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Is the quality of people. There's a lot of potential in our people. There's a lot of potential in the resources, and it's exciting. There's definitely a few things to be done, and I'm going to touch on a few of those. I just wanted to assure everybody that's here that I'm well across most of the issues and comfortable in addressing those and tackling them. Maybe Nick, some people may not know you and some do know you, but your background.
Yeah. Accountant by trade. Been at Black Cat for three years. I've seen the four mines start up and the two processing plants that we've got now start up. Yeah, seen the ups and downs over that period, and prior to this I was CFO at Mandalay Resources.
Just a little bit of when I came on board. It's only been seven weeks, but the board first said to me a bit of a mandate I'll call it, but essentially I needed to lock down a plan and deliver to that plan, and I needed to get our costs down. In a broad sense, that was clarity for me and jumped in. The first thing in order to have a good plan is we need to understand what our resource base is. In that first couple of weeks, dived into the resources, reserves, and ultimately we published that at the end of September. The biggest thing that I think surprised a lot of people was the downgrade in resource grade and consequently the reserves. We can touch on that a bit more today if people ask questions around it and what's happened.
I think in a broad sense, I am confident that we are not going to see more downside. I spent hours with our resource geologists going through what they had done. In a broad sense, we had models previously that made certain assumptions around their modeling. Going forward, we had information from the mining that had been conducted in the early days at the Fingals open pit and Majestic underground. With that information, we are better able to model the rest of the ore body. We have got good modeling, realistic models, and we redid our plans on that. That was the first big step. The next thing was to put out to the market what we thought our plan was and what we thought our costs were. That was essentially the guidance that we put out at the end of September as well.
That was based off a new plan with the new resources. That guidance still stands today, even off the back of the quarterly report. For clarity, we have put that in the report itself, but that guidance still stands. Our plan is still very deliverable for this year. The biggest variance in the guidance, which I think surprised some people too, obviously, a lower production rate than maybe some people expected, was a result of the lower grades that we saw through the resources. It was also the slower mine ramp-ups, and particularly getting into the better quality ore, which is located at Fingals at a bit more depth. Also the stoping in Majestic. The delay in those ramp-ups has resulted in a lower output for this year. The updated plans now include better resource and reserve insights around that grade. The plan also comes with costs.
Certainly tackling that cost thing and starting to understand our cost base and having a cost focus drove us to develop our cost improvement program, set some goals around that, and set a process behind it. If people want to have more detail around, Nick can talk to today. Also, through that planning process, we saw opportunities and probably necessity to actually build our business processes and systems up to better set the foundation for the future as we grow this business and start to become more and more efficient and ultimately grow. That has all been built into our plans and our expectations for our production and cost this year. I feel very comfortable with our plans. The next step, of course, and a few people have been asking me about, is our life of mine planning.
That is definitely another mandate item that the board put onto me. We need to put some focus into what our life of mine plans are, what is the best value options for shareholders, and how do we actually utilize our assets to their full potential. That LOM process we have started. We have kicked off with some more workshops, looking at the latest data. We do have more drilling. We have got updated resource models. Putting those plans together. In the quarterly, I have put out there that in that last quarter of this financial year, we expect to communicate the results of that. The discovery and growth program is a large part of contributing to that.
Its primary purpose is to improve the quality of resource and reserves that we've got in terms of being able to put them in a plan, but it will set the foundation for our LOM. Some of that data is essential to contributing to our LOM. There's a lot been going on in the last six or seven weeks. I certainly know there's some questions around why things happened and what are we going to see in the future. That's why today's focus will be largely around what questions you have and what's important to you. Nick and myself want to answer things transparently and sincerely around what's actually happening. Of course, we're limited by details that we can't share. But we want you to walk away with confidence in the management here, our plans going forward, and give you some sense of the risk profile.
We go from there. Without further ado, I hope Stewart has some questions now that we can pop into. Stewart?
Thank you, guys. We do have a few that's come through now. This is Conor Lenny. Given your comments about the information you learned on the resource and reserves, will you commit to annual resource and reserve updates from here?
100%. Absolutely. If anything, you can do it all at once. I actually want to be reporting incremental updates as we go through. I've just been talking to the resource geologists and the long-term planning manager around our priority for resource model updates, and it'll be associated with our drill priorities once we've got new information. I don't need to hold back from sharing that with the market. It may drive the question by the market, well, so what? What are you going to do next? I come back to I will have a LOM view in June next year, but I may issue resource updates before then. But without any doubt there'll be annual summary resource reserve updates.
Another one from Kaan Peker here. Thanks for your time, guys. First question is on Majestic. How are mine stope grades reconciling against the revised reserve model? Could you explain September's Q on Q lower grade?
All right. Thanks, Kaan. The grade on Majestic in the last quarter wasn't fantastic. We haven't done much stoping in Majestic in the last quarter. Underground mines like that, your development is generally the lower grade. Stoping is the higher grade. We've got reserve grades in there that are sitting at, what are they? 2.8, 2.6 Majestic reserve grades. That's driven by the stoping. We need to swing the mine production, which is happening as we speak, and by quarter three, we'll be at that phase. We're in full production, and we'll see stoping take over. That reserve grade essentially can be realized versus the low ones that we've been seeing. Development heavy in the first quarter, probably more development balanced in the second quarter. The third quarter, we're stoping heavy and that'll drive our grade up.
That's the material difference we'll see in Majestic, and essentially we're hitting commercial production levels then in that third quarter.
Second part to that question for you on Majestic is what portion of H2 production comes from stope already developed and grade controlled versus areas still requiring development?
Good question. That's getting quite technical there. We've got six levels pretty much in development at the moment. So that's vertically near on 100 m of a vertical depth. So in a broad sense, we've got the development done for this year's stoping, but we've got to keep pushing the decline down and keep developing the levels for the next year. Most of those drives have been developed, which means you get much better intel around what resources you've got there. Just having looked at the plans, my judgment would say that we're probably 70%, 80% super confident on those stopes and resources for this year in terms of what we're going to mine. Because once you've put the tunnel in and you've identified the ore body, you're able to model that much better.
We don't call it that, but it effectively becomes a Measured Resource in that terms of confidence. So yes, high confidence for this year's production stoping.
A question from Andrew. Could you provide some examples of what types of activities are involved in the AUD 30 million cost reduction program, and how do you identify and prioritize opportunities for the program?
That's a good one. Nick's leading this program, so I might flick to Nick and maybe unpack it a little bit about what we're looking at in a broad sense.
Yeah. No, it's a good question. We've built our target out there, and the way we've split it up is based on 10 work streams that looks at different activities, major activities across the company involving travel and accommodation, contracts, maintenance, other like energy as an example. What we're doing is looking at basically work stream groups to focus on each of those areas. The first part of that is idea generation from essentially the people on the ground and the people that make the decisions, as well as input obviously from managers. That process, it will take time to kick in, but we're very focused on that. We do have a full-time finance resource to make sure that's properly thought out and properly managed, and I'll be leading that up myself.
The examples is just looking at things that we're contracts across the group, making sure that we're getting the right dollar amount for that because we have been quite. We've started up, as I mentioned earlier, four mines and two mills in the past two years, essentially. It is just a matter of getting things a bit more settled and making sure we're doing things right and optimizing costs on that front. Yep.
Sorry.
I might just expand on that. My prior job in the nickel division of BHP, price was very volatile and we were always chasing the price down and getting our unit costs down. We did a lot of work with McKinsey, Partners In Performance and other improvement programs, and we became very adept at these type of cost-saving programs. I've brought a lot of that experience and shared it with Nick and he's grabbed it. These 10 streams really do get a lot of focus by having stream leads. You set targets and you start chasing that through bottom up. We're engaging the workforce to start generating ideas, actions, accountabilities, weekly tracking as a strong cadence. I'm actually very confident about the difference we can make here, and there's prime examples already coming up in terms of what we're achieving.
For me, it's very exciting and it's a relatively sensible business approach and I call it easy, but this type of thing's never easy. It just starts bubbling up ideas and I get excited about the improvements we can make in costs. We will continue to chase that through Nick and myself, with the right focus and the right engagement from the whole workforce and see some step changes. Two examples are capital and people. All of that comes through Nick and myself now. Any recruitment or any capital, that's the easy one to control, and then we have stronger justifications around that and control.
When you start going to the rest of the things like quantities, you start looking at the amount of materials or product or reagents we're using, and you start to hypothesize and try and find options to reduce scope, and then you try to look at options to reduce the cost per unit. It's all very methodical, and that's why we have a project manager sitting over it to help drive the cadence and the outcomes. But AUD 30 million is a big number and it's well worth that focus. For me, it's a huge potential win there that we can have and I'm sure we'll deliver.
A question from Wayne King. What is the logic in holding bullion? Wouldn't cash be more benefit at this stage as the company is still in ramp-up and inflation is rampant? Cash declined last quarter and cash position is concerning some shareholders, especially as AISC is high and gold price declining.
Cool. Over to you, Nick.
Yeah. It's something we monitor very closely. I think it's one of those strategies that when gold price is going up, you're a genius and when it's going down, you're not. It's a very pertinent question. I do sort of sell as and when required and I think I try and be opportunistic with that. It's not really a focus for us anymore. We do just manage the bullion and the cash on a day-by-day basis. Yeah, it's not so much of a focus for us, going forward.
Okay. A question from Keith. Are you stoping in Paulsens and if so, how's it going? As in stoping in Regulus or Lynx.
Yes. That's a quick answer. There's a lot going on at Paulsens. I'm super impressed at what the team's doing up there. We're drilling Lynx, Regulus and other ore bodies you would've seen in the last announcement. Well, I won't call them ore bodies yet. I'm optimistic. Let's call them deposits, because we haven't actually declared any reserves on those. But the fact is that they have been mining in those as we're drilling them out. So there's narrow vein, long hole open stoping, there's airleg stoping. The guys have been selective in what they go and mine. There's a lot of activity going on there. And they're also developing. They've got jumbos running full time, developing out to these other deposits that are having exciting hits. So a lot of activity there. It's a pretty lean workforce, very skilled, good strong management, safe operations.
Very pleased with how they're going. I'll be visiting up there next week, going through most of the workings, but my reviews to date have given me a lot of confidence. And you would've seen, I might point out, a highlight for me has been the performance of Paulsens just continuing to be consistent, and the plans they've shown me for the rest of the year shows them to be ongoingly consistent. So for me, it's a highlight that I would like to call out and acknowledge the team there.
A question from Carl. Do you expect that the project capital costs for the new Fingals pit is largely done now?
I will say yes. Would you agree, Nick?
Yeah. There is always an element of strip that is required, but I think, yeah, fundamentally correct. We are sort of winding down the sort of stripping or capital activities. The strip ratio going forward will be a lot lower than what it has been, and that is the nature of any open pit mine. So, yeah, that broadly correct. Yeah. That is right.
I think, we have mined near on 1 million bcm to date in Fingals. There has been a lot of work done on there and we have essentially backed off now. We have downsized the fleet numbers down to a single digger that is going to be able to feed the mill, the stock that we need. So I think we have certainly got down to that low commercial strip ratio, and we are able to sustain that with a slower dig rate now, which is pulling back a bit of cash spend, which has been one of the initiatives we have put in place to just conserve the cash rather than build big stocks.
If we need to sprint in Fingals again, we can. So that is just, I suppose giving some reassurance to the whole picture of Fingals is about less cash spend and still feeding the mill what it needs, so we will get a better return.
Another question from Kaan. Will the September quarter be the trough for cash or should we expect further outflows before the H2 production uplift?
Do you want to answer that, Nick?
If you start, I can—
Okay. I think there's still a few things to do in the business. I'd like to say yes, but the reality is we've still got some commitments to do, particularly around getting Majestic up to its commercial production level, looking at some tailings dam builds that are going on across both Paulsens and Kalgoorlie East, and that's going to be some lumpy capital for this quarter as well. Coming out in the second half, we've already flagged in our guidance and verbally to many of the people on today, second half is like a clean runway. But for this next quarter, we're still going to have some lumpy capital coming through.
Yeah. We do have the prior owner commitments in terms of toll treating at
Lakewood as well, which the margins that we make on those campaigns are a lot lower. We will see if that comes through. That is a factor on cash as well.
Yeah. Truly it is a cost-plus contract, so it is very low margins, and that was part of the sale agreement. Picking up Lakewood was a fantastic outcome. This should be the last parcel from that legacy agreement. The opportunity loss is that we cannot process our own equity ore and get a better margin, and that obviously impacts our cash generation in this quarter. I reiterate the second half we clear 100% equity ore into our Lakewood mill, for that six months is our current plan. Unless some compelling commercial agreement comes up for us to toll treat, that is our plan and our runway, which will give us better margin and better cash generation in that second half.
There is a question coming from Clark around disconnect between previous shareholder comms, and issues arising. How can shareholders have confidence in the board and the information being provided?
I obviously wasn't here in the past and the board for me was about being transparent with the market, getting the plans locked down, communicating. The past is the past. All I can assure you now is I've focused on getting out the right resource reserves up front, getting the right guidance out, and I am going to 100% focus on delivering to that guidance, if not trying to exceed it. If I think that's going to happen, I'll communicate that, but I've got a plan. I need to get our costs down. I've got a plan to do that. I am certainly going forward with Nick's help here. We are being transparent. We're being realistic. Maybe there's an element of promotional before. I'm very clear too, in our LOM, we want to grow this business. I'm not comfortable sitting on 80,000 oz-90,000 oz.
I want to go north of 100,000 oz. That is pretty clear strategy and direction and goal from the board. But I need to do it with the right resources and the right data in order to be able to do that. So that's the key focus for this year, and you will see more transparency about what we're doing and what we're working on. We just won't have all the answers people may want tomorrow. Therefore, I'll tell you when you'll get your answers. That's what I've focused on for June. So all I can do is give you a personal commitment that we're going to be transparent and deliver on what we say we're going to do.
Question from Colin. Could you walk us through the specific geological challenges being encountered underground that are driving the grade struggles at Majestic? In particular, is this primary a narrow vein issue compounded by structural discontinuities or just difficult to stope?
I don't think it's difficult to stope. When you look at the 3D geological model, there are lenses and veins everywhere. There's multitudes of them. When we go into a level and develop a drive, it's not a single vein that we just go and chase north, south or east, west or whatever. You've got five or six drives. They keep pushing through that hanging wall and you chase a vein here, you chase a vein there, you chase one here. So you've got multiple work areas that are offset. All of those veins are discrete areas. You've got to sequence them properly. You've got to go and do some extra development to chase them. So I'd describe it as complex in terms of that system that sits there. But basic mining. Stoping is basic stoping.
You develop it's 1.5 m wide, you mine it 1.5 m wide. Whereas the drives are sitting at 4 m wide. That's where you get the dilution. Grade control is absolutely critical. One of the things in my first review at the mine was, quite simply, we were trying to save development and keep the decline focus sinking, which is good. You want to get your decline, get your development. But because we're drilling from the footwall, you're drilling down at an oblique angle. You don't get the best positioning in terms of understanding that ore body, and you don't get down long enough. So in the plan that we've actually done back in September, we actually have a hanging wall drive. We push out the hanging wall drives, create a strike drive along there, and then we drill down deeper.
We start to look ahead for years. We get more efficient drilling. It's just a sensible approach. So our mine planning has changed to incorporate longer-term thinking, better quality information, cheaper drilling costs. That takes a little while to get that drive out there, but that's certainly going to be our focus. I've worked in a lot of narrow vein mines. I call this complex geology that you need to understand. The ore driving that the geos are doing when you drive that ore is exceptional. The geos are doing a great job. You pause the face, they talk to the jumbo operator, you go left to right, you chase that vein, and everything I saw underground showed me that they're doing that really well.
The fact is, we've just got to get more stoping going, and that stoping ramp-up has been hampered largely by availability of people. Long hole drillers at the moment are super hot property in the market. Used to be jumbo operators a year or two ago. As jumbo operators, we pay a lot. The industry pays a lot. But you can generally get them now, but long hole drillers, certainly we're finding a shortage, and our contractor there is Macmahon. I've been talking to them the last two weeks, and we are recruiting, but we're also getting turnover, and so that is hampering us, and we're focused on getting those critical roles filled and maybe carrying some contingency there. That's probably the biggest challenge at the moment, people.
A question from Andrew. What are our life-of-mine plans at Paulsens, and do we have any growth options there?
Paulsens is exciting. I was talking to the General Manager last week about expansion opportunities, because Paulsens itself and all these deposits that we're now exploring offer great opportunities for life extension. I think also for potential expansion opportunities. We're severely constrained at Paulsens around heritage and the protocols there, so it's not easy to do anything. You come back to is we just need to high-grade a bit more as one option. That's some of the thinking around the Paulsens proper. You move across to Belvedere, 5 km away, and that deposit is looking really good. We're putting drill holes into that. That's probably one of the resources we'll do some incremental updates on after the next drill program or maybe two more programs. I'd like to see Belvedere move forward at some point in the future to complement Paulsens.
I don't know that it's going to be easy to expand the mill. Maybe it's high-grading. Maybe there's an ore sorter. I've started conversations on ore sorters and how does that come into the picture. Part of our LOM will have certainly considered the opportunities and the practicalities of maybe expanding output from Paulsens. It's purely concepts at the moment and thinking, but I am encouraged by what's possible up there. Even beyond Belvedere, we've got another area called Big Sarah that we're putting some effort into and hope to put some results out for that soon. There will just be more of that story around that region up there. It's pretty exciting. Watch this space up there. I need to get some more reserves in first. Reserves dropped, so that's a key focus. Then I can start looking at expansion opportunities.
A question from Brad. Previous chairman's letter in the annual report were extremely bullish, and even earlier this year, you announced 100,000 oz per annum run rate and capital was winding back, but none of that has come true. Where was the oversight?
To be clear, 100,000 oz is still on the agenda. Pretty clear. I think the timeframe has shifted, that's all. North of 100,000 oz is absolutely the approach. One of the enablers of that was the expansion of the Kalgoorlie East Lakewood mill. We've ordered the long lead items. We've got approvals. But I'm not going to the board to ask for that expansion capital until we actually have a LOM done and we see the value proposition of that investment in capital and what return we're going to get from that. Again, that will be fed into the LOM picture next quarter four this year. That was part of that 100,000 oz strategy, and at the moment, that expansion is, I'd call it, ready to go, but pending a decision. That's part of what we're not getting to 100,000 oz.
Definitely the grade drop at Kal East is a stumbling point, which we're going to work through. I need to present LOMs to the board that are north of 100,000 oz. Yeah, as simple as that. I think that hasn't moved. What was the second part of the chairman's letter about the 100,000 oz and I forgot that one, Stew. You're on mute, Stew.
Yeah. The actual question, annual report, we're extremely bullish. We're extremely bullish, and even earlier this year announced 100,000 oz per annum run rates and capital was winding back, but none of this has come true. Where was the oversight?
Oh, capital. Thanks, Stewart. The capital will wind back in the second half. The mines are six months behind plan. It's unfortunate, but we've essentially seen that capital being smeared out. We are bullish, and so I can assure you that the chairman and the board are still bullish about this. They've taken this company from an exploration company through to producing now, and personally, it's outstanding what we've achieved. We need to keep on that. Bullish is good. Capital does wind back. We need to be making better margins and get on top of that sustainably. The capital will wind back. Nick?
Yeah. Correct. I think to your point earlier just about all capital going through Chris now as well, that's an important part because every item will be looked at individually.
Thanks, Nick.
Another question from Kaan. If cash generation disappoints, which expenditure can you defer without compromising next year's production? Regional exploration, or anything else comes to mind?
Exploration comes up quite often. It's a big bucket of money, AUD 30 million, AUD 35 million. We've already spent AUD 10 million. A lot of that was at Coyote. So you've still got AUD 20 million, AUD 25 million on the table. I've learned in the past, cutting exploration is not a good idea if you want to have a long life business with plenty of options. To be honest, exploration is my last resort, but of course it's a lever we can pull if we have to. The best opportunity is to go hard on this AUD 30 million, go hard on that.
Then any discretionary capital, we need to be pausing and deciding, do we need that today or can we get it tomorrow? Those conversations are happening for me just as a good business process, but I do not want to think short-term at this stage to jeopardize the long-term.
But if that is the case, then we will pull back on things in operations and capital and maybe exploration, and we just got to weigh up the risks of each one. But at the moment, I believe we can manage our cash position. Nick's across this. Every week he's reviewing that, and we balance that portfolio. Obviously, unexpected things can happen in the market and so forth, so we do think about what we have to do. But I don't want to make a decision now, but there's options. Anything to add to that, Nick?
No, I think that summarizes well.
Yeah.
Question from Conor. Following the earlier questions around capital, will the Kal East project be in a position to commence commercial production across both mines by the end of December?
You can go.
Yeah. Chris mentioned earlier about the diggers at Fingals specifically. So gone from three diggers to one digger. So I think it is safe to assume that the commercial production has been reached at, will be reached at Fingals in the current quarter, in the December quarter. Just with Majestic, we are keeping an eye on that in terms of just the optimizing the stoping fronts and the availability there. So, that is more looking like the March quarter, next year. So both around mid-financial year with those in terms of commercial production.
A question from Keith. Do you think Paulsens could become much better production and grade-wise than you originally thought?
Paulsens improved on last year in terms of when you look at the guidance, they are going to do better than last year if they get in that guidance. So that is excellent. The reserves are only one year. We have lots of exploration opportunities that are being leveraged right now. I think I have already said I am very confident in the abilities of the team there.
I am excited by the opportunities that are popping up. I think Paulsens is doing a great job and the guidance is the right number for now. We would have to do something different, which is why we are drilling there and a second rig will arrive in January. So we have one surface rig. We have one grade control rig underground. We are going to get a third drill rig, which will go underground as well to drill out some of these deposits.
I want to explore the options as those drilling results come in for what else is possible at Paulsens by June next year.
Questions from Phil. There are a few here, so I will do them in parts. Given the importance of Mount Clement to the company's broader growth strategy, what is the current status of the metallurgical test work?
Mount Clement, to be honest, I haven't looked at that yet. I've been focused very much on Kal East and Paulsens. Both Mount Clement and Coyote, the board have given me essentially a mandate or a direction to assess both those deposits and recommend to them what the next steps are. I plan to do that in quarter three and go to the board. In the new year, I'm going to put a lot of effort into those. One of the things I want to understand is, fundamentally, what are the key value drivers? What are the roadblocks? A bit of technology application and thinking. Obviously, metallurgical testing is important, and my understanding is that process happened. I'll find out. But the focus has not been on Mount Clement.
Our focus and our teams have moved their attention to Kal East and getting on top of the issues there. We've had some turnover in technical people. It just has not been a priority, but I need to look into that and assess. A lot of my career, I was also managing studies, a lot of technical mining studies and that. I'm very comfortable looking into that area, and I'm very comfortable looking for value levers that could actually change the dial on things and improve that return. Next quarter three is when I'll be looking at those, both Coyote and Mount Clement, and deciding what we do. The good thing about Coyote is we've actually just finished that drill program, and we're going to get the resource model updated. Then I can assess the stockpiles, the underground.
Our GM at Paulsens is very experienced underground, and I really want to utilize him as well to start thinking about what we can do there. There's different strategies. Instead of a big mill, we could go a small mill and have an ore sorter and work through that. That's one strategy. The other is go big and bold. There's a lot of options to pursue, but it really comes down to how niche we can get on the mining, and what the team are doing at Paulsens could be replicable at Coyote. Antimony is going to depend on the market a fair bit and what goes on, but mining is mining. We need to look at how we can mine it as cheaply as we can and maximize the recovery, and keep that capital cost down. Those things need to be looked at.
That's why in the report you would've seen in the quarterly that no works come out in this quarter that is really moving them forward. That's it, Stew.
I will ask the rest of these, you may have just covered it a little bit there. Has the mine design and economic study been completed, delayed, or deferred? If delayed, what specifically has caused the delay, and when can shareholders reasonably expect the next substantive Mount Clement announcement?
Let's commit now to quarter four along with the LOM. That LOM, to be honest with you, that LOM is gold-focused, but there's no reason I shouldn't be able to put in there what our steps are for the antimony for Mount Clement as well. I will have looked at it in that new year. We'll essentially understand the resource, we'll understand the key drivers, like metallurgical performance, and then we can actually start looking at options, and I'll be able to give a view on that in quarter four.
Do you still intend to advance Mount Clement towards commercial development?
No, we need to do the study work first and assess where that sits. The world's changing all the time, too. We need to just reassess the environment that project sits in and the economics, which will be driven by metallurgical performance and so forth. I can't say we're advancing other than to understand the potential economic returns on it.
A question from Keith. Do you still plan to treat Mangaroon, and if so, when?
For those that aren't aware, there's an agreement with Dreadnought for potentially treating some Star of Mangaroon material at Paulsens. That agreement was put together when we were uncertain about feed for Paulsens. At the moment, Paulsens is feeding their mill and it's fully utilized. We don't need any third-party feed for that mill. That's our case. The other aspect is that agreement runs out at the end of March next year, and we've had no communications with Dreadnought that would be flagging any material coming. To be honest, it's not on my radar, it's not in my plans. I don't need it. But if there's a conversation comes up, then we'll discuss it and work from that point forward.
Another one from Phil here, who refers back to an announcement on 17th of February which stated that the company had been invited to participate in a West Australian government critical minerals delegation to North America in March 2026 to showcase Mount Clement. But there hasn't been any subsequent update regarding this initiative. Can you elaborate, please?
I wasn't here then, but maybe Nick will know.
Yeah. I wasn't there. The previous MD was there.
Oh, did he go, did he?
Yeah.
Had multiple conversations with multiple groups. It is part of the picture in terms of talking about Mount Clement and a value add for that project. But so it is considerations that came from that visit are still on the table going forward. But, yeah, there's been no material impact from that, or nothing material that came from that for the time being, so yeah.
Lastly from Anthony, it is the last question that has come through today, gents. What is the asset forecast over the next 3-24 months?
3-24. That is an interesting one. Maybe we will just work on this year first.
Yeah. We have given the full year guidance as part of the guidance announcements that we put out at the end of last month. Yeah, they still hold true. So in terms of breaking it down into—
A month.
—monthly or quarterly, I think we wouldn't do. I think that the important part of that is that we're expecting the cash generation and production in general to improve in the second half of this financial year.
This quarter came out just in AUD 3,700, and our guidance is AUD 3,500-AUD 3,900 for this year.
Correct.
If I go to FY 2027, which is partly like 24 months, all I'm going to say is the board's been really clear with me, Chris, we need to get below AUD 3,000 all-in sustaining costs. That's my goal. Whether that happens, we'll find out once I've got a LOM and a budget for next year done. That is what I'm chasing, to get sub AUD 3,000. That's my personal goal.
For FY 2028, yep.
2028? 2027. 2028. 2028. Yeah, FY 2028. Thanks. Yeah, I keep getting my years mixed up. That was on day one they said, this is our expectation, Chris. I don't think it is unreasonable. You need a goal, and that is what Nick and I are going to chase. This cost improvement program is the start of something greater, and better mine plans will deliver the biggest savings. Spending more time thinking about these plans and optimizing them and applying technology, be it an ore sorter or something else, can move the dial substantially. That does not happen overnight. This year is AUD 3,500-AUD 3,900. I would like to be in front of you all again for FY 2028 guidance and be able to show you that number. Time will tell.
Thank you, gentlemen. That is everything that has come through today. Some great questions, and I appreciate you sending them through to everybody in the audience. More information about Black Cat Syndicate, you can head to the company website www.bc8.com.au, or you can follow the company social media channels. As mentioned earlier, a recording of this webinar will be available on MarketOpen and BC8's communication channels within the next 24 hours. Gents, thank you for participating in today's webinar. I appreciate your time and wish you and the team all the very best, and look forward to chatting again soon. That concludes the webinar for today. Thank you to everybody for participating and attending.
Thanks everyone.
Have a good day.