Thank you. I would now like to turn the conference over to Andrew Graham, Interim Chief Executive Officer. Please go ahead, sir.
Thanks, Lisa. Thank you to everyone for joining us today, for our discussion on the first half results for FY 2023. Before I turn to that though, I'd like to start by paying the Aurelia team's respects to the two miners killed last week at the Dugald River mine, and also pass on our condolences to their families and friends. A number of us at Aurelia, including myself, have worked at Dugald River and MMG, making this really close to home. I genuinely believe everyone who goes to work should expect to come home safely.
I can assure shareholders as well as our own employees, that as the findings from this incident comes to light, we'll look at those in detail and see what we can learn from that to apply to our own operations, which use very, very similar mining techniques. That would be part of our ongoing commitment to improving safety. Today I'm dialing in from our Hera Mine, so apologies in advance if you get any background noise we don't normally get on these calls. There's a lot going on as you'd expect on-site. At Hera, I'd like to pay respect to past, present, and future traditional custodians and elders of the land on which we are working here today at Hera.
We do look forward to a very long association with those traditional owners, as we develop Federation, operate Federation and with good hope, extend Federation for many, many years to come. Turning to our half year result. I expect that there weren't too many surprises for people in that result, given the level of disclosure we've put out in our quarterlies, particularly the second quarter result, which we talked about in January. Martin Cummings though is on the line today, our CFO, and he'll take you through the results in some detail. Peter Trout is also on the call today, and he'll be available to answer questions when we get to that point.
At the outset, I acknowledge the set of results is simply not good enough, as we talked about at the AGM and subsequently, we must and we will be doing better. I'll talk today, in a little bit more detail about what we're doing to improve the business, after Martin gives us a rundown of the results. First, I'll hand across to Martin, who will take you through the detail behind those results.
Thanks, Andrew. Good morning, everyone. As Andrew mentioned, these are a disappointing set of results that we've released and headlined by a statutory net loss after tax of AUD 29.5 million and an underlying net loss after tax of AUD 20.3 million. As you'll appreciate, these outcomes are significantly lower than the comparison period, being the half year to 31 December 2021. I'll walk through the variances in the underlying profit and loss before tax between the two periods. To do that, I'll be referencing the waterfall chart in section 2.1 of the directors report. Firstly, the sales revenue, which in total was 18% or AUD 42 million lower. In short, the driver of our lower sales revenue was lower grade ore from all of our assets.
Ore process was slightly lower, but the impact was not as significant. Our gold revenue was AUD 19 million lower. We sold approximately 10,000 less ounces in the period, and that impact was mainly from Peak due to lower gold grades. Slightly offsetting this was a higher realized gold price of $2,570 per ounce versus the $2,427 in the prior half. The move in our base metals revenue was higher at AUD 23 million, and the main impacts from that were from lower sales of lead and zinc. We sold around 4,500 tons less lead in this period, and there was a small benefit from a higher realized price, which was just over $3,300 a ton.
The impact from zinc was a bit higher, with sales lower by around 5,500 tons. Again, we did have a small price benefit with a realized price of just under $5,000 a ton. Copper revenue did go the other way. It went up about AUD 3 million in the period, with around 500 tons sold over the first half. Some of that benefit was eroded by a lower realized price, which was about 15% lower at just over $11,000 a ton. Operating costs were unfavorable by AUD 30 million. This variance does include around AUD four and a half million in restructuring costs this half, which you'll see is one of the reconciling items between statutory and underlying profit.
The majority of our cost increase in this half, unsurprisingly, is related to mining costs. The majority of that mining cost was incurred at Peak. We've covered Peak's issues in multiple recent releases. Put simply, their costs have been too high as we transition from contract mining to owner mining. In the December quarterly report, we highlighted some of the inroads we've made so far. There remains plenty of work to do before we're satisfied with Peak's mining costs. Our Working Smarter program is putting a lot of effort into Peak to lower this cost base to more acceptable levels. The other categories of processing and site admin were largely in line with the prior half. That's not to say that there is an opportunity for further cost improvements in this category, particularly around our labor costs.
These are captured within our Working Smarter program. There is also an impact of inventory costs or inventory revaluation within our operating costs, and that's driven by revaluation of our stockpiles with the lower-grade ore mined through the period. There has been a favorable movement in our depreciation and amortization expense in the waterfall, really driven by two items. Firstly, at the end of financial year 2022, Aurelia recorded an impairment of Dargues, which resulted in a materially lower book value for this half relative to the book value that would have applied for the comparison period. In addition to that, our lower overall group production outcome will drive a lower depreciation expense given a large value of our asset base is depreciated based on a units of production basis.
Offsetting this favorable move in D&A is the impairment that we've taken for Hera, this really is the result of the earlier than originally planned closure of the Hera mine and the transition of service infrastructure to care and maintenance. Finally, just to cover off the other material movement on that chart is the revaluation of the financial liability. Movements on this are in relation to the valuation of our Dargues royalty, that is a net movement between what was booked in the December financial year 2022 period and what we've booked in this half. What is important to note is that in between this, in June, the end of financial year 2022 in June, we did revalue this liability down materially as part of the impairment of Dargues.
Moving on to cash, which is the focus of most people, and as we know, we started the year at AUD 76.7 million in unrestricted cash and finished the year at AUD 23.7 million. Cash was a reduction of AUD 53 million over the half. Just looking at what we, what went on during the half is we repaid AUD 8.1 million of our term loans and we cashed back a further AUD 10.2 million of our performance bonds. Important to note that our performance bond cash backing now stands at AUD 41 million. We report that in our balance sheet as restricted cash as an asset. We invested a further AUD 23.6 million on growth capital at Federation and Peak, and AUD 6.5 million on exploration.
Looking at that, a total of AUD 48 million of our cash reduction this year was either directed to deleveraging our balance sheet or investing for our future growth. What it does highlight is that the remainder of the business did consume around AUD 5 million for the half, and that is our focus going forward. Whilst the refinance process we're currently undertaking will allow us to recommence development of Federation, ensuring our operating assets are generating good cash at whatever the prevailing commodity price is remains a key priority. As evidence of that, this is ultimately why we made the decision to cease operations earlier at Hera and announce that in December.
Just touching on the refinance process, and I acknowledge the messaging in this release maybe feels not too different to what we said in the, in the December quarterly report, which was released last month. The reality is there's been a huge amount of effort and work going on to progress the multiple options that we have available. Pleasingly, we still remain on track to finalize this solution by the end of the quarter, and I look forward to taking you through that when we announce it. Finally, as part of the Hera announcement, we did update our guidance for FY 2023 on the 19th of December, and that guidance incorporated all of what we're discussing today in these results. I'm pleased to confirm that we remain on track to deliver that guidance for both production and costs.
Thank you for your time, and I'll just hand back to Andrew now for further remarks.
Thanks, Martin. As Martin's gone through on that result, I think you can understand, you know, as I said at the outset, this result is not good enough, and we are working diligently to improve the position of the business. With that, it's also easy to lose sight of some significant achievements that occurred through the half. I thought I'd take a little bit of time just to pick out a few of those that really mean something to the business and also to me. Firstly, we released our updated mineral resource and mineral reserves, you'll recall, and it included a very significant conversion of inferred material to indicated for Federation, which allowed us to then release the feasibility study that you would have seen there in October.
In addition, and very pleasingly, we were able to increase the resource, the copper resource at Great Cobar by 45% this year and release that to the market at that same time. Having Federation much more certain with a lot of material now in the indicated category and having a larger, and, you know, extremely high grade, relative to other projects, in the pipeline in Australia, Great Cobar project, and we have a very, very strong mix of zinc development and copper development coming down the pipeline, and the work for us is to release that. I mentioned the feasibility study for Federation. It came out in October.
It painted a picture of a very, very compelling investment, which is why we're working diligently through the funding process to get that up and running, as soon as we can. Other than sort of small quantity, it's the highest NSR material we have in the group. To be able to realize that into ore and then get that through one of our existing plants, to turn it into revenue is a key focus for the business. Those who haven't been tracking the progress of Federation through the last half, the site itself has advanced, massively. I was actually out there this morning. You know, there's change houses. There was a workshop. There's obviously the box cut and now, 90 meters decline development at the, end of that box cut.
You know, the preparatory work required to get the development up and going is done. When we're funded and we remobilize Redpath as our mining contractor, we'll be straight into that decline and on our way to ore. On the exploration front, you know, we believe we have one of the best packages of ground in Australia for base metals exploration. We've invested in that through the half. We got the results of the Falcon airborne gravity survey that we've talked about previously, and we've started using those outputs and integrating those with the other pieces of information we have from soils or other geophysical work we've done, you know, in our targeting work in that region. The exploration team has been very active on that.
While we've had a little bit of a pause in not having as many drills running, as you recall, you know, at Federation, we ended up with five rigs running concurrently, which takes a lot of management. Pulling back on that drilling currently has given the team a lot of time to work through all of this data and very rich set of data that we have on our tenement package and really prioritizing the work once we get up and going again on drilling. The other one that was very interesting you would have seen was the IP survey results on four prospects outside of Nymagee, all of which showed strong anomalies and the team's following those up at the moment.
We did announce Mod 5, the modification to Dargues permit, just before the end of the half, which lifts the cap of processing there from 355,000 tonnes per annum to 415,000 tonnes over a calendar year. We were able to take advantage of that right at the end of December by running the plant beyond that 355,000 tonnes. The other one that we've reported on as well was the Working Smarter program. A real, bottom-up, fully engaging the entire workforce to look for opportunities to cut costs and increase margin. We've got a very, very rich pipeline now of projects that we're prioritizing to make sure we're focusing on the right things.
Yeah, I think it's important when we look at a result like the one we have, and I'm not gonna take anything away from my comments previously about the those outcomes not being good enough, particularly the operational situation. We can't forget that a lot of the good work that's been going on around the business is also yielding good results for the company. Now, I've spoken since taking on this interim CEO role about the activities we've been undertaking to improve, as Martin mentioned, under the banner of our Organisational renewal project. Just to touch on a few things, some highlights that come out of that.
Hera, as Martin talked about, in December, we changed the mine plan, targeting higher value ore, which did shorten the life, and we're still looking at a life out into March. I think I flagged on the call in December when we talked about the change of plan at Hera, that we would be closely monitoring, particularly geotech conditions underground. You know, touch wood, we're still mining. I don't want to get ahead of ourselves, but at the moment, it's going well. We're getting some exceptional tons out from underground, you know, the highest tons that I've seen since joining the business. It's been pleasing to see that new plan working well.
Obviously, with the closure of the mine, and the transition of the plant to care and maintenance, there's quite a bit of work required to be effective in doing that and efficient. Rob Walker, our General Manager at Hera, is leading that. You'd be pleased to know that's a well advanced piece of work with a very detailed understanding of what needs to be done, scheduling that out and resourcing that. Peak Mine is now under the management of Matt Nuttall as our General Manager, who joined us a couple of weeks ago. Matt's a very experienced underground mine operator. I was actually talking to him yesterday, and he's certainly identifying some opportunities to improve our operations, particularly underground, but more broadly than that as well. Federation optimization.
We've chatted a little bit about that in the past. That work is ongoing, particularly the update of the detailed life of mine plan, to use a term, operationalize it. Effectively on a feasibility study, we had a plan which was absolutely executable, but we've been integrating that with some inputs from our operating team, particularly the team at Hera, who are then going to take on the development of that mine to ensure that it's the optimum mine development, and that we're taking advantage of all the opportunities in thinking about that ahead of time. That piece of work is coming together extremely well. We've also engaged a project management consultant, to work with us on the execution of the project. Because we recognize we don't build mines every day of the week.
I think it's a good recognition for companies to realize their strengths and gaps. Supplementing our team with some very experienced project consultants, who will handle the kind of day-to-day scheduling and execution of activity with various contractors, is what we've put in place at the moment. Getting ready for when we're funded and we can restart the development. That said, work has been ongoing on the site, albeit at a much slower rate. We've connected Federation through to Hera, with a pipeline, to allow us to then manage water between the two sites more efficiently.
Also in parallel, the work around designing of the intersection upgrades on the road has been ongoing, so that we're ready to go with those and well ahead of when we need to start trucking material up those roads to Peak. We'll come out with more information on that in due course. While on Federation, one that's we've been talking about a little bit, but I can continue that story, is permitting. It's fair to say we're extremely well advanced now on achieving our development consent for Federation. Obviously, once we do, we'll come out and let you know about it. We've been very pleased with the support we've had from the New South Wales government. Working collaboratively with us to develop and achieve that development consent.
Finally, as Martin mentioned, we're also well advanced on a funding solution. That work is going well. Again, we're looking to be out in March talking to you about that. Just a little bit on what to expect going forward from us. Obviously I've mentioned development consent. It's tracking well. Our intent is to have that achieved in this quarter. We'll be back out talking to you about the details of that once that's done. I've mentioned the Federation optimization work that's ongoing. We'll be looking to come back to you with further details about what we thought that yielded and the improvements we've been able to achieve against the feasibility. Finally on funding, which Martin talked about.
Obviously, once we've secured that, we'll be back out talking to you about the details of that. I'm gonna stop at that point, and hand it across back to Lisa, who can then handle questions if anyone has any of those.
Thank you. If you would like to ask a question, that is star one on your telephone keypad. Again, everyone, it's star one to ask a question. If you would like to remove yourself from the queue, it is star one again. We'll pause for a moment to allow everyone a chance to signal. We do have Adam Baker from Macquarie. Please go ahead.
Hey, guys, Andrew and Martin. Just a couple quick ones from me if I may. Just the group cash balance chart that you kind of had in the quarterly result, which showed an improvement over December. Just wondering how that trajectory's been tracking through January and February. I'm imagining with some of the cash harvest going on at Hera, you're kind of comfortable with the cash build situation going on. Yeah, do you have any more color you could add around that? Thanks.
Hey, Adam. Yeah, comfortable with the cash. I mean, without spoiling the surprise when we get to the March quarterly, you know, we talked about the income tax refund that we received in January, AUD 9.8 million. That's come through. I guess that yes, we are in theory building cash at Hera, just the way we're staging the shipments at Hera, we are trying to consolidate those shipments to make them cost-effective. The cash flow at Hera are a little bit lumpy in this quarter. Obviously we've also got our term loan and cash backing commitments that we're maintaining as well, comfortable with where cash is at the moment.
Yeah, sure. That's great. Maybe just a quick one. Just, yeah, I understand that things seem to be going well with the development consent, which is great, on track for March by the sound of things. The funding solution, is that something we should expect concurrently with the development consent, or are you likely to put out the consent first and then think about funding later?
Yeah, Adam. Look, obviously, we disclose them, once we have them. Particularly the development consent is outside of our control as far as which particular day, that comes through. Obviously when it does, we'll put it out there. I think as we're seeing things at the moment, it's most likely that development consent will come first, and then we'll follow, however long after, with information around funding.
No worries. Yep. That's enough. Thanks, guys. I'll pass it on.
As a reminder to everyone, that is star one on the telephone to ask a question. We'll take our next question from Michael Evans with Acova Capital.
Good morning, Andrew Graham. Thanks very much for the update. A quick question on Federation. You mentioned in the announcement that in your comments that there's sort of further refinements taking place to optimize the use of the capital and the existing infrastructure. Can you elaborate on that at all? With regards to the finances, debt finances, I mean, they usually have to draw a line to sort of conduct their DD. Did they draw that line in the sand last year closer to when you released the feasibility study in October? Or are they sort of looking at these refinements and optimizations with regard to considering whatever facility they can give you?
Michael, Andrew here. I might take that one. I suppose the refinements. So the feasibility study, for example, assumed material went to Hera before it went to Peak. Obviously we've since indicated we'll be doing the opposite or intending to do the opposite given Hera plant will move to care and maintenance. The updating, it picks up some of those things. The fact. A lot of it is driven by the fact that Hera will have shifted to care and maintenance. You know, for example, as we're moving towards the end of the mine, operation at Hera, we're actually pulling equipment and cabling and other things from underground to the surface to be able to take across and use at Federation.
Factoring some of those, some opportunities that come with Hera moving to care and maintenance is part of it. Another great example is the camp. We had assumed we would have to build a temporary construction camp, to house construction workers and mine workers for Federation. However, with Hera moving to care and maintenance, then the Hera camp becomes available. Those are the sorts of things we're working through on the physical side. On the mine planning side, you know, we're, there's always opportunity to optimize a mine. We're picking up some of that information, that didn't make the cut-off for the feasibility study. We're also thinking about layouts and things underground, to be optimized going forward. That work's ongoing.
We've had obviously the potential debt providers or other financiers have put or have access to the feasibility information. We have also shared some preliminary thoughts on the other elements to that. The items around optimization of the mine and the capital project. You know, it's still being worked on or being talked about, and we'll have more final information on all of that, once we finalize that, we'll put that out in the market.
Okay, great. Thanks, Andrew. That's all from me.
Thank you. Well, that does conclude the question and answer session. I'd like to turn the call back to Andrew Graham for any additional or closing remarks.
Thanks, Lisa. I won't provide too many remarks to close other than to say, as I flagged, there'll be opportunity to engage with us in the future, in the fairly near future, as we move through, development consent for Federation, the update of the Federation, development plan, as well as then, a funding solution. Our expectation is, we'll be back talking to you about all of those, through March. Thanks, all.
That does conclude today's presentation. Thank you for your participation, and you may now disconnect.