I would now like to hand the conference over to Mr. Dan Clifford, Managing Director. Please go ahead.
Thank you, Bernadette. Good morning, everyone, and thank you for your time today. With me I have Ian Poole, Peter Trout, and Adam McKinnon. We have a slight change to how we will update this morning, and it's particularly driven off the back of our recent market announcements covering exploration updates across all our sites, the mineral resource and reserve report, the latest June quarterly activities report, and the accompanying FY 2022 guidance contained within that report. As such, we'll be referring to a presentation lodged this morning on the ASX titled June 2021 Quarter Update and Outlook. This is our first opportunity to review the year, both in terms of commitments made for the year and the steps taken to get our strategy executed on the ground. I'll move to slide three.
The combination of the sustainability effort and the results with our asset base has incredibly well-positioned us with a footprint that is gold dominant, contains incredibly high value-based metals, including Federation and well advanced organic copper exposures, namely Great Cobar. Set up with the diversity of three operating assets with fantastic exploration potential in front of all three is driving improving reserve and cost bases, commodity mix, and mine lives to steer through the cycle of relevant commodities. Moving on to slide five. Let's now hone in on the year and call out the key aspects of the year's performance. The momentum gathered across sustainability, particularly health and safety and environment community, and more recently, diversity and climate change, has been great to see with substantial reductions in events causing harm across our business. FY 2021 guidance was, in its entirety, met or beaten.
We've added and integrated Dargues into the portfolio and continued a large investment into exploration across Federation, Great Cobar and Kairos, and Dargues, with results on all three fronts. These results have driven a large bow wave of material in our resource and represents a 63% increase in resource growth across the business. With the completion of the Federation scoping study, enabling works and feasibility study underway, and with a PFS at Great Cobar, there is the potential to unlock significant conversion of resources to reserves through FY 2022. Moving on to slide six. Our operations leadership and all our people and contract partners have lent into this performance to achieve a 58% reduction in injuries and a remarkable 82% reduction in reportable environmental incidents over the year, and is absolute credit to the whole team for that performance through the year.
Moving on to slide seven with performance against FY 2021 guidance. Gold was on with a 13% year-on-year increase. Underlying that, an increase of 22% in Peak's contribution to gold, the addition of six months of Dargues and Hera was down, as had been previously flagged, approximately 30% on a year-on-year basis. Lead was a beat and zinc was on. The combination of these two commodities up 23% year-on-year, predominantly driven by Peak and following the upgrades in 2019/2020 to the mill. Copper was a beat, although down on previous years. All-in Sustaining Costs was also a beat, with OpEx costs on target, sustaining capital slightly under and a solid base metal pricing giving our All-in Sustaining Credits a boost. Moving on to slide eight.
Honing further down into the June quarter was primarily impacted by Hera's quarter-on-quarter flagged reduction in gold, and to a lesser extent, Dargues being under plan for the quarter. Moving through to slide nine. Underlying and cost throughput performances across the site were met or beaten, including that the Hera and Peak sites mills both saw a 10% improvement in throughput from the FY 2020 year. Peak did experience some headwinds from labor shortages, particularly through the early stages of half two and later into Q4. Dargues saw delays in some planned high-grade starts pushing into FY 2022. We will go further into Dargues with this shortly with Peter. Noting it contained in the reports that the July is seeing a 47% increase in grade in comparison to June, and a 19% increase in grade compared to the full year performance, with the investment thesis well intact.
I'll now hand over to Ian.
Thanks, Dan. On slide 10. During the year, June quarter, Aurelia maintained its cash on hand. At the end of June, there was a cash balance of AUD 74.5 million. During the quarter, the company funded from operations, post capital of AUD 14.5 million, which is primarily represented by AUD 8.2 million of exploration, including infill drilling at Federation.
AUD 5 million of growth, mine development at Peak and Dargues. It also repaid AUD 4.1 million loan to Aurelia's term loan, which is scheduled to be fully repaid by September 2023. Aurelia also cashed back AUD 4.3 million of its bank guarantees, which are used for environmental bonding. During the quarter, we made AUD 8.9 million of tax payments. Working capital fluctuate from quarter to quarter, depending upon the timing of trade receivables, prepayments, and payables. During the June quarter, there was a cash inflow of AUD 9.9 million. I'd now like to hand back to Dan.
Thanks, Ian. Moving on to slide 11, before we shift into forward-looking for the company, it's really worth reflecting on the continued strong track record in growth from 2014 to now. This is across exploration, development, and operations at Hera, acquisition, operations, and expansions at Peak, and now an acquisition and operations to date at Dargues. This has been, while the chart shows gold production, it's actually resulted in a gold equivalent record for the company of approximately 180,000 ounces. With both expansion and extension opportunities at all three complexes, setting us up for the next three or four years for the continued growth of the company. Moving to slide 13. Looking at guidance for FY 2022, gold is lifting 13% at the midpoint, and that's ranging between 112,000 ounces a nd 123,000 ounces. Underlying this, Peak is steady.
There's a full year of contribution from Dargues this year. Hera is actually halving, as has been well flagged to the market as gold grades reduce and we switch to higher grade base metals over the coming two years. Lead is steady at 24,500 tonnes-27,000 tonnes. Zinc is rising 30% at the midpoint to 31,000 tonnes-34,500 tonnes, with both Hera and Peak contributing to that lift. Copper is falling 25% at Peak to 3,500 tonnes-4,000 tonnes, with medium-term ore body phasing and lower grades this year. AISC is rising to AUD 1,500-AUD 1 ,700, an ounce, driven by Peak and Dargues' first full year and continued ramping of gold grades. Tiny Capital lifts to AUD 61 million-AUD 69 million as a result of no further growth capital development at any of the sites and the inclusion of Dargues into the estimate.
Growth capital subsequently reduces as a result of the shift away from growth capital and is wholly directed at Federation and Great Cobar projects growth for the company. Exploration rises 28 to 31, reflecting directing dollars to the best return and an increasing footprint on the ground. I'll now hand over to Peter for the detail of the individual assets.
Thank you, Dan, and good morning to everyone on the call. I'll be talking to the FY 2022 guidance at an asset level, and that's shown on slide 14 of the presentation deck. I'll also give commentary around the production ramp up at our Dargues mine. Looking at the individual sites, Peak Mine will continue to ramp up processed ore volumes in FY 2022, in line with higher mine tonnages. This tonnage increase will partially offset lower planned gold, lead, and copper grades, while we're expecting a slight increase in zinc grade. The year-on-year change in operating unit costs and All-in Sustaining Cost reflects a doubling of sustaining capital expenditure compared to FY 2021. There are three major contributors to the higher sustaining CapEx. The first is that all mine capital development has transitioned to sustaining CapEx following the completion of growth capital development in the Kairos mining area.
Mine development in the sustaining CapEx accounts for approximately half of the site sustaining CapEx budget for FY 2022. Secondly, we're also embarking on fixed plant refurbishments on some of our long-serving infrastructure and compliance upgrade projects to meet current regulatory requirements. We're also raising the TSF embankment, and that will be about 11% of the total capital spend for the site. Looking at Hera, the operation in FY 2022 reflects the planned reduction in gold grade and the higher base metal grades. These higher base metal head grades will bottleneck at the concentrate filter, and in turn, that will lead to a slight reduction in the mill feed tonnage. The unit operating costs are expected to be comparable to FY 2021 as we see less underground mine capital development expenditure, which offsets the lower tonnage processed through the plant.
At the Dargues mine, we'll see our first full year of production under Aurelia's ownership. Gold production is expected to range between 45,000 ounces and 50,000 ounces as the mine grade improves and ore production moves towards the permitted cap of 355,000 tonnes per annum. The site's unit costs are forecast to be similar to those achieved in the second half of FY 2021, with FY 2022 decline development now being classified as sustaining rather than growth capital expenditure now the operations ramp up to nameplate capacity. No further growth capital expenditure is planned at Dargues in FY 2022. We also expect to see a significant reduction in All-in Sustaining Cost in FY 2022. Guidance of AUD 1,500-AUD 1,700 per ounce is driven by the higher gold production denominator, as shown in the top table on slide 15. It compares the FY 2022 outlook against the FY 2021 actual performance.
Moving further to Dargues, we've had mixed performance over the quarter from the asset. The production physicals traveled well and met our expectations, with the operation demonstrating required monthly development, ore production, backfill placement, and mill throughput volumes. However, quarterly gold production of 5,200 ounces was below plan, primarily because ore was mined from lower-grade sources that are outside the original mining schedule. The third high-grade stock wall from quarter four is now being delivered to the process plant, and we're seeing the head grade increasing throughout July as this material enters the plant. We're also gaining more knowledge of the deposit, especially from the recent 12,000m of close-space infill drilling, mapping of new underground development exposures, and production reconciliation. This knowledge is being used to engineer the underground environment and refine the mine layout to suit the local conditions.
The information from our recent drill campaigns and analysis has been incorporated into the mineral resource, ore reserve, and production target statements that were released last Friday. I should point out that these statements don't include all the drill results that were released for Dargues earlier this month. The lower table on slide 15 compares the life of mine parameters from the June 2021 production target against the acquisition model's outlook as at November last year, and recognizing that these comparisons are across different time periods. There are three points to note. Firstly, the production target contains 200,000 ounces of in-situ gold, with other scheduled measures being consistent with our expectations at the time of acquisition. The recent drilling and work has confirmed that the gold grade increases with depth, leading to the life of mine outlook.
The average grade is expected to be towards the lower bound of the acquisition model, which has led to an uptick in the forecast All-in Sustaining Cost. I'll now hand over to Adam McKinnon, who will discuss our recent mineral resource, ore reserve, and production target statements.
Thanks, Peter. Now, with reference to slide 17 of the presentation. It's been an absolutely standout year for resource growth across the group. A record 141,000 meters of surface and underground drilling was completed, which along with the acquisition of Dargues, resulted in a group resource total of 27 million tonnes, an increase of 63% net of depletion. At Peak, resource growth of 51% included strong contributions from Great Cobar and Kairos, while the resource growth of 67% for the Hera Federation Complex is primarily the result of doubling the resource tonnage from the exceptionally high-grade Federation deposit over the year. Dargues also saw resource growth of 35% after only six months of drilling. The strong resources growth has flowed through into a 53% increase in the group's production target, now sitting at 7.8 million tonnes.
Supported by new data and modeling, the production target now includes material from the Great Cobar deposit for the first time. Group reserves of 4.4 million tonnes have remained relatively steady for the year. FY 2021 saw a significant increase in reserve confidence, with over 50% of the group tonnage upgraded to the proven classification. The company is also now very well positioned for strong reserve growth in FY 2022, with a maiden reserve for the Great Cobar deposit expected in the December quarter of this year, and a maiden reserve and production target expected iteration following the completion of the feasibility study mid-next year. Moving on now to slide 18. The focus on infill and extensional drilling at Peak has seen a 48% increase in the production target to 5.6 million tonnes.
Strong copper gold and also lead zinc results from Great Cobar have seen resources there grow 43% to 5.8 million tonnes. Now containing more than 120,000 tonnes of copper and over 130,000 ounces of gold. Upside potential at Great Cobar remains exceptionally high. Late in June we reported high-grade copper intercepts extending mineralization at depth. This included 7 meters at 6.3% copper, 6 meters at 3.4% copper, 7.5 meters at 3.3% copper, and 6.1 meters at 3.1% copper. Due to assay timing, these results were not included in the new resource for Great Cobar and leave the deposit completely open at depth. With drilling to continue into FY 2022, the decline development access from the new Cobar Mine permitted, and a maiden reserve declaration expected in the December quarter, Great Cobar is likely to be a strong value driver for the Peak operations into the future.
Adding to the results at Great Cobar, ongoing exploration and evaluation work has seen resources at the high-grade Kairos deposit grow 68% to 1.6 million tonnes. Recent drilling has demonstrated high-grade mineralization remains open at depth and along strike. With the development access in place and production commenced, Kairos is also likely to provide significant upside over the coming years. If we move now to slide 19. In late June, the company released a set of exceptional exploration results from the Federation deposit, including, amongst numerous others, 70 meters at 18.4% lead zinc. For context, on a length-weighted basis, this is believed to be the best base metal intercept released to the ASX this year.
The focus on exploration and evaluation at Federation has led to a 45% growth in indicated and inferred resources since the February 2021 update, and is now sitting at 5.1 million tonnes at 14.8% lead zinc, 0.9 grams per ton gold, 7 grams per ton silver, and 0.3% copper. Drilling at Federation continues to see the incredibly high grades extended, with the new resources having an average zinc equivalent grade of 17.9%. For those who like to think in terms of gold, this is roughly equivalent to around 8 grams a ton when calculated using a similar methodology. The latest resource numbers have firmly cemented Federation as one of the most significant discoveries in the region in the last 30 years, with a Tier 1 grade profile.
For comparison, Federation now has 40% more tonnes than the entire undepleted Hera mine to the north, at a 27% higher grade and containing nearly 80% more metal on an equivalent basis. Strong growth in the Federation resources are expected to continue into FY 2022, with an accelerated resource conversion program currently underway to support the Federation feasibility study. The completion of the study will allow maiden ore reserve declaration for the Federation deposit in the first half of the 2022 calendar year. Moving on to Dargues now on slide 20. After the acquisition of the Dargues mine in December last year, Aurelia commenced an intensive surface and underground evaluation program, we have now drilled close to 20,000 meters in the six months to June.
In addition to infill drilling to increase company existing resources and reserves, the company has confirmed the presence of gold mineralization in a number of high potential extensional targets, which were identified as a part of the acquisition process. The drilling has seen an increase in resources of 35%, inclusive of mining depletion since mine production commenced. The Dargues mineralization remains open in a number of directions and extensional drilling is continuing. The area along strike to the west of Main Lode and to the east of Plum Lode remain very sparsely drill tested and are set to be targeted in FY 2022. Thanks, Dan.
Thanks a lot, Adam. With that, Bernadette, could you please open to question and answer time, and I'll do closing remarks after the Q&A, 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 speakerphone, please pick up the handset to ask your question. Your first question comes from Dylan Kelly of Ord Minnett. Please go ahead.
Good morning, team, and congratulations on some pretty impressive charts at the beginning showing the TRIFR coming right down. I have two questions from me. Firstly, can we go back to Peter's points on slide 15? Can you just help us understand what's happened to Dargues in terms of both the tonnes coming back and the grade being where it is, and just explain to us what's happening with the resource model since you've re-cut the numbers? Do you have any indication as yet as to what the reconciliation is looking like, or is it too early to say?
Hi, Dylan. It's Peter here. I'll take your questions. Firstly, we saw the tonnes and the grade in quarter four come down, and we had a couple of delays in different staging areas there that deferred high-grade production into this current financial year. That was supplemented by lower grade feed from other sources, so some stopes were able to bring forward, and significantly a higher proportion of development than was scheduled over the period. If you look back over the half year, we took about 40% of the scoping tonnage that we planned in the schedule as a result of a couple of delays in the scoping areas. We've now got some better information around that, particularly when it comes to ground support, better definition around the ore zones that we're feeding forward now into our mine designs, grade control models, and resource and reserve estimates.
Having had that experience with the site, we're feeling more confident now about some of those parameters. You also asked about the reconciliation, and it is an early mark. I can say, though, that we've gone through a process of routine grade control updates now that we've got the infill drilling coming through and also the mapping and face sampling from development. What we've seen from the grade control model, that it's in line with what we've reconciled through the mill. It's in 5% of the grade and feel bang on in the tonnage. If we go back and compare to the acquisition model, which we have done, the acquisition model actually called lower grades than what we mined and similar tonnes.
Overall, we think from the big picture point of view, at the resource level, we're actually tracking pretty well. We have had learnings at the local area levels, but that's not surprising when you go from 50-meter spacings on surface drill holes down to something like the 25-meter intervals that we're seeing with the grade control drilling. Right at this point in time, globally, we're not seeing any areas that cause us concern with the resource model.
Okay, fair enough. Just turning to the Reserve and Resource update from last week, I can see that the Resource has increased to just over 2 million tonnes. Do you have any update as yet around including a submission based on that from its current levels or something that we should be thinking about more towards the end of 2022, starting 2023?
Yeah. We've got more work to do around that. There's some very good results that came through late in the quarter that weren't picked up in the resource modeling. It hasn't flown through. We need to bring those in, and we've got some more infill drilling coming through and more results, and we need to understand the big picture, first of all, before we go and take that through the mine design phase. We will certainly be looking at what's required from long lead items there, and particularly understanding what permitting requirements and modifications we might require.
Okay, understood. Do you mind if we just switch into Peak? Could you just help us understand why perhaps gold output's remaining flat year-on-year based on the guidance or slightly weaker? Could you give us some color around where the targeted, or where the ore's coming from in terms of Peak North, Kairos contribution, some of the different moving parts, just so we can understand what's happening?
I'll take that one, Dylan. It's Dan here. I had, ahead of the call this morning, a number of questions relating to particularly Kairos contribution. What's important to remember here is that Kairos is one ore body amongst four or five that we are feeding to the Peak processing plant. It is a different ore body to the comparisons of Chronos, and we have indicated previously that Kairos, plus or minus a bit, will be at roughly around 20% of the mill feed for the course of the next couple of years. As that resource grows, its life grows. In essence, for us, that's the limiting factor. It's narrow, it's deep, and it's tight. With overall volumes going up into the Peak mill, it will form about 20%, give or take.
Okay, understood. I didn't realize there was, buried in the presentation, throughput rates for the sites. Do you have any sense as to what the regional lockdowns or how that could impact your production of gross tonnes over the next couple of months? Or is that probably too early to say?
Dylan, it's Peter here. Probably too early to say. I can say that with the Sydney lockdown and more recently Victorian and Queensland border restrictions, there has been an impact over the last week with a number of employees from our contract workforce. It's too early to say what the implications are for that over the full year. Certainly, from a guidance point of view, we have not made any allowance for extended COVID disruptions to the sites.
Okay. Fair enough. I'll pass it along.
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. We will now pause for a moment to allow for question registration. Your next question is a follow-up from Dylan Kelly of Ord Minnett. Go ahead.
Okay. I'll keep it. If Adam's on the line, I just wouldn't mind asking about the reserve replacement from last week. If you look at the bottom of slide 17 there, could you just help us understand why reserves came back from 2020 levels, from just above 3.5 million tonnes back down to 2.5 million tonnes? Am I correct in thinking that you haven't, in fact, replaced depletion for the year?
Sorry, which slide were you talking about there? 17?
Slide 17, bottom left, under ore reserves.
Yeah. Sorry. That'd be correct. We have replaced some of the material we took away over the year, but not the entirety of it. What we'll see, coming into FY 2022, is that we'll, as Dan said at the start of the presentation, we've got this fairway with our resources, and as we get more and more drilling and some of these studies coming through, we'll see a big increase in reserves in FY 2022.
Okay, understood. Just so you can help us out here. What volumes from Great Cobar is going to be coming through into the reserves at this point? There's just over 5 million tonnes at the moment. How do we think? I didn't see any breakdown of that. Is it going to be like 1.5 million tonnes , 2 million tonnes?
[crosstalk]
Dylan, it's Dan. With respect, it's way too early for us to be answering those sorts of questions. We're drilling it. The ore body will be what it is. We'll put the mine design around it, and then we'll be able to be a lot more accurate on what actual tonnage will come from that part of the asset. You can see what it looks like in the production target and the grade through and the flow through of that material. When we lock down on the studies and the decline and ongoing exploration, we'll hone in on what that looks like.
Okay, fair enough. I'll pass it along.
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 of Acova Capital. Please go ahead.
Good morning, guys. Thanks very much. On your guidance and your mill throughput, you sort of got there on the separate slides, 800,000 tonnes at Peak, 480,000 at Hera, 355,000 at Dargues. I haven't crunched through the numbers yet for FY 2022, but are those the throughputs we should be assuming, the three operations for next year?
Mike, it's Dan. How are you going?
Yeah, good, thanks.
The indications we're giving for throughput to individual assets are on slide 14 on those ranges from the left-hand vertical axis of each of those individual asset descriptions. You can see Peak rising from 560,000 tonnes in FY 2020 through to 625,000 tonnes, 630,000 tonnes in FY 2021, and then up to that range, in and around the 700,000 tonnes for the year. Those are what you should be assuming. The production target descriptors in the slides sort of 17 through are implied from production target.
Great. Thanks very much. Just a second question. On the production targets released last week, if we take Peak, for example, you've got a cutoff of 100 and Peak production utilizes AUD 150 per tonne NSR cutoff for most areas. I think you've got AUD 130 for Chesney and Jubilee. Then you look at your costs, and they're sort of significantly higher than that, correct me if I'm wrong, but around AUD 230 in the last quarter. The way I have to think about this, you have to get those costs down to access all that ore in those production targets, or is that ore, those production targets, accessible at your current unit cost mining, milling, admin rates? Your cost per tonne. Is all that production target accessible or do those costs have to come down?
Michael, it's Dan. We've just got a technical issue there with Peter. Adam, is that something you can handle? Just bear with us, Michael.
All right.
Sorry, Michael, it's Peter here. I've lost the call. I had to join it. Sorry.
No, that's okay. Do you want me to repeat the question?
No, I got the question. I just fumbled the response when I hit the cancel button rather than the mute button.
Okay.
To answer your question, the AUD 150 cutoff is the lower limit, the average value sits above that. The key point is that the average grades going through have to be above that NSR to be economic. With that, when we put a scoping study around a block, we look at the total value inside that block and determine whether it goes to the mill or not. The other part to note is that, I think you hit on this before, there is capacity in the plant, we're desperately working to get the mill volumes up through ore delivery from the mine. With that will come a natural reduction in the unit cost. Does that answer your question?
Yeah, I think so. Those unit costs, I suppose in forecasting, we just sort of keep them the same on an absolute basis. Any reduction was more likely to be driven from an increase in the mill throughput other than other operating factors as such.
There's certainly other things we are working on to drive down our cost, and you'll see that trend in the Peak performance in particular. I wouldn't just attribute it solely to volume. We're working on the cost side as well.
Yeah. Just while I've got you, sort of tying on from Dylan's question, because it seems to be key. You missed your Dargues production for the quarter, but the ore that you did end up mining, that grade reconciliation came within 5% of what was expected. Is that a fair comment, summary?
Yes. There's two components. One is the in-situ estimation, and that's the response I gave to Dylan on reconciliation. The second one is spatial compliance with the schedule. In quarter four, most particularly, it was a miss on the spatial compliance that led to higher grade stopes being pushed into the current financial year, and they were substituted with lower grade feed based on stoping and development.
Great. Thank you very much. Just wanted to clear that up. Thank you. That's enough for me.
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. We will now pause for a moment to allow for question registration. There are no further questions at this time. I will now hand back to Mr. Clifford for closing remarks.
Thanks, Bernadette. In closing, we're well down the path with this strategy and set up with gold dominance, high grade base metals, and copper-ready. During the year, we've seen a quantum shift in harm event reductions across our business. Our guidance was met, that guidance included increased throughput commitments from both Peak and Hera. With extensive success in drilling, adding to a significant growth in our resources, 63%. Our plans are being met with an asset added and strong expectations of reserve conversion during FY 2022. With that, I'd like to say thank you to everyone for your time this morning. We look forward to further updates accompanying over the coming months. Thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect.