the next quarter. But no, we're not able to provide a forecast on cash balance at this stage.
Okay, fair enough. Thanks, guys. Thank you.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Adam Baker, from Macquarie. Please go ahead.
Yeah, morning, guys. Just continuing on the theme of the tailings dam at Capricorn. Just on the approval process for the ETSF Lift 2, is there any update from the regulator with regarding that? I believe that would have given you another six months of capacity. Is that correct?
Yeah. So we received a request for further information, so we're progressing with the technical work to support a response to that. That's probably still that will take us a little bit of time to work through that, but we do intend to complete that work and respond.
Yeah, sure. And at E-pit, just trying to get my head around the design storage allowance, and what that incorporates. Is that with regards to the water levels in that E-pit, or now that you can get the water levels down and you've got the mechanical dewatering occurring there, are you able to put tailings back in there now that you've dropped that water height? Yeah, just trying to get my head around that a bit more, if you can add a bit more color.
So the Design Storage Allowance is effectively a capacity that we need to have as freeboard in the pit ahead of the first of November wet season. So it's prescribed in our, in our environmental authority. It's a lower level than the maximum operating level, so it's designed so that, you know, ahead of a wet season, you've got the capacity to absorb additional water. You know, our view is that level currently is very conservative, and the modeling that we did strongly indicated that we could increase that, and therefore, you know, have less water. Sorry, have an ability to store more water effectively in the pit.
Now that it's been knocked back, I'm just keen to understand, is there a potential that you can add more tailings to it, or do you have to kind of come back and reassess from here?
Regardless, Adam, of that current situation with that application, we would always have to submit a separate application for tailings deposition, additional tailings into that facility. That, as I indicated on, is something that we have placed tailings in there for over a period of time, three or four years, or two or three years, and there's no technical reason why we wouldn't be able to place more tailings in there, and that's what we will be applying for. It's not that we can't, in our view, it's not an automatic placement of tailings, so when we, you know, when we feel like it, we'll go through an approvals process.
But just a bit of color, really, you know, in terms of the water level, the so-called risk to the system is associated with overtopping of water from that facility to the local environment. We have just had, as we all know, I'm sure, on this line, the worst event on any historical record, and we did not release one drop of water from our contaminated from our regulated structures through that event. So the risk under any circumstances is, you know, infinitesimally small. So, you know, that hence, you'll understand why we are going directly to an appeal process.
Understood. Thanks for the extra color there. And maybe just one last one on Mammoth and Greenstone. Seemed to have a reasonable quarter there. First quarter back in after the flooding event, 100,000 tonnes for the quarter. Just wondering how hard you can push that? What level do you think you can get up to? This is before you get back to Esperanza South. Thanks.
Yeah. So, we actually did push it reasonably hard. I mean, it's quite different to Esperanza South, the sublevel cave, because it's, you know, quite sequence constrained, requires backfill, et cetera. So, we are turning over multiple stops and pushing it quite hard. It sort of typically has represented up to 40%-50% of overall mill feed, and that's probably as hard as we are ever gonna be able to push that ore body.
Understood. Thanks for those are my questions, guys.
Thank you. Your next question comes from Ben Lyons, from Jarden Securities Limited. Please go ahead.
Thank you. Good morning, everyone. Just a quick one from me, and it follows along the line of questioning from David Radcliffe on the impact of weaker zinc prices, in US dollar terms, at least. One of the factors that's clearly been moving in your favor has been the currency. So I'm just interested, as we sit here at sort of 63.5 this morning, and you head into the 2024 budgeting process, whether you'd consider locking away some of your currency exposure to protect the economics of the overall business? You know, acknowledging that hedging is probably not your desired outcome, but I think you do still have some legacy gold hedging in place against gold and growth, for example. So, you know, clearly an area of expertise. Thank you.
Expertise. Okay. I think in terms of hedging, look, we'll always review it with a view that, you know, clearly our position has been that we're looking to give investors, you know, maximum exposure to commodity prices. You know, that said, we do need to review these things from time to time, which we'll continue to do. I think the view on locking away the FX, we are taking a view in that case that, you know, the Aussie dollar won't move down further. And that's something that we'd need to go into, you know, eyes wide open. So, look, we'll always have these things under review, but there's no firm commitment to do something like that at this stage, Ben.
Hopefully, that's a clear enough answer on that.
Yep, very clear. Thank you, Peter. Appreciate it.
Thank you. There are no further questions at this time. I'll now hand the conference back to Mr. Albert for closing remarks.
Thanks, Lexi, and thank you, everybody, for a good and wide-ranging questions and discussion there. 2023, so far as mentioned, undoubtedly been quite a challenging year for 29Metals. But one might use that overused phrase, unprecedented. And for most of our team, this would have been something never encountered in their careers or experience to date. I do wanna say the response from the teams at both operations and in corporate offices has been outstanding. And I do want to publicly recognize the tremendous effort and commitment by everybody at 29Metals over the past few months. Also, of course, want to thank the owners of 29Metals, our investors, for their continued commitment and support.
We are focused on delivering continued improvement, and we're seeing that through this last quarter in our operations at both sites, building on that positive momentum delivered in this last quarter. Undoubtedly, December quarter will be another significant effort across the business, and we look forward to reporting that progress in the new year. Once again, thank you everyone for attending today, and thank you for the good and wide-ranging questions. Thanks, Lexi.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.