I would now like to hand the conference over to Mr. James Palmer, CEO. Please go ahead.
Good morning all. James Palmer here, and thanks for joining this 29Metals update for the December quarter 2024. Today we'll be speaking to the presentation released this morning alongside our December quarter report. And joining me are Ed Cooney, our Chief Operating Officer, Peter Herbert, our Chief Financial Officer, and Kristian Stella, our Group Executive Corporate Development. So it's great to be speaking with you all again today on what was another great quarter meeting: full-year production and cost guidance, and so delivering on our commitments and setting our guidance for 2025 that is a step up from 2024. So stretching but achievable through the same focus on delivery. Importantly, during the December quarter, we fixed the balance sheet, providing us with the depth of liquidity to pursue our strategic objectives for 2025 and beyond. The first of those being to trigger a compelling project in Gossan Valley.
So a big quarter. Briefly to slide three before getting into the quarter results, the 29Metals investment thesis remains strong, with the group having large copper resources across Golden Grove and Capricorn Copper. Both assets have long-life potential, significant geological upside. Both have lots of copper, which is a critical metal as the world transitions further towards electrification. With the balance sheet now recapitalized, we are looking forward to unlocking this embedded value within the portfolio for the benefit of all stakeholders. Slide four lays out our key priorities that remain the same as when I spoke to you three months ago: health and safety first, always, and across the group discipline in productivity and cost improvements, which remains a key focus.
At Golden Grove, it's all about the drumbeat of delivery to maximize free cash flow and delivering Gossan Valley with the significant milestone of the final investment decision made during the quarter. At Capricorn Copper, it's all about the imperatives for a successful and sustainable restart, with water reduction the immediate focus, with the wet season now upon us. Slide five shows a summary of the December quarter. So on safety, our TRIF down over the quarter, so improving, and we remain focused on safety always. Operationally, it was another strong quarter delivered by the team at Golden Grove, producing 5.3 kilotonnes of copper and 17.6 kilotonnes of zinc, putting us at the top end of guidance for copper and firmly in the guidance range for zinc.
In addition, the asset continues to generate cash, with $48 million of operating cash flow and $18 million of free cash flow post-capital expenditure, including spend on TSF4, which is on track for completion in the March quarter and will set the asset up for the long term from a tailings perspective. So overall, another great quarter at Golden Grove. At Capricorn Copper, progress continued to be made towards our immediate-term focus of reducing water levels on site, with the team progressing those things within our control to position the asset for optimal water reduction through the wet season. We saw the first flows in Gunpowder Creek during the quarter, and the team utilized this opportunity to release 72 megaliters of treated water during the quarter. The team remains prepared for further release opportunities, which typically present in the March quarter.
Importantly, the AUD 180 million equity raising and senior debt refinancing provides 29Metals with the balance sheet to pursue our strategic objectives, specifically the development of Gossan Valley to extend and optimize the Golden Grove mine plan and the progression of restart imperatives at Capricorn Copper. So I'll now pass to Ed to talk through Golden Grove in some additional detail. I'll then provide an update on Capricorn Copper prior to Peter then providing a corporate finance update for the quarter. So over to you, Ed.
Thanks, James, and good morning, everyone. Moving on to slide seven, as James mentioned, another great quarter delivered by the team at Golden Grove, producing in excess of 5,000 tonnes of copper and 17,000 tonnes of zinc. Full-year copper production of 22,000 tonnes was at the top end of the guidance range, and full-year zinc production of 57,000 tonnes firmly within the full-year guidance range. As foreshadowed in the June quarter report, high zinc production in the second half of this year was enabled by paste filling completed earlier in the year and good progress of Xantho Extended development advance, providing access to high-grade ore through the second half of the year. From the chart on the top left-hand side of slide seven, you can see the proportion of Xantho Extended ore has been maintained at circa 50% for the last three quarters.
Development of Xantho Extended continues at rates to maintain this proportion of ore from Xantho Extended total ore feed, with approximately 970 meters of development completed during the quarter, which is a new record and up from approximately 700 meters the prior quarter. Moving on to slide eight, a pleasing quarter for unit costs too, with C1 costs and AISC of $1.80 per pound and $3.30 per pound of copper sold, respectively. Lower stockpile movement charges and higher byproduct credits were the key drivers of lower quarter and quarter unit costs, partially offset by lower payable copper sold. Higher mining costs reflect higher activity levels, including all tons mined and development and higher capital expenditure as TSF4 construction advanced.
Now moving on to slide nine, and really full credit to the site project team with momentum and associated capital expenditure on the TSF4 project continuing to ramp up throughout the quarter, leading to a significant milestone being achieved with practical completion occurring post-quarter end. First deposition of tailings remains on track and is planned for the March quarter, subject to final confirmation of the construction works by the regulator. And the photos on this slide hopefully provide some context to the scale of TSF4. So for reference, the thickener you can see in the picture on the right-hand side is quite large at 30 meters in diameter and equivalent in height to a multi-story building. The thickener has already been successfully commissioned electrically and on water and now just waits for its tails.
And owing to its scale and thickened tails deposition methodology, TSF4 really is expected to enable lower tailings deposition cost over the life of mine. And in addition, the upfront investment in long-term tailings capacity is expected to de-risk future tailings permitting requirements as compared to the historical incremental approach of building staged lifts on smaller tailings facilities adopted at Golden Grove in the prior years. Onto slide 10, and the final investment decision for Gossan Valley during the quarter was another really fantastic milestone. It is an exciting project for 29Metals and an important next phase of investment to enhance the long-term value of the asset. Specifically, Gossan Valley will provide production flexibility as an additional independent mining front. And being relatively shallow and analogous with other ore bodies at Gossan Hill, it is expected to be relatively straightforward to mine.
Importantly, it will act as a replacement high-grade ore source for the declining ore production from Scuddles. The economics of the project are attractive. Our feasibility analysis supports an internal rate of return of 34% with a $110 million initial stage NPV and an initial mine life of seven years. Keeping in mind this is an initial stage development, we do see significant potential to extend Gossan Valley resources, which remain open at depth. The resource we have today is sufficient to underpin an investment decision to commence the development. We plan to test for extensions to the resource, predominantly from underground drill platforms as we progress the development, which will be lower cost than continuing to drill from surface. As shown on slide 11, our two existing underground mines at Golden Grove are Scuddles and Gossan Hill.
And production commenced at Scuddles in 1992, and some 32 years later is still operating, albeit depleting. Gossan Hill commenced production in 1994, and some 30 years later is still operating and home to our highest value ore source in Xantho Extended with significant mine life remaining. And now, for the first time in 30 years, we are preparing to add a third mining front to the Golden Grove complex, the Gossan Valley resource, which remains open at depth. And as mentioned, we have included underground drill platforms to the mine plan, and I know the exploration team are keen to start drilling from underground to test the extents of this system. And speaking of Golden Grove's history of resource and mine life extensions, assays returned from Gossan Hill during the quarter, as shown on slide 12, highlight the ongoing potential of this mining front.
Specifically, high-grade copper mineralization intercepted approximately 100 meters below the existing Europa mineral resource estimates. Resource extension results include some incredible intercepts, such as approximately 44 meters at 3% copper, approximately 33 meters at 2.7% copper, and almost 17 meters at 4.9% copper, and in addition, resource conversion drilling results included almost 26 meters at 6.9% copper, so there is plenty more opportunity at Gossan Hill, and with extension results like these, it's really not hard to see why the exploration team are keen to get underground at Gossan Valley, so to summarise, we continue to focus on the drumbeat of delivery at Golden Grove, with the December quarter bringing home a great result and hitting full-year production and cost guidance.
In addition, we continue to have an eye on investment for the future, specifically TSF4, which is now ready to take tailings, and Gossan Valley. Both of these are really exciting projects expected to enhance the asset for the long term. I'll now hand back to James to talk about Capricorn Copper.
Right. Thanks, Ed, so turning to Capricorn Copper, look, we know there's still a lot of water on the surface at Capricorn Copper, so not great, but as per slide 14, there are a lot of things about Capricorn Copper that are great. On the surface, we have a plant and other valuable infrastructure that will support a future sustainable restart, and underground, lots of development leading to a very substantial copper endowment within an approximately 1,900 sq km tenement position in the prolific Mount Isa Inlier of base metals province. The size of the prize is significant, so our immediate focus remains to deal with the water on the surface so that we can unlock the value below. Reduction of water levels on site remains the immediate focus at Capricorn Copper.
Controlled release of treated water is required to rebase site water levels in the nearer term and to effectively manage potential future high rainfall wet seasons. Given the volume of water on site, meaningful water level reduction is likely to take more than one wet season. Treated water releases are subject to flow rates in Gunpowder Creek, with flows to facilitate controlled releases typically occurring during the wet season between November through April, so upon us now. Slide 16 shows the flow rates in Gunpowder Creek typically occur during the March quarter. Notwithstanding, the team have done a great job in utilizing the limited opportunity during the December quarter to release 72 megaliters of treated water. Treated water releases during the quarter were direct from the repurposed processing plant water treatment plant.
The bulk treated water in Mill Creek Dam is lower quality than the water directly from the water treatment plant, which means higher flows than we've seen to date are required for treated water releases to Gunpowder Creek. Nonetheless, the team are maintaining the treated water quality within Mill Creek Dam and remain ready to make the most of water release opportunities when they present. Slide 17 shows our total water inventory at quarter end. Natural and mechanical evaporation, in addition to the treated water releases achieved, resulted in a net water reduction of 200 megaliters for the quarter. Slide 18 speaks to the significant investment in water management capabilities and environmental compliance projects ahead of the wet season. Cash outflows are expected to continue to reduce into 2025 as these projects are completed, and operating costs reduce to reflect lower steady-state activity levels.
Through 2025, we plan to minimize expenditures to environmental compliance and water reduction activities only, with the guidance range of total operating and capital expenditures for 2025 of AUD 30-AUD 40 million, with spend ramping down significantly post the current wet season, then ramping up slightly in preparedness for treated water releases in the 2025-2026 wet season. In the absence of progression of other restart imperatives, we see potential to further lower annual expenditures beyond the 2025-2026 wet season. To this end, ongoing expenditures and potential strategic options will be evaluated through 2025, with consideration of site water levels post the 2024-2025 wet season, progress on tailings options with the regulator, and group liquidity. So I'll now hand over to Peter to talk through finance and corporate.
Thank you, James, and good morning to everyone on the call. There's a fair bit to cover this quarter, and I'll start with the refinancing of the group's senior debt facilities in conjunction with the $180 million raise. Slide 20 outlines the revised amortization profile, and it's pleasing to say the completion of that refinancing occurred post-quarter end. The refinancing reduced outstanding leverage by a U.S. $18 million prepayment of senior debt and extended that maturity's drawdown facilities to 2028. This reduces scheduled repayments by U.S. $74 million over two years to 31 December 2026, freeing up significant liquidity for the business. The refinancing also simplifies our capital structure with a revolving credit facility consolidated into the term loan. As set out on this slide, this removes the overhang of the step-down in the RCF in October 2025 and the maturity of the facilities in 2026.
Importantly, the refinancing gives 29Metals the flexibility to invest in Gossan Valley by the extension of loan tenor and exclusion of Gossan Valley capital expenditures from the debt service cover ratio covenant calculation. Importantly, we're very pleased with the level of support offered by our senior lenders and alignment on the group strategy. Slide 21 shows the significant liquidity within the business following completion of the equity raise during the December quarter. 29Metals finished the quarter with unaudited available liquidity of AUD 268 million, consisting of AUD 252 million in cash and available headroom under the group's offtake facility of $10 million. This compares to cash and available liquidity of AUD 60 million and AUD 104 million at the end of the September quarter, respectively.
The AUD 180 million equity raising and senior debt refinancing provides 29Metals with the balance sheet capacity to pursue our strategic objectives, specifically the development of Gossan Valley, extend and optimize the Golden Grove mine plan, and the progression of restart imperatives at Capricorn Copper. Moving on to sales for the December quarter, 29Metals' unaudited revenues of AUD 184 million for the quarter was a 5% increase on the prior quarter result. Lower copper sales volumes were more than offset by higher zinc prices and higher gold prices and volumes sold. The strong sales result for the quarter and ongoing cost focus resulted in Golden Grove generating AUD 48 million of operating cash flow and AUD 18 million of free cash flow for the quarter, net of investments in TSF4, which will support Golden Grove's long-term sustainability.
Cash outflows at Capricorn were AUD 24 million for the December quarter relative to AUD 15 million of operating and capital expenditures for the December quarter. This difference reflects movements of working capital, including a reduction in payables balances during the quarter. With significant investment in water management capabilities and environmental compliance projects ahead of the 2024 wet season now complete, outflows will reduce through 2025 to levels consistent with operating and capital cost guidance for 2025, reflecting lower steady-state activity levels.
Following completion of the equity raise and with consideration to minimizing interest payments in 2025, remaining stamp duty installments payments on the IPO-related acquisition of Golden Grove were paid as a lump sum of AUD 13.8 million post-quarter end. The stamp duty was otherwise payable in installments over the period to 30 June 2025. Following completion of the senior debt refinancing post-quarter end, 29Metals also reprofiled its remaining gold hedges.
As of 31 December 2024, 29Metals had 10,000 gold ounces hedged, all of which were due to settle in 2025. Post-reprofiling, these ounces will now settle over 2025 and 2026, split evenly between the two years. Reprofiling of the group's out-of-the-money gold hedges will assist in smoothing group cash flows over 2025 and 2026. Finally, 29Metals continues to progress the insurance claim relating to the loss and damage suffered as a result of extreme weather event at Capricorn Copper in March 2023. As previously reported, 29Metals' insurers agreed to make a further unallocated progress payment totaling $21 million during the December quarter. This is in addition to $40 million in unallocated progress payments received to date, bringing the total insurance proceeds to $61 million paid thus far. James, back to you.
Thanks, Peter. Thanks, Ed. So we had a great finish to 2024, meeting production and cost guidance and delivering on our commitments. We released 2025 guidance with this December quarter report today, with midpoints for 2025 representing a 7% uplift for copper production and a 15% uplift for zinc production versus 2024. So a big year ahead, stretching but achievable through delivery. As we spoke to earlier on slide 4, the team and I understand the immediate and strategic priorities for the business and are making good progress. We must continue to focus on safe, sustainable improvement in productivity and cost management across the business. We must continue the drumbeat of delivery that Golden Grove is establishing now that we're firmly in Xantho Extended and focus on delivering Gossan Valley on time and on budget.
At Capricorn Copper, we must continue to manage our environmental responsibilities, manage costs, and progress the imperatives for a sustainable restart of operations with the immediate priority and focus on reduction of water levels. With the balance sheet now recapitalized, we're looking forward to unlocking the embedded value within the 29Metals portfolio for the benefit of all of our stakeholders, while never compromising on our commitment to health, safety, and well-being. With that, we're happy to take your questions.
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 Adam Baker with Macquarie. Please go ahead.
Hi, morning, James and team. Just a couple of questions on the CY 2025 guidance, if I could. Just firstly, on the site guidance of $370 million-$400 million in 2025, just noticed a slight increase versus 2024, which delivered at $367 million. Just wondering if you could explain the drivers of this slight increase?
Yeah, great. Thanks, Adam. Actually, I'll hand over to Peter to grab those.
Yeah, just generally activity levels and just taking into account inflation that we expect for the period. I think we're obviously always focused on driving productivity through the business, Adam, but it's no one particular thing. It's just general increases across the board.
Okay, thank you. And also on exploration, a little bit of uptick in expenditure expectations between $10 and $14 million. Just wondering if you could give a little bit more of a breakdown of that expenditure. Is most of this drilling going to be coming from Xantho Extended and Gossan Valley, or are you planning any programs at all at Capricorn for this calendar year?
Yeah, I'll take that one. So we are planning to ramp up the number of rigs at Golden Grove. We will do some drilling from surface Gossan Valley in terms of delineating some of the decline activities. But principally, it'll be focused on the Gossan Hill complex at depth. We'll hold off making a decision just yet on Capricorn Copper. Potentially, we could, but we just want to see how we go through the wet season in the first instance. But always plenty of opportunities at Capricorn Copper, and that decision we'll make a bit later in the year.
Cool. Other than that, that's all I've got. Thank you.
Thanks, Adam.
Once again, if you wish to ask a question, please press Star 1 on your telephone. We'll now pause momentarily to allow questions to be registered. Your next question comes from Ben Lyons with Jarden Securities Limited. Please go ahead.
Thank you. Good day, James, Ed, Peter, and everyone on the call. Pretty straightforward release today, so I'd actually just like to ask about the conditions up at Capricorn Copper since the start of the calendar year, obviously already a month in, and whether you've had the opportunity to potentially discharge a bit more of the treated water into the Gunpowder Creek post the start of the year? Thank you.
Great. Thanks, Ben. So we mentioned there in there, so December quarter. So yeah, we've had one opportunity, and the team took advantage of that opportunity. So yeah, released. And at the moment, they're just standing at the ready. It's been very dry throughout January, and you might have seen actually still fires and other things in and around Northwest Queensland, but we haven't had any creek flows so far this quarter. But the team do have the Mill Creek Dam. They're ready to be released. Because it has been hot, we have still been evaporating, so we have still been reducing water, but not the bulk water treatment that we're looking forward to. With that, we're all watching the weather forecasts.
You might have had a look, or if you haven't, you can see just off the Queensland coast and in the Gulf, there's a couple lows, potentially cyclones. So some potential to have those move across and therefore Gunpowder Creek flow, and we'll take full advantage of that release opportunity. But yeah, the one opportunity we've had this wet season was in the last quarter, and we took advantage of that.
Yep, okay. Noted. Thank you very much for that, James. That's it from me, mate. Thanks.
Awesome. Great. Thanks, Ben.
There are no further questions at this time. I'll now hand back to Mr. Palmer for closing remarks.
Great. Well, thank you. Yes, thanks for the time and the questions. From us, another strong quarter of delivery. Four-year production and cost guidance delivered. 2025 guidance is up on 2024 results, so stretching but achievable, and I think you'll agree with each quarter we're delivering. The next two years for 29Metals have the potential to be very different from the last, so thank you and have a safe and productive day.
That does conclude our conference for today. Thank you for participating. You may now disconnect.