Thank you for standing by. This is the conference operator. Welcome to Alkane Resources first quarter fiscal year 2027 results conference call and webcast. As a reminder, all participants on the telephone are in listen-only mode, and the conference is being recorded. After management's prepared remarks, there will be an opportunity to ask questions. For those on the telephone, to join the question, you have to press star one and one on your telephone keypad. Participants on the webcast may type your questions on the Q and A feature on the webcast. Now, let me hand the call over to Natalie Chapman, Alkane's Corporate Communications Manager. Please go ahead.
Hello, everyone. Thank you for joining our call today. Some housekeeping items to note. Please review today's press release for further details on our results and accompanying presentation for today's call is available for download from the company's website at alkres.com. For those on the webcast, please move through the presentation slides yourself as directed by our presenters. Moving on to slide two. I will remind everyone that this conference call contains forward-looking information that is based on the company's current expectations, estimates, and beliefs. Continuing on to slide three. Today's presentation will use terms that are non-IFRS performance measures. Please review Alkane's disclosure materials for the risks associated with the forward-looking information and the use of non-IFRS performance measures. I will also point out that all dollar amounts mentioned on today's call are in Australian dollars, unless otherwise stated.
Another thing to keep in mind during our presentation is that Alkane's fiscal year ends June 30, so that the period ending September 30, 2026 is our first quarter for fiscal 2027. Please move on to slide four. Today's speakers from Alkane Resources are Nic Earner, Managing Director and Chief Executive Officer, and James Carter, Chief Financial Officer. I will now hand the call over to Nic Earner. Please go ahead, Nic.
Hi, everyone, and thanks for joining us today. This, I think we can all agree, is going to be quite an interesting day to be putting out a quarterly report, so I fully appreciate you all being here to listen, and I expect you will have one eye on Bloomberg as well. Let's get into the presentation. Let me start on slide five by providing some of the highlights of the quarter we just completed. We have delivered a strong, steady state first quarter, and we hit our operational targets on the schedule we were after. This generated nearly 41,000 gold equivalent ounces in the quarter, which is 40,000 ounces of gold and just under 400 tons of antimony.
Puts us on a pretty clear trajectory to meet our full-year fiscal 2027 production guidance of 163,000-177,000 gold equivalent ounces. Across the three operations, our throughput rates met our expectations, our recoveries held steady in line with plan, and our lower than previous grades were successfully balanced by high processing volumes, and this was as we intended. Driven by our solid operational execution and our disciplined cost control, our three mines generated AUD 102 million in cash flow for the quarter, which consolidates our strong financial foundation. With this cash-generating capability, we have a strong balance sheet, and we have ended the quarter with AUD 459 million of cash bullion and investments. As I have talked about previously on the last conference call, we are putting that cash to work.
2027 is a year of positioning Alkane for fiscal growth, for future growth, as we are looking to invest AUD 160 million-AUD 190 million of growth CapEx over this fiscal year, and we spent AUD 37 million of it in the first quarter. Lastly, as we have talked about before, we are rewarding our shareholders who supported our growth with the shareholder returns program. At the start of October 26, we paid our inaugural dividend of AUD 0.02 a share, and we announced a share buyback program of up to AUD 50 million. Let us move on to slide six. On a consolidated basis in Q1, we processed nearly 741,000 tons of ore at an average gold grade of 1.83 g/ton and an average antimony grade of 1.11%.
Recoveries of 89.6% gold and 89.1% antimony remain consistent quarter-over-quarter. I have talked you through the three mines production of just under 41,000 gold equivalent ounces, and generally, as I said, these results met our expectation for the quarter. As I have said, it was consistent, it was reliable, it was steady. We are on track, reiterate, to meet this guidance of both production and cost. As well as the investment that we have to maintain our production and expand it, maintain cost control. We are also focused heavily on exploration to expand the resources and extend mine life across all of our mines. We are also continuing to de-risk Boda-Kaiser, our large copper-gold project. To that end, on all of these plans, we are going to be investing AUD 215 million-AUD 255 million collectively on everything.
Let me get into the detail by operation, and then, of course, we will answer the questions at the end. Tomingley, on slide seven. In quarter one, we processed 344,000 ounces of ore, 6% more than in the same quarter last year. The difference being the extra crushing that I have spoken about previously that goes in before the circuit. The average grade of the processed ore was 2.16 g/ton , a touch lower than quarter four last year, and it is simply part of our mine sequencing. Recoveries were over 90% as we get into our straps, particularly with the fine grinding circuit. Despite the slightly lower grade, the better processing rates, the higher recovery, all balanced us out to 21,500 ounces of gold. Just a little bit more than quarter last year.
Our all-in sustaining costs were AUD 2,340 per ounce, a touch lower than the same quarter last year. Please note, this is simply timing of our sustaining CapEx. We do still expect to be within our cost guidance for the site for full-year. The site's operating cash flow was AUD 52 million for the quarter. Growth capital expenditure during the quarter was AUD 25 million, primarily for the Newell Highway realignment project, which we expect to complete over the next six months. As I have stated before, this alignment allows us to access that 200,000 ounces in the San Antonio open cut deposits, thereby obviously expanding our production sources and maintaining the cost here on the site. While it does take up, this is the highway project, takes up most of our site's capital growth project over the year.
Other initiatives that people should be aware of, we are purchasing mobile equipment and equipment rebuilds, and we also have a scheduled replacement and upgrade of our carbon regeneration kiln. Overall, a good quarter. Let's move on to slide eight, talking about Björkdal. In Björkdal, we processed more than 355,000 tons of ore, higher than Q4 last year. Average grade of 1 g/ton , an average recovery of 85.5%, both in line with our previous quarter. This meant we did 10,500 ounces of gold, which is a touch higher than the quarter last year. When we compare the two, as in Q1 2027, now to Q4 2026, the higher throughput rates, basically, we just scheduled a little better than we did last year over the summer vacation period, and we have continued to do a little bit of crusher optimization.
The capital focus on the quarter's growth capital was on two initiatives that we expect to expand production and lower unit cost with time. I have talked about this being our objective at Björkdal. The first was pre-stripping of the Nylunds open pit, with ore extraction actually now commenced in October, not in the previous quarter, but now commenced in October. The second was removing the till on the new portal to the Storheden deposit, which we expect to take our first cut in just a few weeks' time, and we already have lateral development across the Storheden from underground occurring. We want that online within two years.
These initiatives, along with a substantial expansion of the tailings dam facilities, as well as mobile equipment purchases like we are doing at Tomingley and Costerfield, make up most of the AUD 40 million-AUD 50 million growth CapEx budget for fiscal 2027. The Q1 all-in sustaining cost of AUD 3,012 an ounce was significantly lower than the corresponding period in the preceding quarter. This is just simply the fact that we just have more ounces of a pretty fixed cost base. Operational cash flow, therefore, ended up at AUD 20 million. We had a very good quarter delivering to plan at Björkdal. Quite pleased with that. Moving on to slide nine at Costerfield, the gold and antimony mine. We processed over 41,000 tons of ore, which is more, quite a lot more, 14% higher than the previous quarter. Various initiatives have resulted in this.
Slightly improved mill utilization rates and blend control. However, also there, we are pre-crushing. Again, we have a pre-crusher to spread the load out of the crushing circuit, and that gives us a better size feed, which gives us higher throughput rates. In Q1 2027, the gold and antimony grades were 6.5 g/ton of gold and 1.1% respectively. This is lower than we intended, particularly due to overbreak in the hanging wall in the Youle and Shepherd area. It is also just a scheduling issue as well with the higher grade nuggety ore body that we have at Costerfield. Overall, our gold and antimony recovery rates were 93% and 99% respectively, both slightly lower than previous quarter, mostly due to the head grade. As a result, we produced nearly 8,000 ounces of gold and just under 400 tons of antimony.
All-in sustaining costs were AUD 3,194 an ounce, higher than the preceding quarter. This is primarily just due to the lower ounce production. As well as that, just to be completely clear, when we talk in equivalents, the decline in the antimony price has also had an impact on the ounce equivalents production contribution from antimony. I am sure we will take questions on that. Roughly, U.S. dollar antimony price is about $13,000 per ton at the moment on the Shanghai Metals Market. CapEx plans of AUD 30 million- AUD 40 million at Costerfield throughout financial 2027 are focused on the development of Brunswick South as well as equipment replacement, and both of those things are occurring. Our cash flow, after all of the things I have said, was AUD 29 million in Q1. Going on to slide 10, the mineral resource and the ore reserve.
People have heard me speak, we are trying to drive organic growth by increasing our mineral resources, and we have quite an aggressive exploration program across the operations. During the quarter, we released our annual mineral resource and reserve statement that showed the initial results of that plan. Our mineral resources increased nearly 8% net of depletion, measured in indicating are now starting to approach 9 million ounces of gold. So 8.7 million ounces of gold, 1 million tons of copper, and 42,000 tons of antimony. Inferred resources are nearly 4 million ounces of gold, 450,000 tons of copper, and another 13,000 tons of antimony. The largest growth has been at Björkdal, with the new Storheden deposit, the largest impact there. A reminder, the inferred resources, of course, include Boda-Kaiser.
On slide 11, you can see the exploration focus at Tomingley for the quarter was expanding near mine mineral resources with the area between Roswell and Wyoming One, this is bullet one, as well as extending the newly discovered mineralization west of McLeans resources. This is our bullet three on the picture. Drilling was also undertaken to further investigate a mineralized monzodiorite package immediately to the north of Roswell. This is bullet two on the picture. Beyond the near mine work, of course, we have a larger goal of finding the next million-ounce deposit near Tomingley, focusing on El Paso and Peak Hill as well, bullets four and five.
I am going to take a moment just very briefly and obviously take questions on it, people want, to discuss Peak Hill and the objective and results of the deep hole that we drilled at the Peak Hill historic gold mine.
As we announced on October 15th, the drilling was testing for a potential copper-gold porphyry system, which we hypothesized to exist below the high sulfidation system we previously mined. While the drilling didn't fully resolve this porphyry target, it did successfully intersect the continuation of the mineralized high sulfidation epithermal system, approximately a kilometer below the Proprietary open pit, historically mined by Alkane in the late 1990s, demonstrating significant vertical continuity of this alteration mineralization. Key results, you can see there on the screen, 6.4 m of 0.42 g/ton of gold from 1,000 m to 153 m at 0.11 g/ton of gold from 1,427 m. The takeaway from this is this confirms this system remains open at depth, and it may transition towards a deeper porphyry source.
The results also highlight substantial exploration upside beneath the existing resource. So above these holes and below the existing resource. We have a further 6,600 m of follow-up drilling planned in this quarter, the current quarter we're in, to test for high-grade extensions and better define the scale of the mineralized system. Obviously, all with the objective of saying, can we put Peak Hill into the potential feed future schedule for Tomingley? Let's go on to slide 12, exploration at Björkdal. The focus here at Björkdal is to expand the resources whilst fully utilizing the plant and thereby extend the mine life further and reduce costs by delivering higher margin ore. During the quarter, 29 diamond holes totaling nearly 16,000 m were completed at the north zone and eastern zone, near the mine, near our existing underground mine.
Drilling confirmed strong grade continuity, extensions of mineralized vein systems, and several high-grade gold intersections were returned. The infill and extension drilling on the north zone, that's bullet one, included over an ounce a ton of gold at 0.85 m. In the eastern zone, bullet two, included 81.3 g/ton over 4.4 m. Now remember, here we're exploring narrow veins that we mine in bulk, and we have the expertise to mine this efficiently. These results just simply show, as we've often communicated, the Björkdal mineral system remains open both along strike and at depth and supports ongoing resource growth and further mine life extension opportunities. Our current and planned exploration drilling, we continue to target along strike and down deep extensions of this known mineralization.
Then, of course, we want to further expand the resources and find the highest grade feed. But exploration of the Storheden deposit, bullet three, which is an exciting new prospect, 700 m north of the Björkdal mine, which we are already developing to, as you heard me talk about cutting a portal and developing laterally, still has very significant growth potential. 16 extensional diamond drill holes completed in early 2026 extended this high-grade gold mineralization and confirmed the mineralized system now is defined over 2.7 km strike length and a depth of 460+ m . With mineralization opening in all directions. We're going to aggressively explore this target. Let's move to slide 13 at Costerfield. Similar to Björkdal, our goal is particularly here to extend mine life and also reduce costs with higher grade.
During the quarter, close to the current mining operations from the central corridor, drilling was primarily directed towards extending the mineral resource at Kendal, Brunswick South, and Cuffley deposit, bullets two, three, and four. Work also included follow-up testing of the newly discovered mineralized trend located to the west of Brunswick South. We are now calling this Bentley because we are even confusing ourselves with the directions that we are talking about. This continues to demonstrate potential for additional high-grade mineralization. At True Blue, bullet one, we put 33 additional drill holes consisting of 19,000 m there, and the high-grade intercepts confirm the continuity economic potential of the system. As I have talked about last quarter, we have got greater structural complexity. We are doing step-out drilling in and around True Blue.
At the Brunswick South deposit, which we are developing towards at the moment, we did an extensive 91 hole infill and extension drilling program, and there is confirmed continuity between two principal mineralized domains. An upper antimony-rich gold shoot and a lower gold dominant zone extending over approximately 400 m in strike. Reminder, this is just 200 m from existing development, and we are commencing development for it. We have allocated capital to it, and we want it to be a primary production source at Costerfield. Exploration at Cuffley in the Sub KC system, which is bullet four, will result in the discovery of another high-grade mineralized domain between the previously mined high-grade panels at Cuffley and continue expansion of the emerging Sub KC deposit at depth. This newly defined Cuffley mineralization, it is readily accessible from existing underground infrastructure, and we have incorporated this into our life of mine.
Ongoing drilling at Sub KC continues to demonstrate strong potential for further resource growth and new mineralized repetitions along strike. We continue to do structural analysis to work out exactly where should we be drilling here, because it is quite tantalizing. North and east of Costerfield, drilling recommenced on the Northern Dykes, which is bullet five, and there we are targeting mineralized igneous intrusions similar to Sunday Creek, which you might be familiar with. It is owned by Southern Cross Gold. Depth extension testing at the Brown's deposit in bullet six. Slide 14, I am just going to touch briefly on the Northern Molong Porphyry Project that encompasses our Boda-Kaiser Gold Copper Project and Nagambie. At Boda-Kaiser, and the Northern Molong Porphyry Project in general, we did soil sampling, which will aid in defining a planned 4 km RC drill program.
There we are testing just scale potential in and around. Other lower cost activities, which are very, very intensive, but not costing us that much, include the continuity, continuation, sorry, of environmental baseline studies. We are doing stakeholder consultations. We are negotiating with property land holders. We are selecting sites for infrastructure. We have got the purchase underway of additional tenements in and around our prospects, and we are negotiating our own infrastructure. We are on path for a project approval application at the end of next year, at the end of calendar 2027, so midway through financial year 2028, and a subsequent investment decision on approval. Let me take a second to talk about Nagambie Project, where we have an earning joint venture. This project is 40 km from Costerfield, and it might play, hopefully, an important part of that future of Costerfield.
During the quarter, nearly 6,000 m were drilled beneath the historic western pit of Nagambie, confirming continuity in the high grade of the epizonal gold antimony system. We put out the results just earlier this week, and some highlights included a hole including 3.3 g/ton of gold and another with 2.5% antimony. Results continue to highlight strong similarities with the Costerfield gold antimony system, and they demonstrate significant resource growth potential with mineralization remaining open at depth and along strike. We still have two drill rigs going there, and that is focused on further defining the extent of the system and assessing further exploration upside across the project. With that, I am going to hand over to Jim to provide a review of our financial performance.
Thanks, Nic, and hello, everyone. Here on slide 15, group revenue for the quarter was just under AUD 206 million. That was on sales of just under 38,000 ounces of gold and 172 tons of antimony. Average gold prices of AUD 5,128 an ounce, which is about 9% lower than the June quarter. I think we are all familiar with the gold price movements. Average antimony price in the September quarter was just under AUD 24,000 per ton or just under $17,000 a ton. That was 22% lower than the previous quarter. Nic touched on that early in the presentation around gold equivalent ounces and perhaps people might have a question about those markets. We also delivered 7,800 ounces of gold hedges during the quarter, and that is at that average price of just under AUD 2,900 per ounce.
That only leaves us 21,000 ounces of gold to be delivered in the course of the rest of this financial year at around AUD 2,850 per ounce or roughly in the order of about only 15% of our production over the next three quarters. All-in sustaining costs for the September quarter on a group basis were AUD 2,805 an ounce, just under $2,000 per gold equivalent ounce produced. That was 7% lower than the June quarter. Operations at that mine operating level generated pretty good margins at AUD 2,323 per gold equivalent ounce over the all-in sustaining costs. Sustaining capital during the quarter was AUD 13 million. Most of that is expenditure that across the three operations on underground decline and other associated capital development. Just turning to growth capital, that was AUD 37 million for the quarter.
We have talked about this before, but the major expenditure there really is at Tomingley on the Newell Highway realignment project. Some mobile equipment purchases and rebuilds at Tomingley and Björkdal. Also, that is the lifting and extension of the tailing storage facility at Björkdal. Exploration expenditure, about AUD 9 million. Nic went through those slides earlier on the presentation. We are still at the point we expect to meet sustaining capital, growth capital, and exploration targets for the financial year. We had previously guided in FY 2027 that this really is a year of reinvestment to grow our business. Naturally, we should expect the timing of sustaining in growth capital and exploration spend to vary across the quarters. We do expect subsequent quarters, we are going to reflect that and you should see slightly higher all-in sustaining costs.
That is why we have not changed our full-year cost guidance despite a really good quarter in September. Turn to slide 16 now, and we will talk about cash flows, and we have got the cash flow waterfall there. September operating cash flows from our three operations were AUD 102 million. Some items of significance that we have not already discussed was we did pay Alkane's maiden dividend. That was AUD 24 million. Bit of a timing issue there. We will have about AUD 4 million, which was paid in the very beginning of October, and that was to holders on the TSX. You will see that cash outflow in the AUD 4 million cash outflow in December quarter.
AUD 13 million for normal corporate income tax installments and AUD 21 million in the column there for corporate and other expenses. That does include AUD 9 million for corporate and some of that is business development as well.
AUD 2 million for Boda-Kaiser. Lupin, AUD 11 million of Lupin. Planned expenditure during the quarter there over the summer period at Lupin, which is going really well, and AUD 4 million of interest revenue. Then a net inflow, which is a receipt of AUD 8 million of cash returned from bonds, which we previously used to have cash back. Just a guide for the next quarter, which everyone in this industry in Australia will have, is that we should expect in our December quarter to make our final true-up tax payment for financial year 2026 of around AUD 55 million-AUD 60 million as we just go through and finalize those tax returns.
During the quarter, we launched a share buyback program that was up to AUD 50 million over the next 12 months, which I guess at a share price around AUD 1.70 represents about 2% of the shares on issue.
To date, we have not initiated any purchases as part of that program, but we do expect to opportunistically, throughout the financial year or the next, really the next 12 months. At 30 September, financial position remains really, really strong. We have got AUD 450 million of cash bullion and listed investments, and if you include the undrawn line of credit facility, total available liquidity is just under AUD 570 million. That is a strong overall finance position, really underpins the foundation to continue to reinvest, which is what we are doing, and fund growth opportunities across the three operations, including the development of Boda-Kaiser. It allows us then to, after all that, provide for shareholder return program, with dividends and opportunistic share buybacks.
But it has still got a lot of flexibility on the balance sheet should we see any opportunistic, strategic, or value-accretive inorganic opportunities as they arise. With that, I will turn the call back to you, Nic.
Thanks, mate. Leveraging that financial strength Jim's outlined, we believe we have a very good foundation to deliver on our two-path strategy. Number one, continue steady state production whilst maintaining or ideally lowering cost to drive overall margins. This increases our cash generating capabilities to fund growth initiatives and shareholder returns. To this end, I think people can see we're meeting our production and cost targets, we're delivering our CapEx programs on time and on budget, and we're aggressively drilling across the entire portfolio. We are meeting that objective, and we believe that we'll be able to release long-term value for that. Why don't we just get in amongst the Q and A, and so hand back to you. Thanks, Maggie. Please.
Thank you. We will now start the Q and A section. As a reminder, to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from the line of Al Harvey from UBS. Your line is now open.
Yeah, morning, Nic and Jim. Maybe just starting off with the exploration side of things. Wanted to get a bit better understanding of that tenure increase at the Northern Molong Porphyry Project. Guess I'm just trying to get a better sense of the strategy here and maybe how you're thinking about growth more broadly. I know you've kind of touched on exploration to extend mine lives at the existing ops, but thinking more about longer term growth.
Yeah, absolutely, mate. We're in the process of picking up this document exchange, all this sort of stuff. Tenure from Alice Queen to the east and then curving around to the north of the tenement package. There's a two-part strategy here. This is not so much looking for supplementary resources, but making sure that the potential infrastructure footprint that we expand over, we can do sterilization, drilling, and all this sort of other stuff without impacting on other tenement holders. Yeah, that's, to be frank, driving this a lot more than looking for exploration potential up to the north, even though, of course, we will do that.
Yeah. Thanks, Nic. Just to be clear, is that an incremental, like incrementally, you guys are thinking a bit more positively about Boda-Kaiser development longer term? Is that a fair read?
Yeah. Mate, very fair. We are at the moment, we have biologists on the ground doing all the flora and fauna studies across this summer. We have modeling occurring of different water supply and tailings dam options. We are back revisiting the pit designs in more detail, all with a view to having these applications in next year. Absolutely, that is the read, yes.
Yep. Awesome. That is great. I suppose just thinking about the buyback. Based on my valuation and consensus valuations, it would be very accretive to buy back stock at current levels. I suppose, how are you thinking about balancing that with those growth plans you just mentioned?
Yeah. We believe, and this is all assuming the gold price does not just completely collapse back another $1,500 an ounce from where it is. But we believe that we are more than funded to meet the full AUD 50 million buyback as well as meet all the growth programs that we have and maintain an incredibly robust cash position. It will be the gold price and the free cash flow, particularly in the next financial year, that drives how much we look to increase those distributions by the two methods. But, yeah, we believe we are absolutely set.
Awesome, mate. Maybe just finally before I queue up again, just to clarify that the Peak Hill high sulfidation epithermal mineralization you have. I just wanted to clarify, did you say that could go straight into the Tomingley mill if you proved it up?
Yeah. No. Thank you. That's a good clarifying question. So, underneath Peak Hill, the ore that is there is refractory. So we will need, should we mine it, we will need to do some sort of oxidative treatment, be it, pressure OX, BIOX, Albion, one of those type of approaches. So a potential scenario, of course, is establishing an underground crushing and transporting up to Tomingley, which obviously we need all approvals. The external also is a fair way away from that. To then, we'd have to do an oxidative step there. Yeah.
But just to be clear, is the plan still to target the porphyry potential under Peak Hill, or do you feel like it's moving more towards that high sulfidation?
Sorry. Both. Immediate obvious production plan to assess is what I just described. Long-term exploration potential, we continue to look for what on Earth has fed this system. But one is an immediate thing that we're studying, working through, running the economics on, seeing what the approval pathway needs to be for that. The other is just purely effectively greenfields exploration.
Awesome, mate. I might just sneak one more in, to save queuing up again.
Yeah.
Just on the Nagambie earn-in.
Yep.
I think the first hurdle's AUD 12.5 million. How much of that through are you so far?
Look, I'm sorry, I didn't prepare that number to have, but it's not remarkable. A couple of million dollars. Yeah. Because we've got two rigs running. That's AUD 12.5 million over three years, though, don't forget. Yeah. Sorry, mate. But we've only got two rigs running and a modest team there, so it'd be a couple of million.
Yeah. No worries. Awesome. Thanks heaps for that, Nic. Appreciate it.
Cheers.
Thank you. Just a moment for our next question, please. Next, we have David Coates from Bell Potter Securities. Your line is now open.
Thank you. Good morning, Nic. Good morning, James. Congratulations on a good quarter, and thank you for the call. Just a couple from me. One a little bit technical. The low grade, or the lower grades and the dilution issues that you had. Are the low grades sort of associated with the softer ground, or is that just a bit of a coincidence and just something you are working your way through? Or should that be something we should be cognizant of in lower grade parts of the ore body?
Yeah. Sorry, Dave. It is certainly not something that I am trying to steer or guide people toward being a continuing, ongoing thing. Just at different points within Youle Shepherd, the ore body turns over sort of even 60 degrees, in some very small sections, even 45. We cannot effectively cable bolt that hanging wall in any kind of cost-efficient manner. And so we do get overbreak. Because our host rock is not mineralized in the slightest fashion, all overbreak is pure dilution. That said, it only happens every now and again in a couple of different spots of the ore body. We had anticipated dilution, but we got probably a few thousand tons more dilution than we had even anticipated.
Right. It's more about the ore body orientation—
Yeah.
—geometry than it, like a sort of mineralization.
Yes. Exactly. Exactly, yeah.
Cool. You were just chatting about the development pathway to Boda-Kaiser.
Yeah.
Can you sort of run us through, I guess, what the pathway looks like to an FID?
Yeah. Okay.
If we're there yet.
Yeah. Can you hear me? Sorry.
Yep. Yeah.
Yeah, sorry. The step one is baseline environmental studies, which we are doing, and we are one year into those. You have to do two years of baseline studies, and we have a lot of people going onto the ground this summer because if you don't get two seasons worth of data, you effectively lose a year. We have groundwater monitoring bores in place. We have a weather station in place. We expect also across this summer, we'll be doing our heritage surveys, our Aboriginal heritage surveys. Remembering, of course, that this is privately owned land. That's number one. Number two, that will finish. Sorry. That will finish by this time next year. That'll be done.
Number two, we are doing studies on where we're sourcing water licenses, the amount of water, and there's an iterative step here with engineering around potential water capture, tailings dam facilities, locations and stuff like that. Of course, intertwined all of that is talking with land holders who actually own. We own some of the land, other people own some of the land. We're just negotiating, well, how might this look? How does this work with different individuals? We shift and change where we could put infrastructure against that. We think we're on track to have all of that sorted by this time next year.
We would then most likely put out a pre-feasibility study because we've been doing the work on mine designs and plant updates and new electricity costs and fuel costs and all that sort of good stuff, with a view to having the application into government by the end of the year. Then typically, and we understand the vagaries of it, but typically a metalliferous project without too many objections has a 12-24-month final approval process. That's been our history, our average as a company is around 14 months of approval for our three major projects that we've done over the last 15 years. That would see us in the middle of 2029 getting project approval, barring no legal challenges that would see us making an FID, later in 2029.
We would obviously, as we were getting signs and we had responded and we were interacting with the process. That would see us making sort of approaches on partners and stuff through that late 2028, early 2029 period. Yeah. That is—
Sure.
—the broad plan.
That is a great sort of high-level update where you guys are at and timed perfectly for a massive deficit in the copper market, of course.
Yeah. That is right. Yeah. It is funny, mate. You sit here on a day like today where gold is taking a hammering and you think, "Oh, come on, copper." That is right.
Indeed. Speaking of gold taking a hammering, I imagine you guys did a little bit of watching brief on buying back your remaining gold hedges or not. How are you thinking about that at the moment?
Well, mate, my pause and wait strategy has ended up being prescient yet again. So look, no. At this stage, mate, we still just intend to deliver into those on schedule. That's our default plan and anybody putting it together a model should have that.
Yep. Okay, cool. And just while we're on the markets, you did make a couple of comments about the antimony pricing and the market.
Yeah.
Did you want to share, sort of give us an update on that?
Yeah. Look, absolutely. People will have noticed the U.S. dollar price falling for antimony. Like I said, it was $ 13,000 a ton. The main thing that we're seeing is internal demand within China for particularly, the manufacturer of solar panels has fallen as a fundamental. The margins of the guys refining that have been squeezed. That's what's driving it, basically. It's not so much global growth or, because the flame retardant stuff is broadly similar. There's been a little bit of substitution in things like brake pads and stuff. We're seeing a contraction of that pricing. Unfortunately, I don't see really beyond, we'll call it geopolitical reasons. I don't see reasons for that market to rebound strongly in the short to medium term.
Fair enough. Great insight. Okay, thanks very much, Nic. Thank you very much, Nic.
Cheers, Dave.
Thank you. Next question comes from the line of Paul Kaner from Ord Minnett. Your line is now open. Please go ahead.
Yeah. Hi, Nic and Jim. Thanks for taking my questions. Firstly, just on costs at Björkdal. Yeah, those mining costs came down quite significantly. Is there anything specific you can point to there? I know you talked on the scheduling and also the improved production piece, which improved the denominator impact. But, can you maybe just talk to mining costs on a dollar million basis there?
Yeah. Look, I don't want to over-egg the omelet, mate. In that, we have had quite a steady focus over the last year of increasing our developed stocks. So we do have more production fronts open that are letting the tons flow more freely and letting us balance the grade. So that's good. We have also started to invest. We've seen new pieces of kit arrive. We've been steadily buying equipment with arrivals over the last six months. New Boltec scaler, that sort of stuff. We're a little more immune from diesel pricing up there in Scandinavia, like we've referred to before, being really only the underground trucking fleet that does that. And we use a contractor with Scania trucks, like those road fixed-body trucks that you might see around Sydney or Melbourne delivering rock to a site. They travel much more quickly.
They're quite very cheap on a dollar-per-ton basis. So all of those things, together with a more consistent performance across summer on a slightly higher grade, have just led to this result. But like I said, I don't want to over-egg that omelet yet, mate. And so we do expect, whilst on a dollar-per-ton basis, we expect to stay the same. We are still very beholden to making sure we get the right grades and the right ounces out of Björkdal. But I'm confident that we're steadily marching towards that 50,000 ounce per annum rate that we're looking for from there.
Yeah, great. That is very clear, Nic. Just moving to Costerfield, can you maybe just remind us on True Blue, I guess, when you expect that to come into the mill and sort of how that material differs in grade relative to, I guess, the existing mining fronts?
Yeah. In grade, similar, right? However, it was smaller than we anticipated, so we only, I think, have, I do not have it right in front of me, but sort of 50- odd, 5,000 or something ounces like that we could bring into the reserve, so a year and a bit. We have it at the end of our life of mine because we have to develop the 2 km across to it. If we find stuff similar to Brunswick South or Bentley that I referred to, we expect that it will continue to substitute and push True Blue out. What we are really looking for from True Blue is the step-out exploration we are doing up and down along strike across these 12 months. We are looking for that to give it more appeal to develop towards.
It is a very similar grade in gold and it is higher in antimony, because it is higher up in the sequence.
Yep, too easy. Just staying at Costerfield and just following on with Nagambie, can you maybe just talk us through what the opportunity is there? Obviously, some good initial drill results. How does that potentially fit into the mine plan at Costerfield?
Yeah. In a massive arm-waving exploration, excitable type fashion, in an ideal world, we can expand that resource to be more substantial. You can see there the grades, they are obviously this high-grade stuff, but three, 4 g/ton gold , 2.5% antimony. It is slightly lower in gold than we have at Costerfield. That is not saying it is going to remain that way, but on the bits that we have discovered. In an absolute ideal world, I would like to improve the reserve base at Costerfield based on the exploration we are doing in and around Costerfield and have Nagambie as a substantial supplementary feed that we would justify the expansion of the milling facilities at Costerfield. That is my ideal solution.
Failing that at the moment, we will be fleshing it out and putting it later in the mine life, but trying to understand the mining extraction rate we can get from it. Yeah, I think that Nagambie is quite exciting, and I do not think the market really gives Nagambie, the company itself, the recognition that it deserves for the asset that I think it could well have.
No, that is very clear, Nic. That is all from me, mate. Thanks very much.
Thanks, Paul. Cheers, mate.
Thank you. I see no further questions on the phone line. Natalie, is there any questions on the webcast?
We just have one question at the moment. It is, what impact does the rising cost of oil and diesel have on your operations, particularly those in Australia?
Hey, Jim, do you want to handle this one, mate?
Look. Thanks, Nat, and the question for that one. Yeah, look, diesel fuel prices for us, they are around 2%-3% of our total costs, or less than AUD 100 an ounce. That is really just because of our mobile underground fleet with the rest of our Australian operations powered off the grid power by electricity. So it is immaterial and probably more pertinent to really follow through on that question is, it is around supply, and we are not having any issues with supply. We are not a massive consumer of diesel fuel, and we are not located in remote locations. So, yeah, immaterial to us. No issues.
We have no further questions, so I will hand the call back over to Nic for closing comments.
Yeah, look. Thanks very much, everyone, for taking the time to join us today, particularly those who would otherwise be watching a quite interesting market open. As always, please reach out, info or mail at Alkane or alkres.com. So look, thanks, everyone. Have a good day, everyone in Australia, and a good evening for those joining us in North America. Appreciate your time.
This concludes today's conference call. Thank you for participating. You may now disconnect.