Thank you for standing by and welcome to the Northern Star March 2024 quarterly results call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Stuart Tonkin, Managing Director and CEO. Please go ahead.
Good morning, and thanks for joining us. With me today is Chief Operating Officer Simon Jessop and Chief Financial Officer Ryan Gurner. I am pleased to present the group's March quarter performance, despite adverse weather having an impact. With these events now behind us, we are focused on maintaining the strong operational momentum so far seen in the June quarter, and I am particularly proud of our people who demonstrated resilience during the period and delivered our results in a safe manner. Thank you. For the March quarter, we sold 401,000 ounces of gold at an all-in-sustaining cost of AUD 1,844 an ounce, generating underlying free cash flow of AUD 143 million, which is up 40% from the December quarter.
Each of our production centers remains in a positive free cash flow position, and as a group, we remain financially resilient in a net cash position of AUD 174 million, with strong liquidity of AUD 2.5 billion. This financial strength allows us to fund all of our growth investments, exploration activities, and capital management initiatives. As you can see in our results, KCGM stands out this quarter, providing a glimpse of what's in store for this asset going forward. KCGM, our largest and lowest-cost asset, delivered a positive step change operationally and financially, with the Kalgoorlie Production Centre generating the group's highest free cash flow per ounce. This performance is driven by increased access to the high-grade Golden Pike North material, an area we'll be mining for the next five years.
Getting access to this material was a multi-year effort, but the financial returns have been exceptional, and the three-year effort was well worth it. For the KCGM mill expansion, the enabling works were completed and on-site construction advancing to plan. It is exciting to see this activity underway at KCGM, which will double the plant's throughput to 27 million tonnes per annum and lift production to 900,000 ounces per annum by FY2029, and this will establish KCGM as a top five global gold mine. For FY2024, we expect to produce 1.6-1.75 million ounces of gold at an all-in-sustaining cost of AUD 1,810-AUD 1,860 an ounce, into a very healthy gold price which is currently above AUD 3,600 an ounce.
Before I hand to Simon, Pogo continued to perform well with net mine cash flow of AUD 21 million, bringing its full-year contribution to date of AUD 90 million. Quarterly gold sales were 59,000 ounces at an all-in-sustaining cost of $1,567 an ounce. During the quarter, Pogo had a planned shut as well as experienced some unplanned downtime, which has since been resolved. Grades were lower than expected due to stope mine sequencing, although grades have increased so far during the June quarter. Pleasingly, mine development rates continue to strengthen, averaging a monthly rate of around 1,600 meters a month from five development jumbos. Simon will now speak to the Australian operations.
Thank you, Stuart. For the Kalgoorlie Production Centre, including KCGM, Carosue Dam, Kanowna Belle, and South Kalgoorlie, we sold 227,000 ounces of gold, up 3%, at an Australian all-in-sustaining cost of AUD 1,592 an ounce, down 5%. This production delivered a mine operating cash flow of AUD 302 million, up 5% quarter-on-quarter. The region also spent AUD 200 million on significant growth capital projects. This included AUD 95 million on the KCGM mill expansion, plus AUD 32 million on KCGM open-pit mine development and the new tail storage facility, which has a 147 million-tonne capacity. At KCGM, open-pit material movement was slightly lower than our planned movements at 15.8 million tonnes in the quarter due to rain and prioritization of the movement to Golden Pike North, Oroya Brownhill , and the East Wall. The open-pit team has been successfully managing the priorities well, with another 30,000 ounces mined from Golden Pike North.
We remain on track to regain full access to Golden Pike North in FY25. Underground mining volumes for the Kalgoorlie region were flat at 1.51 million tonnes and 2.5 grams to deliver 123,000 ounces. The higher grade was driven from KCGM and Carosue Dam as we regained access to improved scheduled areas. KCGM's underground operations increased development 16% to 3.8 kilometers for the quarter, with the FIM Underground area achieving its first mine ore during the quarter. The development will continue to ramp up quarter-on-quarter as a key lead indicator for opening up new mining fronts, followed by production increases. The Carosue Dam underground mines all performed well, with 53,000 ounces mined in the quarter. Open-pit movements increased 10% to 1.1 million BCMs, despite significant and constant rain impacting the results.
The Kalgoorlie operations increased mine ore volumes while a paste plant at South Kalgoorlie was successfully commissioned during the quarter to ensure maximum extraction of the high-grade +5 grams per ton Mutooroo North area. Processing volumes in the Kalgoorlie Production Centre reduced 15% from a combination of planned major mill shutdowns, unplanned regional power interruptions in Kalgoorlie, and significant rain across the region, causing interruptions to maintenance and the supply chain. Despite these challenges, KCGM's gold increased 13% quarter-on-quarter to 127,000 ounces as underground and open-pit mine grades improved. Pleasingly, the recovery at KCGM also improved 2% from a range of improvements across the plant. Kanowna Belle had significant power outages during the quarter from the grid, while Carosue Dam milling was also impacted by rain. The KCGM mill expansion spent AUD 95 million with staged handover work areas to the major contractor.
The primary crusher excavation was completed, with the first concrete pour completed during April. The new mill footprint and coarse ore stockpile areas are on track to be handed over in the June quarter. The engineering design works are progressing well, with 35% complete and remain on track. We are very pleased with the on-ground construction activities, which have commenced on time and to plan. At our Yandal Production Centre, including Jundee, Thunderbox, and Bronzewing, we sold 114,000 ounces of gold at an Australian all-in-sustaining cost of AUD 2,070 an ounce. This production delivered a mine operating cash flow of AUD 101 million, while we spent AUD 64 million on growth capital projects. Primarily, AUD 21 million was spent on the Orelia open pit. At our Jundee operation, development advanced for 6.9 kilometers, with 780,000 tonnes of ore mined and 73,000 ounces.
Processing achieved above nameplate mill throughput despite significant rain impacts, which meant reagents to site were impacted. The mill head grade was lower due to a drawdown of low-grade stocks and mine head growth. The Jundee renewable project progressed well, with the 16-MW solar farm and 12-MW battery to be commissioned early in the June quarter. The 24-MW wind farm foundations have all been poured, and we are waiting for the large crane to install the turbines during H1 of FY 2025. The Thunderbox underground operation achieved 490,000 tonnes of ore, mined at a slightly higher head grade of 1.8 grams per ton. The Wonder Underground mine ramped up throughout its first full quarter of operation, averaging 292 meters a month, and will be on ore during the June quarter. This is a great start by Northern Star Mining Services and is already putting this mine well ahead of budget.
For the quarter, the underground and open-pit operations successfully mined 1.37 million tonnes of ore above what the Thunderbox process plant milled. At the Thunderbox process plant, we milled 1.13 million tonnes for the quarter and sold 45,000 ounces of gold. The throughput averaged 735 tonnes per hour for the quarter. Availability was a low 70% for the quarter, with a major shutdown completed in February, followed by significant conveyor belt issues and a lack of ability to rectify with the major lightning and rain events. Our bore field was also flooded, leading to a lack of water getting to the process plant. The focus is on achieving a step change in mill availability, with positive signs during April to date as the improvements made in Q3 are resulting in increased runtime.
Our goal is to stabilize throughput above 5 million tonnes per annum while we address availability across the plant. I would now like to pass over to Ryan, our Chief Financial Officer, to discuss the financials.
Thanks, Simon. Good morning, all. As demonstrated in today's quarterly results, Northern Star remains in a robust financial position. Our balance sheet remains strong, as set out in Table 4, page 9, with cash and bullion of AUD 1.1 billion and remaining in a net cash position of AUD 174 million at 31 March. Despite the challenges faced during the quarter, our assets continue to generate positive free cash, with the group's growth capital being funded from operations. Figure 9 on page 10 sets out the company's cash and bullion investments movement for the quarter, with the key elements being quarter-on-quarter total cost reduction at both the cash cost and all-in-sustaining cost level, resulting in the business generating AUD 524 million of cash flow from operations.
Prudent capital expenditure totaling AUD 298 million, AUD 38 million of exploration investment, and AUD 45 million of lease payments resulted in banking AUD 143 million of free cash flow for the quarter. Importantly, all production centers continue to generate positive net mine cash flow. Growth capital investment during the quarter related to key growth projects, including waste removal at FIM South and the East Wall at KCGM, development at FIM Underground, development at Porphyry Underground and Wallbrook o pen pit at Carosue, development at Orelia o pen pit and Wonder Underground, and AUD 95 million for the KCGM plant expansion, which includes work performed and commitments in respect of the enabling works, which are now completed, with construction activities at the site being progressed. Total spend for FY24 is expected to be approximately AUD 415 million, with the reduced spend relating to the timing of some procurement packages being finalized.
It is important to note that this is not expected to impact the date for practical completion, with engineering, design, and construction remaining on track as planned. Also, during the quarter, the company paid its interim FY 2024 dividend of AUD 0.15 per share, totaling AUD 169 million during the quarter. On other financial matters, year-to-date depreciation and amortization of AUD 695 per ounce is at the midpoint of the guidance range of AUD 650-AUD 750 an ounce and is expected to remain within that guidance range for the full year. For the quarter, non-cash inventory charges for the group are AUD 12 million, with the majority of these non-cash inventory charges relating to the milling of historical stockpiles at KCGM and are a component of EBITDA. In the March quarter, we commenced allocating mining costs associated with additions to the long-term inventory stockpiles at KCGM.
Prior to the approval for the development of the KCGM mill expansion project, which was made in June 2023, these stockpiles were carried at nil book value. As previously communicated, processing of this material is scheduled to commence post-completion of the mill expansion in FY26 and will generate significant cash flows for the business. The effect of this change has resulted in an AUD 9 million net credit to cash cost per ounce in respect of Q1 and Q2, which has been recorded in the March quarter. Physicals relating to these long-term stockpiles over the last three quarters of the financial year are provided on page 12 of the report. In respect of the company's on-market share buyback, no additional shares were purchased on market following the company's half-year results release. Up to AUD 131 million remains outstanding, with the program open until September this year.
Notwithstanding the challenges during the quarter, we are confident of a strong finish to the year in respect of production, lowered costs, and robust free cash generation from the delivery of higher mill tonnes and grade from KCGM, higher grades at Jundee, and increased processing output at Thunderbox and Pogo, positioning our portfolio for significant cash flow generation, aligning to our company's purpose of delivering superior returns to our shareholders. I will now pass you back to the moderator for Q&A. Thanks very much.
Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Levi Spry with UBS. Please go ahead.
Good morning. Yes, thanks for your time today. Maybe one question for Simon. The issues at Thunderbox, maybe a bit of information today to absorb, so I'm still catching up. Sorry. But can you step us through the issues there and what the plans are over this quarter and how we think about, I guess, the 600,000 ounces from that hub for next year? Thank you.
Yeah. Thanks, Levi. Certainly a very challenging quarter at Thunderbox, with probably the best way to think about it is weather probably impacted us 5%-7% over the quarter. And this is a combination of not being able to get water to the process plant, reagents, and a few things like that. So that was the sort of one-off anomaly that we've certainly seen post that all rectified and back on. And then really, the rest of the downtime that we saw is probably mostly around the crushing circuit of about 5%-7% impacting the mill throughput and just above the limit to run. We did have a lot of conveyor belt rips, which impacted us over the quarter, and just lightning and storms and couldn't rectify that.
What I was really pleased about at Thunderbox, though, was that over the same period, we actually got the Wonder Underground mine up into full production and will certainly be on ore during the June quarter, which is ahead of plan, really thanks to a great start by the Northern Star and NSMS mining teams to bring that project on time and ahead of plan. So that will give us a high-grade boost. And Wonder Underground sort of has 3.2 grams average reserve grade. So we're looking forward to getting high-grade into the mill.
Yeah. Thank you. Thanks, mate. But just so I understand the milling capacity, I thought you said something about 5,000,000 tonnes you're targeting now as opposed to the 6. Can you just talk me through the program there?
Yeah. Levi, that'll literally be the run rate in Q4. So really, it's a great driver to get those ounces. But you've seen that obviously reflected across the groups of where those ounces have fallen back. So our attitude at that plant, there still is work required to ensure that the availability is maximized and we can maintain at or above the 6 million tonne. We won't get that rate this quarter. So the outlook is really on FY2025, what's required to be done this quarter. We know the work. We know the planned activity. It's really around the CapEx associated with future-proofing that asset to be reliable at 6 million.
Right. Yeah. Yeah. Got it. Thanks. And just one last one. Ryan mentioned a AUD 415 CapEx number. Sorry. Can you just calibrate that? What's that compared to?
Are you talking about the expansion project, Levi? Yeah. So that's right. So the forecast for the full year on the expansion project is 415. We initially guided 525. So as I was sort of saying in my call or in my talk, there's been some delay to the awarding of procurement packages by the contractor. And so they're quite lumpy milestone payments. So they've been delayed. There's no delay to engineering, design, construction. That's all on plan. So yeah. So we guided initially 525. What we're saying now is it's more likely going to be 415 for the year, Levi.
Got it. Roger. Thank you. Thanks. Thanks.
Your next question comes from Kate McCutcheon with Citi. Please go ahead.
Oh, hi. Good morning, Stuart team. Just at Pogo, you're running a reserve grade there of 8.5 grams per tonne, which is inclusive of dilution and recovery by definition. Should we think about the mine grade over time getting to this level, and what are the key things that have to happen there? Or is there a piece of work still to be worked through on head grade over the long?
Yeah. Thanks, Kate. Absolutely is something we're working through. We are recutting presently as we're talking everything across the group on resource reserves, obviously with relation to cut-off grades, relation to revenue side of things, which is only modest changes to those. But we're looking at the actuals at Pogo, so how we've achieved development grades, how we've achieved the scoping grades with the mining factors applied. And we're literally iterating all that through the current plan at the moment. What we do see at Pogo, given you've got a plus 7-million-ounce resource, above 10 grams, moving cut-off grades brings a lot of material in or out depending on how that's treated. And then we're looking at the 1.3 million tonnes we've been able to achieve, obviously 1.4, 1.5 million tonnes through that plant. What's the right happy place for that?
So we've still got 300,000 ounces in our head. The head grade will depend on what that throughput needs to be and the recoveries. I'm not hanging on 8.5 as a number for reserves. I'm hanging on costs and margin and productivities. So I think there's probably some compromise on that reserve grade, but it doesn't diminish the quality of the deposit. It's really just the factors we apply.
Okay. So tonnes versus grade.
It is with that large cost base. Yeah. So we're spending $30 million a month at Pogo. We're obviously targeting to get that down to $25 million. And it's going to take us a lot of effort with that, with the energy costs and a few external forces on us. But it's really that denominator of gold sold. And so the economies of scale of that plant, ramping up throughput, you've seen some great throughput through it. And it's really some planned shutdowns that are in place to rectify some things. The mill motor still needs to be replaced. So all that planned work ahead gives us security of throughput. I think whether the reserve has an 8 handle on it, that's indifferent to what the margin and the quality of the asset's going to be. I can make it 9 grams and shorten the life.
I can make it 7 grams and extend the life. That's what we're balancing at the moment.
Okay. Got it. And more a strategic question. If I look across the portfolio, you've got a few assets which are higher cost and are a bit lighter on free cash flow. You've got Aussie dollar gold at almost a record, AUD 3,600. How are you thinking about any divestments here? Are they conversations that are happening, or is this the go-forward portfolio that you've got now for the short term, I guess?
Yeah. I mean, all assets are contributing. On the front page there, we've got our all-in costs of AUD 2,600 an ounce. The spot's $1,000 an ounce above our all-in cost. All assets are generating strong cash and obviously servicing and funding their exploration, their organic growth, their dividends. All those things are benefiting from it. The asset portfolio we have today is our five-year strategy to deliver our 2 million ounces by FY26. So they're important. They're key. We're using them. It's a decent gold price. People are asking us about M&A. Selling assets at this price is great, but who can afford them or who will pay for them? We're not here to sell things just for the sake of it. You need to really have good discipline around these things. All these assets matter to us at the moment.
Okay. Got it. And then just super quickly, you're spending AUD 100 million less on KCGM this year. CapEx guidance has stayed the same. Is that just rounding in the wash, or is there more CapEx going in elsewhere like Thunderbox?
Yeah. Around our allocation. So when we see these things whether slipping over a month or so, it's reallocation of funds that we have surplus to that. So absolutely, things like Wonder coming on early and ramping where you put your effort, it's more a reporting of where things are going as opposed to not having the money or having excess money to then reapply. I think the planning around it, we understand it is a three-year build, AUD 1.5 billion, which has 10% continuously in it. It's all around the timing. The other benefit is that that east wall remediation is essentially complete this financial year. So the expenditure around that works on that east wall, again, falls away. And then the reallocation of that cash flow can be either onto the southern cutback or direct operating costs and pulling Brownhill North up.
Yeah. Okay. Thanks, Stuart.
Your next question comes from Matthew Frydman with MST Financial. Please go ahead.
Sure. Thanks. Morning, Stuart. Great to see, first of all, from the Swindlerson Underground during the quarter. I'm sure the team would be excited about that. Can you remind us, please, of your plans around, I guess, a more holistic scoping study or feasibility study on the KCGM Underground piece? And I guess the second question to that is similar to what Kate was just asking around the group holistically. You've got a high gold price. At KCGM specifically, you're going to have ample mill capacity post the expansion and probably a very significant underground endowment in terms of resources and reserves. So how do you constrain that underground study to balance NPV, risk of executing, and capital that you need to deploy? How do you constrain your sort of option set around that study? Thanks.
Yeah. So I think I'll start with just a look back on the resource reserves. We'll obviously get into the finalization of that now. We'll get to the next month. So we'll be publishing those resource reserves. And they will show the quality and scale and the opportunities around the Kalgoorlie district that feeds into that expanded mill. And it's not just Fimiston Underground. There's lots of other great things that are regionally able to be brought through to that plant. So that's pretty exciting. We'd be pretty pleased to be able to publish and talk about those things. On the current underground Fimiston, obviously, let Simon speak about progress there and the attitude. But there's two parts to this. That's the current immediate access.
But the overall larger underground I've sort of spoken about below the pit will come in post the pit mining so that it doesn't disturb any of the pit activity. But the current FIM Underground is kind of independent of that pit activity.
Yeah, Matt. What you'll see with the Fimiston Underground is it's very small capital outlay to incrementally just keep bringing on more development, more access, and more stops. You can see the reserve grade is around 2 grams per ton for KCGM Underground. So we see good cash flow generation as we start to really ramp up the mine. But you're not going to see a massive capital investment for no ore production. Very, very quickly, you'll see the ore production keep ramping up at KCGM Underground. And then it becomes just a broader grade displacement piece for the KCGM mill. So over FY25 and 2026, we'll displace 1 gram per ton material. And we'll put in 2 grams from the underground. But first, Fimiston Underground's really great. We will certainly be adding new portals in the next FY25.
We've got a lot of plans underway to ramp up the production areas at KCGM. Super exciting. We're seeing plenty of growth every time we drill a hole there. Looking forward to getting out the resource and reserves in the June quarter. We're seeing good growth at KCGM Underground.
And Matt, we were adding resources for less than $10 an ounce. So this is the organic opportunity here to grow and expand and to generate cash from these ounces. They are essentially on our doorstep and very effective and efficient organic growth.
Yeah. Got it. Thanks, guys. Thanks for that detail. I guess what you've described is, as Simon said, a fairly sort of incremental growing scoping operation. How do we think about longer-dated future plans to transition that to something more of a bulk operation like a sublevel cave or something? Is that still on the cards? And is that likely to sort of come out when you present updated reserves and resources? As you said, slated for the June quarter, I think you said, sorry, Simon?
Yeah. So the works that's happening that's incremental is also establishing drill platforms. The works required for a large-scale cave-style mine below the open pit will first need to be drilled out. We're talking about multi-year drill-outs and assessments and talking about multi-million ounce targets that are coming into that plan. So I know we're trying to talk about what's the CapEx number. We should be looking at what's the size of the price from a scale and quality of the resource and then the drill density to make that resource a reserve. Firstly, we don't want to do expensive, deep, timely directional drilling that was occurring before we owned it. We want to get down with truck-accessible decline drill drives and basically drill this out to the level that we're confident to put shapes around and mine designs.
It will be concurrent with the mining activity at Golden Pike, which is the next 4-5 years, pulling the Golden Pike floor out. I will not start a large underground and create or disturb the activity in the pit while that's being mined. So don't double dip on Golden Pike North being mined and a large underground coming on top. Talk about the expansion of Mount Charlotte, the mining between the Super Pit and Mount Charlotte expanding and adjacent to those works, which is independent to the Super Pit.
Got it. That's pretty clear. Thanks, Stuart.
Yeah. So the 900,000 ounces essentially coming from those blended ore from open pit, underground, and stockpile sources, that's what we're essentially leveling to. And the current outlook and forecast on CapEx is with that.
Yep. Got it. Thanks. And then an exciting sort of longer-dated opportunity to go bigger in the underground.
Yep. You know our plan, how we iterate. Once those things are done, we don't stop. We'll relook at that. Steven McClare's team will be assessing those opportunities.
Okay. Thanks, Stuart.
Your next question comes from Mitch Ryan with Jefferies. Please go ahead.
Morning, Stuart and team. Thanks for the question. You've called out a revision of the AISC costs at KCGM of AUD 71 an ounce. Just making sure my back of the envelope is sort of right. I'm going AUD 71 an ounce times all the ounces to get AUD 15 million of costs. So I guess my question is, one, is that calculation correct? And then I'm assuming that wasn't in the prior cost guidance of AUD 1,730-AUD 1,790, but it is in the AUD 1,810-AUD 1,860. So if you hadn't had that AUD 71 an ounce revision, the cost guidance actually would have been about AUD 10 an ounce higher at a company level. Is that correct?
Yeah. Mitch is right. You're right. I mean, the AUD 71, though, relates to ounces sold in this quarter. So it's an adjustment in this quarter. So if you're looking at, that's why I said in my notes, dollar value's sort of like AUD 9 million. So as I mentioned, it's because ultimately, there were costs going to the other ore sources that actually we ended up on a stockpile from a material perspective. And so that's why we're like, "Well, hang on. We're going to mill this material. We've got to allocate cost to it." And so that's why we revised those numbers.
Okay. Okay. And it is in the revised company-wide guidance of 1,810-1,860?
Yeah. That's right. That's right.
So there are a number of costs that were in our direct control, and there are a number that were outside of our control related to the elevated gold price. So obviously, a lot of our wages and salaries are linked to gold price mechanisms up and down. And royalties are linked to the gold price up and down, so above our assumptions. But then there were hard-money costs related to increases in inflation as everyone's experiencing. They're real. So we don't like it ourselves. And gold price or, sorry, our costs going up $40-$50 an ounce. But when you zoom back out, gold price has gone up 10 times that, $400-$500 an ounce in the same period. So the two are somewhat linked. It's going the wrong direction for us.
But gold price has covered up a lot of that in cash flow generation and margin expansion as occurred.
Yeah. Definitely. Appreciate the call. That's it from me. I'll pass it on.
Your next question comes from Al Harvey with JPMorgan. Please go ahead.
Yeah. G'day, Stuart and team. Maybe just on Pogo, can you kind of elaborate a bit more on the impact of the power outage there? I know you said it's not expected to normalize till late in the June quarter. So just wondering how you get comfort in that kind of timeline to get things sorted out and what kind of risks we have into 2025 there.
Yeah. No worries. Thanks, Al. Yeah. So there's a few things there that have disrupted us on power. But all the power is generated through a cooperative. So costs to that cooperative, whether they come from our asset or come from the state, basically get divvied back out to the suppliers. So energy costs go up and down. And then obviously, when we have power disruptions there during the winter season, you've got lots of issues around your heating and freezing and mocking up of those things. So basically, when the plant goes down, we're buying heavy gas into the winter to generate the heat, to keep things warm, keep them moving. And those costs are extraordinary. But because of not doing it and there are other parties in the state where they've got their mills frozen, you've got to wait for the season to thaw out.
So when you're jammed in those corners, you run gas and heat your stuff up so that doesn't freeze.
Sure. Thanks, Stuart. Maybe just back on the resource and reserve update in May. I think last exploration update we had, there were some good results coming out of Pogo like STAR. Just wondering how we think about production growth potential at Pogo, what are kind of the constraints on scale, how you're thinking about opportunities further afield in North America, and I guess, yeah, how you balance up that growth in terms of opportunities around the Super Pit and Aussie mines.
Yeah. Before we put our eyes further afield in North America, we see huge value in really proving out what's there at Pogo. And so STAR, as an example, is a great target we're continuing to drill. Pretty excited about being able to show people more step-outs from that. It's still early stages. So as far as to get shapes and things around it, we've got to get the density into it. And then obviously, Goodpaster 's still sitting on the back burner, but we're drilling between the main mine and Goodpaster to fill in gaps that go in under the river and essentially give us a pathway to get to Pogo sorry, get from Pogo to Goodpaster economically. And then Hill 4021, the other side, is also pretty exciting extension. So we like all of the results we're getting there.
I guess what we're finding is a lot of the same material, 10-gram resource. Ideally, we find an old Liese 1 lode where it's 1 ounce material, but we're still testing for those things. So at the moment, it's about life going onto the end of the asset as opposed to something being accelerated and brought forward and supplementing higher grade. Prior to our ownership, the head grade of Pogo was 13 grams. So we're obviously talking about putting through around 8 grams a ton. There is material that can be found there that is a superior grade. If we can find it through the same mill throughput, we can really derive value and margin out of it. So that's what we're trying to target. And that is our focus before we step out away from the Pogo mine in North America.
Great. So basically, any material step change there's going to need a pretty chunky expiration hit around that ounce-per-tonne mark. Is that kind of the crux of it, Stuart?
No, no. Finding exactly what we have there is fine. The question of whether we accelerate it, whether we kind of put extra effort and expenditure to accelerate it, is if it appears greater than the average grade that's sitting there. So if Goodpaster was sitting there at 15 grams per tonne, it would be my priority target developing across, drilling it out, bringing it into the mine plant earlier. It's exactly the same with what we have. I've got seven million ounces of 10-gram material. Goodpaster 's one million ounces of it. So it's the same grade. So I guess what I'm saying is unless it's better and it's the same attitude at every other mine we operate, if something's better, one to underground, it gets ramped up, accelerated, put into Thunderbox Mill before another underground that's three grams or two grams, etc.
It's just the same attitude of trying to. It's not high grading. It's prioritizing your cash flows and maximizing your PP.
Sure. Thanks, Stuart. I guess just to round it out, so just broadly, growth options in North America, you're pretty happy just ticking away at Pogo. Is there any plans further afield, things that you're looking at? I know some peers have been looking at a few bits and pieces out that way.
You've seen us test the water with the Osisk o evaluation with Windfall, and we didn't get there. So anything we look at is always disciplined. I think it's going to be a challenge in this environment to find value in North America. So it doesn't mean we won't look at things, but I think it's a challenge for anyone in Australia with our currency at the moment. I'd like to reiterate that our organic opportunities are phenomenal. And that's where our effort and energy and focus, and that's what's in our control that we can determine to deliver into.
Yep. Awesome. Thanks, Stuart.
Thanks, Al.
Your next question comes from Ben Lyons with Jarden. Please go ahead.
Thanks. Good morning, Stuart. Everyone on the call. Just want to talk about the grade profile at Jundee, please. Pretty sure I asked the same question following the December quarterly stats. But we've got a new five-year low in mine grade at Jundee, about 2.9 grams, well below reserve grade. So firstly, maybe you can just elaborate on your confidence in lifting the grade into the June quarter, talking to stoke sequencing, open faces, etc. But more importantly, on a sustainable basis going forward, what we should expect for the grade coming out of the Jundee underground. Thanks, guys.
Yeah. I'll throw to Simon. Yeah. Mine and mill grades can alter. And obviously, when we get a record milling throughput, it's going to be supplemented with lower-grade material that averages it down. But I'll throw to Simon on just general outlook. There's quite a blend of sources for material from Jundee.
Yeah. So certainly, yes, low for the quarter. But the impacts for getting the dirt from the ROM pads and from Ramone, a lot of high-grade ore stranded out at Ramone. And Ramone, on average, is lower grade than Jundee. But during the quarter, we couldn't truck it across due to 190 mm of rain up there versus the average of sort of 19 mm. So 10 times the normal amount of rain meant we couldn't move things. And even within our current Jundee operations, we had to not mine some of the better grades at the bottom of the mines just as part of our flood management plan. So we're certainly knocked out of areas that we wanted to mine during the quarter.
Then you've got to flow on into the mill with milling low-grade stocks due to crusher wet dirt that we can't crush, as well as just not being able to get the right dirt into the mill. In terms of quarter four, yep, Jundee's going to have a big quarter. We're confident of that and tracking well leading into the end of the year. We're confident, Ben.
Yep. Yep. Cool. I'm picking that up. Sorry, can I just tease out one of those comments, Simon? Your inability to access some of the deeper ore sources underground due to your flood management plans, I think, to paraphrase what you said. Sorry, can you just possibly elaborate on how the underground sequencing was impacted by what was going on with a bit of rainfall at the surface?
Oh, I said it's just looking after the safety of our employees. So when you get 100 mil of rain in sort of 10-12 hours for that part of the world, there's obviously a lot of water that flows into some big historic open pits. So you get a buildup of water in the open pit fairly quickly. And it's just good management that we won't operate the bottom areas of that particular mine for a period. And then the pumps catch up, and you get on top of it again and go forward. So it's just those short-term interruptions, well managed by the site team. And then we go back to business as usual.
It sounds dramatic, Ben, but it's 101 for underground miners. There's clouds in the sky and rain coming in the northern parts of Australia that dump it on you in a hurry. You just bring all your equipment and your people back up above your bottom few levels because where does water go? So the amount of people that have flooded jumbos and boxes and fans and done this, you just pull back and operate in higher levels until it dries out as a precaution, pretty much basic underground 101.
Okay. Outstanding. Thank you very much for the education, guys.
Your next question comes from Alex Barkley with RBC. Please go ahead.
Thanks. Good morning, Stuart and team. Just a quick follow-up on Pogo grade. You've called out that there was an improvement there in your pre-release announcement. Just wondering exactly what that was about, something to do with maybe the stope development ratio or reconciliation, or was that positive later in the quarter into April? Just trying to understand what the positive aspect was there. Thanks.
Yeah. Thanks, Alex. Look, it's just where we sit in the cycle. We're looking for any glimmer of what's good, what's bad, what's average, what's expected, what's not. And so the best thing at Pogo, really, on the development rate, nearly averaging 1,600 meters a month through the quarter, means we're opening up new mining areas. We're getting very productive at doing that. Usually, that gives us a lower average grade because there's more development material, which is being trucked, which is getting milled, at a lower grade. We don't see that as a negative. We see that as opening up new areas and giving us options in the future. And then we look at reconciled grades from our stoping activity. And is it planned? Is it on track? Is it above? So yeah, our highlights were basically on improving grade and getting you get 1,000-ounce days.
You'll end up with 1,500-ounce day. Now, you can't times by 30, and you can't times by 365. But that's what you look for at a high-quality, high-grade asset. When it clicks out like Jundee can do, when it can knock out 1,000-ounce days and 1,500-ounce days, that you've got these high-grade pockets that excite us. So I guess that's where we're buoyant about it. You all look at averages and three months and trends. We're right on the face of the data looking at deposits and reconciling and understanding what's in front of us.
Yep. Sorry, can you remind me again what the sort of life-of-mine stope development ratio for ore is, and when do you expect to get there?
We're trying to be at around 65%-70% stope ore. So we've been.
Okay. We've been pretty close there. Yep.
Yeah. We've been at that. And we've highlighted that our mining dilution is excessive for what we'd designed. And I think back to Kate's question on will we adjust those factors for the reserve grade because it sits at 8.5 grams, likely, yes, because controlling so when you're in an underground mine, you've got stressors that help you, and it holds the ground together. When you're mining in a mountain, there aren't confining stressors, and you have excessive dilution because it's not held up. And so there's a calibration at Pogo when we're at a certain RL, at a certain height in the mountain, or if we're level with the valley, or if we're below the valley floor, that the factors, just gravity, doesn't help us with the confining stressors in that mountain or if you're actually in confined.
I'm getting into detail here, but this is not an easy answer. We're going to have to come up with one number. There's actually 10 numbers that derive that average. Yes, it's going to flip around. It's going to go up and down. It's going to be multiple factors for multiple mining zones. You're going to see one number at the back end, and it's going to be a very profitable mine.
Okay. Interesting. Thanks very much, guys.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from David Radclyffe with Global Mining Research. Please go ahead.
Hi. Good morning, Stuart and team. So my question's on hedging and the hedge book. And given spot prices where they are, have you given any thoughts to changing the policy, given the macro and markets obviously not great today. I saw you added another 160,000 ounces at about $1,000 higher than what you delivered to, which is obviously positive. But is forwards really the right way to go. And what are the thoughts here, given that the balance sheet is obviously strong, and you're now adding ounces past sort of when the KCGM expansion is expected to be delivered?
Yeah. Thanks, David. The mark-to-market doesn't look good, but it doesn't mean it's wrong because a mark-to-market is purely it's never going to be realized as far as you've got a four-year profile against a spot, and you can't deliver into spot. So we understand it, but our mark-to-market number is irrelevant, really. The policy is being maintained. So as we deliver into, we potentially add, but we do it strategically. And as you see the profile of pricing lift, I mean, you can get forwards that are well in excess of $4,000 an ounce currently. It doesn't mean we fill our boots up. It just means we methodically go through and replace, and we stay at or around that 20% of our production profile while we're spending capital, while we have debt drawn. That's a prudent capital management strategy.
We always will look at that policy and view whether that's the right blend going forward. But essentially, at the moment, it's achieving what we need it to achieve. Yeah. So I said it sits around I think the minimum's around 8%. The maximum, around 35%. We're sitting around about 20% of our forward production hedged over the four years.
Okay. It continues on, I guess, post the need for capital at a similar rate, is what you're saying?
Yeah. That's the policy. We've still got two and a half years of our FIM build. There were some questions earlier asked around a large underground at KCGM that we'll need capital. All these things are viewed in the thoughts of secured returns. This is a very, very unique circumstance with where the current spot gold is and where it's come from in the timeframe. We are so well positioned and leveraged to gold price lifts, irrespective of that hedge profile, 80% of our gold has been delivered into spot and generating significant cash flows. Our all-in cost was AUD 2,600, and the spot is AUD 3,600 an ounce. I think there'll be a lot of gold miners dusting off plans or pits or how do they bring material in at these levels.
We've already made these decisions years ago, and we're already advancing and have spent the capital, developed the mines, and have the tap a fair way on throughout this investment process when people are still evaluating it. The only way they're going to make those commitments to make those investments is to either draw debt, raise equity. To do that, they're going to need to put some hedges on to guarantee outcomes or financial returns because this all was not economic at other levels. It's very economic at these levels. Hedging for gold miners is an absolute outstanding tool, not offered to other commodities. We use it appropriately to secure payback periods, guarantee investment returns. You run spot price through our current Fimiston mill expansion. It takes the IRR to 30%. These are outstanding returns and outstanding outcomes.
Forwards, hedging secures those for gold miners that's not afforded to other commodities. So we love it, and we'll continue to use them as we need. Thanks.
All right. Brilliant. Thanks for the call. I'll pass it on.
Your next question comes from Daniel Morgan with Barrenjoey. Please go ahead.
Hi, Stuart and team. Just coming back from the books, is there anything at the mill which suggests an overall design flaw that needs rectification? Do you think you will be able to run it at 6 million tonnes per annum in 2025, or might rectifications be needed in 2025? Thanks.
Yes to both. I think yes to Daniel's. We see things that we want to address. Yes, we'll need some modest capital to do that, and that will guarantee us those throughput rates. So that assessment, those works now, and it reduces risk effectively to deliver that 6 million tonne per annum. So yeah, we're working through what that work is required, committing to that scope, and we'll give that guidance in FY25.
Thank you. Big June quarter, as is the way, how much of the drivers of this travel into FY25? Obviously, this quarter, you'll have an absence of planned mill shutdowns, but you've also got very high grades. Is the high-grade portion temporary, or might it continue? Thank you.
We still have shutdowns planned, as you see us in usually quarter one and quarter three, whether that's by design or by those mills every six months need a plan. As far as grades, if we're talking about things like KCGM, Golden Mile North, we just end up with more and more material as we free up that and open up the pit floor, as the East Wall remediation work is absolutely completed by end of June. We've got free access into that Golden Mile North. So that's where that grade there continues. Pogo, Jundee, Wonder Underground, all these things are within the cycle. There's no homogeneous average grade. It's up and down, and it's sporadic, and it's in the mine plan. Ultimately, it will deliver an average. But that's where the grade's being driven.
Thank you so much.
Thank you.
No further questions at this time. I'll hand back to Mr. Tonkin for closing remarks.
Great. Thank you very much for everyone for joining us on the call today. I look forward to updating you as we continue to advance our profitable organic growth strategy. Have a great day.
That has concluded our conference for today. Thank you for participating. You may now disconnect.