Thank you for joining today's teleconference for the release of Matt Gibson's eyeing September quarter activities report. Matt Gibson, Chief Executive Officer, Peter Coe will be leading the discussion and is joined by Chief Financial Officer, Jill Dobson and External Relations Manager, John Faceus. Mr. Coe 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.
Thanks, Sally, and good morning all and thanks for joining us to discuss Matt Gibson's September quarter report. Look, I appreciate that some of our investors and the analysts who follow us will be at the Diggers and Dealers Conference in Kalgoorlie. However, we've sought to release our quarterly report earlier than usual, so that our presentation tomorrow can cover the latest information. So regarding the September quarter, we started the new financial year on a positive note with continued improvement at Kulin Island in terms of material movement, production and sales, and we've also taken the key step to further extend the life of our Midwest business through our Shine project. Total ore sales for the quarter were 1,400,000 wet metric tonnes, which was 19% higher than in the June quarter, and we generated all sales revenue of A129 $1,000,000 FOB.
So that's free on board is the way we report. Sales were split roughly half, half between Kulin and the Midwest with sales of the high grade Kulin Island fines increasing 30% quarter on quarter to 672,000 tonnes and that was a good start to the year given current pricing of course. We also continued the low grade sales program from Extension Hill in the Midwest with the sales there totaling 701,000 tonnes at continued low cost. Significantly, last week, we also announced the planned extension of the Midwest business by the clearing and ore reserve estimate for the first stage called Stage 1 of the Syne DSO project. We're aiming to commence sales from Syne in the middle of next year at a rate of around 1,500,000 tonnes per year for an initial life of 2 years, and we have the potential based on the resource base to extend for an additional 2 years after that depending on the market conditions at that time.
At Kallen Island, our new airstrip is also ready to receive the 1st jet carrying out personnel later this week, and that represents a major benefit for both our operational efficiency and the well-being of the site workforce. During the quarter, the group unit cash costs averaged AUD56 per tonne FOB sold, and that was before the capital investment in advanced waste stripping of AUD 24,000,000 at Kulin Island. So overall, on a group basis, the cash flow totaled $32,000,000 for the quarter, comprising operating cash flow from Kulin after the waste investment of $26,000,000 operating cash flow from the Midwest of $8,000,000 and that included the $2,000,000 from the historic rail refund, which is continuing. Interest income of $2,000,000 and corporate admin and foreign exchange costs totaling $4,000,000 Then following the payment of $16,000,000 for the cash component of last year's final dividend and positive working capital movements of $6,000,000 the net increase in our cash and investments balance over the quarter was $22,000,000 and that took our total cash and investment reserves at 30 September to $445,000,000 So turning to Kulin now in a little more detail. Our mining performance at Kulin continues to improve and that's been aided by dry season conditions, ongoing optimization work and some recruitment gains.
Total material movement increased 35% on the prior quarter to 5,200,000 tonnes and our unit mining costs per tonne moved reduced to our targeted levels. From a geotechnical perspective, the mine continues to perform the plan. The seawall is working to design a normal operational geotechnical activities on the footwall, which comprise depressurization, drilling, cable bolting, shop creating and meshing continue to progress well. So aided by the strong iron ore prices in the quarter, Kulin generated operating cash flow of CAD50 1,000,000 before the capitalized waste stripping investment of CAD24 $1,000,000 to generate the net cash flow of $26,000,000 that we stated earlier. The site cash costs were consistent with achieving our full year guidance at AUD66 per tonne sold, FOB, and that was before the advanced waste stripping investment.
So the new airstrip, as I mentioned, is now effectively operational and the first jet flight, which will bring our personnel directly from Perth, is scheduled to occur in a few days' time. This follows a successful proving flight by a Fokker 100 Jet just over a week ago. It's a significant positive development for us because it will deliver some productivity benefits as well as improvements for the well-being of our people, particularly in fatigue risks and reduced travelling times. It will also play an important role in our ongoing COVID-nineteen management plans. Looking forward, as everyone knows, I think the operational focus at Kulin over the next 12 to 18 months is on completing the elevated waste stripping phase in the main pit.
And this will see us move about 50% more waste this year than we did last year. And given that required advanced waste stripping investment, which will total around $100,000,000 this year, overall expenditure will be at its highest at this time and production most variable in line with the waste cycle. But this waste movement represents a critical investment, which will enable us to significantly increase all sales and cash flow at much reduced unit costs to occur from next financial year onwards. It's always been part of the life of mine plan and we're very fortunate that we have high iron ore prices at this point, which will see us perform well this year on it. As we indicated in guidance released with our financial results, sales from Kulin Island this financial year are anticipated to be between 1,800,000 and 2,100,000 tonnes weighted towards the latter part of the year.
Oil production and sales will be substantially lower between November March, and that's in line with our plan, where we have the peak of the waste mining cycle and also the height of the Northern Australian wet season. And then our sales will increase after that time. We'll also look to bring forward cargoes as and when our mining cycle allows and we've successfully done that in the past. As noted in August, we'll also be investing a further $20,000,000 on capital improvement projects at Kulen, primarily on an upgrade of the crushing circuit to handle the greater volumes of ore we are scheduled to produce from next financial year onwards. In relation to the Midwest, the operation continues to generate steady sales and cash flow.
We shipped 701,000 tonnes of low grade material in the quarter and the cash cost was AUD40 per wet metric tonne FOB sold, that was in line with our guidance. Consequently, the Midwest operation generated cash flow of $8,000,000 as I mentioned, and that included the $2,000,000 of the ongoing rail credit refund. As indicated in August, we now expect low grade sales to extend well into the December quarter and for this financial year to total somewhere in the range of 1,000,000 to 1,200,000 tonnes. Also in the Midwest in relation to the Shine project, which is located 85 kilometers north of Extension Hill. Last week, we declared an initial Stage 1 ore reserve of 2,800,000 tonnes at an average grade of 59.4 percent iron, and we aim here to commence sales in mid next year.
As with our low grade program, we've adopted a stage development plan for the Syne project so that we can stay aligned with market conditions. Stage 1 is expected to cost between $17,000,000 $20,000,000 to bring online and predominantly that represents road works costs and site establishment costs. And we'll produce around 1,500,000 tonne per year of lump and fines products over the initial 2 year period, with an average cash operating cost, excluding royalties of between $65 $70 Aussie per tonne. Our pit optimization work has assumed an average 62 percent at the iron ore price of $70 per tonne, CFR, and an exchange rate of $0.67 Obviously, it's moved up a little since then. But even at those levels, our project looks very robust at current and anticipated prices.
The Stage 1 ore reserve represents only a portion of the total measured and indicated mineral resource and subject to market conditions remaining supportive, we'll see the potential to add another couple of years of production by proceeding with Stage 2 at that time in the future. Stage 1 costs are based on trucking the ore by road, about 300 kilometers from the Syne site to our port facilities in Geraldton. Although importantly, we're also in discussions with a number of groups about potentially more cost effective alternative transport options. Our state environmental approvals for Shirena are already in place and we're now in the process of finalizing the remaining permitting and commercial arrangements with a view to commencing physical works on the site early next year. The project requires a 3 month timeframe for pre stripping, so we'd expect to commence all sales in the middle of 2021.
We're pleased to be able to get Shine moving as for those who might remember, we originally deferred it when the market was very soft back in 2015. And so this project will provide a meaningful extension of our existing operating presence in the Midwest, which actually commenced way back in 2004. In terms of prices during the quarter, we continue to benefit from good prices due to strong underlying demand from China and ongoing supply issues in various countries in the world, in particular Brazil. The average flat 62 percent FE CFR price was US118 dollars in the quarter and that was up from US93 dollars in the prior quarter. And more relevant for us, the US65 dollars index also improved and averaged US129 dollars CFR, so that's for delivery in China in the quarter.
However, as is consistent with historic periods of higher pricing, we did see the high grade premium reduced slightly from an average of 11% in the June quarter to 4% in the September quarter. And as a result, our blending strategy was adjusted to maximize tonnage with some minor reductions in grade, meaning that we sold an average grade in the September quarter of 63.8 percent. The Kulin DSO fines realized an average price of US104 dollars per tonne FOB in the quarter after penalties and that was compared with US97 in the June quarter. Also shipping freight rates did increase a little in the September quarter with the rate of Panamax vessels going from Kulin Island to China averaging approximately CAD10 a tonne, up from the range of CAD7 to CAD8 per tonne in the June quarter. In relation to low grade material from the Midwest, which is sold on a fixed price basis, realized an average price of US30 dollars per tonne FOB for fines and US41 dollars for lump, slightly above the prices we achieved in the prior quarter.
So before closing, I also just wanted to note that we continue to incorporate COVID-nineteen management practices in our business. Although we were fortunate to be able to return to normal FIFO rosters at the start of the quarter in July, this was a significant positive at that time, especially from a health and fatigue perspective for our people. We have retained key protocols to reduce the risk of virus entry and transmission, and we do remain alert and ready to respond promptly in the event of any required reinstatement of government or other restrictions. So in summary, the company had a robust September quarter, good start to this financial year, with production and sales at good levels from each site and cash flows correspondingly strong. We are well underway with the focused waste stripping investment required at Kulin Island to set that mine up for strong operating cash flows from next year onwards.
And we're also working to commence the Syne project in the Midwest with, as I mentioned, initial sales targeted for around the middle of next year. So on that note, I hand back now to you, Ali, and for any questions that we may have. Thanks.
Wonderful, Peter. Thank you so much. Yes, you have been invited to ask questions. It would seem there are no questions at this stage, Peter.
Okay, Ali. No problem. Unsurprising given that Diggers and Dealers is on at the moment in any case. And we look forward to our presentation tomorrow morning at that conference. So thanks all for listening and speak to you soon.
Thank you, guest. As your host has now said, the conference has finished. You may simply hang up your lines.