I would now like to hand the conference over to Mr. Dan Clifford, Managing Director. Please go ahead.
Thanks, Melanie. Good morning, everyone, and welcome to our half year results call this morning. With me, I have Ian Poole and Peter Trout. Before we get started, I think it's a point of reflection for where we are at the moment with the milestone of reaching another reporting period. Sometime during the last reporting periods, I've been generally expressing our objectives as creating a strong foundation for value. You know, that via discovery, acquisition, the operating of our assets, and the subsequent extension of them. I think now when we look back and thinking forward for the business, now I think the discussion is shifting towards actual execution and what we think we can or what we will be building off this platform or foundation in terms of value.
I'll just start, we're gonna look over the shoulder a little bit, with our operating performance through the first half of the financial year. Our financial performance and cash generating foundation. As I said a bit earlier, I think what's important is we shift the discussion to what can be and what will be built going forward. I move to slide six. I am actually immensely proud of our business and what we've managed to achieve in a reasonable period of time, with significant improvements across safety, health, environment, and of course, the onset of COVID into our businesses or across our states. Although I must say there remains a lot of drive required yet in the sector.
This comment for me comes about with, you don't have to look hard and around our industry or business at the moment. Things like the Rio report, AFR reports through on Newcrest, the ongoing dialogue around Parliament House to see that there is significant drive required within our sector. From myself and our management team and the board, our attitude towards this is now shifting to, from rather than one of being responsive and reactive to actual energetic participation. Extending our arms further around health and safety, environment, our community, but also the ground truthing for our people in terms of employee experience through surveys and on-the-ground assessment of how our business is performing.
This is just to summarize this point. This is actually about ensuring that we are building or we're gonna build off what I would call a truly progressive and healthy foundation. Let's move on to slide seven, extending that discussion on the foundation. Gold up 18% with Dargues significantly offsetting Hera's lowering contribution to the business. Copper's down, although half one a bit softer than we're expecting for half two in this financial year. Lead's even. Zinc's strongly up. Across the board on base metals and gold, we are the beneficiaries of some very healthy prices. With that, our All-in Sustaining Costs remaining at FY 2021 levels. Move over to slide eight. Our operating guidance is as per our discussions on the December quarterly during mid-January. We have had some discussion around the Omicron impacts.
From our perspective at Aurelia, I think it's fair to say we are seeing the Omicron impacts appearing to reduce across our business. It's interesting between the operations all being different and also in head office in Brisbane, the impacts are all quite wide and varied, but I think we are seeing that reducing, which is great to see. That being said, with the Western Australian borders opening and travel and movement of labor, we could see that somewhat offset the Omicron reduction when it comes to labor availability across our businesses. I think just talking to those first couple of slides, I think really in summary of those, I think it's very clear and we believe we have created a solid and healthy foundation in which the business can move forward. Moving over to slide 10.
The next key or cog in this drive chain is our financial position to enable us to build off this foundation. Our revenue's up to AUD 235 million. Just remembering, I think, looking back on the full year of FY 2021 was just over AUD 400 million for the full year. So you can see our run rate on revenue increasing. Statutory EBITDA up to approximately AUD 80 million, although our NPATs are down with increased D&A, and as flagged earlier this year with the inclusion of Dargues into the portfolio. Operating mine cash flow has been maintained. Net mine cash flow down with increased capital. That's across both, particularly across sustaining, but that's with the inclusion of a third asset to the business. Our group cash flow down after the net position.
This year or this half, we've actually spent twice what we spent in the prior corresponding period on exploration expenditure. Puts us in a position to end at December 31 with AUD 95 million cash at bank. With that, I'll just hand over to Ian for some more detail into the financial performance. Thanks, Ian.
Thanks, Dan. We're on slide 11. The revenue for the period improved by 13% to AUD 235 million compared to the prior corresponding period.
Realized higher prices contributed 4% of the improved revenue for the period, with increased prices for all base metals, partly offset by a reduction in the gold price. Increased volumes contributed 9% of the improved revenue, including the contribution of gold concentrate from Dargues, which was acquired in December 2020, which more than offset the lower gold volumes at Peak and Hera, and the higher lead and zinc sales offset the lower copper sales. Spot prices for all Aurelia's commodities are now higher than the average realized in the first half. Go to slide 12. The underlying EBITDA for the period was AUD 84 million. The net profit before tax for the period was AUD 14 million, and the net profit after tax was AUD 7.5 million.
As shown on the waterfall graph, major change in the net profit before tax compared to the prior corresponding period were an increase in base metal revenues at Peak and Hera due to improved prices and quantities of concentrate, which resulted in increased costs at Peak and Hera because of the timing of shipments and costs associated with concentrate sales. Gold revenue at Hera and Peak less than the prior corresponding period, with lower head grades and mill throughput at both Peak and Hera. Gold revenue from Dargues operations offset the decrease in gold revenue at Peak and Hera. There was AUD 48 million of operating cost at Dargues, which included AUD 30 million of depreciation and amortization and accordingly contributed AUD 28 million of the EBITDA for the group for the period.
One of the key costs for the period, and there's been a query about it, was around depreciation charges, which was AUD 63 million, which is broken down into Peak of AUD 22 million, Hera of about AUD 10 million, and Dargues of AUD 30 million. The depreciation charge is really based on a unit of production basis. We look at the total cost of the mine, what we've got up, what the costs, what the capital costs are now as well as into the future, and then we determine what the charge is. It's a variable cost. That will, depending on our level of production, determine the depreciation charge. Next, I'd like to go to slide 13, which is cash flow.
As Dan said, there was AUD 97 million of operating cash flow, mine cash flow for the period, which was used to fund AUD 35 million of sustaining capital at the three operating sites. Noting that Kairos development at Peak was growth capital in 2021, which is now classified as sustaining capital. We had AUD 6 million of growth capital for the feasibility study at Federation and the EIS, as well as the Hera camp expansion to enable the next stages of the Federation project. AUD 12 million of exploration spend during the period. It included the infill drilling programs at Federation and at Great Cobar, as well as our exploration program at Great Cobar, as well as other near mine and regional exploration programs.
We also had AUD 10 million of cash backing for our environmental bonding obligations and an AUD 8 million reduction in the term debt facility, which resulted in a net increase of AUD 21 million in cash for the period, and giving us a closing cash balance of AUD 95 million and net cash position AUD 55 million, which means that we're well-placed to continue to fund our organic growth projects. Now I'd like to hand back to Dan.
Thanks, Ian. Just in looking at that solid EBITDA, continued strong cash generation with our exploration activity, the continuation of investment into exploration and extending of these assets. I think really in summary, it really does puts us again in a very healthy position. What I mentioned earlier about moving from talking about building a platform to actually building on that foundation. With that, I'll hand over to you, Peter.
Thanks, Dan, and good morning to everyone on the call. I'll be speaking to slides 15 and 16 of the presentation deck. Further to Dan's comments, over the half, we've substantially progressed our internal growth portfolio, with two projects now moving forward to execution. Our most advanced projects, being Federation and Great Cobar, are set to deliver life extensions to our Hera and Peak Mine, and that will underpin future cash flows for the business. At Dargues Mine, surface drilling is now testing targets outside the mineral resource footprint. In parallel, stakeholder consultation and environmental assessments are underway to support an application to modify the project's development consent. We continue to be excited by the Federation project, given it's located only 10 km from our Hera mine and has some of the best lead zinc grades of any new mining project.
The feasibility study is progressing well and remains on track for completion in the middle of this calendar year. In January, we released drilling intercepts with some spectacular grades, and drilling continues to extend the deposit outside the mining area identified in last year's scoping study. We've now reached the data cut-off dates for the feasibility study's geological model, with the drilling results collected over the last half year now being incorporated into an updated mine design. I think it's significant that drilling has yet to find the limits of the Federation deposit. We're looking at the feasibility study as delivering us what will be a starter project that provides a platform that will extend production from the Hera Federation complex into the next decade. There's also been some excellent progress with project permitting and approvals over the half year.
We've received all regulatory approvals required for the exploration decline at Federation, and the project's environmental impact statement has been finalized. We anticipate that the EIS will be available imminently for public exhibition and comment, which is a significant milestone for the project. At site, stage one of the Hera camp expansion has been completed, allowing us to accommodate the additional workforce required for the surface civil works and exploration decline development that we expect to commence in the coming months. Separate from the feasibility study, five drill rigs are operating at Federation to further extend the limits of the deposit, which remain open in several directions. Results from this drill program will inform an updated mineral resource estimate that's expected mid-year.
Turning to slide 16, we published the findings of the Great Cobar pre-feasibility study in January and are now moving towards project execution, with the underground access declines planned to start in July of this year. The PFS supported the development of a new satellite mine based on initial mining area at Great Cobar and the declaration of a maiden 840,000 ton ore reserve that will more than offset mining depletion at the Peak Mine this financial year. The PFS also showed that mining at Great Cobar could deliver 2.3 million tons of feed to the Peak Mine's process plant over a normal five-year production period to produce high-quality copper gold concentrate and gold silver doré.
Similar to Federation, the Great Cobar mine development will provide underground drill platforms to unlock the upside potential of the deposit, and that's supported by the recent deeper drilling intercepts from our surface drilling campaign that post-date the PFS dataset and were therefore not included in the PFS findings. On that note, I'll hand back to Dan for closing comments.
Thanks, Peter. I think it's pretty clear to see here that the building now is, has or is about to commence genuinely on this foundation, something that we, as I mentioned earlier, looking back as where we got 31 December, has been a terrific milestone and a real inflection point for where the business is. With that, I'll now take questions, please.
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 speaker phone, please pick up the handset to ask a question. The first question comes from Dylan Kelly with Ord Minnett. Please go ahead.
Morning, gents, and thanks very much for the layout of today's results, particularly the tables that just give us a very quick reconciliation back to the underlying numbers. Ian, I think it's your time to shine. When it comes to the D&A, could you just talk us through how we think about Dargues rolling forward? Should we just assume whatever the carrying value of the asset is today, divided by the amount of tons sitting in reserve, should give us a D&A number rolling forward? Second question, to add to it. On the tax, what's the, I was expecting an outflow for the quarter, but it seems that you get a refund.
You know, what's the look forward here in terms of, for the remainder of this calendar year, in terms of tax, cash tax payments?
Okay. I'll answer the depreciation question first. For the Dargues, we use the production target as our basis. If you take the production target and divide the cost base by that, and then that gives you your pro rata. That's effectively a quick and dirty way of doing it. Divide the depreciation for the period by the ounces, and then that gives you a rate, and that should be a pretty good proxy for the rate going forward.
Okay.
Okay.
Understood.
From a tax perspective, we had an inflow of tax or refund, tax refund during the period, which is just the real tax payments timing on the accelerated deductions that we claimed last year that got the refund this year. That was why it was an inflow rather than outflow. Going forward, over the balance of this year, there'll be some tax outflows, but reasonably modest because we have a reasonable tax shelter because of the purchase price of Dargues. The government also has provided accelerated tax deductions.
Okay, understood. I can see you've got on the balance sheet what AUD 6 million in current tax assets.
Yeah.
Okay, cool. That's fine. In regards to the bonding requirements, on a look-forward basis, how much more can we expect to come there? Is that fully funded to this point, or are you still waiting for the latest reserve resource statement to roll through and extend the life? Is there any sort of potential there that you might be able to get some of that refunded or any movements there or indication of what the flows might be?
We'll have to continue with cash back until at least June. Then depending on where the reserves are sitting at that time, that we're in discussions with the banks to try and defer that out, because if we get life extension on our reserves, that should
Limit the risk from the banking perspective. There'll be additional payments between now and the end of June. After that, we should be able to negotiate with the banks to push that out further based on where our reserves are at that time.
Okay, fair enough. That should just be going away at the same rate at what, AUD 4.5 million a quarter?
Yep, correct.
Thereabouts. Okay, understood. I've taken up a few spots. I'll pass it along and circle back with some questions on growth.
Thank you. Your next question comes from Roy Gilsing, who is a private investor. Please go ahead.
Yeah, Roy here. Thanks, Dan and others. I just want to ask, you know, depreciation seems to be fairly high this half year. Is that likely to continue? With regards to Dargues, we had some geotechnical problems early in last year. Are they likely to continue at depth? Any comments on that, please?
Hi, Roy. On the depreciation, the depreciation rate should continue at roughly the same rate that we've included in this half year. On the geotechnical question, I'll hand that back to Dan and Peter. To Dan, yeah.
I'll handle that one. Thanks, Ian. Thanks, Roy. One other thing too, on that depreciation, I mean, it all, as Ian said, is driven by mine life as well. You know, it's a key plank on our strategy to extend these mine lives out with extension drilling and exploration. So that is a way for us or a catalyst for us to be reducing that non-cash component. On the geotech front, we're in general terms at Dargues, conditions actually improved or have improved from the earlier or shallower sections of the mine, as particularly as the structural geology, if you like, puts us in a better conditions as we get deeper. But we're not expecting that to flip the other way as it continues at depth.
Okay. Thanks so much.
Yep.
Thank you. Your next question is a follow-up from Dylan Kelly with Ord Minnett. Please go ahead.
Sorry, me again. Peter just mentioned the notion of two projects transitioning into execution. I understand where Federation and Great Cobar sit within this. I just wanted to know where Dargues, in terms of expansion, sits at the moment in terms of permitting or applications to commence works there on possibly expanding the mill. Could you give us any color there? Second one, just to add to it, if I read this presentation right, you're talking about Federation being a Tier 1. How do you define a Tier 1? I think is the question. How does this bode in terms of your thoughts around the ultimate size and scope of a mill expansion feeding into this next round of study?
Hi, Dylan. It's Peter here with a question on Dargues' permitting. I think at the time of acquisition, we flagged a couple of opportunities there regarding the latent capacity in the mill. The permitting is addressing that and a couple of other issues as well. One, an important one, goes to water security. At the time we acquired Dargues, the area was in drought, and so we are looking to establish a water management dam on the site to harvest surface runoff and store that when the rainfall is high, as it is at the moment. There's another several other modifications relating to vehicle movements, et cetera, that we're just looking to tidy up in anticipation of an extension of the mine life there.
With that comes a program of studies and evaluation to look at the impacts and consultation processes which we've already commenced with local stakeholders.
I'll cover the next bit off, Pete. Yeah, with respect to Tier 1, Dylan, it's you know, it's not a bad problem to have for us in how we define that. I guess a couple of numbers to quantify what might be seen as arm waving when it comes to that comment of Tier 1. 19% Zinc Equivalent, or even if I put that at you know, reasonably current prices on base metals, 8% Gold Equivalent across the entire resource, that is. So, you know, I'd challenge people to find a better grade ore, an ore body like that currently at the moment, certainly in New South Wales or Queensland for that matter. I guess when I talk about having a good problem to have is how we size the asset.
Now, there's two things with this. One, as Peter mentioned earlier, we haven't found the boundaries to this ore body yet. As mentioned in previous conference calls, we've focused very heavily on infill drilling to get ourselves in a position for a rock solid feasibility study towards the end of this year. Step out drilling will happen and that's when we start to establish real size of this ore body, you know, strike and depth. The debate will rage on the size of this, of the processing facility. You know, we've got, I think we flagged early in the year at surface 600, you know, in terms of consenting, we've got a higher upper end boundary that we have allowed in terms of decision envelope on what this asset looks like.
With that being said, we're very cautious of ensuring we don't over-capitalise as well. I think that this will come out in the wash during the feasibility. In terms of the mine, the mine design, the infrastructure required for the underground, the footprint, that's all quite easy and pretty well-defined already. The crux of the feasibility study really is about the processing facility options on the existing footprint. I think we'll see or have a lot more clarity on that as we push towards the end of this financial year.
Okay, fantastic. Just in terms of community consultation and engagement, what's the feedback been like around Dargues of late and community sort of sentiment towards what you're trying to do in both there and Cobar and Great Cobar?
Yeah, Dylan, Peter here. One of the things we track routinely is the number of community complaints and also the positive interactions we have, and we've seen a pleasing reduction in community complaints at Dargues. They principally relate to noise and to a lesser extent, light. We've actually had members of our consultation committee on site at night, in the middle of the night, to track down the particular sources of noise that are causing irritation. We've made modifications to the facility to reduce that noise impact. It's really pleasing to see that's been well received locally by the community members. There's more we can do, and we continue to work through that through our consultation engagement process.
We've also engaged with aboriginal groups regarding the modification program that we're looking at and the exploration we're currently doing at the site, and have received very good support there. I think if we look out around the Cobar region, we've got a good relationship established there with the Cobar Shire Council, and there's no doubt that the Great Cobar project going ahead is a real shot in the arm for Cobar, and I'm really pleased to be able to see the community support around that. We know we've got obligations on us to make sure we operate that in a first-class manner, which is fully our intention.
Okay. Good update. Thanks very much, gents.
Thank you. Your next question comes from Andrew Bowl er with Macquarie. Please go ahead.
Yeah, good day, gents. Just going back to your comments about talking about the cutoff date for the study on Federation being passed, are you planning on doing an interim update towards the end of this calendar year on a resource estimate for Federation? Or are you just happy to sit on the estimate that's to be used in the study? Cheers.
Hi, Andrew, it's Peter here. We're doing two things in parallel. If we were to wait for all the drill results to come in for Federation and then do the study, we'd be here for years. Clearly, we wanna bring this deposit into production as soon as possible. That's why the study program is working to a timetable to cut off results in early February. We'll take those results and pull them into the study. That's not the end of it. The second part is the drill program that's underway at the moment. I mentioned 5 rigs on site. They are looking to now extend the deposit rather than infill, which has been our focus recently. We expect to have an updated mineral resource estimate around the middle of the year.
Now, what that means is there'll be a disconnect between what went into the feasibility study and therefore gets reported as a reserve likely versus an updated mineral resource estimate. I think that's just the nature of the process as we look to advance the projects while also doing enough work to show the potential for the deposit and allows us to plan for the future to make sure we don't go and put surface infrastructure in places that may sterilize a portion of the deposit.
No worries. That makes sense. It sounds like, you know, sort of a mid-year estimate this year. Given the rate of growth, you don't think you'll put out a, you know, almost a calendar year estimate at the end of this, you know, start of next calendar year, before your annual result mid next year?
No. The plan at the moment, Andrew, is just as we go through our normal annual update to our mineral resource and all reserves, which is normally released around July, we'd incorporate an update to the Federation mineral resource estimate at that time.
No worries. That makes sense. Thanks very much, guys.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Bill Murray with W. Murray Super Fund. Please go ahead.
Sorry to labor the Dargues depreciation, but just another question. If you look at the situation as of today and the rate you're writing it off, really the mine only has another two and a half years of mine life. Now, fair enough, you have been sort of doing infill drilling, but the drilling outside the actual current situation, it doesn't really give a lot of confidence that that's gonna be extended too much more. Bill, it's Dan. I'll take that. We've been drilling. I think the key is that the initial focus on stage one was from certainly from an underground perspective infill and confidence on the actual LOM plan right in front of us. That's been the highest priority. The second stage has kicked in.
We've got underground and surface rigs going now. We have been delayed on two fronts. One, getting assays back from labs on those core results. Secondly, as a key part of us in a mutually beneficial coexistence in an area where, you know, we've had residents there before the mine, we're actually only drilling on day shift. Typically, we would see results back faster on both those fronts. The thesis of extending that mine site, that mine life is right on our radar in terms of deployment of exploration.
As I said earlier, I think that's, you know, what some of the concern might be. Depreciation is timed over the production model, whereas production target, I should say, you know, and if we can extend that asset out, that's when that'll start to alleviate.
Thanks. That's all for me.
Thank you. The next question comes from Michael Evans with Acova Capital. Please go ahead.
Good morning, gents. Thanks very much for your time and the update. I know it's just an interim report, but you're making good cash and prices are strong. Just on the dividend, you chose not to pay one. Has there been any sort of change from the board on the thinking around that? I know you've got lots of great projects, you know, Federation. Is there... You know, how are you balancing that sort of dividend thinking with the growth? I would have thought being in a net cash position, generating cash, you could manage both. I assume the CapEx on Great Cobar and Federation would be relatively smooth over the next couple of years.
Just on that, remind me that the Federation, I think you mentioned, the second part of the question, EIS, I think you mentioned at the beginning, Peter, it might have been, you expect to submit that imminently. Will you make a public announcement with some numbers around CapEx and PFS results at this half?
Hi, Michael, it's Dan. I'll cover a couple of those questions off. In terms of dividends, the company, we've never done an interim, as a company, we've only ever done finals. I think-
Yeah.
I think all our shareholders would expect that it is a point that is deliberated at board level once we see financial results either half or full year. I think it is, and it has, and it will continue to be, a debated position with an outcome at board level. In looking forward, you know, looking at our capacities to be able to do that, and we have paid a dividend historically. I think there's a bit of water to get under the bridge yet on two fronts. One being, you know, feasibilities are done for a reason, and that is for us to lock down on capital costs of these growth projects or extension projects.
Until we have those firm and in conjunction with that as to whether we see sustained buoyancy in the commodity prices are very important considerations when it comes to, you know, prudent decisions now for what can be, you know, negative consequences later. In terms of dividends, I'd assure shareholders that once we understand our exact financial position at the end of each period, one of the first discussions actually is returns to shareholders and our ability to do so in the light of what's coming forward. The first thing, I think when it comes to will we be releasing any sort of estimate on capital for Federation prior to the end of this year. I think your question was, will we be releasing any sort of estimate on capital for Federation prior to the end of this year. The answer is no, we won't be.
It'll be contained when we get it to feasibility level outcomes and FID.
Right. I'm just looking at page 23 of the presentation, Dan. Isn't that first half CY 2022? I'm just looking at that online chart. Is that-
Are you talking in relation to the release of the...
...this half. Before 30 June, you expect to release to the market a feasibility study for Federation. Is that correct?
Mid-year. Mid-calendar year. At mid-calendar year 2022, yes. You can see that's what will enable, I should say, the release of the maiden ore reserve, which you can see roughly in July this year.
Okay. You should be, I mean, no one can throw a dart at commodity prices, but with regards to your CapEx number, you should be more confident about a dividend at the full year result than where you are now, given you've got these outstanding studies going on. Is that a fair comment?
I think it is, yeah. I think we should be. It depends what those costs look like and you know, if you can accurately forecast you know, commodity prices, then I'd like to be in your shoes. But the answer is yes, we will get more and more confident as we bring on. You know, we got operating cash flow and we've got some large capital of investment back into our assets to come. In all circumstances, when we know time frames and amounts, capital management for us will be a lot clearer. Okay. Thanks, Dan.
Thank you. Your next question comes from Anthony Wallace, who is a private investor. Please go ahead.
Hi, Dan. I just wanted to ask you about a year or so ago, it was mentioned in some presentations about being copper ready. I was wanting to see now that you've got some more detail about Great Cobar, can you add a bit of color to that for me about a year ago?
I certainly can. Yeah. It's copper ready for us. I think when we first built that into communication of our strategy and it's about 18 months ago. What we were very much alluding to at that point was Great Cobar and our ability for organic growth of what we could see then as what would be and is now a very valuable commodity. The ready means we own the asset and it's in our hands in studies and what we can do with it. You know, as that strategy has unfolded on us positively, the Great Cobar asset now is right on our doorstep.
You know, you can see it would be a two- or threefold increase in our copper production from where we've been historically in the next two, three, four years. Very valuable for us. We are ready. That asset now, as you heard Peter talking, has gone beyond PFS. It's now being handed over to operations for inclusion in our LOM plan. With that subsequent board approval via our budget for execution, where we'll be recommencing a decline into that ore body early in the new financial year.
Okay. Great. Thanks. One other quick question about, say, like diesel costs and ongoing future energy requirements. What's the thoughts around, when it comes to federation and others about your mix of energy use, whether it be renewables or whatever. What's being thought about that?
What is our attitude towards this, Anthony? It is a terrific opportunity for us to actually, you know, as I said earlier, the energy for us in when it comes to climate change or diversity inclusion, social aspect, is not now about reacting to or responding to these threats. It's about actively and energetically participating in solutions and correction of these issues. When it comes to energy mix, for our businesses, the biggest opportunity and that we have is with federation in terms of we can make meaningful change to the energy mix on that asset now with proven technology.
One of the other aspects that have been built into our capital estimates and through finalization in the feasibility study is to ensure that we can transition this sort of business over to hybrid energy, so the use of renewables, and the base load of gas. We are actually very excited about what that looks like. Particularly you start factoring cost of carbon into these decisions now. Great opportunity with a brand-new asset, some already well-proven technology, and we're seeing the real emergence now of common use of underground battery equipment now as opposed to diesel, particularly on the LHD front.
We're actually dead set excited about the opportunity, and we can be very early on this front because it's not every day a business gets to build, you know, and I'll keep calling it this because it is, as far as in my mind, a Tier 1 asset right at this point.
Yeah. Yeah, I thought that might be the case. Look, quickly regarding you were talking about dividends. Would share buybacks also be considered in the same mix as a dividend?
They form part of our capital management deliberations, Anthony. It will always be. You know, we always sort of look at it as three buckets, previous levels of cash on the balance sheet, continuing to be able to fund the growth or fund sustaining of the business and the growth of the business, and then returns to shareholders. That they are really the three buckets that we look at. They're never always gonna be even. They will ebb and flow, but share buyback and dividends would certainly be consideration. I won't make commitments as to what that'll look like until we finalize our plans and get more line of sight on the capital commitments over the next few years.
Okay. All right. Great. Thanks very much, Dan.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Clifford for some closing remarks.
Thanks, Melanie. Thanks everyone for your time this morning. As hopefully you sense the excitement and the inflection point for the company as we go through 31 December. You know, we're moving not only our dialogue, but our actual action on the ground now, well beyond just foundational work. It's about driving performance across the business and what I'd call, you know, it's almost a relentless pursuit of operating excellence and excellence across all our ESG and non-financial measures. We're generating strong cash, and this is about a constant optimization of our assets within the business. That moves us to execution. This execution now isn't just at a strategy level. It's actually directly at a portfolio level here where we can adapt to what's coming at us.
We can adapt to commodity prices, and we can adapt to tailwinds in terms of how we manage our portfolio at full value. I think in essence, what you can see now as investors in the business or potential investors in the business, that this build on the foundation is now imminent. It's right in front of us. It's in fact already commenced at the Federation deposit. We're really looking forward to this next six months of delivery of this growth. Thanks very much to everyone for your time. We will talk at the next quarterly update. Thank you.