I would now like to hand the conference over to Mr. Dan Clifford, Managing Director and Chief Executive Officer. Please go ahead.
Thanks, Ashley. Good afternoon, everyone, and thank you for your time this afternoon. I have Ian Poole with me as well on the call today. Just by way of opening, I think to summarize it simply for how we view the year's performance, it was definitely a year of two halves. To be short and concise with it, I think half one was a quite solid performance for the business and half two was not. It's that impacts of half two that have impacted our full year results that we'll talk through today. We'll cover those as well as some of the changes that have either been made or that are underway as we work to correct the performance from the second half and also set up to get into the multi-year extensions in front of our Cobar Basin assets.
We'll also cover the next steps of information, particularly around the Federation Feasibility Study, towards the end of today's call. Let's move over to slide three. In FY2021, we focused very much in the business on the fundamentals across our sustainability performance, covering fatal risk, injury rates, and our environmental performance. The push through FY2022 has been very much to expand that push and to get our arms around the broader essentials of aspects of running a great business across culture, conduct, engagement, diversity, climate, and more recently into the psychological safety area. Those fundamentals from FY2021 have remained on track with continued performance over a two to three year period. Also now I'm comfortable and myself and the board are comfortable we have set the right foundations and base have in place to get the broader aspects of sustainability in the business performing.
Move over to slide four. Just covering operations, and we'll cover a bit more of this in detail as either myself or Ian run through the various aspects of the financial year. At a group level, it was simply all about volume, and that was where the majority of the issue lay for us. Although total processed tons for the business was up about 6% year-on-year, Peak and Hera did, particularly in the second half, underperform roughly by 60,000-70,000 tons each. On that front, Dargues was okay in that it actually exceeded its nameplate for the year in throughput. Base metal grade and price was a positive, giving us the increase in gold equivalent to being just under the 200,000 ounce equivalent for the year.
I think that really shows the benefit of our commodity mix in the business. I'll hand over to you, Ian.
Thanks, Dan. Good afternoon, everybody. On slide five, group financial performance. The company made a statutory loss after tax of AUD 85.1 million, with an underlying loss of AUD 1.3 million and not the 3.2, which is shown on the slide. I will put an update out shortly. I'll discuss the key drivers for the loss when we address slide seven. The revenue of AUD 438 million for the year was a 5% increase compared to the prior year. I'll cover that on the next slide. The underlying EBITDA for the period was AUD 43 million, which was a 15% decrease compared to the prior year.
The decrease in the EBITDA was primarily due to increased costs, which were the underground contractors at transitions at both Peak and Hera, a full year's cost at Dargues, which was acquired in December 2020, and the higher freight costs due to higher volumes and increase in rates. There's also higher zinc treatment charges for the zinc concentrates due to volume and rates. While the cash flow from operations of AUD 154 million was an improvement compared to the prior year, Aurelia's lower EBITDA was offset by tax refunds of AUD 12.5 million received during the year. If we look at slide 6. As noted earlier, there was an increase in the overall revenue for the year to AUD 438 million.
This slide has a bridge between last year's revenue and this year's revenue. You can see that the company benefited from higher prices across all our key commodities, but offset by lower volumes, particularly gold. Peak and Hera production was lower due to lower mill throughput and grade. The lower production at Peak and Hera was partly offset by the higher gold production at Dargues due to higher throughput and grades and the full year's ownership. There was, however, higher zinc volumes due to improved production at both Peak and Hera because of the higher grades at both operations. As noted when Aurelia released its June quarterly report, there has been an increase in zinc treatment charges in calendar 2022 compared to calendar 2021. To look at profitability on slide seven.
As I did earlier, the company made a statutory loss of AUD 85 million and an underlying loss after tax of AUD 1.3 million. This slide shows a bridge between the profit before tax of AUD 71 million to the underlying profit after tax of AUD 1.3 million. The changes in revenue and operating costs have already been addressed in the earlier slides. Look at the first item on the D&A expense. There was an increase in the depreciation charge compared to the prior year of AUD 60.7 million. This change is primarily at Dargues. Because Aurelia's depreciation amortization is largely determined on a units of production basis. When the gold equivalent production increases, as it did at Dargues, the depreciation amortization charge will increase.
Gold production at Dargues was just under 3x that of FY2021. That was a key driver. The next column is around the acquisition and integration costs. They were the costs that we spent in FY2021 when we acquired Dargues that's been added back. The next column regards the impairment expense for Dargues. In March 2022, Aurelia flagged an upper range post-tax impairment of AUD 80 million of its Dargues mine. The final impairment charge was AUD 185 million, which is AUD 95 million post-tax, which is above the upper post-tax range. In March, management and the board became aware of this potential impairment and informed the market immediately based on the best information available and forecast outstanding exploration results.
Since then, the exploration results have been softer than expected, and the impairment was increased to AUD 135 million. This impairment has been added back when calculating the underlying performance. The AUD 21 million and the net change in the remeasurement of the financial liability relates to the life of mine royalty at Dargues compared to the prior year. The life of mine royalty at Dargues was remeasured as a result of the impairment, and AUD 127.1 million has been added back when calculating the underlying performance. The AUD 114 million is a statutory loss before tax, and the company generated a tax benefit of AUD 32 million, which resulted in the statutory loss of AUD 81.7 million.
Other than the impairment and the Dargues royalty, which we've already touched on, we also added back AUD 3.5 million of rehabilitation costs, which related to the historical workings of Hera Mine to work out the underlying performance. These changes resulted in an underlying net loss after tax of AUD 1.3 million. It was quite a complex set of results, but I think we can see where we've ended up for the year. I'd like to hand back to Dan.
All right. Thanks, Ian. Let's move on to slide eight. Let's deal with a bit more detail around the operating performance of the sites. As I mentioned earlier, I think performance majority hit by across the group, particularly by volume throughput, particularly both at Hera impacted with labor availability. Gold grade at Peak was underperforming for us, but particularly the Q4 production interruptions with the shaft and the blasting misfire in the north mine spreading back into the south mine in terms of a delay. The key move for us at Peak is really focusing now on the improvements we can make to the asset, not only now to ensure the short term is corrected, but also to dovetail into the future expansion with Great Cobar, and that's transitioning to a business that is majority owner operated.
There still remain contract specialist provision on the site. It's definitely focusing more on full-time equivalent efficiency. Market is tight. Planning on getting everyone we need. The business could be a risk, and we are very much focused on getting more efficient operations at that asset. Hera was slightly different, interestingly, and it was different in terms of the first half to second half. The actual throughput through the Hera mill was constrained in the first half by higher than expected base metal grades, resulting in throughput being lower. That's okay, 'cause we still get the metal, but at the end, that did impact throughput.
Then going into the second half, post the long-term view that we took on transitioning of our contract partner there to dovetail also into the Federation decline development, we did have some reliability issues with the mobile fleet, with the new contractor, and more exacerbated to the end of the year with some poor ground conditions. That being said, as I mentioned earlier, Dargues hit all its physicals. I think, the company and our shareholders are well aware of the grade impacts on the asset, but its physicals have actually either been all on or above expected performance. Move over to slide nine. Talk to cash flow. Whilst the impacts I talked about earlier and that Ian's covered as well did drop our operating mine cash flow by about 10% to the prior year.
Our sustaining capital went up to AUD 70 million, which is a AUD 22 odd million increase over last year. The real breakdown there is at least 50% of that spend of AUD 70 million was all in development in the business, as we have had also a full year of development at Dargues on top of a switch of growth capital development at Peak to sustaining and ongoing development at Hera. The balance of that 35 to the 70 is across our equipment and our lease charges on our equipment, plus the contracted equipment and some TSF work at Dargues. Growth at AUD 19.1 million. Federation was AUD 14 million of that and the balance to Peak and Great Cobar.
On top of that, we continued, and I'll talk to that in a minute, we continued funding exceptional exploration across the group up this year to AUD 30 million with the vast majority or the majority of that spend being bringing Federation along to get us into this position with the feasibility. On top of that was debt repayments of approximately AUD 16 million and also cash backing of our bonds and the total of that cash backing and debt repayments, just that AUD 38 million of which we now have about AUD 30 million in restricted cash sitting to back the environmental bonds and liabilities of the business into the future. Let's move over to slide 10. Just to follow up on the comments about the level of investment back into the ground, whether it be exploration or the growth capital.
What is great to see is the tangible progress from this investment. AUD 50 million on top of our sustaining capital in the business invested back into the civils, in which you can see some updated photos in the slide deck, mobilization of the contractor in preparation for the decline and progress through state consenting, which is a complex task, particularly in New South Wales. In talking on consenting, we've already got Great Cobar there. The combination of the progress of Federation and the completion of the consenting for Great Cobar significantly de-risks the business going forward as two key projects are either consented or well down the path.
I think added to that, it's actually really valuable to have this size of exposure to zinc and copper in the business, and they're only a few steps away from us on both assets. Let's move on to the Federation feasibility. We issued to the market that we will communicate the outcomes of that during September. I'm sure people can understand that it's a sizeable investment for our business and the consideration of different milling options for the Federation ore, just in the light of business conditions at the moment, project risk and capital escalation. I think people will understand that it's very clearly linked to other businesses or other assets in the group, and so is the Hera. It wouldn't be appropriate for us right now without the Federation feasibility to be issuing guidance with it.
When we get to September and we've got full support from the board on what we're doing with Federation, we'll communicate that to the market. Okay, with that, Ashley, I'd like to hand over to questions, please. Go ahead.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Dylan Kelly with Ord Minnett. Please go ahead.
Oh, yes. Good morning, or sorry, afternoon, team. Thanks very much for some of the additional disclosure that gives us a breakdown to some of the underlying numbers. Just starting off, Ian, with some of the questions around the Dargues write-downs and the size and the scale of it. I didn't quite catch your earlier commentary about, well, what were the moving parts within that and why it ended up coming in a bit high. Could you just walk us through those different elements? I heard something about the bonding, the royalty, and the exploration. Could you just walk us through?
Broadly, there were the two big changes in the impairment for the results. That was that we had the write-down, which is the AUD 135 million, and then we had attached to Dargues is a royalty, which is a life of mine royalty. Because the life of the mine is shorter than when we had the account last year. That's why there was a writeback on the remeasurement of that royalty. That's why. That's it. They're the two, the AUD 135 and the AUD 27 million on the to get to the underlying. That's that point. Then from a and a when we do our modeling, we just look at the
The prices, cost assumptions, capital assumptions, and where we think the resources and reserves will be. That's why. That resulted in a slight increase from 120- 125-135.
Okay, fair enough. Just on the topic of Dargues and D&A, you made some comments there around the fact that increased quite a lot year-over-year just through to production throughput. Is there any accounting treatment changes there that we should see next year that impacts or that changes any that run rate?
No. With the impairment, there'll obviously be a lower cost base from it. Broadly, we'll look at the units of production and that'll give that number, calculate that number. I can take you through that offline.
Okay. Yeah. That'd be great. Now just on the topic of sustaining CapEx, Dan, you made the commentary before about the fact that this was a like a large investment for the year, yeah, back into Dargues and development and what you had happening at Kairos and what's going on at Fed. Look forward to into FY2022, FY2023. Can you give us a sense of that development profile? Are we through the worst of it in terms of big leaks of cash going back into the ground?
Yeah, I understand. I think we'll deal with that. We'll be pretty clear through guidance, when we settle on Federation, Dylan.
Okay, fair enough. Just on the topic of additional charges there, environmental bonding for next year, you mentioned you've got AUD 30 million undrawn. Do we just consider that to be unwound periodically from here or post the next MRE update? Will that revert or is there a chance of a refund there?
I think from planning purposes for us, we're leaving it in restricted, but I think, you know, that's a whole funding package, discussion, Dylan. It sits in overall funding within the business. That's something we'll address through the course of the year.
Okay, fair enough. I'll pass it along and circle back.
Your next question comes from Michael Evans with Acova Capital. Please go ahead.
Good morning, Dan. Thanks very much. My first question is a follow-up on Dargues. Just in March, you flagged the impairment at the time. I think you said that the contained gold was 195,000 ounces, and you expected it to be about 15% lower. Then there's a note which is 15% lower than 195, it's about 165 or something. Then there's a note in your accounts towards the back that the recoverable gold is 72,000 ounces. If you take the 165 and you assume you recover about 90%, I think you get close to 150.
The note in the accounts, it talks about a remaining life of mine or recoverable gold of 72,000 ounces. Is that as a result of the exploration or a result of the exploration you've done since you made that announcement in March? Will we get more clarity on that when the reserves and the resources come out? Or is there other things that I'm not reconciling between your announcement in March and those notes in the account on Dargues?
That's that assessment's been done on preliminary information that we have so that the MRE will come out, formal MRE will come out a bit later. This is based on our assessment with in conjunction with the audit from an accounting perspective.
Sorry, what was that last point, Dan?
That we've looked at it from a conservative and from an accounting perspective on what the carrying value could be, and that's the basis we've used for the assessment. The MRE and the production target will be, when that's finalized, that'll be released to the market. We've based it on some early numbers.
Okay. On the depreciation for the group was higher than I expected and a lot higher than last year. If we use the new asset base and divide it by the 72,000 ounces or something like that, we'd be close to the mark on the depreciation for Dargues going forward. Is that correct?
Yes. We also include if there's any more future development. There'll be some more future mine development, so that also needs to be included in the cost base. Not just what was on their books today, but also what the cost to access those ore bodies, future ore bodies are. That needs to be added as well, then divide it by the.
Okay. Dan, I think the question to you, it might be a bit out there, but on Hera, you've got the higher base metals there at the moment. Do you have spare capacity at Peak at the moment? Is there any scenario where you would put the Hera mill on care and maintenance and send ore from Hera to the Peak mine and get economies of scale that way. In the interim period or in the mine life remaining here, is there any scenario in which you'd do that? Or is there any obstacles that I can't think of other than economic ones, perhaps?
I think, Michael, it's best for us. I think what you're talking about there and the question you're asking are key considerations right now for us, actually in the feasibility decision between utilizing or maximizing existing milling capacity or building or significantly upgrading the Hera plant or building a new one. I think that's the point I was making is at the quarterly update in July, and that is the key, I think one of the more substantial decisions or outcomes from the feasibility. I think it's best that I'll address that question when we get to the release of the feasibility. There's no doubting.
Okay.
There's no doubting that the maximization or the full utilization of existing capacity is very much a part of the decision-making process.
Yeah. Okay. No worries. I'll wait for more color.
Which can mean, of course, and you know, the revenue models of those decisions are, they can be pretty complex. They are whilst they're both polymetallic plants, one produces a bulk and another one produces three separate cons. I understand it's quite a complex decision.
No, I understand simplistically, there's some advantages of separating the cons at the Peak plant versus the Hera plant, but I know that's only one variable among many in the decision.
Yeah.
Okay. No worries.
Other considerations I think that are important in that, and I'll again come to these during feasibility, though, is the consenting of moving ore between the mills has gotta be factored into that and at what levels and what timeframes we are consented to do that.
Okay. Hang on. That's great. Thanks, Dan. I'll pass it on.
Once again, if you wish to ask a question, please press star one on your telephone. Your next question comes from Franklyn Brazil with Brazil Farming Pty Ltd. Please go ahead.
Yeah. Good day, guys. We're pretty keen to see the production and cost guidance for the year. Note that's been put back. I'm assuming that's because you normally also disclose your sustaining CapEx and growth CapEx at the same time, and that's the main reason why that hasn't been able to be provided at this point in time.
That's generally correct. That's right, Brad. They're interlinked, particularly when just what I was talking about with Michael there. These outcomes of these decisions interlink both of the Cobar Basin assets.
We're really waiting for Federation to come out before you can-
Yeah.
Finalize that because that's really gonna impact, especially growth CapEx.
Exactly. That is exactly right.
Yep. That's it.
There are no further questions at this time. I'll now hand back to Mr. Clifford for closing remarks.
Yeah. Thanks, Ashley, and thank you to everyone. Just in wrap up, I think as I mentioned earlier, it was a year or two halves. I think we have either made or are underway with the changes we need across contracted transitions, a mix of own or operate, FTE efficiencies, the real drive into planning and asset management for reliability of the assets, and not only to correct the issues from second half into this financial year but also make sure that whatever changes we're doing now are really complementary of the life extension projects that we've got coming. On those, for us, for those, they are very much about improvement in asset quality and performance. The progress, I think, across both of those extensions has been quite solid or actually more than solid in FY22.
As I mentioned earlier, I think the other key advantage in this for the business is actually having the ground in front of us for a huge organic pivot towards zinc and copper, of which are very valuable not only to us, the business, but also into the market and the world with the changes going on. With that, I look forward to another call in September at some time. We will give the market notice of when that call will be, that we can cover off what we see as the outcomes for the Federation feasibility and what flows from the rest of the business on that. Thank you for your time, and we'll talk during September.