I would now like to hand the conference over to Mr. Bryan Quinn, Managing Director and Chief Executive Officer. Please go ahead.
Hi. It's Bryan Quinn, Aurelia Metals Managing Director and CEO. On behalf of the team, I'd like to provide you with some key points from the Half One FY24 results. I do thank you for joining the call today. I'm joined by Aurelia Metals Chief Financial Officer Martin Cummings and Chief Development and Technical Officer Andrew Graham. In today's presentation, we'll be referring to the slides released earlier today, and we'll actually spend some time or additional time on the financial waterfalls and the exploration information that both Martin and Andrew will talk to. For the Half One FY24, our business has remained on track to execute our strategy, which included Peak increasing volumes and meters relative to the previous Half One FY23.
Our Federation Project is progressing with development meters and remains on track for first stope ore in Q1 FY2025, and we're targeting delivery of the project within the approved budget. Our cash remains strong. We're generating operating cash flow of AUD 34.3 million in H1 FY2024, and our cash in the bank was AUD 108.7 million, with an overall strong liquidity position of AUD 163 million. I'll get Martin to talk through some of the details with you on that. Overall, we're in good shape building our growth portfolio, being self-funded at present in H1. Hopefully, from today's results, it provides some clarity on why Aurelia Metals is a good value proposition for our investors relative to our peers. But we also acknowledge we still have a long journey to deliver what we're aspiring to over the coming periods.
Our operating discipline on lowering unit costs to offset inflationary pressures continues to be a priority, which is ongoing across all areas, including capital projects, operations, and corporate costs. We're starting to see some of the benefits flow through from this focus, but recognize significant work is still being targeted in H2 FY24 and also H1 into FY25 to deliver the sustainable step change that we are aspiring to. At present, our focus is improving efficiencies and productivity in the mining and maintenance and getting uptime on our processing facility for the remainder of H2. Our exploration team continues drilling in the Cobar region with four rigs within H1 FY24 and to date delivering excellent and exciting results for the Aurelia business. In fact, we published some of these results from the Chesney North region at the Peak Mine and recently Nymagee results last week.
This reinforces our view that the region and leases within Aurelia portfolio have high prospectivity to build on our resource. Andrew is going to speak to this in more detail in the coming moments. But it's clear we're very happy with the results and the options it provides us in terms of our short, medium-term business planning. Our current safety performance has not been in line with our expectations for H1. We've had slips, trips, and hand injuries, which have been disappointing that people haven't been returning home the way they came to work. We've put several measures in place. Firstly, really focusing on frontline leadership, working to identify hazards with our teams, retraining people in basic processes to make the workplace safer for them on the job.
Secondly, we're doing a lot of work focusing on fatal risk controls across the sites so that we can actually understand what the controls are and ensure people are trained in those, and we can identify hazards much more frequently and make it safer for people. Lastly, we're also looking at significant risks and looking at how we can actually put the right controls in place there as well. There's a multi-prong approach to really ensuring we get the injuries prevented and also prevent fatalities, which obviously we do not want to see. I'm just going to hand it over to Martin to talk through the next couple of slides on the group operational summary, and then I'll refer to some more detail around the operating business and the projects. Over to you, Martin.
Thanks, Bryan. So firstly, we covered our operational performance and outlook in detail in the December quarterly call, but I'll quickly recap on the outcomes turning on to slide 4. Our production volumes were lower in the half with the comparative period including production from Hera. We closed the Hera Mine in March 2023, and the processing infrastructure was placed on care and maintenance. You'll see throughout the pack that we've removed Hera from chart - excuse me - to highlight the impact after Hera. So excluding Hera, gold production was lower this half, driven by a 23% lower grade at Peak, and Dargues grade was also marginally lower. In addition, Peak's processed about 10% less tonnes during this half. On the base metal side, though, production, it was the opposite story, with zinc and lead grades around 15%-17% higher.
As we outlined in the quarterly, we are expecting higher production to finish FY2024 with higher grade and tonnes at Peak. Gold is expected to be in the upper half of the guidance range, with zinc and lead in the lower half of the range. And for copper, while it isn't a large production volume for us right now, we did reset that guidance lower in January, given the likelihood we would not achieve the original guidance. Pleasingly, our all-in sustaining cost is expected to land within the range, and our sites are managing their costs well, resulting in spend that's lower than our internal plans. So just turning to slide 5, which is the group financial performance. And it's pleasing that we've continued this journey of improved financial metrics across the board.
There is no doubt that the comparison period on this slide, being the first half of FY23, was a disappointing period for the business, so improvement was expected. In this half, we're focused on increasing our operational efficiencies and costs at Peak and generating solid cash returns from Dargues. This is translated into material improvements that you see on this slide. As I said, we expect to build on this in half two with continued production growth at Peak and cash generation from Dargues. Given all the mine development at Dargues that's now been completed in the December quarter, we expect the strong cash flow to continue. Moving on to slide six, which gives you a bit more detail on the movements in revenue, which overall was AUD 45 million lower than the Half One FY23. We've pulled out Hera.
40 million of that variance was contributed to Hera. But from the remaining AUD 5 million, it was driven by movements in volume and price. For gold, the lower gold production was more than offset by higher gold prices for Peak and Dargues production. And our average price received in this half was 3,060 an ounce, up from 2,570 an ounce in the comparative period. In terms of base metals, it was the mix of ore processed at Peak that really drove the higher lead-zinc production and lower copper production. Peak's mill feed this half consisted of 72% lead-zinc ore and 28% copper ore, whereas in the comparative period, that mix was a bit more even at 55% lead-zinc and 45% copper ore. As I mentioned earlier, lead-zinc grades were also up in this half.
In terms of volume, these variances essentially netted each other out, leaving the main impact here from the lower zinc prices we received this half. The realized price in the prior period was AUD 4,678 a tonne for zinc, whereas the average realized price this half was about AUD 850 a tonne lower at AUD 3,822 per tonne. The last variance on this chart you'll see was regarding zinc treatment charges, which we had lower contract rates in calendar year 2022 versus calendar year 2023. Looking forward, we expect to continue enjoying these higher gold prices in the second half with our average hedge price of AUD 3,072 an ounce for the remaining production from Dargues. Lead and zinc prices are around the prices we achieved in the first half, but the extra volume will lead to higher revenue. Just moving on to slide 7, which is EBITDA and NPAT.
As I said, we did expect to deliver improved EBITDA in this period versus the comparative period. We've pulled out the loss from Hera and added that back to the comparison in the top right chart. I talked about the lower revenue from Peak on the previous slide, but it was the inroads that we're making on operating costs that have been the really pleasing aspect this half. The main variance within this is within our mining costs. Those mining unit costs fell from $164 a tonne in H1 2023 to $125 a tonne in this half. As we showed you in the quarterly, the December quarter unit rate was $123 a tonne. We are focused on continuing to lower that towards $100 a tonne, driven by both volume and cost-saving initiatives.
Dargues continued their solid EBITDA production performance, enabling it to realize the benefits of the higher gold prices in the half. As I just mentioned, all the mine development at Dargues was completed in the December quarter, so we expect that cash generation margin to continue through to the end of operations in early FY25. In terms of corporate and other, the main change in this chart for the first half is that we're now including the costs of care and maintenance at Hera within corporate and other. And as I indicated back when we issued guidance, those costs are around AUD 500,000-AUD 1 million per quarter. In terms of net profit, it was pleasing to return the business to a positive profit before tax, and that was driven by lower depreciation and amortization charges along with the higher EBITDA.
The D&A was a little bit lower this half with the lower production from Peak. Given most of our assets are depreciated on a units of production basis, we will expect that to increase marginally in the second half. I'll just highlight, you'll note that the income tax expense of AUD 2.7 million for the period was a bit higher than what you would expect as an ordinary movement on tax. The main driver there is that we took a AUD 2.4 million adjustment related to the difference between the tax refund that we expected to receive at the 30 June accounts versus what we ended up receiving of AUD 17.8 million. I took you through that in the quarterly. Finally, while we're talking about tax, you'll note we do have a deferred tax asset of AUD 9.2 million for carry-forward losses at 31 December.
And that has benefited, I guess, from the fact we've received AUD 27 million in actual tax refunds relating to tax losses over the past two years. It's likely we will recognise some additional tax losses at the completion of Dargues in early FY25, and we're currently working through that calculation in the lead-up to mine closure. And I'll be in a better position to give you an update on the tax situation at Dargues when we release our full year accounts. And finally, we'll just turn to slide eight, which is around the balance sheet. And clearly, it has been a transformational period for the balance sheet with the completion of the equity raise and the closing of the refinance with Trafigura. So I think it's worth just reflecting on where the balance sheet has finished at 31 December.
We completed the refinance with Trafigura, and those funds are earmarked now for the development of Federation. We're debt-free and other than some equipment leases and had significant cash of AUD 108.7 million in the bank. We received a further AUD 17.8 million in January from the tax refund, taking our pro forma cash to around AUD 126 million. Our finance facility has no repayment or cash backing requirements until the middle of calendar year 2025 and a four-year term. Today, we're only six months into that term. And the interest rate on our loan note is competitively priced at 6% over the benchmark, and we have no financial covenants. Pleasing for me as well within the half was the ability for Peak and Dargues to fully fund our growth expenditure, which means the proceeds of the refinance are largely untouched. Thanks for your time, and I'll hand the call back to Bryan.
Thanks, Martin. Look, I'm going to talk through the operations and the project, and then I'll hand to Andrew to talk in more detail on the exciting exploration results we've been getting. Firstly, on slide 9 with Peak, look, the Peak business is obviously focused on delivering the sort of increase in volumes and the increase in meters so we can set ourselves up for a good finished FY24 but also set ourselves up for FY25. There's a list of projects that are well underway to safely improve the unit costs but also to look at how we can maximize value through our production. Some of those the adding that some of those projects are in addition in excess of AUD 10 million if you look at both the productivity and efficiency projects that they've got on the table at the moment.
Development performance at Peak for H1 has improved in line with our expectations and is now focusing on delivering this in a consistent way quarter by quarter and obviously focusing on how we can improve the unit costs for those development meters. It's great news for Peak that we've been able to get those meters back up where they need to be. And in fact, it's given us good scope to have access to stopes several months ahead of ourselves now to get the work done for preparation for stoping. It does help de-risk the overall production plans for the full year, but obviously, we still need to get that to the service and process it and deliver those sort of overall complete process for the organization. We rolled out the regional Cobar leadership model with Peak and with Federation in H1, and it's been implemented in H2.
There's obviously opportunities around standardization, having one set of management teams focusing in the region. It's optimizing mine plans, looking at how we think about trucking, optimizing the plant throughput both from Peak and from Federation going forward, and really setting up our crews and staff at Peak and Federation to align to one plan that can optimize the value out of that complex in that Cobar region that we call our Cobar Regional Model. At Dargues, the focus for the H2 period is really the safely and reliably retreat out of the mine with production finishing in Q1 FY25 while obviously safely maximizing the cash from the operations, especially on the back of some very attractive high gold prices that we've been able to lock in. The work is well underway in parallel for the sale of the complete site, including the mill or just the mill.
In parallel, there's closure planning being well advanced in terms of the work in the actual site itself. Importantly, we're working through what components also that we can take from Dargues and use in the Cobar region, which will be cash and capital savings for the Cobar operations going forward as well. Equipment, loaders, trucks, light vehicles as examples, how we factor those into building our business in Cobar. Obviously, all of this is in light of how do we maximize the value back to shareholders from this sale process and closure process as well as meet our provisional requirements to remediate the site in the right order.
In the meantime, we're also working with our workforce at Dargues to look at how we can redeploy the people into the Cobar region and/or the completion times and various closing with the team members who want to leave the operations at the end of the operations. I just talked about Federation. The Federation Project, obviously, the critical path has been development of the decline and obviously getting us into the stope area for Q1 of FY25. Other critical path work has really been infield drilling to obviously resolve where our stope location and setup is going to be. The first shaft raise bore was completed safely, and we're just over 70% complete on the second one, which is one of the larger shafts. The Burthong Road upgrade has been tracking very, very well considering the weather events.
Effectively, over 8 kilometers has been sealed and completed for that particular part of the project, which is a great milestone for Federation. Some other key milestones included over the period, underground electrical substations being installed in the decline and commissioned. As I said, the underground infield drill drive was placed in one of the cutouts and has been drilling since early January. All of those events, obviously, all those activities continued on even though we reported rain impacts on development and potentially causing a pause to our development for a period of time. We were able to continue most of the other activities running in parallel, and they've progressed to, as I said, the first shaft raise has been completed, stope created, and the second shaft is being raised at 70% complete. Just one last comment on Federation.
We obviously did report about the pause development because of the water and the rainfall impacts we had. We subsequently reported that we don't see this being impacting on our first stope ore in FY25 quarter one. All the equipment in terms of pumps and pipelines and spillway work that was underway both before the event and during the event of the rainfall, and now have all been put in place. There's still ongoing project work around water management we need to do as we continue to build our project, which is also just part of the project scope and operational scope to get the business ready for the future.
At a strategic level, our growth team continues to work on the optimization options of our portfolio in the Cobar region to utilize our infrastructure as we continue to set up our operations to use our full capacity of our mills. Obviously, that's going to be based on where we maximize value and how we distribute our sort of volumes. We have several options that we're working through, and then we'll provide some insights today and the future. But it's obviously clear that we're looking at both what we have internally but also what our neighbours potentially have and how can we get synergies from each other to optimize our value. So there's a lot going on in the operations and the project space and also in the strategic space around how we optimize value going forward.
I'll just pass on to Andrew now to cover the details around our exploration plans and results.
Thanks, Bryan. For those following along, we're up to page 12 of the slide pack where we showcase a little bit of what we've been doing. Since the start of the financial year, we've put out three exploration releases, which showcases really how great the tenement packages that we've got there in Cobar and also in-mine and near-mine prospectivity. So the first of these releases featured amazing grade at our South Mine at Peak in the Perseus Deeps , which we got, for example, 13 meters at 17.6 grams gold, which is a fantastic hit in anyone's book. We also, on that same release, put out some information about Chesney South drilling, 11.5 meters at 1% copper and 1.9 grams gold. Again, a great hit, testing that piece between Chesney South or Chesney and the Burrabungie opportunity.
So some excellent results there for the Peak Mine. Also at Peak, we followed up in January with the results of our Chesney North exploration program. 6 holes completed there, all hitting mineralization, copper mineralization. Just to call one out, 17 meters at 1.8% copper and 0.4 grams gold. Certainly fantastic from two points of view. Great copper, great grade with a credit there of gold but also very, very close to planned workings there at Chesney North and giving us the potential to think about how we time Great Cobar as we mine Chesney North ahead of it. There's a great photo there in the slide for those following of Dinesh from our Cobar district team, in that case, logging hole 81 of that Chesney North program. We certainly have a really great team on the ground there delivering these results.
Now, to top it all off, last week, we released a 4-hole program at the historical Nymagee Deposit. Just to call out, for example, hole 102, two very strong intercepts around 30 meters at around 2% copper. That's fantastic. But as well as that, 7 meters in excess of 17% zinc in the Western Lead-Zinc Zone . And on top of that, some great copper grades in the inter-lens stockwork. So if you haven't looked at that release, I'd encourage you hop onto the ASX website or our own website and have a look at that. Some excellent drill results from our first 4 holes there in Nymagee. And we'll certainly be following that up through FY25.
So it's great that these exploration programs are yielding results, really evidence of that strong prospectivity in and around and across our exploration package in Cobar but also a fantastic showcase of the people we've got on the ground doing that exploration. Throw it back to Bryan to wrap up.
Thanks, Andrew. So as we noted throughout the presentation, obviously, the management team's really focused on delivering our four-year guidance and our growth plans. And as highlighted by Andrew, there's some really exciting work being done in unpacking or uncovering our prospectivity. And as Martin talked about, showing our financials and our balance sheets, some really strong indicators that we're a business heading in the right direction. Like any businesses, we have our ups and downs. But we're very focused on developing and operating this premier base metals business in this very prospective Cobar region, which is obviously tier one by any standards globally. In summary, for us, we want to highlight what supports our vision going forward. We have this really strong extensive resource base, and we're obviously uncovering more as we progress with our exploration program.
We have the established infrastructure in place, the 1.2-1.3 million tonnes. And really, we're looking at how we can optimize that as we continue to run Peak to maximize value at Peak and start up Federation Mine in FY25. How do we utilize our infrastructure to really maximize the throughput but also maximize cash and value to our shareholders? But we have that opportunity in front of us, and it's there for us to use. We're transitioning, obviously, at the Peak Mine to be more copper dominant in the medium term from a lead-zinc sort of based business to more copper, which is very exciting considering where we're heading as a company.
We have multiple mines with multiple sources of ore in both Peak and Federation going forward, which will give us the opportunity to optimize our throughput through our mills and obviously then optimize cash flows as well for our shareholders. We have the fully funded high-grade project at Federation, which is on track to first stope ore. We're progressively advancing through the scopes of work as we've highlighted. We've had 83% commitments against our FY24 budget at the end of January. And overall, at the end of January, our total project is about 43% of the total project plan, which obviously goes into FY26. Priorities other than development is really around electrical engineering works, power station, and stage two construction works on site going into FY24 and FY25 for the Federation Project.
But once again, it's fully funded, and we've sort of got a clear path to getting to our first stope ore in front of us. And I guess overall, if you look at our we've got a lot of programs underway to progressively improve our productivity and lower the unit costs. And these are well underway. Like I said, we're on a journey. We still got much work to do, and that's going to progress as we move forward as an organization. And hopefully, the amount of work will start giving us results in H2 and also into FY2025 as well. So I'll pause there and pass it to Betsy to open up for the Q&A, and then I'll come back and provide some wrap-up comments.
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, then two. If you are on a speakerphone, please pick up the handset to ask your question. The first question today comes from Daniel Roden with Jefferies. Please go ahead.
Hi. Thanks, Bryan, Martin, and Andrew for catching on the results today. Perfect. Just wanted to start with yourself, Martin, just on some of the financial stuff. So just with the utilization of these tax losses, you've got AUD 9.2 million. There may be some more coming from Dargues when that closes down. What's the expectation on the when those come into the, I guess, the income statement? What's the utilization of those tax losses going forward?
So the profile, Hey, Dan. The profile will be the way that we'll get the tax deductions for Federation, so as you know, we'll get immediate deductions on mining development. So there is a bit of a tax shield in the early stages of Federation as ore starts to be mined. And then as you pointed out, we've got the AUD 9.2 million of carried-forward tax losses. So we don't have any tax payments in our models in the near term given that starting position and then that sort of natural shield from the higher development early on in the mine. I talked about commercial production out of Federation. We're going through a life-of-mine process at the moment. But after stope ore, that commercial production window on the old plans was around 6-9 months after first stope ore.
So that's the sort of timeframe where the operation won't be cash positive. But commercial production will come inside with around about the time when it starts to break even. I hope that gives you a bit of color. So nothing really in the short term.
Yep. No, perfect. That's great. And I just wanted to talk on depreciation as well a little bit. It's kind of probably a bit semantics. But even accounting for the removal of Hera, I guess the numbers I was coming out with on the units of production basis had the depreciation for the past year a little bit higher. So I was just wondering what, I guess, how should we think about the outlook for the remainder of FY2024? And I guess going into FY2025 as well after Federation comes online, similar trend of pressure match the expectation for depreciation for the next two years, I guess?
I won't guide you on year two, but I'll give you some guidance on this half. So as I mentioned, a lot of our assets are on a units of production basis. So it was a lower half production-wise, and therefore, the depreciation unwound a bit slower in line with that. The other piece that we're working on is the Dargues assets. So there is a lot of work going on at the moment to work out the remaining values and how those assets will unwind. And some of that was actually pushed through in this half. So that is around recalibrating Dargues to the expected finish date of the first quarter of 2025. So on the rest of this year, I think I mentioned I expect depreciation to be slightly higher than in the first half just given the higher production.
And then I'll give you some guidance on what Federation depreciation looks like in time.
Awesome. All right. Thank you. And I might ask one more just for the, I guess, the group. But with you've got the Cobar-based optimization projects due in FY24, I just wanted to kind of unpack the current thinking around, I guess, Great Cobar. And there was mention of, I guess, some organic and inorganic synergies in exploration and maybe from some of your neighbors around what that profile might look like. So yeah, I just wanted to, I guess, ask and understand a bit more about what the current thinking was around the Cobar-based strategy and where Great Cobar fits into that profile.
Can I talk to this one, Andrew?
Yeah. Well, thanks for the question, Dan. Look, I think it's firstly most important to point out that we've got a very robust plan that we can deliver on. And that plan's the one we've articulated to the market previously. Developing Federation, taking some of that Federation ore up the road to Peak. We have permits in place to do that and then turning on Hera when the time is right. With that, then there's a natural sequence at Peak. Mining South Mine, high NSR materials predominantly at the moment. It's sort of transitioning, as Bryan talked about, to North Mine and copper in time. And how that sequence then works and the timing of that is a key piece of our life-of-mine planning activity. And that works ongoing at the moment.
It's really, for Great Cobar, a toss-up of continuing to mine the ores that we have right in front of us in New Cobar versus taking the time and the effort and the money to get across there to Great Cobar when it makes sense. So that'll be a key output of our life-of-mine work at the moment. Obviously, it's a moving feast as we drill holes and get excellent results as we have been. So it's really taking account of all of that most recent information. From your second part question just around sort of third parties, I've talked about it last time with the quarterly. It would be remiss of us not to be thinking about the possibility of working with others given we have two fantastic mills there in the Cobar Basin.
Really, at the moment, we have a very, very strong feed and pipeline of materials between Federation and also the Peak Mine. Really sequencing those for maximum value is something we're really focused on. All right. Is there any other question, Dan?
Yep. No, definitely does. Perfect. Thanks, guys. I'll hand it over. Thank you.
The next question comes from Adam Baker with Macquarie. Please go ahead.
Morning, Bryan and team. Thanks for taking my question. Maybe just spot on Federation. You are more back-ended for the growth CapEx this financial year, about AUD 40 million-AUD 50 million from what I can see. How much CapEx will go through into FY25 until that project, I guess, the development changes to sustaining? Thanks.
Hi, Adam. Martin here. So yeah, we are still maintaining that guidance this year of 70-80. So your inference around the spend rate in the second half is correct. You might recall when we went through the feasibility study update, the movement in capital from what we called first stope ore through to commercial ore was around about AUD 30 million, a bit over AUD 30 million. That did have some capitalized production in it. So there were some operating costs starting to come through, and we were capitalizing those and capitalizing the revenue as well. So through to commercial production, which is around, as I said, 6-9 months after first stope ore, was a net of about AUD 30 million.
And then it will start to transition to there'll still be heightened mine development going on through that period, but some of the other costs will end up being in production activities and operating costs. So that's probably the best color at this stage. Obviously, we'll give you some more as part of next year's guidance on what it looks like.
Thanks for that. The raise bore shafts and the installation of the ventilation fans, that's all captured within FY24 guidance. Is that correct?
Yes. So the ventilation, so the raise boring has been done. 1 shaft's complete. It's been obviously shotcreted. The second one we're doing is 70% complete. Its work done in the third shaft will be raised in this financial year also. Obviously, the various activities in terms of ventilation fans and so forth or egress ladders will be generally installed this financial year ready for our first stope ore in Q1 FY2025. And on the money side, commitments have been made for those things. So it's sort of it's already out in the market, and the money's being spent this FY2024.
Gotcha. Just touching on that point on the first commercial production from Federation, 6-9-month kind of ramp-up from first stope ore, can we infer that that means that you're at the 600,000-ton per annum run rate, I guess, by the March quarter next year?
No. No. So that was around about 20,000 tonnes a month at that point. Obviously, we then ramp up progressively from then to the nameplate of 50,000 tonnes a month.
Gotcha. So yep, still a little bit further ramp-up to go from there. All right. Thanks very much. Cheers.
Quite a lot, really, to go from 20 to 50. Yeah.
The next question comes from Paul Kaner with Ord Minnett. Please go ahead.
Hi, Bryan and team. Thanks for taking my questions. No financial questions from myself, but maybe just a couple on the operations. So firstly, at Chesney, you fired your first production stope there. Was that always coming into this mining sequence this early in FY24, or were you just being a bit more opportunistic given those recent drill results?
In terms of Chesney, you're referring to the Chesney operations, part of the operations?
Yeah. Yeah.
Yeah. So basically, the sequence of the Peak Mine has been as we talked about at the quarterly, the sequence was we moved some stopes from Q3 into Q2 and then obviously stopes from Q2 into Q3. We're progressively mining those stopes now. And if you look at the total year of FY24, we'll be well, the plan is to be on reasonably close to the sequence, including obviously the Chesney area as well that we had factored into the plan from the period. But the results that Andrew's talking about on the exploration, they obviously will go through our JORC process and be factored into the LOM going forward. I think I've answered your question. It was a bit hard to hear what you said. That's all.
Yeah. No, that makes sense. I was just making sure that nothing's been sort of brought forward in the sequence, which you answered anyway. And then just secondly, on recent rainfall, good to hear that the first raise bore at Fed is still on track. Could you maybe just elaborate a little bit more on the tailings facility there at Hera and how that sort of coped with recent rainfall?
Yes. So with the rainfall, then obviously, the rainfall's very localised up there. You can have a lot of rainfall at Hera and very little at Federation and vice versa. And obviously, some of this can be not even impacting on Peak because it's nearly 100 kilometers away. We had a plan to install extra pipelines between Federation and Hera to be able to pump, obviously, water from Federation to Hera. Those pipes are actually on the ground, and they just weren't installed in time. We were also in the middle of installing a spillway in the TSF for dealing with obviously any major rain events that may have occurred that would exceed the levels of the dam. And that was obviously to protect the dam from any potential overflow or event in the future if we had significant rain. So those things have all been finished.
Now, the spillway was finished, and the pipelines have been finished. We still got some work to do on them, some small bits of work to do on them. And they've actually installed 4 water cannons now in the TSF. And the design of that really is to basically send the water there and evaporate it through the actual cannons. And there's some more plans underway to bring some other big evaporators in as well to help with that. So the work was a lot of it was planned. A lot of it is still work to be done in terms of having the operation fully set up to operate at full capacity in the future. But being a project, we just didn't have all those things in place that we would love to have in place if it was an operation.
Yeah. No, that makes sense. No, that's it for me. Thanks very much.
The next question comes from David Coates with Bell Potter Securities. Please go ahead.
Thank you. Thanks, Bryan and team, for the presentation and call this morning. Just a quick one from me on the unit cost savings that you're looking to achieve, that AUD 100 a tonne target. Do you guys see the opportunities to make those savings? Is it economies of scale or more jumbo headings or something like that? Or what are the key things you guys are looking for?
Yeah. Thanks, David. So it's a good question. Look, there's a couple of things. Obviously, volume is one of the obviously drivers. Having more volume is one of the benefits of unit cost. But to get the volume, you need development meters to be ahead. So you've got somewhere to actually mine and produce a stope to make that happen. So obviously, getting our performance on our jumbos to the right level. And we've recently moved the jumbo from Dargues to Peak. So we've got two of the same type of machines now running at Peak, which is fit for purpose to the conditions. So getting those two jumbos really pounding out, getting the meters, getting us three or four months ahead in terms of stope options, obviously allows us to sort of look at how we can bring the volume on. So that's obviously a big metric.
The other things are really around unit costs in terms of maintenance unit costs, having the right strategy in place for our equipment. It's in terms of mining costs, in terms of what we're doing in the mine, use of contractors versus owner-employees, and sort of making sure we have the right number of people doing the right activities. So there's a host of work going on in terms of becoming more efficient but also on the basis that we can get better productivity as well from having these development meters ahead and sort of well and truly improved. It also comes down to just having better focus on availability and utilization what we have. For several years, we've had the cage riding facility not being operational.
Having that operational in the future would mean we can get people back in the mine and utilizing their time much more efficiently as well and gives us hours on equipment and obviously can reduce our costs indirectly as well through having the right number of people running their equipment the right way. Through to things like, David, even just making sure we've got the right loads on each truck running between the bogger and the dump. So making sure we're using what it's designed for gives us better productivity improvements as well and lowers our unit cost. So they're all the generic sort of things that we're focusing on in the site. But it's a target we're aiming for. You've seen the sort of decline that's happened so far, and we believe there's more to go, and the team's going after it.
And you just sort of touched on people as being part of that equation. Are you guys seeing more skilled labor availability with the tough times the guys in the nickel mines in the west are having, or is that sort of not really filtering through?
Well, we've been obviously employing people at Peak. Part of the change that was done last year when Peter Botten opened the mine, we've gone owner-operator. We've been gradually employing people across this last 12 months into those roles. I guess we've seen a bit more of people being available and putting their hand up from the west. But our real market focus is the East Coast, Victoria, New South Wales, and Queensland.
We've recently deployed a charter from December to provide opportunities for where we can't get labor in the local market, that we can bring them in from Brisbane or other eastern state areas and just bring them on the roster of our charter so we can get more efficiency but also open up the market to people who may have been flying to the west and are happy now to fly far less distance and work on the East Coast in a sort of a mine which we believe has got good growth potential.
Nice one. Okay. Thanks very much, guys. Cheers.
As a reminder, if you would like to ask a question, please press star and one to enter the question queue. The next question comes from Bill Murray, a private investor. Please go ahead.
When the drilling at Nymagee was suspended a few years ago, metallurgical considerations were considered the major problem. Has that now been overcome?
Andrew, would you like to answer that one?
Yeah, absolutely. Thanks for your question this morning, Bill. Look, we haven't done any more metallurgical test work in the last six months. We've done exploration drilling. We are fully aware of the history of Nymagee and some of the question marks around deleterious elements and other things. The drilling we completed, we certainly didn't see any arsenic, which is good. That's certainly been reported in the past. We did see talc, but it was just within that lead-zinc zone. And if you think historically, when they were doing the original study and think about bringing the mine on, they were looking at bringing that lead-zinc material in early in the piece, and it made up a fair portion of the feed. So I could kind of see why talc was front of mind at that time.
Talc is resolvable metallurgically, but it's about understanding what we have first, then think about how we do that. And similarly with pyrite, we definitely saw pyrite with the copper lens. Again, it can be resolved metallurgically. But our focus at the moment, Bill, is to understand the ore body, drill it out, get additional inventory, understand what that inventory looks like, and then think about in a study phase how we would then treat that material once we had sufficient inventory at good grade.
Another question. The Hera upgrade of the mill, is there any timeframe for that to treat the Federation ore and any idea of how much it was going to cost?
Might keep going, Bryan, if that's okay. So yeah, the base plant that we have effectively takes the high lead-zinc grade material, the high gold material, the high copper grade material from Federation up to Peak and is processed through Peak, which is a much more suitable two-product flotation plant with a gold-lead circuit. So very well suited. The plant at the moment then leaves that lower grade material, lower lead-zinc material for treatment through Hera. And the current plan is it goes through the plant effectively as we turn it off, so creating then that bulk lead-zinc concentrate. To restart, obviously, the plant was turned off operationally when it was operational. So to restart, it's a case of bringing it back to what it was. We had a contract crusher on there, which has since been demobilized. So we will need to remobilize the crusher.
But otherwise, the plant, other than the work required to get it back to what it was in its base form, shouldn't be a huge amount of work and shouldn't be that expensive. One of the pieces of work we are doing as part of that Cobar optimisation, though, is to say where could we spend or deploy targeted capital to improve what we're doing there at Hera in a sort of a go-forward sense. And that work's ongoing. But the base that we've talked about previously and that we put out in the market is effectively turning Hera back on as it was.
That's all for me. Thanks.
There are no further questions at this time. I'll now hand the call back to Mr. Bryan Quinn for closing remarks.
Thanks, Betsy. Just to wrap up, look, thanks everyone for joining the call. Thanks very much for the questions so we can provide those answers to everyone on the call. Look, obviously, as a team, we recognize we do have a good value proposition going forward, and it's on us to develop and operate our base metals businesses in this Tier 1 location to really maximize value. Four of the key focus areas really right now is to make sure our people are safe, make sure that we're doing all the right things to deliver the Peak performance where it can be, making sure we get the Federation Project first ore underway and focused on for Q1 FY 2025.
And importantly, we need to make sure we continue to safely maximize the cash coming out of Dargues in parallel to setting up for closure and making sure we look after the people and also make sure that we have a clear path to demobilize and remediate that site and obviously get some value out of what's actually there on site. So in terms of where we're going in our value proposition, we have got resources. We're continuing to unpack what that prospectivity looks like, as Andrew described. As we described also, we're obviously looking very hard around how we can maximize value out of the infrastructure. We actually have the infrastructure, and it's really how we put capital into the right location to make sure we can maximize that.
We have the high-grade project, Federation, well into under construction, and we're moving through all the critical path items and sort of working our way through to a point where we can get to this first ore . Importantly, as Martin highlighted, financially, we're in a good position, especially relative to our peers. We've sort of very much got the strong balance sheet. Cash is funding our growth right now. And obviously, we need to keep that focus going forward. And we've got significant sort of work underway to try and improve our performance both on the productivity and the efficiency side of things that's happening on the sites as well. So we've got a lot to do, and we've got a plan to get there. But it's important that we sort of quarter by quarter keep pushing for our performance and be credible what we're trying to achieve.
So thank you very much. I do appreciate the team, really a team and all the contracted partners we have working with us. Everyone's putting their effort towards delivering these results. And also appreciate the support of our investors as well to give us feedback as we have been getting every quarter. So Betsy, that's all I have to say. But thank you, everyone, for participating. Appreciate it.
That does conclude our conference call for today. Thank you for participating. You may now disconnect.