Thank you for joining today's teleconference for the release of Mount Gibson Iron's September quarter activities report. Mount Gibson Iron’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'll be an opportunity to ask questions. Due to time constraints, only institutional participants will be invited to ask a question at that time. A recording of the call will also be available via the Mount Gibson Iron website shortly after completion of today's teleconference. Thank you, and go ahead, Peter.
Thanks, Lisa. Good morning, everyone, and thank you for joining us to discuss Mount Gibson's September twenty-four quarterly activities report. As usual, I'll give a brief overview before handing back to Lisa for any questions. Just as a reminder, all currency we mention on this call is denominated in Australian dollars unless otherwise stated. As you will have seen from this morning's report, Mount Gibson's shipping volumes, grade, and revenue were temporarily lower in the September quarter, as expected, as we completed the reconfiguration of the primary in-pit haul ramp at Koolan Island in accordance with the mine plan. This work encompasses the transition of iron ore mining from the depleted western end of the pit to the shallower eastern end, which will now be the source of our high-grade iron ore production over the remaining two to three-year life of the operation.
The reconfigured haul ramp and the new tertiary crushing circuit were both successfully commissioned in the quarter, with iron ore production already increasing, while iron ore grades have also returned to the usual high level of 65% Fe from the end of the quarter. Accordingly, the operation remains on track to achieve the company's sales guidance for fiscal twenty-five. Now touching in a little more detail on the operations. Firstly, in relation to safety, we have continued our two-year improvement trend. The rolling twelve-month LTI frequency rate remained at zero incidents per 1 million man-hours worked, which is a very good achievement. Significantly, our rolling twelve-month total recordable injury frequency rate, which reflects LTIs as well as other injuries, again reduced, and it declined from 4.4 incidents per 1 million man-hours worked to 2.9 at period end.
Safety is highly correlated with production performance, as many of you will know, and we and our site team are focused on achieving further improvements for what is a remote and challenging operating site at Koolan Island at times. In relation to shipping, we completed seven shipments in the quarter, totaling just under 0.6 million wet metric tons at an average grade of 63.7% Fe. Our sales revenue totaled 61 million free on board, which reflected an average realized price of $74 per dry metric ton, FOB, equivalent to AUD 110, and just a reminder that we report on FOB terms at Koolan Island, which is after we've deducted shipping freight costs.
This was after our downward provisional pricing adjustments of AUD 6 million, or approximately $7 per ton, due to weakening iron ore prices in the quarter, of which you would all be familiar. As a reminder, Koolan Island's revenues are subject to provisional pricing movements, both positive and negative, as the contracted revenues are based on average monthly prices occurring 1 to 2 months after the month of shipment. In relation to costs, cash operating costs for the quarter totaled AUD 55 million, equivalent to AUD 99 per ton shipped, FOB. The full capitalized mining costs of AUD 18 million, which were primarily for the haul ramp-related work, capital projects of AUD 4 million, and state and third-party mineral royalties of AUD 6 million.
With the expected rise in shipping rates and grades for the remainder of the 2024/2025 financial year, we remain on track for our unit cash cost guidance, which is AUD 95-AUD 100 per wet metric ton shipped, and that's inclusive of our capitalized mining costs, but before royalties, which of course, are a function of sales price. Iron ore production totaled 0.5 million wet metric tons, down from 0.7 million tons in the prior quarter, due to ramp reconfiguration work that was completed in the period. This has involved construction of a ramp switchback in the center of the pit, the establishment of an upgraded dewatering system, and commencement of the removal of the former eastern haul ramp.
A lot of work is necessary to widen the eastern half of the pit to provide future access to the deeper levels of the high-grade ore body. Removal of the eastern haul ramp is scheduled to be completed progressively through the 2024/2025 financial year. As a consequence of the above work, total material movement increased substantially to two point six million tons, temporarily lifting the short-term waste-to-ore stripping ratio to four point seven to one, from zero point five to one in the prior quarter. The stripping ratio is a key cost driver at Koolan Island, and although it will vary in line with the waste extraction cycles in the main pit going forward, the stripping ratio is anticipated to progressively reduce through the current financial year and future periods, and is expected to average less than two to one from the remaining mine life from this point forward.
Ground support work also progressed as scheduled in the central footwall area above the August 2023 rockfall zone. This involves a program of on-wall anchor drilling, grouting, and installation of protective mesh, and a safety barrier fence, and it's necessary for safe access to the high-grade ore zones directly beneath this area. The on-wall drilling program is now 50% complete, actually a little above that now, and is expected to be finished in mid-2025, although we are planning for the usual interruptions during the coming northern Australian wet season months. Also, in the quarter, we released our updated statement of mineral resources and ore reserves as at 30 June 2024, with the remaining ore reserves in the main pit estimated as 7.2 million dry metric tons, grading 65.1% Fe.
For conversion to wet metric tons, it's worth noting that the typical moisture rate is around 3-4%. In relation to processing, processing in the quarter was generally aligned with ore extraction from the main pit and totaled 0.4 million tons. The tertiary crushing circuit was successfully commissioned, reducing rehandling requirements and enabling more efficient and cost-effective processing now of the harder material being sourced from certain eastern sections of the main pit ore body. Contract crushing personnel and equipment were demobilized in the quarter as a result. Koolan Island's cash flow for the quarter totaled AUD 5 million, and that comprised an outflow from operations of AUD 22 million, while we completed the various mining setup works in the pit.
But that was fully offset and more by the receipt of the final AUD 27 million insurance proceeds relating to the business interruption component of the August 2022 processing plant fire. From a group perspective, cash flow also totaled AUD 5 million, with interest income of AUD 5 million covering all of the corporate administration and exploration costs. and in addition, just over AUD 3 million was invested in the exercise of one of the tranches of equity options that we hold in Mid West iron ore producer, Fenix Resources, and that lifted Mount Gibson's shareholding in Fenix to a little over 10%. Cash and investment reserves totaled AUD 412 million at 30 September, and that's excluding the investment in Fenix, which had a market value of approximately AUD 22 million at quarter end.
Including the value of this holding, the company's period-end cash and investment reserves therefore totaled AUD 434 million, and that's equivalent to approximately AUD 0.36 per share. At this level of cash backing, and given the expectations of what we hope to generate from Koolan Island, we commenced an on-market share buyback late in the quarter, which will be for up to 5% of the company's issued shares. To date, a total of 3.5 million shares have been bought back at an average price of AUD 0.317 per share, and we expect to continue with that program going forward.
In relation to realized pricing, as noted earlier, iron ore prices were substantially weaker in the period, with the benchmark 62% Fe CFR Fines Index dipping below $90 a ton in September, and averaging $100 per ton for the quarter, which was 11% lower than in the preceding quarter, but importantly, the high-grade 65% Fe price continues to trade at a solid premium to the 62% benchmark, with that premium increasing marginally from 8% to 9% per contained iron unit, and that premium is obviously very important for us for Koolan Island. At today's spot prices, which have weakened since the end of the quarter, the price for 65% Fe material maintains an overall premium to the benchmark index of around $15 per ton.
During the quarter, while shipped volumes and grades were temporarily lower, Koolan Fines still realized an average free on board price after shipping freight of $74 per dry metric ton, as I mentioned earlier. Now, this was after adverse provisional pricing adjustments totaling $6 million, and that's the equivalent to $7 a ton. In Australian dollars, the total realized free on board price equated to approximately AUD 110 per ton, as mentioned earlier. Shipping freight charges from Koolan Island to China reduced slightly from the previous quarter and ranged between $13 and $14 per ton that we shipped. While the outlook for iron ore is heavily linked to monetary and fiscal initiatives for the Chinese property, construction, and manufacturing sectors, demand is also strong from other countries, and we note that there's been significant improvement in the proportion of profitable Chinese steel mills.
And we're seeing steady demand for Koolan Island's high-grade and low-impurity cargos. Now that we've finished with Koolan Island, just stepping back, I wanted to reiterate our previous statements regarding the company's strategy, which is effectively twofold. Firstly, the management team is focused on safely maximizing production and cash flow from the remaining life of the Koolan Island operation. It's well set up to achieve most from the remaining ore reserves and other potential value creation activities at site. Achieving this first objective will work to set the business up for being well-positioned with substantial cash reserves to pursue investments and acquisitions to create a larger and more profitable company.
Today, following the strong cash generation achieved last financial year, we've commenced this work with a handful of initial investments in junior resources companies, where we believe that future financing or strategic opportunities may arise and where we're seeking to utilize our skills and experience from our organization.... So to finish, in relation to our outlook, while the September quarter was impacted by weaker iron ore prices and the phase of our Koolan main pit mining schedule, we expect an improved and consistent shipping rate over the remainder of this financial year and seek to further increase this rate in future periods. We've made a steady start to fiscal twenty-five and look forward to generating improved cash flow from the Koolan operation and to advance some of the new investment opportunities for the business.
Finally, we also look forward to providing an update at our upcoming AGM on the 20th November in Perth. That can be attended in person or online, and we encourage all shareholders to check the notice of the meeting for details on how to participate. So with that, Lisa, I'll hand back to you for any questions that any listeners may have. Thank you.
Thank you very much, Peter. If anybody would like to ask a question, please press star one on your phone now. Okay, we do have a question, and it's from Glyn Lawcock from Barrenjoey. Go ahead, please, Glyn.
Thanks very much.
Hey, Glyn.
Good morning, Peter. Maybe just you've touched on it a little bit, but I'm always curious that because you have obviously a large shareholder who is, you know, in China, I mean, what are they saying to you about the recent stimulus measures that have been introduced? Is it too early, or is there anything they're sharing with you on what they think is going on and what it could mean for the industry in terms of steel and iron ore?
Look, I think it's still pretty early, Glyn. The feedback that I've received is this is the start of a range of announcements, but that's across manufacturing, construction, infrastructure, and property, so it's a broad brush. I think there's an expectation from our major shareholders that there will be more in the property sector, but it's pretty early to say. So I don't have anything specific to give you at this point.
Okay, but you called out that you said demand's still strong. I mean, obviously, they just buy everything they can, and it's been going on to inventory, I guess, some people would say, this year, but just the premium for your product, you know, like, you sold a little bit substandard product, as you said, you're going back to sixty-five.
Yep.
One of your peers, I mean, it's not a peer, but, you know, they sell a high-grade product, Iron Bridge, and they said they were getting less than the sixty-five index. Has there been some problems in the quarter as well? They called out concentrate was in excess supply, so, you know, your high-grade product was getting discounts to sixty-five. Is that what you've seen as well?
We haven't seen that, and the reason, Glyn, is that our contracts, if we are selling a 65% cargo, our contractual mechanisms work such that it links to the Platts 65 index. There are adjustments for penalties, and our main penalty is silica, so we do pay between sort of $5 and $7 a ton for silica, but that's really it, and we haven't picked up that there are issues with that high-grade material that we've already started to sell in October. Now, maybe it's a volume-related issue in that, you know, we are a niche and small producer, and so there are particular mills that will buy from us just from a small blending perspective, but we haven't heard any specifics about problems with our 65% product at all.
Okay, and that $5-$7 a ton penalty for silica, that's fairly fixed, is it? Or does that move around, I guess, with volume of concentrate in the market as well?
It actually moves according to the Platts and Metal Bulletin penalty rates that are published daily, so it's actually linked into a formula directly to those, price indices.
Okay.
If there are issues that arise in the high-grade sector and those price penalty indexes basically change, well, we will wear that change.
Are you at the higher end or lower end at the moment then, for that sort of penalty?
Towards the lower end, because at 65% Fe, our silica levels are around, and it's the main impurity in the ore, between 4.5 and 5.5% silica. And so we typically pay a penalty or from a level of around 2 to 2.5% is a normal tolerance, and we pay from above there. So if our grades reduce, as they did in this last September quarter, then typically the reduced iron flows straight through to a higher silica. Then accordingly, we pick up, and we wear a higher penalty for those products.
Yeah. And look, just one final question. Just on the cash flow, you know, group cash flow AUD 5 million, and then, you know, you've got sort of a net zero from the corporate and then a little bit of money on the buyback and the investment in Fenix, but cash, cash went down AUD 30 million. Is the delta all working capital, is it? That's not inside the AUD 5 million of the group cash flow.
That's correct. So the, the delta there is the investment in Fenix, because we capture those cash and investments in the one bucket in the way we report it, so that's one part. But we had a ship on the second last day of month, which departed, and so we captured that in our operating cash flow, but we obviously didn't receive the funds for it, and that's about a $ 9 million change, $8 to $9 million . And we didn't receive those funds until early October. In addition, we had normal accrual working capital-type changes in that we came off a strong June or stronger June quarter, where we accrued for mineral royalties and the like, and the accrual for mineral royalties in the September quarter was quite a bit less, another $5 or $6 million dollars less than what we had in June.
So when you add those kind of things up, they're all working capital in nature based on the way we publish our operating cash flows.
Yeah. Okay, that makes sense. Thanks very much, Peter.
Cheers, Glyn. Thanks.
Thank you. If anybody else would like to ask a question, please press star one on your phone now. Okay, thank you, Peter. We have no further questions.
Okay. Thank you all. Please, if you do have any questions, feel free to reach out to us. You know where to find us, and, have a good day. Thank you.