Please be advised that today's conference is being recorded. It is now my pleasure to introduce CEO, Gareth Manderson.
Thank you very much for taking the time this morning for Core's quarterly, and the first quarterly against guidance and the first quarter, I'd argue, in operations, or a ramp up of operations at the Finniss site, Grants and the concentrator operations. With me in the room, I have Doug Warden, CFO, who will also be available to take questions at the end. I'll run through the slide presentation that we provided earlier this morning, and then open for questions afterwards. So this would be the first quarter where we've been able to achieve integrated operations through the commissioning of the concentrator establishment of mining operations. So essentially, pit through to port.
It's the first period where we've had steady ore delivery from the plant. Oh, sorry, steady ore delivery to the plant, coming out of the wet season of the last year. We are focused on three things: building the business around the Finniss operations, so the Grants mine; developing the BP33 project; and exploration and growth. Highlights this quarter include an 8% increase on total material moved, spodumene concentrate production of a little over 20,000, so 20,692 tons. Recovery is improving up to 50% for the average in the quarter. I'll go through a little bit of detail around recoveries, as I know there'll be a few questions around that. We've also completed the prepayment terms.
So you might recall that we embarked upon some prepayments to manage cash flow and secure, or manage risk during startup of our operations. So they are now complete and fulfilled. We've actually started fulfilling volume into our offtake, our long-term offtake agreements with Ganfeng. And a solid average realized price at delivered grades, so not referenced back to SC6, but at delivered grades of AUD 2,550 per ton. As I said, BP33 is progressing well. We've got the feasibility study underway, and the early works is in flight, and we've got some photos and a little bit more information at the back end of the presentation this morning.
And most pleasingly, subsequent to the quarter, we've had the BP33 measured and indicated resource upgrade by 89%. So that improves the confidence and actually supports the mine plan and feasibility study work that's going into BP33 at the moment. Cash balance at end of quarter was AUD 202 million, and that includes the placement and SPP raise earlier this year. And that was targeted at providing balance sheet flexibility and preserving our options, preserving our strategy to continue to develop the BP33 project and the exploration program, while having the Grants mining operations starting up. We did have one reportable injury during the quarter, so a hand injury that required some medical treatment, not a lost time.
And we've embarked upon critical risk management, so that's about understanding the risks around fatality and ensuring that we have those controls in place, and engaging people in the identification and application of those controls during the work that they're undertaking at the site. So during the quarter, we had a strong focus on improving our mining and processing operations. So in the mine, you can see an 8% increase in TMM, but also very pleasingly through blasting improvement and dig unit availability improvement, we've been able to see record ore extraction at the end of September. This meant, during the quarter, we've seen consistent ore feed that has enabled us to be a little bit more strategic in the way that we present ore to the concentrator.
We've also installed a second radar to improve the monitoring of pit wall stability at Grants, and a significant amount of work has been done in wet season preparation. So haul road upgrades, water storage facility, and new de-water storage facilities, and improvements and new dewatering equipment. At the end of the quarter, we had 165,000 tons of ore on the ROM pad, and that's rising to well over 170, actually closer to 180, as we speak, current month. That is a focus for us as we enter into the wet season in the Northern Territory at the back end of this calendar year.
To enable some of the improvements that we've we've been driving in the concentrator, we've had some great negotiations with our offtake partners. One has we've actually secured and resolved an an agreement to go down to a grade of 4.5%, and the other is very close to being finalized. And I'll go through a little bit more detail around the plant recoveries and how that's connected to that program later in the presentation. At this point, I'll pass to to Doug, to to run through the financials.
Thanks, Gareth, and good morning, everyone. I just want to take a few minutes to add a bit more color to the cost and cash flow performance for the quarter for you. So C1 unit costs for the September quarter of AUD 904 a ton were broadly in line with the previous quarter. It's important to note that that C1 cost is net of AUD 985 a ton of mining costs, which were deferred to inventory in the quarter. So this basically relates to a build of ore stocks on the ROM pad as we prepare for the wet season. And we expect to continue to do that over the next couple of months, heading into the end of the calendar year. So cash costs before this inventory adjustment were-...
1,889 dollars a ton, as is shown in that table. You'll note from the unit costs for the quarter, that they were broadly in line with the previous quarter, despite production being 40% higher. This is not because our cash costs were significantly higher, but it's to do with the strip ratio, for the September quarter being broadly in line with the life of mine average, and therefore, the majority of those waste costs were charged to the P&L, and therefore unit costs. Whereas in the June quarter, the strip ratio was considerably higher than the life of mine average, as we were doing, more of a cutback, and therefore, a much greater percentage of the waste costs were deferred to the balance sheet, to be then amortized over the life of Grants.
The operating cash flow or cash outflow, I should say, of AUD 26 million was impacted by the timing of shipments, with approximately 8,500 tons of concentrate at port as at 30 September, which was included in the early October shipment. This, together with a repayment of nearly AUD 28 million to Yahua in respect of a QP adjustment. This related to the prepaid arrangement and was a result of the significant fall in the spodumene price between the date of the prepayment and the end of the QP. Also excluded from the cash flows related to this prepayment was the 13,000-ton shipment in early July. That cash was received in quarter four of FY 2023.
And finally, CapEx for the quarter of just under AUD 20 million, included AUD 8.5 million for the BP33 box cut, with the remainder relating to Finniss operations, which included AUD 3.3 million for water storage facilities, and AUD 2.4 million for site establishment costs, and AUD 2.5 million in deferred stripping. That's all from me. I'll hand back to Gareth to conclude.
Thank you very much, Doug. I'd just point listeners on the call to slide eight in our pack, and you can see the trend line there around both production and recoveries. I just wanted to call out, there's two focus areas for that. One is to look at our commercial agreements, and that's probably the minor one. But the main one is to actually take a look at the operations and start to tune and improve that. We've seen a number of things that have come through in these trials, and I would just say that there's two things that are impacting the variation that you see in the quarter and the recovery of 50%. One is a series of trials have been run.
The second is that, we've made sure that each of our shipments have met our customer specifications. We've subsequently been able to settle on an approach with the customers, where we're able to reduce grade and increase lithium units. So that's the benefit to the customers, increased lithium units in the overall, and reduced grade enables some of the improvement work that we're driving in the concentrator at the moment. So from a recovery perspective in the facility, we've built up the ROM and are now looking at feed blending and management options. We've embarked upon a series of crushing trials and have moved to a 10-mm feed size from a 6-mm feed size into the plant, to reduce fines.
We've also looked at set points and how we're operating the plant, and we've actually embarked on a couple of debottlenecking-type projects to increase rate. So you can see our focus there on preparation and management of feed, optimization of the plant, and debottlenecking to improve rate. Essentially, what that has meant is that we've seen recoveries on an average basis, quarter to quarter, a mild uplift. But what I would say towards the end of the quarter and then into October, we've seen quite a nice improvement as we start to settle in on what our operating parameters may be moving forward, to match the commercial agreements and the improvement in the plant.
In the first couple of weeks of October, we're averaging around 55%. Rest assured, our improvement program will continue into the coming months. So if I was to summarize all of that, we're saying for the full year, we're not changing our guidance. We anticipate to be on track to reach production unit costs and CapEx guidance for the financial year. We'll continue to embed this approach of integrated operations from pit through to the port, and we're doing a lot of work to get ready for the wet season as well. So we've seen the ROM stocks build, and will continue to build up through to till December.
And then as the wet season starts to hit, we'll change the mining sequence and start to do more development work in the upper benches that'll be less impacted by the wet weather we anticipate. We're continuing on with the BP33 work and the exploration program. So I'll just step through the slides. If you take a look at slides 10 and 11, you can see the progress that's being made with BP33. So the box cut current excavated is 340,000, 354,000 tons with a total of 393,000 tons. So great progress cutting the box cut. And you can see the wider end or the lower end of the box cut there.
So there's another bench or so to go. Sorry, on the photos in slide 11, you can see the first footing pours for the tunnel liners in the upper part of the decline. So this is the decline that gets us through to the portal. And in the photos on slide 12, you can see photos of the tunnel liners that have been delivered to site, ready for assembly. And the right-hand photo shows you the steelwork reinforcement that goes into the footings for the tunnel liner.
On slide 13, very, very pleasingly, subsequent to the quarter in October, we were able to announce that the measured and indicated component of the resource for BP33 has increased to 89%. We've subsequently also seen an increase in grade and a slight increase in volume, but it's really more the grade and the confidence that is the substance of that particular announcement. Which I think provides a great runway for the mine plan and the feasibility study that's due for presentation and contemplation by the board to FID in quarter one calendar year next year. So in summary, our focus is on safe operations, particularly with the establishment of critical risk management. So what are the fatality risks associated with the work that we do?
How do we make sure that the right controls are in place and in people's minds as they're doing each and every task? We are working very hard to meet the scheduling production guidance, and I'm really pleased and very impressed by the work that the team in the mine and the team in the concentrator have been able to do to improve productivity. In doing those things, we'll deliver into offtake contracts. Our agreements with Yahua and Ganfeng. Exploration plan is continuing. We're still on track to complete that.
You will recall that the predominant focus of exploration is finding and improving our mines, particularly in the first part of the planned period, BP33 and Carlton in particular, and you've seen some announcements in that space. The BP33 underground feasibility study is continuing. We'll look at fine-tuning. So based on the information that we're getting from the exploration program, we'll continue to fine-tune and understand what the strategy around the tenement packages that we have across the territory and how we might sequence options in the future. The community grants program, we're into our second round. Really pleased, more than a dozen community groups have benefited from that, very modest request.
So it's a fantastic kind of win-win for Core to be able to be engaged in the community and support some of those local community groups. And we're learning from our first period of operations. So whether it's the mine, whether it's the concentrator, whether it's the BP33 early works, what have we learned this month? How can we improve on that in the coming months, particularly around safety? And, of course, the DNA of the business. So the contemporary approach to workforce management to ensure that we have a safe, sustainable, and cost-effective production outcomes. And we'll continue to build an experienced base and a capable team to deliver for our shareholders. So at that point, I will pause and open for questions, please.
Certainly. As a reminder, to ask a question, please press star one one on your telephone. If your question has been answered or you wish to remove yourself from the queue, press star one one again. One moment, please, for our first question. Our first question comes from the line of Jonathan Mannes with Bank of America.
Hi. Good morning, Gareth and Doug. Thanks for the call this morning. I just wanted to check on reducing your grade from the sort of 5.5%-5%, but you don't have any reduction in operating costs. Does that sort of imply that moving forward, we're sort of expecting operating margins to remain slightly under pressure while we're getting through our recovery improvements? Just any color that you can provide on when we might start to see operating costs move in line with the reduction in grade. Thank you.
Yeah, thanks for the question. Yeah, look, it relates to... You're talking about the AUD 902 C1 cost versus AUD 904?
Yep.
Yeah. So it relates to this issue around the stripping. So, that I was referencing in my opening remarks. So essentially in the June quarter, the strip ratio in that quarter was much higher than the life of mine average. It was basically more than double the life of mine average. And so the costs associated with that stripping overwhelmingly were deferred to the balance sheet. So the way you should think about it is the June quarter benefited from that, because our policy is, where the strip ratio is above the life of mine average, we defer cost to the balance sheet. And where it's below or at that level of the life of mine average, we hit the P&L with those stripping costs.
So June quarter benefited from stripping costs being deferred, whereas the September quarter was broadly in line with the life of mine average stripping ratio, and therefore, those stripping costs hit the P&L. So that's the main reason that you didn't see a reduction in the unit cost, despite the fact that production was 40% higher. Does that answer your question?
Yeah, no. Well, well understood. Thank you. The other one I had was just around your ability to continue to place fines into the market. I've heard from some of your peers in sort of industry context that, you know, the DSO and the low-grade products are starting to, you know, not be favorable given the dynamics that we're seeing in lithium or in conversion markets. I'm just wondering if you have any color that you can provide on your appetite to continue taking that product?
Yeah, look, I think that's a fair question. There's a few value levers for Core in that space. So one is that it you know obviously provides additional space in our tailings facilities. So extraction of that material reduces the need for dam wall raises and capital spend in that space. And then probably more importantly, and to your point, it's a product that has some value in the market and has to date. We are still seeing interest in that product. But we are mindful that as prices for spodumene concentrate come down, it may come under pressure. So we're watching that, and we you know based on demand and pricing.
So if we can't get the right sort of pricing from that, and it doesn't make sense from a business perspective, we won't sell that product into the market.
Understood. I'll get one more in, if that's okay. So given that you've renegotiated some of your offtakes, to be able to take the 4.5% product, should we expect you to remain around the 5% through the rest of the year and into next year? Or do you think you'll continue to drop that product quality down, with a view on trying to bolster recovery rates?
Yeah, look, the flexibility that we've got there in those contracts, we'll see a sort of, I would say, a minimum of 4.5. So, it'll probably be a little lower than the 5 that we announced in this quarterly. And subject to production runs and our customers, you'll expect it closer to 4.5.
Perfect. Thank you. That's all from me.
Thank you.
Thank you. Well, please, for our next question. Our next question comes from the line of Hugo Nicolaci with Goldman Sachs.
Morning, Gareth and Doug. Thanks for the update this morning. I'll just want to pick through a couple of questions from me, please, and maybe just quickly a clarification. First off, just your unit cost report, that's on an actual grade sales volume basis, right?
It's based on production, production of concentrate. It's not a-
Yeah, and
Equivalent, if that's what you're asking.
Yeah, so it's production of actual grade, and that's... Yeah, that's the whole way through, even to, with royalties.
Yes.
Yep. No, great, thanks for that one. And then I guess just jumping across to the mining piece, you know, highlighting the increased material movements in the quarter. I was just hoping you could maybe talk through a little bit more color just around the amount of ore and the grade coming out of the mine at the moment, and then how you expect that to kind of shape up over the rest of the FY 2024 year. Just given that you've, off the top of my head, guided to AUD 45 million-AUD 50 million in deferred stripping costs this year, but spent only AUD 2.5 million in deferred stripping in the quarter.
Yeah. No, we actually, this stripping is causing a little bit of confusion, and I understand why. So we the AUD 2 million that we referenced in the capital section of the report, that's the amount that was deferred to the balance sheet. So there was actually a much greater cost that was absorbed into the P&L, and therefore into the unit costs. So the total waste cost for the quarter, to give you a feel for it, was net AUD 27 million, but only two of that was referenced in the CapEx, went to the balance sheet, and the rest hit the P&L. So that was the point I was making before.
We moved, just to put you in the picture, almost 2 million BCM of waste, 1.94, to be precise, in the quarter. Yeah, does that, does that answer your question? Happy to take-
Yeah, that,
If, uh-
Yeah, no, so I might follow up on, on that one, but that's, that's a helpful start. Thanks. And then just to follow up from the, the previous question around the, the lower grade that your, your customers are, are happy with that 4.5%. I mean, just firstly, is that 4.5% for the duration of your offtake agreements or maybe just for the next, you know, 9-12 months? And, you know, in terms of pricing on that lower grade product, are you still expecting a linear grade adjustment to a 6% price, or are you starting to see a, a discount emerge there with lithium price decline?
There are some minor discounts, but not overly material against the realized price. But one of the agreements is locked in. We're actually in the process of finalizing, but it's very close for the second one to accept those. And the benefit for the customer is a higher lithium content, so they get basically higher volume. And for us, it actually provides a bit of flexibility in the operation of the plant, so we can improve recoveries and deliver those higher lithium units.
Great. Thanks for that, Gareth. Then maybe just squeeze one more in. You touched on the bottlenecking works that you're looking to do. I was just wondering if you could expand a little bit on those, and I think concentrator feed rate historically was kind of 1-1.1 million tons per year. What uplift you might expect to get out of those debottlenecking works?
Yeah. So this is, there's a couple of ways to improve performance in a processing facility. So it's throughput rate, it's availability, and it's recovery. And so we're focusing on all of those. So the recovery piece you would say is tuning the plant, the reagent dosing, et cetera. There's some work that's been done to look at feed sizing of the plant, reduce the proportion of fines, those sorts of things. In the availability of the plant, so uptime, it's really actually, to be honest, quite pleasing to see that that has become an issue for the team to start working on, which they are doing.
So, excessive wear in places, blocking of pipes, those sorts of things, you know, understand, resolve them as quickly as we can, but also get to the root cause and see how we might be able to improve. And from a rate perspective, it's really just looking at product through the plant and what it is that's holding us up. So there's some modifications that have been done to some screens, for example. Apart from that, what I would say is the sorts of things I've seen in other facilities will be pipes, pumps, control loops, things like that, that just make sure we're just maximizing the throughput through a bottleneck.
So you run the plant, you find out where the bottleneck is, and then you put an engineering solution in place to, to improve that, and you go to the next bottleneck.
Thanks for the color. I'll pass it on.
Thank you. Thanks, Nicola.
Thank you. One moment, please, for our next question. Our next question comes from the line of Adam Baker with Macquarie.
Morning, Gareth and team. Just maybe a quick one on recoveries of May. What do you think is achievable for the recoveries with the DMS circuit moving forward? And thanks for providing that chart in the slide pack, which provides the monthly breakdown and recoveries. I see you got up to 53% there in August. Do you think that's a level that could be sustainable moving forward?
In the first part of October, we've seen 55. We're quite aware of what others have done or at least publicly disclosed, and so there's some objectives that we're setting the team in that particular space. I would say that, look, the last quarter has been a series of trials, a series of options have been progressed. We're settling in on an operating or a set of operating parameters, operating recipe, if you like, to kind of stabilize it at the point that you see at the moment. So what's our target grades? What's the, what are the set points in the plant? And then, Adam, we're gonna start to kind of step up from there.
So, at this stage, I'm comfortable to say that we'll be able to achieve above the 50, and I'd like to be at something similar to what we've seen in the first couple of weeks of October. And then, you know, the team, you know, I don't have to push them very hard. They've got aspirations to move higher than that.
Great. And, maybe just on the inventory, encouraging to see such a big build of inventory there. I guess some key learnings from last year's wet season there. It looks like you've almost got a, you know, a quarter's worth of production mill feed there. So just wondering, you know, worst case scenario, if it is quite a wet season and, you know, the water becomes an issue with the pit and things like that, how do you go for road access and getting connecting your mill into port? Is that something that becomes an issue in the heat of the wet season?
Yeah, good, good set of questions there. So look, really pleased to see the ROM build-up. I think that's as a result of the productivity improvements in the mine and particularly, you know, bench turnover at the base of the pit where the ore is. So that is a focus for us to get ready. So it's there's a bit around this integrated sort of pit-to-port strategy that's at play there. There's also a bit around the mine sequencing and preparation for the wet season to build those volumes, which will be a significant focus up and up into the wet and into December. Look, everyone talks about what size is the wet going to be? I think that we just need to be ready for it.
It's not so much the wet that's the issue, it's the pattern of rain, and the heavy falls that you get, as you're starting to kind of point to, Adam. So what we wanna do, I guess, in the coming months, is get ourselves in a strong position to decouple the mine from the concentrator, so the concentrator has the ROM that's available to it. And so you see that ROM build, and it's built, but still building quite well over the last few weeks, subsequent to the quarter. In terms of your question around from the mine itself, so delivery of concentrate through to the Darwin Port, it is an all-weather access road.
Like most roads in the territory, during the wet season, they can become inundated with water. I don't anticipate that we will see any significant outcomes as long as we don't see anything worse than what we've seen in the past, which, you know, a few days of water across the road, for example. But so far, we've been able to get people in and out quite regularly. But to your point, if there is quite an excessive rainfall event, you know, we see lots of impacts through the territory, on the news, and, you know, Core won't be immune from that. Our approach is really more around making sure we control what we can.
So let's get ROM up, let's run the concentrator well, get our, our concentrate stocks up in between the port and the plant, during that period. And then, and then we'll monitor the weather, and we'll, we'll respond to that as required.
Great. Thanks for the color there. I'll pass it on. Thanks, Gareth.
Thank you. Thanks, Adam.
Thank you. One moment please, for our next question. Our next question comes from the line of Tim Hoff with Canaccord Genuity.
Hi, guys. Thanks for the quarterly update. If I'm just looking at your cash operating costs and your, your tonnages, it implies you spent about AUD 40 million on, on costs this quarter, this past. Should we expect that to fluctuate much throughout the year? Obviously, wet season, you're moving less material, and you're gonna be taking material off the stockpile. But how do we think about that dollar million figure throughout the year?
Yeah, I think, Tim, that's a reasonable estimate. Obviously, as we've dealt with a few of the questions so far, you know, this whole issue around how much is going to the balance sheet and how much is going to P&L. But, in, as I've emphasized, in this quarter just gone, most of the stripping costs went to the P&L, except for AUD 2.5 million. So when you extrapolate the numbers out and come up with 40 million, you know, that's not a bad number. And I'd also note that that's net of about AUD 4.8 million in margin associated with the fines. That's in the fine print as well, if you see in the report. So yeah, but I think, you know, processing and crushing, they'll be fairly consistent.
And as with mining, it's just what goes to the P&L and what goes to the balance sheet, and we'll try and make those clear as we can going forward.
Yeah, brilliant. Thank you. I think that's probably it for me. Thank you.
Thanks, Tim.
Thank you. One moment, please, for our next question. Our next question comes from the line of Al Harvey with JP Morgan.
Yeah, good day, Gareth. Just another one on recovery. So appreciate your comments that a lot of, a lot of trial work going on in the quarter. Just wondering if you'd give us a bit more of an update on those improvement projects you've outlined on, I think it's slide seven. Particularly interested in the network that you've been doing. I guess I'm trying to get a sense of whether or not the fines issue is primarily geological or if it's comminution related. And I suppose by extension, how that impacts your works on exploring the addition of a float circuit.
Sure. So, fines generation, as we all understand, will be either through the plant itself, in the crushing area or at the drill and blast step, or a function of the ore body. What we're seeing is that the ore body itself probably has more fines than anticipated. We don't believe that, at this stage, at least anyway, it's not the area that has got a lot of focus on in terms of blasting, creating the fines. We have, however, and I have talked about some blasting improvements. So we've looked at the blast design and the equipment that we're using around blasting to improve that.
That's actually to kind of reduce oversize and ensure that we don't have additional, additional fines generation as a result. You know, improve load and haul, those sorts of things, and bench turnover at the bottom of the pit. So that's been quite positive. But that's not, and hasn't had, to date, at least anyway, an impact, metallurgically. We've run a series of trials around feed size, and for a period of time there, we were actually blending, or sorry, running, on a campaign basis, 6 mil and a 10 mil size. We're able to now move to a straight 10 mil size. So we do think the majority of our fines generation, so not ore related, but generation related, actually was in the crushing area. So we're optimizing that.
We'll continue to work on in that space. In terms of metallurgically, you know, we've talked about the micro classifier. We've talked a little bit around dosing of the ferrosilicon, for example. And we're doing a lot of work at the moment around presentation across screens and management of screens, which is a combination, I guess, metallurgical, but also probably a rate improvement step as well. So, what fraction and grade is going across the screen, and are we getting the right throughput across that screen?
Thanks, Gareth. And yeah, I guess, yeah, how that's making your thoughts around the float study.
Oh, sorry, yes, the float study. So, the float is in study at the moment. We've taken some bulk samples. I think I mentioned that before. We are, the bench scale testing is progressing at pace, and the study is underway in conjunction with the BP33 study. So we see lots of improvement opportunity right now in the current facility without a fines treatment circuit. And we know that some others have been able to achieve, you know, reasonably high recoveries, and so we're on that pathway. So we don't see us urgently needing to move down the pathway of a fines treatment plant today.
But what we do see is a realistic option for the future. Given the capital and complexity associated with that plant, it makes more sense to attach it to a project like BP33 rather than Grants.
Right. I guess I see the, still the feasibility ongoing with the filter or belt press. I was kind of under the impression that that's float circuit recoveries, but perhaps I'm wrong. I'm just trying to understand how, where that fits in, with respect to the potential float circuit, and if that's part of the BP33 work as well.
Yeah. So that equipment would possibly become part of a float circuit, if you like. And it's a. It was flagged early as an initial, faster, lower capital solution to address fines at the end of last quarter. Where we're at now is that if you think about a float circuit, we would attach the BP33. The filter type operation is, you know, given the capital and commitment associated with that, and then also given what we can see is the pathway at the moment in the current plant and the improvement options and further work that can be done there, we're really focusing on that first because that's a no capital or very minor, you know, cash spend type options.
At the moment, it's very little spend. It's really more about, tuning and optimization.
Great, Gareth. Just one quick on it. Apologies if I, if I missed this in your opening comments, but just wanted to see if there'd been any update on the Tesla correspondence flagged back in August?
No. Look, we're still working with Tesla, as we've said before, to see if we can come to some resolution without litigation.
Great. Thanks again, Gareth.
Thank you.
Thank you. One moment, please, for our next question. Our next question comes from the line of Jon Bishop with Jarden Group.
Good morning, guys. Thanks for taking my questions, and well done on a good quarter. It looks like you've covered a huge amount of ground there at site, so well done to the team. Just to extend a little bit further on the flotation question that Al asked before. I mean, obviously, it's too early to give full details, but I would assume economically, you're working with a broad ballpark on sort of a lump of capital associated with the plant, just to stress test tolerances. Are you able to give us an idea of what sort of range of number you're looking at if you were to go down flotation for BP-33?
Jon, thanks for the question. Appreciate the feedback for the team, and we'll definitely pass that on. But look, I completely appreciate that, we would like to understand the capital cost and what the range might be for the flotation plant, and it's a question I'd like to answer as well. Unfortunately, we're in the process of completing the study, and so I think I just need to let the team complete some more work on that. But, you know, quite genuinely, the last update, they're still trying to understand what the flow sheet and the design may look like. So obviously that needs to be settled first, prior to understanding exactly what the capital cost may be.
And then the second thing to kind of consider there is, it's really more associated with BP33. It probably doesn't make sense with the mine life at Grants, at least not at this stage. So we will consider it as part of that BP33 work.
Yeah. Okay. So is it fair to assume that with your final investment decision on BP33 and the feasibility estimate, that flotation will be a consideration of that work? Or is it sort of... I know it's being run jointly, but is it gonna be a later piece?
I think with a concentrator, there's two things to think about. One is, how much improvement can we extract from the concentrator as is with that improvement program that we've talked about, minimum or low capital? And then, what benefit might a higher CapEx solution like a fines treatment plant attached to that? The two ore bodies, the test work that we've done to date and the progress to date, is still suggesting that the two ore bodies, Grants and BP 33, process in a very similar way. So that would mean that whatever solution we define for Grants in the concentrator space, would more than likely naturally flow through to BP 33.
So I'd say for BP33, we should consider it as an underground mining project, and then think about the float plant as what's the processing solution required for the Finniss operations?
Yep. That's very clear and very fair. Just on BP 33, again, I realize it might be getting ahead of things, but how should we think about how the mine development might look? I mean, obviously, you've had some good gains on drilling confidence and resource confidence. Obviously, the depth extension, therefore, has significantly extended the ore body at depth. Are you able to sort of give some ideas as to how you're thinking about mining that ore body and therefore what the upfront development capital might consider? I'm not looking for a number, but you know, how it might look. Are you having to decline a fair way down the ore body, so on and so forth?
Yeah, look, it's still probably a little bit more around the mine plan. So let's just keep in mind, you know, we only announced that increase in confidence around BP33 a few weeks ago. So that will go into the mine plan as part of the study work. You know, we're working to optimize, to your point, the productivity of the mine with the access to ore and tonnage of the ore. So we'll probably. I think it's probably best, John, to wait till we do a little bit more work and come back with a bit more of a picture around what BP33 mining sequence might look like.
Yeah, fair enough. I realize I'm sort of putting you on the spot. One final question then. You did make reference to your monitoring of pit wall stability at Grants. Are you able to sort of provide some commentary as to how that is actually looking? Are you still seeing geotechnical issues? Obviously, with the monitoring, it allows you, you would think, to get ahead of those issues and address them before they become a manifest issue. But are you able to talk to how the geotech is shaping up for Grants in particular, and perhaps even BP33?
Hmm. Yeah, so I think it's fair to say that all mines have a geotech component to them. All of them require monitoring and a careful set of controls, and then, you know, trigger action response plans associated with that. We're no different. We're probably seeing. As we've started to kind of do that work in the Grants Pit, we're seeing that we've got kind of the east and the western walls, if you like, are probably the two areas where we felt that the radar kind of monitoring equipment would suit. So, rather than having one, which we put in some time back, we've actually got two, so we can just get a better look at both of those walls.
If, you know, people will probably understand that, if you're directly opposite, and you've got that scanner scanning from the other side of the pit, so to speak, you get a better picture of what's happening there. So that's really why we've done that, just to get better data and information. You can see in the photos there that the pit's looking great at the moment. One of the things that we need to be mindful of is that with water and rainfall, and the wet season coming, that's usually the area that starts to test some of the stability in those walls. So we'll make sure that we monitor it very closely.
We wanted to make sure that we had the right equipment in place to support the teams to do that, hence that change.
No, that's really great feedback. Thank you very much for taking my questions, guys.
No problem. Thank you very much, Jon.
Thank you. One moment, please, for our next question. Our next question comes from the line of Kate McCutcheon with Citi.
Hi. Good morning, Gareth and Doug. Can you just provide some comments on the physicals for the quarter? So Hugo asked about mining, so if I can ask about processing. Can you give some comments on milled tons and grades for the quarter, and how that is reconciled versus reserves or expectations?
Yeah, go ahead. Yeah.
Yeah, so milled tons processed for the quarter were just under 150,000 tons. Crushing was a bit above that. And I've already talked about the waste mine being just under two million BCM. The ore tons mined for the quarter were just under 320 kilotons. So hopefully that helps. What... Does that cover all your questions?
Then... yeah, then just maybe some comments on the head grade and how has that performed versus reserves?
Yeah. So from a reconciliation perspective, we're seeing kind of at or a little bit better than in terms of sort of volume and grade. So I wouldn't get too excited about it. It's not a huge percentage, but it's enough to say that I'm really pleased with the work that was done to define the ore body at Grants. So we're seeing good reconciliation, essentially.
Okay, so we should think about, grade being at reserve or similar to reserve?
Yes. Yeah, I think that would be-
Excellent.
Yeah.
Great. And then last quarter, we spoke a bit around the royalty discussions with the government. Is there any update there on how that's being thought about, whether on a SC6 price or a spot con price?
Yeah. So the royalties that have been applied are the current NT royalty scheme. So our engagement with the government is positive. We've put our submission in. We're waiting to hear from them. We expect something coming back from the NT government in the early part of next year, so very early next year. But right now it's sort of quiet because we've put our submissions in, as have others, and we're just waiting to hear a response.
Okay, cool. Thank you.
The recommendation and suggestion we've made to the NT government is that they take a look at the WA regime. It's simple, it's well understood. And it will be, you know, it would mean the NT is on a similar basis to WA. So from a competitive perspective, it sort of removes that issue.
Thank you. And our next question comes from the line of Andrew Harrington with Petra Capital.
Good morning, Doug and Gareth. Thanks for your time. Sort of following on the float, no float question, and fines and recoveries. What happens to the fines if they're not sold? Are you gonna stockpile them or are they just gonna be put into tailings?
Yeah. So the grade of the fines that we've been able to extract from the tailings facility and send to sale is around 1.3%, so it's actually reasonably good grade. If we can't sell it at a reasonable price in a reasonable market, I think it makes sense to stockpile it, which we will do. So, there's a few benefits to that. I think one is it becomes, you know, maybe you might consider it a lower-grade stockpile that can be dealt with later. Or it reduces the volume that's stored in the tailings facility.
You know, mitigates the need to raise dam walls as often.
Yeah. So just to confirm, you said 3% was what's coming out as fines? 3%.
1%, 1.3%.
One point, thank you.
Yeah, 1 point.
Clear.
Yeah.
Um, and-
I wish I had them.
... and, please remind us, what's the life of mine strip ratio expectation that you've got for Grants?
It's about 15 to one.
15 to 1. Okay. And lastly, seeing as a lot of my questions got answered already, the AUD 27.7 repayment to Yahua, where does that get shown in the cash flow statement? Is that taken out of the revenue line or?
Yes, it is.
Sorry, was that yeah? Sorry, I might have trouble with my line. Is that yes?
Yes.
Okay, thank you. That's it for me. Cheers.
Thanks, Andrew.
Thank you. Well, please, for our next question. Our next question comes from the line of Richard Knights with Barrenjoey.
Hi, Gareth. Thanks for the call. Just a quick follow-up on the royalty payment. I mean, it looks like we're seeing a fair bit of volatility QoQ with that royalty number. It looks like it was about AUD 500 a ton in Q4 last year, down to sort of AUD 150 a ton in this past quarter. How should we think about that going forward? Is there a simple way to think about it? Obviously, the Northern Territory regime is fairly confusing, but
Yeah.
What's the best way to think about that?
Well, yeah, the volatility is driven by the fact that it's profit-based, so it's 20% of, you know, sort of, the language, I think, is net value. So you can go on the website and have a look at what that is. But unfortunately, the 20% that the number that the 20% is applied to is not sort of referenced to any commonly understood accounting number. But they do sort of outline, in broad terms, at a high level, what deductions you get. So obviously, as the price comes down, the profit or that net value comes down and therefore, the royalty is lower. And that's what you're seeing quarter on quarter, essentially. So, you know, as Gareth said, we're advocating the ad valorem method that's used in WA, 5%.
Whether they go to that, who knows? But certainly have made noises that that's appealing to them to go to a simpler ad valorem-based method. We'll see what happens.
Okay. Thanks.
Thank you. Please, for our next question. Our next question comes from the line of Brett Hucker with Canaccord Genuity.
Thank you, guys. I appreciate the color that you've had on the call so far. I'm just curious on that quarter end shipment, the 10.2, and I may have missed this, but how should we think about that in terms of specs and realizations achieved? I'm not sure if you can comment on that.
Uh-
So is it grade and price, is it?
The shipment that went in September, you're talking about? October, I think.
Yes.
You're talking about October?
October.
October.
Yeah, October.
So let me answer this, but I don't think it's answering your question. It's on spec, on its way to Ganfeng. It'll attract the same terms as any shipment into the offtake agreement. But what's the... That probably doesn't answer your question, I don't think.
Well, I was hoping for more, but that, that's fine if you can't comment. I understand you may not be able to, but-
So you're asking, Brett, more around what the grade was and therefore-
Yeah, I'm, I'm interested in, in the grade, specifically in the grade and the price achieved. Can... If you can comment. You may not be able to.
Yeah, look, we'd probably rather not comment on the grade. I guess, probably suffice to say that, in line with the commentary that we're putting the quarterly, we're approaching it to our approach to production and therefore, to the sales contracts, is more tons at a lower grade. So, I guess that's probably the best explanation.
Yeah, no problem, guys.
That's fine.
Thank you.
Thank you. I would now like to hand the call back over to CEO, Gareth Manderson, for any closing remarks.
Excellent. Once again, thank you very much for people taking the time to, to dial into the call. Appreciate the, the questions and the interest in Core. We're focused on three things moving forward. One is to develop the business, in and around Grants. You can see we now have four shipments of concentrate, improvement in recoveries, improvement in mining operations, and a, and a lot of work going into preparation into the wet season. BP33, so the early works is progressing well and at pace, and the team is, is working to get as much of that done prior to the wet season, as, as possible, and, and they're doing a great job.
And we're also in the process of establishing that, feasibility study for presentation and consideration for an investment from the board in quarter one calendar year, next year. And then the exploration program is probably halfway through. Now, given that we have sort of a wet season, dry season impact, we've been directing the effort towards proving up mining options and supporting studies in the early period. And now starting to test some of the options that we see, predominantly around North Finniss, but also testing Central Finniss. And we'll take a look at Shoobridge and Anningie and Barrow Creek with some preliminary work, as well, with all going to plan. Thank you very much for your interest today.
I appreciate the time on the call.
Ladies and gentlemen, thank you for participating. This concludes today's program. You may now disconnect.