Thank you, Dustin. Good morning, everyone. I'm joined on the call today by Matt O’Neill, our Chief Operating Officer, Peter 'Rocky' O’Connor, our General Manager, Investor Relations, and Fran Summerhayes, who joined us a month ago as our CFO. It's great to have Fran on board, and she's made an impressive start in her first month. I will have Fran make a couple of introductory comments about herself soon. Today, we released the September quarterly report, which will be the reference point for the call. There are three key things to take away from the call today. Firstly, we're on track to deliver on our FY26 commitments. That is for group guidance, production, costs, and capital. Our projects are on schedule and on budget, and our five-year capital outlook remains unchanged. Secondly, there's been a structural shift in the sector, both for gold and copper.
Gold as a financial reserve has accelerated, with central banks being net buyers of gold for 27 of the last 28 months. For the first time since 1996, central banks are holding more gold in reserves than US Treasuries. In terms of copper, short-term supply issues matched with an increasing long-term demand forecast, but no clear pathway for increased supply, is seeing rising near-term and long-term copper prices. Lastly, Evolution with a long-life, low-margin portfolio, including two high-quality copper assets and minimal hedging, is able to take advantage of the current metal price environment, invest for future growth, generate high-margin returns for our shareholders for the long term, not just the next- few- years. The September quarter was another quarter where we safely delivered to plan and start FY26 very well for Evolution. On the safety front, we maintained the improving trend with our TRIF remaining below five.
Production for the quarter was 174,000 gold ounces and 18,000 copper tons at a very low, all-in sustaining cost of $1,724 per ounce for continuing operations. This performance delivered record net mine cash flow of $366 million and our second highest operating mine cash flow of $676 million. Net mine cash flow for the quarter was up 23% against only a 4% increase in the achieved gold. The benefit of copper in the portfolio is further evidenced with the price up 15% in the quarter. A couple of record net mine cash flows to call out include $55 million at Northparkes and $39 million at Red Lake, with that operation continuing their safe and reliable delivery of positive cash. Importantly, the cash generated in the September quarter was at prices well below the current spot prices.
Spot prices are AUD 1,200 per ounce and AUD 1,300 per ton above what we achieved in the September quarter. The two cash flow charts on the first page clearly demonstrate the potential for the year should these high prices remain. It means we would generate over AUD 3.3 billion in operating mine cash flow and around AUD 3.1 billion in mine cash flow before major capital, an improvement of around AUD 570 million compared to where the spot prices were when we released our FY26 guidance in August. It would also be AUD 1 billion more cash flow than what we generated in FY25. Group cash flow for the quarter was AUD 196 million. As outlined at the June call, we expected a working capital unwind in the September quarter.
In the June quarter, we had higher capital predominantly associated with the plant expansion completion at Mungari, the commencement of the OPC project at Cowal, and ventilation and truck work at Ernest Henry. This resulted in AUD 35 million in high liabilities balance at the end of June, which were paid in the September quarter. We also had AUD 26 million in higher receivables at the end of September due to higher volumes of concentrate sales outstanding, compounded by the rising copper price in the quarter. This is actually a positive, though, as we will receive those proceeds in the December quarter. We now expect working capital movements to return back to a normal rhythm where, on a full-year basis, the movement would be either in an inflow or an outflow. Our balance sheet flexibility further improved with gearing now at 11% and a cash balance of AUD 780 million.
Our disciplined capital management continued during the quarter, repaying AUD 170 million off our term loans. Post the quarter end, we paid the remaining AUD 110 million. These loans are now fully repaid, and we have no debt repayment commitments until FY29. On the projects front, Mungari has successfully completed commissioning the expanded plant and will be in commercial production this month. The final project cost is now forecast at AUD 212 million, which is 15% below the original budget. Given the AUD 43 million of net mine cash flow for the quarter, Mungari is well on its way back to being a material cash contributor for Evolution and quickly paying back the project investment. At Cowal, the OPC made solid progress during the quarter with commissioning of the open-pit trucks and completion of the Northern Lake Protection Bund. The project remains on schedule and on budget.
With that, I'll now hand over to Fran to introduce herself before Matt takes us through the operational performance.
Thanks, Lawrie. I'm delighted to have joined Evolution Mining at a pivotal time for both the business and the broader industry, especially with the structural change happening with gold and the supply disruptions in copper. With increasing metal prices and a clear strategic focus, Evolution is well placed as one of the lowest-cost gold producers, consistently and safely delivering robust margins and cash flows. In my first month, I've had the opportunity to visit three of the operations and participate in board meetings. What stood out for me is the depth of the safety culture and the openness and enthusiasm people have across the business for being part of Evolution. As the CFO, my initial focus is on listening, learning, and building relationships, including with our current and future investors and the analysts who cover us. I bring a disciplined, value-driven approach to capital allocation and operational efficiency.
It's an exciting time to be part of the Evolution team, and I am committed, along with the management team, in elevating the business and making a meaningful contribution to Evolution. Thank you. Over to you now, Matt.
Thanks, Fran. As Lawrie noted, the September quarter was in line with our full-year plan, and we remain on track to meet full-year guidance, allowing us to continue to benefit from the rising metal price environment. We produced 174,000 ounces of gold and 18,000 tons of copper over the quarter, and pleasingly, we did this at a lower-than-planned AISC, helping us to generate a second consecutive record net mine cash flow. Despite these positive metrics, the area I remain most proud of is our safety performance. Happily, I'm able to repeat a message I've given a number of times in these updates, which is to report that our performance in this area continues to be strong, as evidenced by our total recordable injury frequency rate for the group dropping below five.
The consistency and predictability we are seeing in the operation continues to be built on the back of teamwork and collaboration across the entire Evolution team, and it's a credit to everyone involved. Our goal remains the same: we say, we do, we deliver, and I'm very pleased to say that I think we've done that this quarter. As I noted earlier, our operations have started the year in line with plan and remain on track to meet full-year guidance. Some items for note for the quarter were Cowal and Ernest Henry completing their regular biannual shutdown activities. We also had some minor interruptions to the open-pit activities or the mining activities at Cowal due to wet weather.
However, it was pleasing to see the work the team have been doing on improving resilience payoff, as we were able to feed the processing plant from our mine surface stocks, ensuring no mill downtime or feeding of subgrade stocks. Work's progressing well on the OPC project, and as Lawrie noted, the Lake Protection Bund has been completed ahead of schedule within the September quarter. Red Lake, Northparkes, and Mount Rawdon continue to deliver in line with their plans. The ramp-up of the mill at Mungari continued through the final commissioning on track to be completed this month, and I'm happy to be able to report that through our expectations, the team on site are very excited to see what they can achieve with the new plant. This brings the formal part of our update to an end. I'll now hand back to Darcy for questions.
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 Kate McCutcheon from Citi. Please go ahead.
Hi, good morning, Lawrie and Matt. Just starting at Ernest Henry, you gave us the update for now that shaft is full to 2040 plus, and you pushed out that AUD 200 million of CapEx outside the next five-year profile, so that's a great outcome. How do I think about the incremental cost of that AOS material that will be trucked? Because I imagine that will be higher cost. So if we looked at AUD 1 per ton mining cost at Ernest Henry today, say, mid-30s in real terms, what does that look like on the revised plan, or is there anything you can talk to about that?
Yeah, Kate, I'll hand that one to Matt.
Yep, thanks, Lawrie.
So the alternate ore sources, there's a variety of places that they're coming from, Kate, so a lot of them are actually going to be used through the old materials handling system, so they're going to be through passes back to the crusher in the same way that we mine those levels initially. There are a couple that we will truck, and they'll truck a little bit further into those passes, so there's not a material shift. We're not trucking the material out of the pit, like when that operation first started, we were trucking all the way to the surface, which obviously almost doubles your unit cost. That's not what we're doing with the alternate ore sources. We do a bit of rehab, and we'll get back to the old systems of using the passes.
What about below?
Below?
Below.
Oh, sorry. Yeah, below the, so when we get below the crushing horizon, which is where we're into that area now, we are going to be trucking back up to the crushing horizon, and that's got a dedicated truck loop. Again, it's only a pretty short level, like it's 25 meters between levels. So obviously, the further we go, we'll increase the number of trucks and ventilation, which we've sort of documented pretty well over time. But again, they're not going out of the pit, so it's not a material step change in unit cost.
Okay, got it. That is helpful. And then at Cowal, now that you've finished that Northern Lake Protection Bund, is there scope to pull forward the Southern Bund and putting that together? I don't mean to put the cart before the horse, but do you see scope to reduce that open-cut feed gap later this year or a risk to the upside?
So Kate's spoken like a good engineer. Yes, the work is finished. The site team is looking at whether we continue and do the Southern Lake Bund, but it's not needed. But given the works and the progress we've made on the Northern, they'll have a look at it. We know, and we've said this previously, if we do need to do it as a wet move on the Southern Bund, the project allowed for a dry. You're talking about $40-$60 million of incremental capital over and above the project budget, but it does give us access to the Southern area. So that's something that we'll assess over the next- three to six months.
Okay, thank you.
Thank you. Your next question comes from Daniel Morgan from Barrenjoey. Please go ahead.
Hi, Lawrie and Team. I guess my focus is also on the Bund and the OPC. What would be the benefits of bringing forward the Southern access, getting access to those open pits? Can you help us think about timing of grade, of magnitude? I mean, I know that you've just outlined an additional cost if it's a wet move, but with gold prices where they are, bringing forward that potential production would seem to me pretty beneficial, wouldn't it?
Yeah, look, I'll hand that to Matt then. I'd say that there's two things from an overall perspective for the operation is that when we're timed to do that in a few- years, if you do have a couple of wet seasons, then what does that do to the time that it takes and the cost of actually doing that Bund versus now while we've got the access? It does give us greater flexibility on the site, but Matt, do you want to talk about what it does operationally with the pits?
Yeah, it's really around flexibility, Dan, but you wouldn't see anything materially increase in the next 12-18 months. Obviously, we're trying to work towards the Northern area being pulled forward, and the works that they've completed in the first quarter have allowed us to go a bit further in front than we were. The Southern one will also open up some additional different. It opens up some oxides, which we do like treating. It does help with our throughput. So it's an option for us that we're going to be chasing, but again, it comes with that price tag. So it's a question of when the extra ounces come through to offset the stockpiles that we're planning on treating now, and at the moment, it's not within the next sort of 12 or 18 months, just in terms of where you'd sit it.
So then, in short, for your models, as Matt said, nothing over the next couple of years. If we did make that decision and let the market know, we would sort of say, "What does it do in terms of years three to five?
Yep, that's very clear for now. Just staying on Cowal and just the more immediacy, obviously, wet weather looks like you've had some impacts on the bottom of the pit, just having access to it temporarily. Where is access at currently, and should we expect that high grade ore to come through this quarter or perhaps in the second half of the fiscal year?
Yeah, so we've got access back. We were out for between a week and a half and two weeks of impact in the pit over the course of the quarter, mainly in September. We have got ourselves back where it's pretty tight, I think, as people would most be aware of. When we get to the bottom of that pit, it gets pretty tight. Normal operations have resumed, and we're expecting to see a kick-up in the next quarter, and then we'll continue that through until that pit's finished. There's no change to the fact that that pit will be finished this financial year, and then we'll go to the stockpiles after that.
Thank you. And then just last question on Mungari, just the latest live update of the ore sources ramping up in sympathy with the mill expansion?
Yeah, so we're in front on the ore sources. So Castle Hill has gone really well. The team out there with NRW have done a fantastic job, so very happy where that is. And we've got enough stocks in front of the mill now. We're running through its final sort of stages of commissioning almost as we speak with different types of material and hardness and location. So everything's performing quite well, and I'm pretty comfortable that by the end of October, we're in a good position where that mill's commissioned and we're away, and we've got enough feed to achieve what we need to achieve.
Okay, thanks, Lawrie and Team, for the update.
Thanks, Dan.
Thank you. Your next question comes from Andrew Bowler from Macquarie. Please go ahead.
G'day all. Just a question from me on capital returns. I mean, you outline on the front page, and I think it's pretty clear to everyone that if gold prices continue, we'll be in a net cash position by the end of the financial year. Is a review of the capital returns policy something you'd consider once you get back to that net cash position, or is it very much a reinvestment story for some other projects, potentially, for example, bringing a block cave on a little bit sooner than expected at Northparkes, etc.? Or would you look to that capital returns line item with that excess cash?
Yeah, Andrew, look, it's a good problem to have with the rapid rise in the gold price. I mean, we said at the August call that as we've now got to 15%, we're now touching down to 10% gearing.
That means we've got to look at what we do in terms of that capital returns for shareholders. We'll be doing that at the half-year when we look at the interim and also as we go into the second half of the year. Our policy of paying out around 50% of cash flows, I think, still works very well, and that means we've got some opportunities to look at that. I mean, when you talk about the capital, our five-year capital outlook allows for a block cave at E22. Moving it forward, I mean, it was due for decision in FY27, so it wouldn't really change our capital spend over the next five- years anyway, but as I said, when we get to the half-year, we'll discuss with the board as to what we do around those returns.
Understood. And just one more from me. Obviously, it was reported by the media during the quarter that there were some continued issues with the power supply in the Kalgoorlie region. From memory, Mungari is running off that local grid out near Kalgoorlie. Can you just talk through if there was any impact from that and what sort of mitigation strategies there are? Are you looking at adding a backup plant or potentially increasing renewable penetration there to sort of help smooth out those reliability issues that Kalgoorlie's seeing at the moment?
Yeah, it's Matt here. Yeah, we did see interruptions at Mungari with the power issues that have been occurring there. So we had a number of shutdowns, some of them planned but with relatively short notice, and others load-shedding events where we had to take the plant down. We do have partial backup supply there, so we've got some generators as a result of the new investment. And so we use that to keep the plant alive, but it doesn't run the mill, for want of a better term. It stops us standing and creating operational problems. So yeah, it did have an impact. We lost quite a few days, almost a week, if you like, with the interruptions from the power side there as well.
In terms of options going forward, we're like everybody else in that region, would like the government to do something about it, but also we're looking at what options do we have. I know other companies have done things themselves, so we're looking at all our options because those interruptions, we don't see them in the short term.
No, all right. That's all from me. Thanks.
Thanks, Andrew.
Thank you. Your next question comes from Hugo Nicolaci from Goldman Sachs. Please go ahead.
Hi, Lawrie and Team. Just first one from me on Mungari. It looks like your processing costs are still largely being capitalized. Should we expect that to normalize from this quarter forward, just given your processing rates ramped up? And where do you see those processing costs, maybe on a per-ton basis, normalizing too?
Yeah, you want to cover that? Yeah, you will see it ramp up. Sorry, ramp up. You'll see it capitalizing, and you'll see it come up. We had a forecast of reducing the AISC by about 16%, I think was the number, which at the moment we see it in line with when we're looking at what we're looking at. So we'll keep running it in full mode for the next probably two quarters before we can give you a really good steer on where it is. But yeah, it's in line with what the project expected. And at this stage, we haven't come up with any material variances in what we thought it would cost.
Got it. Thank you. And then just one on cash generation. I guess understanding sort of where the costs may be normalized going forward. Just you highlighted at the start, obviously, the commodity price strength in both gold and copper, but look at the major cash generation before major capital. It's obviously down quarter on quarter. Are you able to just give us more color on the timing of those copper payments you highlighted and then where the costs may be normalized going forward from here?
Yeah, so a few things there. Hugo, I mean, the costs, the only real change you'll see in the operating costs as we go forward is what Matt talked about as we ramp up production at Mungari. And so those processing costs will be sort of AUD 16-18 a tonne in the second half of the year, and their all-in sustaining costs comes down. The actual operating costs as we go forward, the other main driver will be obviously royalties on the gold and copper revenue. So we don't see a lot of change through the balance of the year. The guidance, as we've said, AUD 17.20-18.80 remains in place. In terms of then the concentrate, so it's different at each of the operations. So Ernest Henry has now reverted back to a one-month quotational pricing period.
At the end of June, it was on a four-month. So the shipments, therefore, will be settled within basically 60 days rather than 120. So that is why that receivable balance will come down through the December quarter. Northparkes is on a three-month pricing period, so that's not going to change too much in terms of the 10% final payments that we receive. And it is then going to be driven on shipments. So we had a big shipment quarter. We had four shipments this quarter at Northparkes as opposed to only, I think it was two in the previous quarter. So that will sort of start to normalize, as I said, around our working capital.
Thanks for that, Lawrie, and then just lastly on Cowal and the throughput there, obviously sort of lower throughput this quarter. Are you able to give us a steer in terms of what the profile in terms of tons and grade looks like for the rest of the year and around that guidance? Should we expect you to continue to process the higher grade material off the stockpile to keep that sort of 1.3, 1.4 throughput grade?
Yep, the short answer is yes. We'll see it come back into that range a bit higher. And with where we sit in the pit and access back in there, it'll return to the normal operating range until probably quarter four where we see the pit completing. But we also see that being offset by the underground ore sort of ramping up through there, and that's going according to plan as well. So yeah, it'll kick up from first quarter, but it'll sit in the normal ranges that you'd expect for the guidance.
Great. Thanks. I'll pass it on.
Thank you. Your next question comes from Baden Moore from CLSA. Please go ahead.
Hi, good morning, everyone. The CapEx guide, it sounded like you were looking at bringing forward some production or at least looking at your growth options. Five-year guide at 750 - 950. Do you think that's still appropriate now, just given where your cash flow is running to, and the market seems to be signaling it's time to produce more? And maybe just a second question. I was wondering if there's any change to how you're thinking about increasing your utilization on your Ernest Henry mill now you've got some certainty around what's happening in Mount Isa?
Yeah, so the CapEx profile, the $750-950 over the next five- years, as we've outlined previously. And certainly, if you look at the deck that we issued at Denver, it outlines all of the projects. I mean, we've got the E22 at Northparkes, the OPC at Cowal, the Bert ore body at Ernest Henry. All of those projects are in there. So any acceleration of capital just because of the metal pricing would be incremental at this stage. And then when you talk about the utilization at Ernest Henry, that is the study that is going on at Bert, which allows us to go in from the open pit and come out through there rather than using the materials handling system to enable us to get higher utilization of the installed capacity there.
So just to confirm, no read-through here that you'd necessarily be reviewing that 750-950 over the next 12 months?
Not unless there's other projects. And as I mentioned just earlier, if we bring forward that work on the southern lake bund at Cowal, that is additional capital that we would have to bring in that's not in the five-year outlook. And then if we make any other decisions across each of the assets, then we would update if there is a change in that capital. But the capital we've put out there for the next five- years allows us to deliver those growth projects at each of the assets.
Okay. Thank you.
Thank you. Your next question comes from Matthew Frydman from MST Financial. Please go ahead.
Sure. Thanks. Morning, Lawrie and team. Maybe firstly, a bit of a two-parter on costs at Cowal. Clearly, a pretty big step up in AISC quarter on quarter, running a little bit above your guidance range. Can you step us through the drivers behind that? I mean, is it purely just the shutdown activity and the rain that you alluded to, or is there anything else that really needs to kind of normalize across the coming quarters in order to bring unit costs back into the guidance range? And I guess the second part of the question is maybe thinking a little bit more longer term. How should we be thinking about the mining cost and the AISC as we come to the end of the year when the open pit finishes and obviously transition to more stockpiles?
Clearly, quite a few moving parts there with the stockpile drawdown, the OPC being capitalized, etc. So what does that all mean for how we should think about unit costs compared to, I guess, the actual cash expenses coming out of the business into the back end of the year? Thanks.
Matt, that was a lot of questions in one. I'll try and address it for you, and if Matt wants to add anything on (Matt on our side, not you) wants to add anything, we will. I mean, the first thing I'd say is you've got to look at Cowal. Over the years, it has delivered to its numbers. It's on track to deliver the guidance. It was expected in the first quarter that you have the maintenance shutdown with lower production, but there are the maintenance costs. So that's driven up the all-in sustaining cost. As Matt mentioned, we lost a week and a half, two weeks on having to use stockpiles due to the wet weather. That's a non-cash use of lower it for the cost for this quarter.
But the costs will come down as we mine the pit out through the rest of this year and displace that stockpile material. So if you look at it, we're going to deliver to the guidance range. We're on track for that. The costs were expected to be higher in the first quarter. As you go into the next- year, we're then processing stockpiles as we finish mining E42. That'll be for about 18 months, two- years. So therefore, your costs on an AISC basis are going to be fairly similar, if not a little bit higher, because you're going down in terms of the grade of that stockpile material. But just bringing you back to the bigger picture, I get it. Look at Cowal operating cash flow this quarter of AUD 215 million. So that's an annualized rate of AUD 860 million, which is more than what we generated last- year.
And if you overlay it with the gold prices for the rest of the year, you're probably looking about $250-$270 million extra cash flow. So it's almost like at Cowal, you buy four quarters and you get a fifth quarter free because it would generate over $1 billion of operating cash flow for the $100-$200 an ounce on the non-cash inventory that it does to the AISC. I'll take the operating cash flow every day.
Yeah, got it. Thanks, Lawrie. And you sort of alluded to the fact that going into next- year with the lower stockpile grade, the AISC will be broadly flat or maybe actually a little bit higher. But in terms of the actual cash generation of the businesses you're alluding to, it should actually improve materially given that on a kind of expensing basis, those stockpiles are already. Yeah, you've already paid for them.
Absolutely, and being clear that next- year we do a full- year on lower-grade stockpiles, so production is going to be lower. Therefore, your AISC will be a bit higher on a non-cash basis. But I'd expect it's going to make fairly similar cash flows before, obviously, the investment in the OPC. The operating cash flows will be very solid.
Yep. Yep, exactly. Okay. Thank you. That makes perfect sense. And then maybe just quickly, you alluded to in the text there that the underground at Cowal ramping up to 30% of mill feed. I think previously you'd said the target was 2.4 million tonnes per annum. Is that number still right? Sounds like if you're feeding, depending on your throughput rate, if you're feeding 30% of mill feed there, that maybe there's actually a little bit of upside risk to the underground. How should we, I guess, yeah, think about what your aspirations there are? Thanks.
I'll hand this to Matt just to talk about where the underground, we're not sort of upgrading that. That was this quarter. And so therefore, obviously, as we had the mill outage for the maintenance for the quarter, therefore, as we brought that online, the underground got priority feed over the open pit. And certainly, when we were out for the wet weather, the underground got priority feed. But Matt, do you want to talk about the bigger picture of the underground's fit?
Yeah. So we're at a pretty strong quarter of the underground with total material moved, increasing to the point where we're pretty comfortable. 2.3-2.4 is what we're going to be running at. And we've seen the team on site able to deliver that. So no plans to go further than that at this stage. Obviously, investigating what can we do with where everything sits, but that's where it still sits, and comfortable that that's achieved or achievable with the team we've got.
Got it. Okay. Thank you, Matt. Thank you, Lawrie.
Thanks, Matt.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone. Your next question comes from Alex Barkley from RBC. Please go ahead.
Yes, thanks. Hi, Lawrie and team. Thanks for the call. A question on that Ernest Henry feasibility study, just firstly confirming if that was completed and might it get released at some point, and then are you able to talk about some of the updates versus the PFS, maybe around life extensions or grade changes? Just any details. Thanks.
Yeah. Thanks, Alex. I'll get Matt to add to this. The feasibility study finished. And as we've said, essentially, with the amount of ore that we found below the existing 1175 and where we're planning to put the materials handling infrastructure, it's now filled with ore. So that means that infrastructure has to go lower down in the cave. And that work will be done over the next sort of 12-18 months. But essentially, the outcome is that we continue mining. We mine below the 1175, and we truck back up to the materials handling system. And as Matt said earlier, we'll also be mining additional ore sources that have been identified that we can use the existing materials handling system for. So there's no real outcome on the study per se because essentially all we are doing is increasing ventilation, refrigeration, adding in trucking, and doing development.
So it's just a continuation of the mining because we're not adding any of that infrastructure, which pushes the $200 million out of the next five-year capital profile. And so that's really what the outcome of the study will be. Do you want to talk about then just the mining? And one of the main things that came out of the study is that we actually keep the plant filled through to 2038, whereas the PFS had it declining from about 2033 through to 2038. So it now does keep it filled at 6.8 till 2038. Do you want to talk about just sort of the mining and?
Yeah. I mean, same mining method at the moment. The mining below the crushing horizon, sublevel caving, truck back to the crushing horizon. Grade's not changing materially. To be honest, there's a little bit more gold in some of the places that we've seen, but you wouldn't see it as a material variance to what we've been mining so far. So all in all, the drilling that we did for that study sort of in a good way said there's a lot more there. It's just, now we've got to work out where we put the infrastructure so that that works ongoing and it doesn't interrupt the existing operations for quite a few- years yet.
Okay. Thanks. That's all very helpful. Just the last one on the Mount Rawdon Hydro project. Last quarter, you had a comment around the Queensland investment, but not this quarter. Why is that? Is it possible to get a quick update on the project and the timing there?
Yeah, Alex, look, it's continuing to work to plan. I think if you look at news out of Queensland in the last sort of four to six weeks, they're doing a full re-look around some older or other renewable energy projects and focusing on all of that. Ours is still tracking to plan the commitment to the project. We're doing work on site that's being funded by the government. And the expectations are that in the March quarter of next- year, we'd get a sort of a final outcome on terms of the government exercising that option on the project.
Okay. That's very helpful. That's all from me. Thanks, everyone.
Thanks, Alex.
Thank you. Once again, if you wish to ask a question, please press star one. Your next question comes from Ben Wood from UBS. Please go ahead.
Morning, team. Thanks for your time. A few of the questions have already been asked, but I guess one for me is on the gross debt from here, noting that there are no obligations until FY29 is sort of outlined in the release, but the continuation of the 100% mean minimum paydown this quarter, how are you sort of thinking, I guess, about the gross debt paydown from here in respect to the capital allocation piece sort of asked by Dan before, and just sort of noting that the gearing situation has greatly improved from even 12 months ago, so how do you think about that?
Yeah, Ben. I mean, as I said earlier, it's a good problem to have. I mean, in terms of the gross debt, the next repayment is due in FY29. And as it's in our U.S. private placement notes, you can't prepay those. So we won't be paying off any more gross debt between now and FY29. That's a $273 million payment in the first half of FY29. That would sort of be the next repayment. What we do with the cash that we're generating now is something that we will take and discuss with the board as we come into the half- year and again as we come to the full- year. Certainly, as you would have seen over the last two- years, as the gearings come down, the dividends have gone up. As the cash flow has increased because of the pricing, we've also been increasing the dividends.
So that's expected to continue. What we do with the extra cash is going to be discussed in the next six to nine months.
Thanks, team. Helpful to know that the early prepayment's not an option for the 2029. Thank you.
Thanks, Ben.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Conway for closing remarks.
Thank you, Darcy. And thanks, everyone, for your time on the call today. We've had another safe and consistent quarter setting the foundations for FY26 and on track to deliver guidance and certainly make sure we take advantage of the current high metal prices, be that gold, copper, and silver. Thank you for your time today.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.