Thank you, Melanie. Good morning, everyone. Thank you for your time this morning. I have Ian Poole and Peter Trout with me this morning. This morning we'll run through our FY 2021 results and achievements, and cover off guidance. More importantly, make a direct link to our strategy by way of some clear expectations on our growth projects, milestones, and schedules. I'll be referring to the presentation posted this morning titled, FY 2021 Financial Results and Outlook, and make a start on slide four. We covered many of the tactical achievements at the June quarter and full year update we conducted in July this year, including the significant improvement in our ESG performance, operational outcomes, guidance, and achievements with a hugely successful exploration program, resulting in a remarkable lift in our resource base across the assets.
To boil it down to a simple statement for the year, it was all about delivery in the short term and investing in for the long term. New records in EBITDA and gold production equivalent. Significant lifts in our NPAT, second only to a very strong half two in FY 2018. The portfolio has been boosted with the acquisition of Dargues to three operating assets. The mills run harder than ever before, and this, combined with an increase to a large increase in our resources, has put the company in a great position for funding our growth plans across all three assets, of which one includes not declaring a dividend this year, so that we can create resilience in the light of COVID-19 and direct capital to the highly attractive returns our growth projects offer our shareholders. If we move to slide five.
This hasn't been an overnight story, these sets of results. The results of prior investment into exploration, planned upgrades at Peak, development, and our commodity mix and prices achieved have driven improvement across the board. All-in sustaining cost margin up to 41% at AUD 1,140, and on a percentage lift even higher on an all-in cost basis. Earnings and profit all lifting, including recent exploration at approximately AUD 20 million, our Dargues investment, and growth capital across all the sites. Additionally, this is AUD eight million in debt repayments and an additional AUD eight million going to the cash backing of our environmental bonds. I'll now hand over to Ian for a further detailed analysis.
Thanks, Dan. I'm on slide six. Aurelia generated a record AUD 416 million in revenue during the year, a 26% increase over the prior year. This was driven by a 50% increase in volumes and a 48% increase in prices achieved. During the year, Aurelia also benefited from a reduction in treatment charges as competition for concentrates remained strong due to supply disruptions in South America and global demand. Aurelia's revenue is gold dominant, with 61% derived from gold sales, complemented by significant base metal by-products. Go to slide seven, net profit. Aurelia more than doubled its underlying NPAT to AUD 57 million, with a statutory NPAT of AUD 43 million for the year, which included a one-off Dargues acquisition cost of AUD 20 million. The primary changes in NPAT from the prior year are the 26% uplift in revenue as described on the previous slide.
An increase in operating costs at Peak and Hera was volume driven with an increase of ore throughput and increased concentrate produced. The inclusion of the operating cost at Dargues, which was added to the portfolio of assets in December, also contributed to increased costs. There was also an increase in depreciation and amortization due to the addition of Dargues to the portfolio. Interest and taxes increased by AUD 17 million. The taxes were higher in the current year due to higher profits and the permanent difference in respect of the Dargues acquisition costs. Interest costs were higher due to the establishment of the finance facility for the Dargues acquisition and interest arising from the term loan and the guaranteed facilities. If we go to slide eight, cash flows.
Operating mine cash flows generated AUD 185 million for the year, which funded sustaining capital, which was made up of the sustaining capital, sustaining leases, and cash cover on our guarantees for rehabilitation of AUD 8.2 million. Growth capital of AUD 26 million was focused on the mine development at Chronos and Dargues, and in FY 2022, mine development proposed to operations will be sustaining capital. In December 2021, Aurelia acquired the Dargues operations for a cash outlay of AUD 165 million to the vendor, and we also incurred associated acquisition costs of AUD 20 million.
The acquisition cost was funded by an equity raise of AUD 125 million and term debt of AUD 45 million. The exploration costs of AUD 21 million included on-the-ground exploration at Federation, Great Cobar, and Dargues, as well as the scoping study and the feasibility study for Federation and the associated EIS studies required to enable the consenting of these projects.
During the year, we incurred debt servicing costs, which included interest, as well as AUD 8.1 million in debt repayments on the term loan. The tax paid during the year relates to the tax installments required during the year. The dividend of AUD 8.7 million relates to the final dividend from FY 2020, which was paid in October last year. All in all, a pretty good set of numbers. I'd like to hand back to Dan.
Thanks, Ian. Move over to Slide 10, please. We covered group guidance in detail in July, so I'm not going to dwell on it this morning, but where I do want to take the presentation and the discussion is, it's really important to draw out the link of this guidance to our growth and the investments in front of us. Our metal production does, on average, across the board, lift by approximately 10%. Our all-in sustaining cost does rise, predominantly with a reallocation of growth capital to sustaining, and subsequently, there has been further sustaining lifts, including the acquisition of Dargues and some reinvestment into infrastructure at Peak based on our views of a longer mine life.
One of the key differences this year looking forward is that in the growth capital of AUD 16 million-AUD 18 million, the vast majority of that is aimed at Federation and/or including in exploration valuation, the 20% lift in exploration all targeted across the three projects and regions that I'll cover shortly. One other key difference this year, if we look at the bottom of Slide 10, is the smoother nature of the gold production on a quarter-on-quarter basis in comparison to prior years. This is due to the inclusion of Dargues, its continued ramp-up of head grade, and the Kairos ore body at Peak settling in after the commencement of it in June 2021. Moving to Slide 11. The results of the prior investments and our current plans see all the metals rising across the board, with the exception, in the short term, of copper.
Further double-digit growth in the gold equivalent production to approximately 200,000 ounces for FY 2022. The achieved growth, investment, and balance sheet strength all come together, driving our strategy for long-term value and returns growth. In moving to Slide 13-Slide 15, we'll run through the actual activity on the ground right in front of us and our expectations on the delivery. Focus on Slide 13 now with Federation. This is a remarkable organic growth story, and we have now had it set clearly on a set of rails to delivery. Its history is actually very short, it's quick, and it's testament to the agility of a company like Aurelia and the value of the ore body. four years from discovery to a planned first production, for an underground is quick delivery of cash flow.
This year, namely FY 2022, the focus is on the continuation of the EIS and the approvals process, enabling works for the underground that covers camp expansion at Hera and the civil and surface works required for the preparation of the decline. This is all contained within the AUD 16 million-AUD 18 million growth bracket in the forecasts. Gives us two things, and these are really important points. Exploration declines really are about drilling, but what it does for us here at the moment is it gives us early access to the ore body starting very soon. FY 2023 becomes about the continuation of that decline and the commencement of the plant either being an upgrade or new, depending on the feasibility outcomes through the balance of this financial year.
It's important to note here that the exploration decline can commence before the full EIS preparation and approvals process is commenced by way of the exploration decline REF. It's important to note that the plant and development and early production can't commence until those approvals are achieved somewhere in the period of half one calendar year 2023 or late in FY 2023. The real advantage here for us is the early access to the ore body, the early commencement of the decline, and the enabling works on the surface give us the ability to smooth out the capital from now and be well contained within our operating cash flows to ready the asset to full production post-completion of the mill. This, and added to this is our advantage with our mills. Shareholders will be well aware we've got Peak 100 km up the road.
In the region, that the opportunity for us to bring on early production. Particularly when the heavier loads of capital come on, there's a significant advantage we have in the region and over greenfield sites, and from my perspective, goes to the heart of funding of our growth plans for the business. If I move to Slide 14. Peak has been a similar story. Great Cobar is well advanced down the regulatory approval path, and the exploration decline is already approved. Although the exploration decline kicks away in half two calendar year 2022, that does coincide with the full approval for the asset, but that decline can commence earlier as it is already approved. This gives us a two-year to three-year horizon to real organic copper exposure for the company.
Moving over to Slide 15, for Dargues, the absolute priority for us here is the continuation and completion of phase I and the subsequent planning of phase II drilling. In parallel with that is the environmental assessments and regulatory approval paths for an extension of the mine life and incremental capacity increases off the asset, all well within the current mine life position. With that, please, Melanie, I'd like to hand over to question and answer time, please.
Thank you. Your first question comes from Dylan Kelly with Ord Minnett. Please go ahead.
Good morning, team, and thank you very much for a nice clean set of numbers this morning. Two questions from me just to start, and I'll probably circle back. Could we just talk, Dan, firstly about the dividend? Has the board sort of edged towards a policy or a fixed policy at this point? Could you just give us a bit more color around what considerations were made in light of the decision to not to declare one in this instance?
Sure. I'll take that one. Dylan, in answer to your first question, no, we don't have a formalized dividend policy. What considerations we went through are pretty much twofold here. One being we have significant growth trajectory in front of the company. When we can now with extended mine lives, the development load coming at the business and the returns on offer from those growth opportunities, it enables us to make what we think is much more prudent capital allocation decisions. It's not without consideration of the COVID-19 environment in New South Wales at the moment. For Aurelia Metals, we have three assets all concentrated in Western and Southern New South Wales, and the COVID threat is real. It is real to regional New South Wales, and we can't ignore that.
Our decision is basically twofold on investment back into the business and ensuring the resilience of our balance sheet, in the business in the event of any implications of COVID-19.
The next question just around the balance sheet. How do we think about the current debt position that you've got, preferred gearing levels, looking forward? Do we take what Aurelia have done in the past in terms of just paying down debt as quickly as you can and thinking about it being zero and just generating cash? How do we think about it from here?
There's a couple of facets here. I think, through the course of FY 2021, we did pull the available levers for capital for the business being across cash off the balance sheet, equity, and debt within the company to set ourselves on the platform that we've established over this last year or two. In fact, it's over the last three years, four years. In looking forward, on the basis of our producing assets and cash flows, we are planning on repaying the debt, well, we are repaying the debt on a quarter-on-quarter basis right through, for the term of that facility. That's roughly AUD 4 million a quarter. We've paid AUD 8 to date. We'll pay another AUD 24 odd over the course of FY 2022 on that facility.
Sitting next to that is the cash backing of our environmental bonds that we require for our license to operate with the businesses. There's two different angles that this needs to be looked at, and I'll just draw into this answer the large growth we've had in our resource base as we go through feasibility studies over the course of this year. Our ability to have large conversion of resource to reserve, and therefore mine life extensions significantly mitigates any cash backing requirement on the business for our bonds once those reserves are placed and the mine life's extended. What that does for us is allows further cash within the business to handle the growth opportunities. In addition to that, the debt facility, while it is being paid down now, we've got a great relationship with our banking syndicate.
It's a corporate debt facility, and it's in place now for the existing mine lives. We would naturally be talking to the banking syndicate about what flexibility looks like on that existing facility as it stands now to be one of the key attributes of what our funding solutions are looking forward. I think, Dylan, what's really important to note here is that the sheer grade and value of Federation from our perspective, we shouldn't be scared or nervous about taking on a debt with such a great growth project in front of the business. It warrants us being able to ensure the most effective and lowest cost way to fund the growth to that and bringing on of that project in the future.
No, fair enough. That makes a lot of sense. I'll just take one follow-up question just to lead off from your final point there about funding Fed. It seems as if you can do this quite cheaply. It's a question of how much modifications you want to make to the existing Hera Mill. In light of the timeline that you've put out here, do you have anything further to update in terms of how we should think about size or incremental CapEx to expand the mill and put this into production?
It would be, considering we've just gone scoping into feasibility. We have penciled circa 600,000 ton capacity for the facility. The option as to whether it's an upgrade of the existing facility or constructing next to it is really for feasibility. I think what's really important here to note is that the flexibility within our business, because of the availability of the Peak Mill as well, enables us to bring on that early production. Whilst when we were seeking consent or while we are seeking consent for Federation, it does include the flexibility to truck north to Peak such that we can prioritize the highest NSR into our available milling capacity.
If we've got a mill shutdown because we're giving it an upgrade to handle the full value of Federation, we've got the opportunity to displace much lower NSR material out of Peak and bring Federation in early to get much better cash outcome for the business while we've got the lumpy capital. In that alleviates the issues around the larger capital in and around the time that mill is needing to be constructed. In terms of capital cost of that mill, we haven't released that to the market yet. I feel that's too early on the basis of the feasibility to being completed over the course of this financial year. I think there's plenty of benchmarks out there, Dylan, that you can work from on that front, considering that it's not a greenfield site. We have existing tailings facilities. We have existing MIA areas.
All our environmental structures are in place. Camp's getting an upgrade now, not in a year or two's time. From the mill perspective, it's not all of the capital costs that's going into that project.
Okay, understood. I'll circle back with more questions then.
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 Michael Evans with Acova Capital. Please go ahead.
Good morning, Dan. Thanks very much for the update and the extra information on the guidance. That's really helpful. Just a pretty simple one, I think, on Federation. You've got the approval for the exploration decline at Great Cobar, but you don't have the approval for the one at Federation yet. Are you expecting that imminently? I'm assuming in that growth capital, you did mention at the beginning that most of that vast majority is at Federation. I'm assuming that is the exploration decline. What are you assuming on when you get the approval, and how quickly can you get the equipment or the contractor to sort of get cracking on that? Because I'm assuming it's all planned, et cetera.
Yeah, there's a couple of things with that, Michael. The approval for the exploration decline, and its associated secondary type approvals that are required to put boots on the ground is quite imminent. That application was made some time ago.
Okay.
I think that answers the first one. Secondly, to put a decline in is all the civil and surface works and construction of the MIA required, the mine infrastructure area required to that. The civil works and the packages associated with camps, civil works, box cut are all well and truly advanced, and we're actually not far off the capability of having ourselves in a position where we're ready to execute. You can see that nothing will happen on the ground until the environmental REF and associated secondary approvals are granted. That is right in front of us and all contained within that AUD 16 million-AUD 18 million. Those surface works will start. It's also important to note here too, that the biodiversity offset requirements for a business and a development like this have also coincided in a very similar timeframe.
That is also a very clear regulatory gate for us to commence activity on the ground. We're also in a very good position with those biodiversity offsets due to work the company's been doing on Hera and associated properties for many years now. That's all good. Those works and civil works will commence during the course of the remainder of this calendar year, with ambitions of being ready for the decline commencement in H1 calendar year 2022. At some point in the next nine months.
Okay. Got you. Right. That's half one calendar 2022. Okay.
Yeah. Noting those timetables, the bars, the GANTTs at the bottom are in calendar year.
Yeah
The years above are articulated both ways.
Yeah. No, got that. Thanks very much. Whilst I've got you sort of mentioned there you penciled in around 600,000 tons for the facility at Hera, and last time I think we spoke, it's obviously a triple flotation plant you're looking at given Federation's got copper, lead, zinc. You just made a comment then if the NSR is that compelling and there's the potential to displace ore at Peak and truck ore to Peak from Federation. Can you sort of give us a bit more color and thinking around that?
Oh, yeah.
Why you would do that?
Yeah, I think that the key with it, Michael, is that there's absolutely no doubting that Federation on its own justifies its own mill in and around that capacity. There's no doubting that. That is not at any way shape or doubt for us. It will take that through the feasibility study to lock down its degree of accuracy and make sure that. Now, you've got to remember here, we are continuing to drill as well. We haven't found the extents of Federation yet. While we do that in parallel, we've got to draw a line at some point as to what our capital decision is. Please don't take the fact that we may truck up the road for early production as any sign of our views on the value of Federation. That's not at all the case.
What we're trying to achieve here is that if, for example, we were going to do a significant upgrade to the existing Hera Mill, flotation and filtration at the back end, but also grinding at the front end because we're going to the 3 separate tons, means you're all over that plant. The reality is the plant's going to be down and we can't be producing through it. We look at it then as a company and say, well, we have, in the region then, only one mill operating at 800,000 tonnes a year capacity. It makes sense from a better cash outcome for the business.
For the business, not necessarily just Hera or just Peak, but for the business, you get a much better cash outcome if you are prioritizing at that point in time when you've only got the one mill, the highest NSR material to those mills. What we would logically look at there is that there is an average NSR across Peak, which is a mixture of higher NSR, particularly from the likes of Chronos, Perseverance Deep, et cetera. There's also a mix of the lower NSR material in the northern mine. There's no doubt in my mind that the early material from Federation would, including its trucking costs, clearly outstrip the NSR of that Peak material.
For that period of time, until we have whichever way the new mill or updated mill is configured while it's in construction, we have the ability for a better cash outcome for the business. That really smooths out our requirements and particularly assists in funding. That's what it is. I wouldn't at all reflect that sort of decision on our view on Federation's value. It's purely about making sure that we're in really good shape to bring that asset on as soon as possible.
No, I wasn't trying to infer anything on your view of Federation. In fact, I was wondering if you had You mentioned the 600,000 tonnes that you're. You do have to draw a line and to do your studies at some point in time, and I understand that. I suppose I would look at the Federation resource. I'm just trying to guess something higher. I was just wondering whether you had a situation where you adjusted the Hera Mill to do the triple flotation at 600,000 tons. Federation got bigger, as you said it possibly could. No one knows at this point. You find a way to get 800,000 tonnes out of Federation. You've specced Hera to 600,000 tons. You might truck 200,000 tons to Peak. I don't know.
Your point about Now that I think about it, clearly there's a bit of work to be done at Hera, and what you're saying is if we have to shut it down for three to six months, as a group, where's the highest NSR material? I totally get the trucking cost, given the NSR of the material at Federation is so high, it's negligible in the scheme of things. I get that. That actually makes perfect sense.
I think it's an age-old problem, Michael, here for us.
Yeah. It's circular.
We are moving quickly on this asset from discovery to first production, approval and first production in four years for an underground. That's good going.
We can clearly see the value in it. We would be remiss not finding the fastest way to monetize the highest value ore bodies we have in the group. I think that's what this plan lays out, and the consequential benefits of doing that is that it smooths out our capital requirements and our operating cash flow inputs to the funding solutions for the business going forward.
Yeah. No, I totally agree on Federation. That's why I think that extra color you've given in those back-end slides is fantastic. Appreciate it. I'll hand it back. Thanks, Dan.
Thanks, Michael.
Thank you. Your next question is a follow-up from Dylan Kelly at Ord Minnett. Please go ahead.
Hi, Dan. Sorry, just a quick follow-up here. You were talking before about just the regional lockdowns, and potential impacts on the business. Could you just run us through how it's impacting the operations day to day? I assume that the workforce is exempt. Supply lines of all sorts of flavors and tastes, I'd assume have some degree of interest. Any color you could give there would be appreciated.
No problem. I think, Dylan, and any of the listeners, it won't be a surprise that we're on high alert with our assets and our communities. Canberra is an hour's drive from Dargues. It's been in lockdown. The regional LGAs around Dubbo and to the north, northwest have also seen spread of the Delta strain. We have added additional precautions to entry to our sites, whereby we are requiring full tests and the return of negative results before people will actually be allowed through the front gate on our sites. That's an additional precaution above and beyond what New South Wales Health is requiring for movement within those LGAs for, as you say, for exempt workers, of which we are. We've gone the extra steps. There's two key reasons.
Obviously, there is the protection of our communities, and because we have people in and out of those communities, and that is of utmost importance to us that we protect that. I can't say we can definitely eliminate, but absolutely minimizing the chances of Delta coming onto the sites. The impact of that is, particularly in western New South Wales, probably until more recently, where the ADF has been deployed into the region to help, has been the turnaround on testing does cause people to not be able to come back to their normal rostered swing or shifts. We have been suffering a little bit on labor availability and therefore productivity off the sites.
As I've said before, I think we've dealt with this in most quarters since March 2020, is that it ebbs and flows depending on where the pinch points are on border crossings or testing and results return. We're most certainly continuing to produce through this quarter, but we are on high alert, and that does introduce some inefficiencies in our business with our being able to get labor into the operations.
Okay, that's quite clear. Thanks for including some of the color around guidance and exactly how you look at things on an AUD per ounce. Sorry, not AUD per ounce, gold equivalent basis as well. Just a question on the spread by quarter of gold production. What's the thinking there, and what's the basic rationale for that spike in, say, like the third quarter of this year?
It's a combination of a couple areas. Predominantly, it's the continued ramp-up of Dargues as its grades improving. That's predominantly September and the growth into December quarter. Similarly with phasing and the settling down of the Chronos ore body and others at Peak, we look particularly for a strong December and March quarter to be achieving for the full-year guidance. It is driven by ore body phasing predominantly, Dylan.
Okay, that's nice and clear. Thanks, Dan.
Thank you. Your next question comes from Bill Murray, Private Investor. Please go ahead.
Morning, Dan. Just on the Great Cobar exploration decline. The initial decline was due to start in February 2019, and you've now got it starting in second half of 2022. That's a 3.5-year delay. I just wonder if you can expand on why there's been such a huge delay, given the fact that, it would have helped with the infill drilling and all that sort of stuff, and copper being such a hot topic at the present time.
I think the primary reason that Great Cobar has moved out in timetable, whilst it has been approved, is that the couple of the simple facts of the matter that we found Chronos in the intervening period and have injected our capital and operating focus into the bringing on of Chronos. Similarly, for the higher grade NSR ore bodies or higher NSR ore bodies in and around the existing Peak infrastructure. I think that's primarily the reason for the delay. I think we've spoken about as a company being copper-ready now for 18 months. I think, I would say that the increase in the copper price or the rise in the copper price has probably caught quite a few people by surprise in the last year. Great Cobar is our copper exposure coming, and you can see now the further work going into the drilling there.
I think in summary, and in looking back in hindsight to a degree, is that we believe the Kairos, Peak North, Perseverance, Chronos areas, S400, were of higher value NSR than what we knew of Great Cobar back then. Albeit now with the drilling that's occurring from surface before we go to the expenditure of an exploration decline and not being sure, we believe that was the better decision, and that's the way it's panned out.
Given the fact that you do have capacity in the mill, why wouldn't you start the exploration decline now?
Mainly because we're still going through pre-feasibility work on the configuration of the Great Cobar mine.
Okay. Just on another question. On Dargues, are you still happy with that acquisition? I suppose it's fair to say that there's very few people outside the company that thought it was clearly very poorly priced. I mean, obviously, we don't have all the information that you have. I'm just wondering if you could put a bit of flavor and give us a bit of hope for the future, because it's been pretty dark up to now, really.
Well, I can understand the market's view on that, Bill. There's no doubting that. From our perspective, it's got nothing but high conviction. The work that was done to ascertain how we could bring that asset into our portfolio. We've had the keys now for just over six months. At that last quarterly call, I did express our disappointment in the latter two months of that June quarter. We did have a number of issues. I would call them at the moment, learning issues, particularly geotechnical and ground control issues in the early stage of scoping that did defer the high-grade ore bodies. You'll note that in July, we did put through the interim July number of, I think it was 3.6 grams a ton, which was a significant improvement over the June quarter.
We know the grade improves with depth. We're confident. We remain confident in the asset that it was right for the company to invest in. We continue the drilling, and the approvals to get the incremental capacity to drive further value in that decision. From our perspective, the investment thesis is alive and well.
That's all from me. Thanks.
Thank you. Once again, if you wish to ask a question, please press star one. Your next question comes from Ed Chan, shareholder. Please go ahead.
Hi. Thanks for the briefing. I'm looking at Slide 10, I suppose one of the concerning things there is the jump of about 20% in the AISC costs. You've mentioned this rise in sustaining capital. The other thing I noted is that if you look at your reference prices for the base and silver metals. The silver and copper are about, spot prices are about 10% higher than the reference prices, lead and zinc at the moment are about 20% higher. I assume that would have a substantial impact on that calculation of the AISC. Is that correct?
Yeah. You're spot on, Ed. It does. I think for planning purposes, similarly to what Michael was talking about with, at some point you've got to draw a line in the sand with drilling and feasibilities and things. It's similar here in that, for the company to lay out its position on forward guidance, we got to draw a line in the sand at some point as to what the commodity price is for our assumptions. We drew that line in that sand prior to June 30 through our budgeting and planning process. If you look back to roughly that May, June period, what spot prices were quite a bit lower than where we are now. You are correct.
I think on a rough calculation, any of the analysts will be able to do this, if you put today's base metal spot prices through that calculation, that all-in sustaining cost of AUD 1,500-AUD 1,700 does drop. All else being equal in production and cost per ton on the sites.
Yeah. If you're looking at Slide 11, revenue from by-products is pretty close to the gold revenue. I would assume it would have a very substantial impact on that cost number.
It certainly does.
Yep. Okay. Thanks very much.
We'll achieve that. We've got to, as I said, we've got to draw a line in the sand. The commodity prices are important for us, obviously, particularly with the natural hedge of these base metals in our mix. We update these on a regular basis going forward, primarily to make sure that we are, from a grade control and stope scheduling, we're extracting full value, based on pricing in those, in that quarter-on-quarter terms, really. We will keep an eye on these and update accordingly as we see commodity prices move. They do have an impact, and we'll guide forward on a quarterly basis if there's any material changes in our assumptions.
Okay, great. Thanks a lot.
Thank you. Your next question comes from Stuart Dodd with Renaissance Asset Management. Please go ahead.
Thanks for the opportunity, and well done on the results, guys. No one probably says that enough, but good set of numbers. I guess, you did let the genie out of the bottle there, Dan, by saying you've got that conviction at Dargues, and you're highlighting great improvement in July. Has that improved or been sustained in August?
It's continuing, Stuart.
Great stuff. Just maybe for Ian, just remind me that the third-party royalty that you can get out of the balance sheet there, that goes through the AISC. This is for Dargues. Is that right?
I think it's been stripped out. The cost itself goes through there. The actual expenditure on a month-by-month basis. The revaluation doesn't go through there. There's a revaluation at the end of the period, that doesn't go through, but the actual cost of the royalty goes through in the all-in sustaining cost.
Perfect. Thanks.
There are no further questions at this time. I'll now hand back to Mr. Clifford for closing remarks.
Thanks, Melanie. Thank you everyone for your time this morning. Just in summary, we've got a terrific asset base here, mine lives, and a commodity mix that the combination of those three things really puts us in a terrific position for being able to see clean through any commodity cycles coming within the business. We've got terrific ongoing organic growth. We've got the ability to phase that growth and the capital requirements within the confines of our balance sheet, operating cash flows with the existing assets. Puts us in a great position going forward for improving our asset quality and into the future returns growth for our shareholders. Again, thank you very much for your time. Next update from us will be for the next quarterly release for the September quarter. Okay. Thank you, everyone.