Thank you for joining today's teleconference for the release of Mt. Gibson's IRON's December's Quarter Activities Report. Mt. Gibson's Chief Executive Officer, Peter Kerr, will be leading the discussion and is joined by Chief Financial Officer, Jill Dobson and External Relations Manager, John Facius. Mr.
Kerr will provide a brief overview, after which there will be an opportunity to ask questions. Due to time constraints, only institutional participants will be invited to ask questions at that time. A recording of the call will also be available via the Mount Gibson website shortly after completion of today's teleconference. Please go ahead, Peter. Thank you.
Thanks, Bethany. Good morning, all, and thanks for joining us to discuss Mount Gibson's December quarter report. As usual, I'll give a brief overview and then hand back to Bethany for any questions that anyone may have. So as an introduction, the business performed steadily over the quarter and the half year period, both in the Midwest and at Kulin, notwithstanding some challenging weather conditions at Kulin later on in the quarter. Group ore sales, as we've disclosed, totaled 900,000 metric tonnes in the quarter and the total for the half year was 2,300,000 tonnes in line with our plan.
Sales at Coolin totaled 400,000 tonnes in the quarter, while the final quarter of low grade sales from our Extension Hill site in the Midwest totaled just over 500,000 tonnes. High grade sales from Kulin in the half year were 1,100,000 tonnes, which was consistent with our plan and guidance, while low grade sales for the half year were just over 1,200,000 tonnes, which was a touch above the top end of our guidance. Sales revenue totaled AUD110,000,000 FOB for the quarter and AUD 239,000,000 for the half year. And of course, it was assisted by the strong pricing we've seen, particularly in the last 2 months. Group unit cash costs were below guidance at Aussie 56 per wet metric tonne FOB for the quarter and 55 for the half.
And that's before the investments we've made in advanced overburden stripping at Kulin Island and 1 or 2 other minor capital projects, and I'll talk about those shortly. Our group net cash flow for the quarter was AUD 20,000,000 and for the half year was AUD 52,000,000 The company's cash and investment reserves totaled AUD 436,000,000 at the end of the quarter, and we have no borrowings. The reduction of CAD 9,000,000 in the cash and investments total over the quarter wasn't reflective of the operating cash flow, but reflected all the working capital outflows as we close and clear creditors from the Extinction Hill site. And it doesn't yet reflect the proceeds of significant positive provisional pricing adjustments from Kulin Island's December quarter sales, which we will receive this quarter now. So just turning to Kulin in a bit more detail.
For mining and production, as you know, our focus this financial year is on completing or substantially completing the overburden stripping phase to set the site up to significantly increased ore sales and reduced costs from the second half of this calendar year onwards. Mining performance was on plan in October November, and we achieved total mining movement in those months of over 2,000,000 tonnes, which was very encouraging. And we were also tracking well in December before being affected by the onset of very heavy early wet season rains. In December, more than 7 70 millimeters of rain fell in the month, which is a bit of a record, I think, for December for some years at least. And in 1 48 hour period, we had 430 millimetres and that temporarily restricted access to lower levels of the main pit.
Mining continued as planned in the upper western end of the main pit, but our overall volumes reduced for the December month. Mining access was reestablished in early January and our volumes are returning to planned levels, which is good. In addition, as we reported in early November and although not having an impact on mine volumes in the period, we incurred a localized rock fall on the upper western footwall of the main pit. This required us to suspend mining in that area, but only a week or so earlier than we were currently scheduled to actually stop in that area. There were no injuries or equipment damage and the rockfall was constrained by protective meshing installed on the footwall as part of our normal geotechnical controls.
The seawall side of the main pit was not impacted and mining in the rest of the pit continued as planned. So mining was not originally scheduled to resume in the affected rockfall area until later in March this year. That's enabled us to review and determine the best approach to resume safe mining in this area. It's anticipated that these remedial works will involve some modest additional capital expenditure this year, the ground support on upper zones of the footwall where historical ground support installations are less intensive than they are on the lower levels closer to where we're mining now. The timing to complete this work is under further assessment and contractor resources are being appointed.
Ore crushed during the quarter totaled 300,000 tonnes and our sales, as I mentioned, were in line with our plan at 400,000 tonnes for the quarter and 1,100,000 tonnes for the half. Our site cash costs at AUS56 dollars per wet metric tonne sold for the quarter and AUS55 dollars for the half year were good, and that was before our waste stripping investment and capital upgrade projects. We'll be updating our annual cost guidance with the release of our half year financials later next month once we've updated some forecasts for our mining performance and we've clarified the timing of that footwall ground support work that's required. The site generated operating cash flow in the quarter of $54,000,000 before capitalized advanced waste stripping of $40,000,000 and other capital projects of $2,000,000 So the net cash flow figure was $12,000,000 for the quarter. In terms of outlook, based on the mining activities that we've done in the quarter, we now expect Kulin ore sales probably to be at the lower end of our guidance for this 2021 financial year.
So approximately 1,800,000 tonnes, And that's a function of the mining challenges that we've had and the things we need to do to ensure that, that footwall works well. Ore sales over the March June quarters are anticipated to therefore remain broadly in line with what we've achieved in the December quarter. With more ore coming from the upper west end of the main pit as we move ahead with the waste stripping program and this has always been in line with our plan, the grade shipments or the grades of the shipments for the balance of this year will reduce to between 58% 61% iron before the volumes and grades lift very quickly and significantly from the September quarter onwards. And that remains subject to our footwork works. So higher iron ore prices are having a significant positive impact on our shipment revenues.
And as a result, the net investment that we're making in the waste stripping program is significantly below where we thought we'd be, which is good. In relation to the Midwest, our team has done a great job over the last 18 months of the low grade sales program from Extension Hill. And as planned, the final shipment of low grade material was exported in late December, and that took the sales in the quarter to a little over 500,000 tonnes. Our sales for the half year were just, as I mentioned, a little over 1,200,000 tonnes. The average site cash costs for the quarter and the half year was Aussie, dollars 40 per wet metric tonne FOB, which was the bottom end of our guidance.
The cash flow from the Midwest was $12,000,000 for the quarter, including $2,000,000 from the historical rail refund credit that continues to flow through. And for the half year was CHF 20,000,000 cash flow from the operation. The low grade program has been a significant success for us since we commenced those shipments in June 2019 and has generated 4,100,000 tonnes of sales and cumulative operating cash flow of just over $30,000,000 Aussie,
which is
a great result. So we're now transitioning to final closure at Extension Hill and turning our focus to the Shine project, which I'll talk about in a minute, which is located 85 kilometers to the north and we've already moved and mobilized equipment and people from Extension Hill to Syne to assist with that development. Rehabilitation of Extension Hill is currently provisioned at approximately A10 $1,000,000 much of which will be spent over the next year and that's also subject to the timing of plant and infrastructure removal. In relation to Syne, during the quarter, we declared an initial Stage 1 ore reserve of 2,800,000 tonnes at 59.4 percent FE and we're targeting mining commencement early in the June quarter and initial shipments early in the September quarter. As with our low grade program, we've adopted a stage development plan for Syne to keep aligned with market conditions.
Stage 1 has a low capital cost of only AUD 17,000,000 to AUD 20,000,000 and to establish the site and produce around 1,500,000 tonne per annum of lump and fines products over an initial 2 year period. And the average cash operating cost of that stage will be somewhere around AUD 65 to AUD 70 per wet metric tonne FOB before royalties. In our original pit optimization, we assumed an average 62 percent iron ore price of US70 dollars albeit at a lower FX rate of US67 dollars which is where around where it was at that stage. So given today's significantly higher prices in Aussie dollar terms, the project is obviously extremely robust. Assuming conditions remain supportive, there's good potential for a further 2 years in an expanded Stage 2 pit for Syne and that's based on measured and indicated mineral resources within the model pit shells at the moment.
Work in the December quarter at Syne focused on-site preparation, permitting and approvals and really chasing down the remaining requirements and advancing key commercial arrangements. Our base case assumes ore is hauled approximately 300 kilometers by road to Mount Gibson storage facilities within the Geraldton port. However, potentially more efficient and lower cost transport options are under advanced discussion with 3rd parties, and we'll update on those as appropriate. Initial site works commenced in the last few weeks, including the establishment of site water supply and deployment of mobile plant and equipment. The mobile mining fleet itself and we will do the mining ourselves has also been secured and recruitment of the key senior site leadership personnel is now effectively complete.
The project remains on schedule to commence mining pre stripping during April in order to achieve the first sales, as I mentioned, early in the September quarter. So in the December quarter, expenditure on the project was only $1,000,000 and we expect to incur most of our budgeted capital development expenditure in the current June half. In addition, approximately $15,000,000 will be spent in the June quarter on initial mining waste pre stripping and stockpile build activities. So that's effectively a working capital type investment. So just before I finish up, I wanted to say a few words on pricing, which obviously continues to be very strong.
The average Plat 62 benchmark index and that's the CFR price for delivery in China was US134 dollars per tonne for the quarter and that was up from US1.18 dollars in the September quarter and for the half year was US1.26 dollars So the prices that not many people including ourselves anticipated but very welcome. The 65 index price also lifted, this is the 65 percent FE index price, to an average of 146 CFI U. S. In the quarter and 138 for the half year. So as we've noticed and consistent with past periods of higher pricing, the high grade premium was actually quite compressed at just under an average of 4% for the quarter, and we adjusted our blending strategy accordingly to maximize our revenues.
Our Kulin DSO fines realized an average price of US149 dollars per tonne FOB after penalties and significant positive provisional pricing adjustments. That was compared with US104 dollars per tonne in the prior quarter. The December quarter price of US149 dollars comprised US130 dollars of pricing related to the December quarter shipments plus the provisional pricing adjustments relating to the September quarter. So that's been obviously a very positive outcome for us as that price is particularly lifted later in the quarter in line with our quotation periods in our agreements. Shipping freight remained reasonably consistent across the quarter, averaging approximately US10 dollars a tonne for Panamax vessels shipping from Kulin Island to China.
For our low grade sales program in the Midwest, where we've sold our cargoes on a fixed price basis, our average realized prices in the quarter were US34 dollars a tonne FOB for fines and US45 dollars a tonne FOB for lump products. So in summary, just to close, I believe we achieved a steady December quarter in line with our plans and in particular are focused on the schedule overburden stripping program at Kulin Island. So we will continue to invest in this program and in the development of shine over the next two quarters, being the March June quarters this year. And our focus will remain on cost control and then the significant increase in production and cash flows that we're chasing from the September quarter onwards this year. So on that note, Bethany, I'll now hand back to you for any questions that others may have.
Thanks.
Thank you, Peter. Institutional guests are now invited to ask questions. Our first question is from Hayden Bairstow from Macquarie. Please go ahead, Hayden. Thank you.
Hi, Peter. Just a couple for me. Firstly, just at Coolant, I mean the costs are going up a little bit. Is that just a variance in waste versus ore movements for the quarter? Or are you finding it harder to get a full complement of staff or anything like that?
Is there any because I would have thought with the the airport is now open, I presume, so you can just fly direct up there. But just trying to get your thoughts on that. And then on Shine in the Midwest, I mean, it's not huge amounts of volumes. The forward market is not that liquid, but for those sort of volumes, it probably is all right. I mean, at what point do you start locking some of this stuff away to guarantee your capital return?
Yes, no problem. Good questions, Haydn, relevant for us. Look, I'd say for Kulin, the costs that we're seeing, we've been actually steadily working and improving on the cost metric that we've mentioned in the quarterly of mining and administration and logistics cost per total tonne moved. And that's been coming down. But in the December quarter, we're impacted by weather and also the Western football piece, which will require some more ground support higher up.
So it's those things that we're wanting to assess a little more accurately now and adjusting our guidance. And that's important for us obviously because as a cost per total ton move, that's the efficiency and cost effectiveness of our waste mining that's key. But when you express that total cost overall with crushing and the port related costs in the island divided by the tonnes we're selling because we're going to be selling, I think, fewer tonnes than we had originally hoped, particularly in the June quarter. And we'll be continuing with the kind of run rate we're seeing now. Just per tonne sold that will necessarily rise because of that waste stripping we're doing and because of these mining adjustments that we're making.
So I see it as a pretty temporary thing. It's part of the exercise in getting this waste this overburden moved. So we can then get into more substantial volumes of the 65% plus iron ore from the September quarter onwards. That's really the key. On the airport, yes, the airport is open.
We've been flying direct jets twice a week, Wednesdays Thursdays, Perth, Cooling and return. And that's been operating very well. We've had 1 or 2 interruptions in the wet season, which we've needed to work around. But on the whole, our staff are very happy with that. We are seeing labor cost pressures.
I think you probably see that from every minor, in particular, in certain disciplines. And so we are putting a lot of effort into our people and our incentive plans and our conditions on-site to ensure that we offer a pretty good package for employment. That's important to us. But no doubt those cost pressures are starting to rise and will become an issue for the industry in terms of numbers of skilled people for the available jobs. In relation to shine, yes, it isn't a big volume.
We have actually done iron ore hedging in the past and we've done a little bit going forward. It's something we're looking at now as we particularly get closer to the start date of shipments for shine because the market is in backwardation. And obviously, the further out or further ahead you do it, you suffer from that backwardation in the forward curve. But that's something that's a hot topic for us at the moment. So at this point, it's a monitoring and strategy exercise for us.
Okay, great. And just one final one just on I mean, it's obviously for the board, but should we expect any sort of material shift in the dividend policy given how much money you're starting to make and where iron ore is? Or is it still just going to be sort of a continued as you were payments?
Yes. Look, I'm not I can't comment at the moment on that because the board's approach is to assess for the full year and see. But it can the board can obviously decide and change its approach as needed. But that will be that is a topic of discussion at board meetings pretty obvious for when iron ore prices are higher. So but I've got no information at this point on what the board might be thinking there now.
Okay. Good stuff. Thanks.
Thank you, Hayden. Thank you, Peter. It seems we have no further questions at this time.
Okay. Thanks, Bethany. And thank you all for listening to the call. A copy will be placed on our website, if you would like to go back and access it. And hopefully, we shall see you and speak soon.
Thank you, everyone. As your host has closed the call, you may now simply leave by disconnecting your line.