I would now like to hand the conference over to Mr. Lawrie Conway, Managing Director and Chief Executive Officer. Please go ahead.
Thank you, Cameron, and good morning, everyone. I'm joined on the call today by Fran Summerhayes, our Chief Financial Officer, Nancy Guay, our Chief Technical Officer, and Rocky O'Connor, our GM, Investor Relations. Today we released our FY26 half-year financial results, along with announcing the approval of two key projects at our cornerstone operations, being E22 at Northparkes and Bert at Ernest Henry. The call today will reference the presentation we released this morning. The forward-looking statement details are provided on slide two, and people are encouraged to take note of these. I'll be starting on slide three. I personally think today is a milestone day for Evolution. The work we have done executing our strategy since we formed in 2011 has demonstrated to be the right one.
Today we have a portfolio which is of the highest quality and are embarking on the next phase of growth while at the same time delivering high returns for our shareholders, including record dividends. We have always said that by focusing on margin, we will make sure that our shareholders benefit. We will bank the cash, invest it wisely, and reward you along the way through share price appreciation and dividends. Today shows that we are meeting that commitment. The record financial performance has been built up over the past two years of safely and consistently delivering to plan and capturing the benefits of a rising metal price environment. The business is in great shape, probably the best it has ever been, and it is right to be reinvesting in the high-margin suite of assets that we have.
As you will see shortly, the returns on these investments we'll generate are some of the highest in the sector. From a portfolio perspective, our operations are set to take advantage of the current environment. Cowal continues to be a material cash generator while investing for mine life extensions via the OPC project. Mungari has successfully transitioned back to being a major cash contributor for the group. Ernest Henry and Northparkes have been reliable cash generators, and the projects announced today will enable us to lift returns through utilization of latent processing capacity and increasing our gold and copper production. Red Lake is showing what it is capable of doing, having delivered over AUD 200 million of cash in the last 18 months, and Mt Rawdon continues to contribute while we work through the final stages of the options to move to a renewable energy project.
Moving to slide four, the consistent performance is delivering high returns. Our underlying profit more than doubled to AUD 785 million, while our group cash flow was 123% better at AUD 608 million. The benefit for our shareholders is a record dividend of AUD 0.20 per share, up 186%. Fran is excited to be going through the full details of the financials shortly. We have continued our discipline in terms of capital allocation and only investing in projects if they demonstrate they can generate high rates of return. It is the right time now to be investing in the projects at Northparkes and Ernest Henry. The E22 and Bert projects will utilize excess processing capacity to increase production. At Northparkes, to extract maximum value from the asset, the role of the stream that Triple Flag had needed to be sorted.
The collaboration and positive intent of the Triple Flag team has facilitated greater flexibility in evaluating the multiple ore bodies at Northparkes. The updated agreement allows us to move forward with the E22 block cave and start studies on expanding production, including the potential development of the gold-rich ore deposit. It also provides a pathway to develop additional gold-rich deposits. We will receive a payment of AUD 120 million in December and receive a materially higher proportion of the metal from the potential E44 deposit. Full details of the updated agreement are provided in the appendix of this presentation and a separate release. I do thank Sheldon Vanderkooy and James Dendle, who worked closely with Kieran Smith and our corporate development team, to finalize the amendment. On slide five, you'll see a summary of our disciplined approach to capital management.
We have the right mix in terms of returns for our shareholders, investing for organic growth and acquisitions, and having a balance sheet that underpins our strategy. Shareholders are receiving record dividends with over AUD 400 million to be paid in April. We have lifted our planned total capital investment for FY27 to FY30 to between AUD 900 million-AUD 1,100 million per year. The driver to the change in outlook is only linked to the scale and scope of the projects or the new projects such as the Coarse Particle Flotation and the expansion study at Northparkes. It is not due to any project overruns or the like. For FY26, our group major capital is updated to between AUD 500 million-AUD 605 million, associated with starting investing in the projects announced today and the fact that the Cowal OPC project is ahead of schedule.
We have now commenced development of the E46 pit, brought forward from FY28 the work on the Southern Bund, and will increase our work on the Integrated Waste Land form given the availability of more waste material. The overall project capital at the OPC remains unchanged at AUD 430 million. Overall, this is good capital investment, and I will show you why on the next slide. We also announced today an expansion of our Canadian footprint with two quality exploration targets in British Columbia. Our discovery team believe these targets have the potential to become Evolution-scale projects. We'll be extensively drilling these over the next 12-15 months. Our balance sheet is in great place. We're on track to move to net cash by the end of FY26, and the balance sheet can support all components of our strategy.
Turning to slide six, and to me, this is the most important slide of the whole presentation. It clearly shows the quality of our portfolio and the discipline of our investments. The projects in execution, or those just approved, are all going to improve the group average rate of return as these projects are all above the 18%. Significantly, at conservative gold and copper prices, the range of returns are 23%-77%. These returns improve to 38%-128% at a gold price that is 10% below today's price. At Northparkes, the return from E48 could be as high as 128%. When we acquired the operation, we made a deliberate decision to take advantage of the installed infrastructure at E48, which bought us time to fully assess E22 and the Triple Flag agreement. This is a great example of how to allocate capital.
Further highlighting the benefits of our capital allocation is the Cowal OPC project. We are one year into the project and is tracking ahead of schedule. Cowal delivered over AUD 130 million of operating cash flow in January alone. This is an annualized rate of AUD 1.6 billion and was delivered while utilizing some lower-grade stockpile material and is more than enough money to fund the OPC project. Overall, we're investing in the right projects at the right time so as to improve the returns and the quality of the portfolio. With that, I'll now hand over to Fran.
Thank you, Lawrie, and good morning, everyone. At my first results presentation with Evolution, it is a pleasure to be talking to a set of record financial results and rewarding our shareholders while we continue to invest in our quality assets. On slide eight, underlying EBITDA achieved AUD 1.6 billion, up 59%, and record underlying profit after tax at AUD 785 million, up 104%. These financial outcomes were driven by stable and safe performance, on-plan and consistent production, benefiting from the higher metal prices while protecting our margin with strong cost control. Highlighted by our record underlying EBITDA margin, which has improved by 14% - 57%, we are banking the benefits of high gold and copper prices with our sector-leading all-in sustaining costs.
With record group cash flow at AUD 608 million, up 123%, declaring a record interim dividend, this is three times higher than the FY25 interim dividend of AUD 0.20 per share, fully franked. Both operating and net mine cash flow for the half were all-time records. As the Slide nine shows, net mine cash flow is up 151% at AUD 1.1 billion, delivering on our operational performance while we continued investing in our long-life, high-margin operations like the open pit continuation project at Cowal that is ahead of schedule and on budget. Mungari operation net mine cash flow is up almost 240% following the successful commissioning during the period on schedule and below-budget mill expansion project. Group operational cash flows, sorry, operating cash cost and sustaining capital spend was in line with prior periods. As our underlying EBITDA margin increased from 50% - 57%, highlighting the quality and strong operational performance.
These strong margins are expected to continue with our improved all-in sustaining cost guidance for FY26. We continue to bank the upside from the higher prices through consistent, safe, on-plan delivery, in turn leading to a very favorable step change in our balance sheet, which was already at investment grade before. Our balance sheet is in great shape, as the charts show on slide 10. Since December 2023, over the last two years, our gearing has significantly reduced from 30% to only 6%. During the half period, we've repaid all bank-term loans with the final AUD 280 million, which was repaid during the half. Now, only remaining debt is our U.S. private placement. This is long tenure and low cost with an average fixed interest rate of 4.47%, with our next payment not due to FY29. Our cash balance is AUD 967 million.
Net debt has significantly reduced from AUD 1.6 billion to AUD 362 million in the last two years. With the revolver credit facility remaining undrawn at AUD 525 million available, our total liquidity is at AUD 1.5 billion. As cash generation and balance sheet strength has improved, shareholders are seeing this reflected in higher returns without compromising high-value return on investment in our quality assets or balance sheet flexibility. As we have said before, as gearing comes down, dividends are increasing. The chart on the top right of slide 11 clearly illustrates that in times when gearing reduces, dividend increases. Gearing peaked in FY23 following various acquisitions to establish our high-margin asset portfolio that is now generating significant cash flow. Gearing has reduced rapidly while dividends have picked up.
The chart shows what it may look like if the final FY26 dividend was the same as the interim dividend, bearing in mind that the current gold spot price is around 23% higher than the half-average gold price achieved. This could be up to AUD 500 million in extra cash flows in half two. Our dividend policy remains unchanged. We are targeting an annual average 50% payout group cash flow. Following record financial performance with strong group cash flow, with the outlook on half two FY26 with expected production guidance to be achieved, continue investment in the business, and improved revised all-in sustaining cost, the board has approved a fully franked dividend of AUD 0.20 per share. This is 186% higher than the FY25 interim dividend. We have been and we are disciplined through the cycle dividend payers.
This is the 26th consecutive dividend, and in a six-month period, this interim dividend of AUD 406 million represents almost 20% of the total dividends declared over a 13-year period. Clearly shows that we are honoring our commitment and rewarding our shareholders. Aligned with our shareholders' feedback, the dividend reinvestment plan will continue to be on offer with no discount. With current spot prices, we're on track to be net cash by the end of FY26 while continuing to invest in our long-life, high-margin assets, which I will hand over to Nancy to share with you. Thanks, Nancy.
Thank you, Fran. Today, we are pleased to outline the significant progress we are making as we continue to advance our asset and build long-term value for shareholders. The timing is highly favorable. Metal prices are trending, and we are exceptionally well positioned to leverage our growing copper portfolio at a time when global demand for copper is accelerating. As Lawrie highlighted, the board has approved projects both central to our strategy of investing in high-quality assets that generate sustained value. We have the E22 block cave at Northparkes, which will underpin production for the next decade, and the Bert project at Ernest Henry is a near-surface high-grade deposit that enhanced mine life, optionality, and cash generation.
On slide 13, before we move into the detail of this project, I want to briefly reaffirm that we have a clear disciplined strategy for every asset in our portfolio, and it is an exceptional portfolio. Ernest Henry and Northparkes are two standout examples of that strategy at work. We continue to operate a high-quality, well-balanced suite of assets with defined pathways for growth. The approval of E22 and Bert reinforce our disciplined capital allocation approach, investing in the assets we know best, increasing our copper exposure, and positioning Evolution to capture value in the strengthening market. Slide 14, Northparkes' growth strategy is anchored by three major investment streams, each designed to unlock the long-term potential of this highly scalable ore system. We are now progressing the next chapters of Northparkes with the development of E22, the next major underground production source.
The project carries a capital estimate of approximately AUD 545 million on the Evolution share. Northparkes has a long, successful track record in block cave development, supported by highly experienced operating teams and strong underground infrastructure. This foundation positioned us extremely well to deliver E22 efficiently and with a high level of technical confidence. The E22 project is fully approved, with first production planned for the end of FY30, sustaining mill feed at approximately 7.4 million tons per annum. Slide 15, we are also progressing with the addition of a modular Coarse Particle Flotation (CPF) circuit to the existing mill, a low-impact, high-return upgrade designed to deliver a 2% increase in copper recovery. This enhancement improved overall operational efficiency and strengthened our financial performance. The Coarse Particle Flotation project is a AUD 75 million investment Evolution share. Over the past year, we have assessed several long-term growth pathways.
The board has now approved a full expansion study with a budget of AUD 14 million Evolution share. This study will evaluate the optimal future processing scale, assess mine-to-mill integration options, and define the development sequence required to unlock the next phase of Northparkes growth potential. Slide 16 outlines the scope of the expansion study, but more importantly, it highlights the substantial upside embedded within this world-class copper system. We see Northparkes as a much larger asset than it is today. This study is a critical step towards that future. The work on the way is evaluating options to materially increase mill throughput while assessing new open pit opportunities alongside the next generation. In summary, this expansion study defined a sustainable processing envelope for Northparkes and positioned us to quantify and ultimately capture the full potential of a copper system capable of supporting significant higher production for decades.
Slide 17, turning to Ernest Henry, the board has approved the Bert project with a capital budget of AUD 160 million. Bert is a near-surface, high-grade deposit that integrates seamlessly with our existing operation. It is a well-defined and well-drilled deposit advanced by our discovery team. Its geometries support efficient extraction through sublevel stoping with backfill, enabling us to bring the ore online with minimal disruption to the current operation. Commercial production is scheduled to begin in FY29. Bert is a meaningful addition to Ernest Henry's long-term plan, enhancing both copper and gold exposure at a time when demand and market fundamentals remain highly supportive. In closing, it is a very exciting period for Evolution. This project enhanced production visibility, increased our exposure to a favorable commodity cycle, and continued to build long-term value for our shareholders. Cameron, I will hand back to you for Q&A.
Sorry. That's to me, Nancy. So slide 18 provides a good summary of the business. There's opportunities to deliver meaningful, high-returning growth from Northparkes and Ernest Henry, which further upgrades the quality of our existing portfolio. I acknowledge we haven't spent much time on the call around the Triple Flag amended agreement. For the analysts, this will no doubt take a bit of time to unpack, and Rocky, Fran, and Kieran will make themselves available to provide further details in the coming days. However, we do believe it's been a genuine win-win for Evolution and Triple Flag, and I do acknowledge that both teams who work closely to achieve that. Finally, we're proud of the results we've released today, which were only made possible by the teams across all of our sites who continued to deliver safely to our operating plan.
We're banking the benefits of the high metal prices through record cash flow, which enables us to reward shareholders with record dividends, degear the balance sheet, and fund the next phase of growth. I generally believe that Evolution has not been in better shape than it is today. Thank you, Cameron. Please open the line for questions.
Thank you. If you do wish to ask a question, please register by pressing star then one on your phone, waiting for your name to be announced. If you'd like to cancel your request, please press star two, and if you are on a speakerphone, please pick up your handset before asking your question. Thank you. Your first question today comes from Hugo Nicolaci from Goldman Sachs. Please go ahead.
Hi, Lawrie, Fran, Nancy. Congrats on a strong half year. First one from me, just in terms of Northparkes and the study there. I think Triple Flag highlighted the study to 10, but you guys haven't put a capacity number on that. How should we think about the sizing there in terms of the plant relative to some of the mineworks that would be needed to do to get to 10, or whether it's a full replication in terms of going to 14?
Yes. So Hugo, the reason there's no fixed rate is, as we previously talked about, it can be anywhere from seven and a half to a full replication to 15. What the study needs to work out is what's the right size and scale of the plant that matches the different ore bodies that will come through over the next 10-20 years. So our view is we think 10 is a minimal achievable one, but we'll go through that part in terms of the study. Nancy, do you want to talk on the ore bodies?
No, I think that's the thing. We have all the ore bodies, so it's really a question of sequence to make sure we can fill the mill.
Yeah. Thanks.
And just to clarify there, what's the earliest you could bring deposits like MJH or things forward, just to then think about from our side whether that's a progressive expansion or whether that's a big expansion in one go relative to the mine sequencing?
I'll let Nancy talk to the mine sequencing. Effectively, our approach is that when the study is done, it would be a one upsize of the plant. We wouldn't be seeing us doing it in stages. When you look at it, you've got E48, E26, then E22 would come online in FY30, 2031, and ramp up. Those production sources give us enough to certainly go above the nameplate and above the permit of 8.6. What the scale is, is what the study needs to work through in the next 12 months.
Got it. That's helpful, Lawrie. And then.
Sorry. Hugo, Nancy was just going to add a couple of comments.
Yeah. I think the ramp-up will be done progressively, but as soon as possible to go to 10, 11, 12. But MJH will be the same sequence that we talked initially. So it's the same sequence. It's more accelerating and have maybe other open pit source to complete.
Yeah. Hugo, that's where the work on E44 has a role to play. It's open pit and able to provide into the plant without the pressure on the undergrounds.
Got it. That's helpful, Color. Then another one if I could on Cowal. Appreciate a number of projects across the portfolio progressing, but just on Cowal, you're permitted there to 9.8. Obviously, as you accelerate the waste movements, the southern wall move, you potentially unlock a number of open pits that could potentially provide a bit more flexibility on feed. Could you just remind us what works on the plant need to be done to potentially get you to that permitted capacity and how we should think about the timing of those potential works?
See, you've moved on quick, Hugo. We only just said today that we're getting the southern coming forward and E46 is ahead. I think the plant one, that's a little bit off in timeframe. Our focus really is getting the three pits operating, the underground ramped up so that then the constraint becomes the plant. So the short answer is that's not in the horizon at the moment to go above the 8.8.
Thanks, Lawrie. I'll pass it on.
Thank you. Your next question comes from Levi Spry at UBS. Please go ahead.
Yeah. Thanks, Lawrie and team. So maybe sticking at Northparkes. So FYD, sometime FY27, that was what I heard.
The studies will be finished.
For the expansion? Yep.
Yeah. By end of FY27, the expansion studies will be finished.
Yep. Got it. Thank you. And then I guess just in terms of the amended agreement with Triple Flag over E44, how can we think about the process that would happen as part of that? What have we learned from the updated agreement today in the context of potential expansion?
What we've learned there, Levi, is that Triple Flag knew they had a role to play in unlocking all the opportunities at Northparkes because under the original agreement, E44 wouldn't have been developed in our lifetime because it was gold only and we had to bear 100% of the cost. What it has done and what Kieran and the team have been able to work through with them is it's put an in principle how these things can be assessed, but rightfully from Triple Flag side, they'd need to know what is the ore body, what's the method of mining, and everything that would be and the metal that would be attributed to it before they would commit to what their involvement would be.
Got it. Okay. Thank you. Yep. And then just a technical question on the flotation. So good news there. Can I just confirm it's an extra 2% on what number? Is it 84%-86%? What's the absolute number now?
Yeah. It's a 2%.
So the copper recoveries? Yep.
Yeah. It's a 2% improvement from current performance.
Okay. Great. Thank you. Thanks, Lawrie.
Thank you. Your next question comes from Daniel Morgan at Barrenjoey. Please go ahead.
Hi, Lawrie and Tim. First question just on the E22 project. If you look at slide 14 and the other news you've provided, you've got a twin decline configuration that comes up from E22 to surface. Just wondering, what is the ore haulage capacity which is included in the capital of the project explicitly? And then what option exists for greater numbers than that that have been contemplated to just preserve option value at site? Thank you.
The capacity that's 6 million tons per annum. The conveyor and all the system will be able to handle this 6 million tons per annum.
It'll be able to do 6 million tons per annum in the scope of the project, but is there the potential that you could widen the belts, increase the power, and get more than the 6 million tons under the scope?
Yes, we have, but the design right now. And we have a four tipping point as well, so that will give us more flexibility. So we think we can do more than six, but right now, the design is for 6 million tons.
Yeah. So in short there, Dan, one, we have allocated capital. If you look at the full AUD 680 million, there's probably around AUD 50 million that allows us extra optionality to go above that 6 million ton per annum. But when we build it, the things that will go in other than, as Nancy said, the quad-tipping and the like, we'll work at the six. So it's built for that optionality.
Yeah. So I guess that takes you in principle to 12.5 of haulage from underground if I've got the site correctly in my mind, and you could potentially do more than that if you upgraded the conveyors further. Is that accurate?
That's a good assessment.
Okay. Thank you. And then what is the potential for other gold-dominant open pits across the property to be potentially brought into that? Are you going to do a body of work to explore more the open pit potential across the site? And if there are highly gold-dominant ore bodies, is that something for the future negotiations that this E44 agreement provides a pathway for?
Yeah. Look, Dan, it's exactly that. So E44 is that first one that we knew based on the previous studies that we could look at now. We were never going to do any drilling on that under the previous arrangement. So that provides us. And when you look at an E28 pit and a couple of the others that are more gold-dominant, we'd look at drilling those, looking at the size and scale of those pits. And Glen and the team, I have no doubt now, have a little bit more freedom to look at their drilling programs to say gold-dominant ones aren't excluded. And if they identify any, then Kieran's got to go back to work and work out a new amendment.
I think the benefit that we've got there is by having the discussions with Triple Flag is there's an understanding of how it works for both of us and the mechanics of how we can go through that have been laid out now with E44.
Yeah. Thank you. And then if I just refer to slide 16 where this is at Northparkes, you've got a number of potential future ore sources laid out. So E22, obviously, you've got now well, you will be moving to execution now, and that's sanctioned. There's a bunch of PFS level studies. So it looks like Major Tom, E51, E44, and MJH are I guess the most advanced things that would be sequenced. A, can I just confirm that that's accurate? And B, on MJH, is that a block cave? Is that a sublevel cave? And can you use existing crusher capacity used to do MJH? Thank you.
Yeah. I'll hand that over to Nancy. But just in short, the ones that the PFS level studies are the ones that are into the expansion studies that we've approved today. So they're the ore bodies that will be assessed at expansion. Nancy, on MJH?
Yeah. MJH was looking to be a block cave at this stage, and we are looking at different options for the crusher or material handling system. So it's still open, and that's going to be reviewed in the next coming months.
Okay. Thank you so much for your perspectives.
Thank you. Your next question comes from Mitch Ryan at Jefferies. Please go ahead.
Morning, all. Brian, this is an impressive-looking slide 10. I hope you're not letting the old CFO take any credit for that. Firstly, can you just talk to Bert and some of the metrics around that? Mining rates, grade profiles, is it relatively homogenous through the planned timeframe? Can we get some more metrics around Bert, please?
Yeah. So Mitch, I'll just get you to ask a bit on Bert again. It was very hard to hear what you were saying.
Yeah. Sorry. I'll turn this headphones off. Hopefully, this is better. Hoping you can give us some more metrics around Bert, please. Can you give us mining rates, grade profile, operating costs, some of the key metrics that we should be thinking about for modeling that?
Yeah. Look, I'll hand that to Nancy to talk broadly around Bert and the metrics, and then Rocky will certainly be able to provide more information offline on that.
Okay. So Bert, we have ramping up. Like we said, we're going to start production in 2029. 2030 will be, I will say, for production for almost four and a half years. So we're going to go to produce 700 million tons of ore going from this deposit.
700,000.
Dozens.
Yep.
Of production.
The grades are more or less double what the cave is.
Yeah. 0.9. Yeah, double.
So it's a 0.9 copper and gold?
The gold is 0.82 as well. 0.8.
Okay. 0.8 gold. And the operating costs, the cost per ton of mining or development meters, how should we think about some of the breakdowns there?
Yeah. Look, Mitch, I'll get Rocky to follow all of those up with you. I mean, the operating costs are pretty well in line with normal staking operations. There's nothing different at Bert to any of the others.
Okay. Yeah. Perfect. And then looking forward to that information. And then secondly, exploration spend. How should we think about it now that you've brought these Canadian properties into the portfolio for sort of FY27 and beyond? Do we think that there's an increase in exploration costs, or is it going to just sort of be a reallocation between what has been some of the spend in the other projects? Will they ramp down?
No. So these projects will be our assessment drilling will be done by the end of FY27. The amount of drilling going in there will be incremental to what we're doing because we're not going to redirect it away from Mungari, Cowal or any of the existing operations. You're probably talking upwards of AUD 10 million-AUD 15 million in those projects depending on how successful the program goes.
Okay. Thank you.
Thank you. Your next question comes from Matthew Frydman at MST Financial. Please go ahead.
Sure. Thanks. Morning, Lawrie and team. Can I ask a couple, please? Firstly, on Cowal, just following on from some of those earlier comments on the OPC, obviously, a pretty reasonable driver for value in the business in the near term, at least. So can you expand on the fact that it's running ahead of schedule? I guess what does that mean for timing of transition to open pit feed from E46 and sort of quantify how far ahead of schedule it's looking? And also any impact or benefit, not just from the open pit feed perspective, but any impact on the undergrounds? Does that allow you to access particular underground areas earlier than perhaps you'd planned? Yeah. Just wondering what the sort of quantity of that running ahead of schedule looks like. Thanks.
Yeah. Matt, it's only a couple of months. It's not significant in that regard. So it doesn't impact on the underground over the next couple of years. What it does do is that as the lake is drying out, as I said, we'll do the southern end work, and then in E46, we will start to ramp up there as we finish in Stage H. So Stage H now will go out into the last quarter of this year because of weather that we've had in the last few months in the E42 pit. So that's allowing us to start work on E46. So in terms of next year, you'll still see almost the whole year on stockpile ore. Towards the back end of the year is when you'd get anything sort of out of E46, which previously was scheduled for the start of FY2028.
Great. That's really helpful. Thank you, Lawrie. And then secondly, in terms of the sort of incremental CapEx you've guided to, I guess, particularly over sort of FY27 and onward, can you kind of break down what projects or particular aspects of the projects weren't included in your sort of prior medium-term guidance around CapEx? I guess I'm wondering, where do I need to add CapEx versus what was already in that medium-term outlook, particularly given that you mentioned that the overall CapEx budget for the OPC is unchanged and actually part of the FY26 increase is pulling that forward? So yeah, just wondering outside of the OPC where the CapEx is getting added versus your prior medium-term outlook. Thanks.
Yeah. Sure. So I mean, look, if we look at the four years, the main ones are at Northparkes, Ernest Henry, and Cowal. So if I look at Northparkes, E22, the scale and the future optionality that we're building in, and I mentioned to Dan, is one of them. At E48, we're now getting 20% more metal. We've got five levels versus the study had four. We approved the Coarse Particle Flotation and the expansion study. There's another one that's going on around regrind capacity at Northparkes. So when you look at all of those, you're talking in the order of AUD 250-300 million for all of those items that weren't previously in there.
And then similarly, when you look at Ernest Henry, Bert, as Nancy mentioned, the mining rates are going to be higher because we're basically getting about 50% more tonnes, which is then obviously doubling the metal, and we're also getting that. And we're obviously doing some studies below the 775 that we're now bringing into the plan. So you're probably looking at around AUD 120 million-AUD 150 million there at Ernest Henry. Then at Cowal, while it is going to go ahead of schedule and we're doing the southern one earlier, that does open up an opportunity for us to bring mine development from FY31 and FY32 into FY29 and FY30. And then we have also acquired a second-hand village, which saved us about 50% on the capital cost at Cowal.
So in that one, you're probably talking $120 million-$140 million going at Cow, and that will make up almost the majority well, actually, almost all of what we're talking about over that four-year period.
Thanks, Lawrie. That's a really clear breakdown, and thanks for those numbers.
Thank you. Your next question comes from David Radclyffe at Global Mining Research. Please go ahead.
Hi. Good morning, Lawrie and team. So if I could start on Northparkes and maybe ask Dan's question another way. On the last site visit, there was discussion of the potential to operate E22 at up to 9 million tonnes. So just wondering what drove the decision here to keep it at the 6 and not go to the higher rate given the discussion around the mill upside does sound positive.
Yeah. Look, David, I'll have to just go back and sort of refresh myself on the one a couple of years ago. But essentially, that was certainly predicated on the basis that you didn't have all the other ore sources that could be available to you. And so what we've looked at is what's the right size of the E22 cave. We believe that if we go, as I said, between 7.5-15 million tons per annum, running that at anywhere between that 6-7 million tons per annum or even a bit higher makes the right sense for the asset and for the capital that we're going to invest into it now.
Okay. Maybe if I can follow up on the sequencing questions and just think about the open pit ore sources given the current shaft can do 6.5, so you're kind of limited in the near term. I'm not really clear about when you bring back open pit ore. It does sound like maybe E44 is now ahead of E51 or Major Tom. So what could the timing be on a new open pit?
Yeah. Look, I wouldn't say that E44 comes ahead of the others. I mean, we've got the drill results and the outcomes on Major Tom and E51, and we'll advance those through the study period. I think what it does do is that E44, you wouldn't be seeing that coming in till about FY30 into the plan. But what it does provide is the opportunity for us to look at the alternative ore sources that Nancy and the team are going to study through FY27 to enable the plant expansion.
Okay. No, that's helpful. Thanks. Maybe if I could just sneak one last one in. Obviously, at current gold prices, Red Lake's on track to generate significant surpluses. It does owe the group, but it does have, obviously, significant optionalities still. So is there any thoughts or studies underway to increase the spend at Red Lake? Or given that you've got so many projects you've talked about, you'll just deploy the capital to those?
I think it's fair to say that the Red Lake team's starting to get a little bit of interest in asking for capital, having delivered about six, seven good quarters. I think the thing is that we've got a mine life that's 15+ years there. It's going to need some investment. It has to compete, and I think the returns need to demonstrate that. But I think it's earning that right. We'll look at studies around tails reprocessing. We're looking at what are the options around whether that allows us to use the third plant, the Bateman Mill, what we do in terms of mining areas. And certainly, when you talk to Glen and the team, there is still a view that there's more to be discovered there that will provide us opportunities to invest.
I'd say it wouldn't be investing in taking the Red Lake and the Campbell Mills higher. It would be, does the Bateman Mill provide optionality? So it's just getting there. I don't think they're willing to stick their head too high up out of the trenches to ask for money, but they're certainly getting ready for it. As long as they keep delivering quarter in, quarter out, they'll enhance their chances.
All right. Perfect. Thanks, Lawrie. I'll pass it on.
Thank you. Once again, if you would like to ask a question, please register by pressing star then one on your phone. Your next question comes from Alex Barkley at RBC. Please go ahead.
Thanks. Morning, Lawrie and everyone. A question on the Northparkes permitting. I think I heard Nancy say E22 is fully approved. Is there already some kind of permit for the mill expansion? And a bit similar to David's question, was it always a 6 million-ton per annum E22 case that was under study work? And what exactly is the capacity that has been approved? Thanks.
Yeah. Sure. So in terms of the permitting, yes, the permitting for E22 is all received, and we don't need anything to plant. Pardon me, [it] is permitted to 8.6 million tonnes. So to go above that will require an approval, and that is what the study team will take into consideration during the expansion study next year. And then in terms of E22, it was viewed as being six to seven. And as was mentioned earlier, there was talk of the nine. I just need to go and refresh in terms of what was the considering which was the conveyor to surface, which is not what we're contemplating in this one. So it's six with capacity to seven or optionality for seven being built into the project.
Okay. Sure. And just the last one, speaking of the 9 million tonnes that was talked about on site, you threw out a number around AUD 120 million CapEx to get the mill to that point, say reaching 10 sort of thing. Is that CapEx number still in the ballpark? I mean, that could well be what people are basing their expectations around. Just maybe a rough idea there would be helpful. Thanks.
Yeah. Look, I dare say that in the last two years, that number will have changed, and that's really what the study's got to look at in terms of the capacity, sorry, going from 7.5 to 10 or 11 or 15, the 120 certainly has gone up since that was done two years ago. And you've got to remember that that actually, when we were on site, was based on a study that was done by CMOC about 18 months before we took ownership around the potential expansion. So it's definitely changed since there, Alex.
Yeah. Okay. Sure. Thanks very much, guys.
Thank you. Your next question comes from Adam Baker at Macquarie. Please go ahead.
Morning, Lawrie and team. Just a follow-up on E22 CapEx of AUD 545 million. Just wondering what the breakdown is over the next five years. I mean, is it a pretty even split across these years, or will the CapEx spend be more back-end weighted as you accelerate the development in preparation for first production?
Yeah. Look, it will be almost smooth over the few years. There'll be a slow ramp-up in terms of the capital this year. Then probably for 2027, 2028, and 2029, you'll see that ramp-up from, say, just over a and this is in our 80% share, over AUD 100 million, AUD 120 million in 2027, moving up to around the AUD 150 million and then around the sort of AUD 170 million-AUD 180 million in 2029, and then it tails off in 2030 as we get into it.
That's clear. Thank you. Just secondly on the recovery activities at Ernest Henry following the rainfall event late in December, how are things going there? You're back up and running, or is there still a little bit of remediation to occur?
Yeah. It's both. We're back up and running. The shutdowns that Matt talked about in the call last month have been completed. So the site's now finishing the remediation work, ramping up the mining activities, and then by the end of March, we'd be back to normal full run rates.
Great. Thanks.
Thank you. That does conclude our Q&A session. I'd like to hand the call back now to Mr. Conway for closing remarks.
Thank you, Cameron. Look, prior to signing off, I do want to call out a lot of people have put a lot of effort into getting all of the information out today. It's either in the finance team, investor relations, corporate development projects, studies, and of course, the teams at Northparkes and Ernest Henry to allow us to put the releases out today. I do thank them for that. I thank you for your time on the call today, and we'll talk soon. Thank you.
Thank you. That does conclude our call for today. Thanks for participating. You may now disconnect your lines. Thank you.