Thank you for standing by. Welcome to the Northern Star June 2024 quarterly results. 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 one 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 our Chief Operating Officer, Simon Jessop, and Chief Financial Officer, Ryan Gurner. I'm pleased to present an exceptional June quarter performance to close out FY2024. With Thunderbox and Pogo, we are both highlights, achieving record performances complemented by continued strong performance from the portfolio. In FY2024, our team delivered record gold sold and record net mine cash flow. This demonstrates the quality of the asset portfolio across our three production centers and also the value our investment is making to unlock future low-cost, high-margin ounces. I'm particularly proud of our people who safely delivered on our FY2024 commitments. Thank you for all your efforts, which are continuing in FY2025 as we advance our profitable growth strategy.
For the June quarter, we sold 439,000 ounces, at an all-in sustaining cost of AUD 1,815 an ounce, generating underlying free cash flow of AUD 189 million, which is up 32% from the March quarter. For the year, we generated underlying free cash flow of AUD 462 million, up 29% from last year. As you can see in our results, Thunderbox and Pogo stand out this quarter for record mill throughput and, in turn, gold ounces. Each of our production centres remains in a positive net mine cash flow position, ensuring they are self-funding the growth. As a group, we remain financially resilient in a net cash position of AUD 359 million. This financial strength allows us to fund all our growth investments, exploration activities, and capital management initiatives, including dividends and share buybacks, as demonstrated during FY2024.
For the KCGM mill expansion, on-site construction is advancing to budget and schedule. It is exciting to see this activity underway at KCGM, which will double the plant's throughput to 27 million tons per annum and lift production to 900,000 ounces per annum by FY2029. Investors and analysts will have the opportunity next Sunday to visit KCGM and see firsthand the significant progress made prior to the Diggers and Dealers Conference. We have today also provided FY2025 guidance. We expect to produce 1.65-1.8 million ounces of gold at an all-in sustaining cost of AUD 1,850 to AUD 2,100 an ounce into a very healthy gold price environment, currently around AUD 3,500 an ounce. As per previous years, planned major shutdowns will be carried out across all three production centers in the September quarter, so FY2025 delivery is second half weighted.
We are majority of the way through our five-year profitable growth strategy, which sees our production grow to two million ounces by FY2026 and, more importantly, enables the delivery of higher free cash flow levels. Three years into our growth investment, we have delivered AUD 1.3 billion of free cash flow, which confirms our rationale for the value-creating strategy. We forecast FY2025 capital expenditure to be in the range of AUD 950 million to AUD 1 billion and AUD 20 million, plus the KCGM mill expansion CapEx of AUD 500 million to AUD 530 million, which is in the second year of its build phase.
Before I hand over to Simon for the Australian operations, Pogo in Alaska delivered an exceptional quarter, a record of gold sold at 91,000 ounces at an all-in sustaining cost of $1,091 an ounce, which delivered record mine operating cash flow of $107 million and record net mine cash flow since being under Northern Star's ownership. This is a testament to the team and the asset strength, also delivering a record annual gold sold of 278,000 ounces at top of guidance range. I remind listeners that Pogo boasts a gold resource of nearly seven million ounces at above 10 grams per tonne, highlighting that we will be generating strong US dollar cash flow for the next decade plus. A fantastic achievement, and well done to Team Pogo. 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 221,000 ounces of gold, down 2% at an Australian all-in sustaining cost of AUD 1,712 an ounce. This production delivered a mine operating cash flow of AUD 335 million, up 10% quarter-over-quarter. The region also spent AUD 264 million on significant growth capital projects. This included AUD 101 million on the KCGM mill expansion, AUD 52 million on the KCGM open pit mine development, and AUD 24 million on underground mine development. We also have successfully started to commission the new tailings storage cells of E and F at KCGM, which have a 147 million tonne total capacity. At the KCGM open pit, material movement was 16.6 million tonnes, as we prioritized the partial access mining of Golden Pike North, with a further 43,000 ounces mined in the quarter.
The east wall cutback works continued, along with Oroya Brownhill and Fimiston South. For the full year, we mined 72 million tonnes of ore and waste as the open pit team continued to manage competing priorities. We remain on track to regain full access to Golden Pike North in quarter two of FY2025. Underground mining volumes for the Kalgoorlie region increased 3% to 1.55 million tonnes, with grade up 12% to 2.8 grams and delivered 143,000 ounces. The higher grade was driven from Kalgoorlie operations, South Kalgoorlie mine, and Carosue Dam mine sequence. KCGM's underground operations increased development a further 11% quarter-on-quarter to 4.2 kilometers. The development meters will continue to ramp up quarter-on-quarter going forward, with the arrival of two new jumbo fleets at the end of the financial year.
The Carosue Dam underground mines all performed well, with 54,000 ounces mined in the quarter. Open pit movements increased 16% to 1.3 million BCMs, despite consistent rain impacting these positive results. The Kalgoorlie operation underground mines increased mined ore volumes and grade, which increased 36%, driven by South Kalgoorlie's mine averaging 5.4 grams a tonne over 37,000 ounces for the quarter. Processing volumes in the Kalgoorlie production centre increased 13% quarter on quarter, as KCGM had a smaller planned shutdown along with good milling performance at Carosue Dam. KCGM's head grade reduced with less high-grade ore available from Golden Pike North, which was offset with lower-grade stockpile ore. KCGM recovery was impacted due to a float circuit and Gidji losses, with both being addressed in the first quarter shutdown of FY2025.
Carosue Dam processing finished with a new annual record of 3.9 million tonnes processed in the year, which is a major credit to the team. The KCGM mill expansion spent AUD 101 million over the quarter, with total engineering progress at 44%, and the major equipment package also at 42% complete. The concrete pour at the end of June was 9%, while as of today, as we're sitting here, it's 18% pour, with the largest single pour of 1,600 cubes completed early in July for the ball mill raft. We are very pleased with the on-ground construction activities, and we look forward to showing the progress of the KCGM mill expansion project as part of our upcoming KCGM site tour. The project remains on time and tracking to plan.
At our Yandal Production Centre, including Jundee and Thunderbox, we sold 127,000 ounces of gold at an Australian all-in sustaining cost of AUD 2,109 an ounce. This production delivered a mine operating cash flow of AUD 155 million, while we spent AUD 81 million on growth capital projects, primarily at the Orelia open pit and Wonder underground. At our Jundee operation, development advance was set to 7.6 kilometers, up 10% quarter-over-quarter, with 796,000 tonne of ore mined and 88,000 ounces up 20% quarter-over-quarter. Processing was lower than nameplate due to a fixed plant fire, which impacted the gold room and back of the processing plant, requiring a large amount of electrical rectification works. By quarter end, the impacts of the May fire were rectified, with a large build-up in gold in circuit, with lower gold sales due to the reduced mill tonnes.
Jundee's renewable project of a 16 MW solar farm and 12 MW battery system is currently in its final commissioning phases, with partial renewable power now being successfully exported into the grid. We also have one of the four wind turbines erected as the crane moves through the program before commissioning of that stage begins. The Thunderbox underground mines, including Thunderbox and Wonder, achieved 613,000 tonne of ore for 35,000 ounces at a head grade of 1.8 grams per tonne. The Wonder underground mine continued to ramp up ahead of plan, with 1,508 meters developed with one jumbo over the quarter. It's a credit to the Northern Star Mining Services team, who are building this mine with the Thunderbox technical team ahead of plan for low cost, which ultimately brings high-grade ore feed earlier to the Thunderbox mill.
For the quarter, the underground and open pit operations successfully mined 1.5 million tonnes of ore, which is at the expanded mill's quarterly nameplate. At the Thunderbox processing plant, we achieved nameplate on a quarterly average of 1.5 million tonnes milled and sold 63,000 ounces of gold, up 40% quarter-over-quarter. The mill throughput averaged an impressive 795 tonnes per hour for the quarter. Availability was also a new quarterly record of 85%, with a significant shutdown occurring in April in those numbers. For the first full financial year of processing, we achieved 87% of the nameplate throughput. We are continuing to work on availability in the crushing circuit and milling stability by rectifying known wear points.
The last quarter is a great result for the Thunderbox team, who continue to unlock the full value of this major plant expansion. I would now like to pass over to Ryan, our Chief Financial Officer, to discuss the financials.
Thanks, Simon. Good morning, everyone. As demonstrated in today's results, the company is in a strong financial position. After an excellent quarter, we've increased our net cash position to AUD 359 million and increased our cash and bullion to AUD 1.25 billion. The company has generated record full year cash earnings of approximately AUD 1.8 billion, and as forecasted, we've delivered a material uplift in the second half, driven by higher production, lower unit costs across the business, and higher gold prices. A reminder that the company's policy is to pay 20% to 30% of cash earnings in dividends.
Figure 9 on page 11 presents the cash, bullion, and investments movement for the quarter, key highlights being operating cash flow of AUD 688 million, a 31% lift on the prior quarter, and underlying free cash generation of AUD 189 million, bringing FY2024 underlying free cash flow to AUD 462 million, up 29% from prior year. Importantly, all production centres are delivering strong net mine cash flows, which totaled AUD 686 million for the full year. As Stu mentioned, Pogo, an absolute standout, delivering a record contribution of AUD 238 million for FY2024.
Growth capital investment during the quarter related to key growth projects, including at KCGM, Fimiston South cutback, and East Wall remediation works, development at Porphyry Underground and Wallbrook Open Pit at CDO, development Orelia Open Pit, Wonder Underground, and remediation works at Thunderbox processing plant, and approximately AUD 100 million for the KCGM plant expansion was incurred during the quarter. Total spend for FY2024 on the project was approximately AUD 350 million. The reduced spend related to the timing of some procurement packages being finalized. But importantly, this is not expected to impact critical milestones, schedule, or budget. On other financial matters, full year depreciation and amortization of AUD 703 per ounce is in line with guidance of AUD 650 to AUD 750 per ounce, and non-cash inventory charges total AUD 34 million, with the majority of these charges relating to the milling of stockpiles at KCGM.
As part of the company's ongoing capital management program, the on-market share buyback continued during the quarter. 305,000 shares totaling AUD 4 million was bought back and cancelled. Since the program started, 19.5 million shares have been purchased at an average price of AUD 8.85 per share. AUD 128 million remains outstanding, with the program open until September this year. A reminder that blackout for us applies until our FY 2024 results are released in August. Following the delivery of a strong Q4, the company is well placed to deliver FY 2025 production and cost guidance. Sustaining capital expenditures forecast to remain within our current range of $200 to $250 per ounce sold. FY2025 growth capital, excluding the KCGM expansion project, is guided at a midpoint of AUD 985 million. This investment is centered on our returns-focused organic growth options.
At the Kalgoorlie production hub, the majority of the investment is allocated to projects which will deliver the mill feed and infrastructure for the KCGM plant expansion. These projects include development and ramp-up of Mount Charlotte and Fimiston underground mines, open pit material movement, and infrastructure requirements. At Yandal, the majority of the capital investment includes advancing the existing Thunderbox mill feed sources at the high-grade Wonder underground, Orelia, and development of the Bannockburn open pit. At Jundee, mine development will commence at Cook-Griffin, a recent exploration success, and continue at the main Jundee ore body with additional infrastructure planned.
At Pogo, mine development and resource drilling are an ongoing capital requirement to open new mining areas and increase the number of available headings. In early FY2025, major infrastructure works will be undertaken to maximize utilization and availability of the plant, including rebuilding the ball mill motor and replacing the trunnion. The milestones in FY2025 for the KCGM expansion project include delivery and installation of major equipment, as well as commissioning of service infrastructure. We are guiding FY2025 spend to be AUD 500 to AUD 530 million for the project. FY2025 exploration is guided to AUD 180 million, with investment focused on KCGM and Jundee in mine exploration, and at Pogo, additional drilling at the Star Discovery is planned. Importantly, with the company's strong liquidity position of AUD 2.7 billion, our profitable organic pipeline and exploration activity is fully funded.
Finally, in respective hedging, table 5, page 11 sets out the company's committed hedge position at 30 June. The overall hedge book stands at 1.8 million at an average price of $3,122 per ounce. I'll pass back now to the moderator for Q&A. Thanks very much.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Mitch Ryan with Jefferies. Please go ahead.
Good morning, Stu and team. My first question just relates to you've reiterated $2 million of production in FY2026. How should we think about this? Is that sort of the lower band of a guidance range, or is this more of a midpoint, or is it a stretch target for your FY2026?
Thanks, Mitch. Yeah, look, I guess what we've published today is the FY2025 guidance outlook, and I'd reiterate that's a checkpoint on our growth pathway to two million by FY26, and then that is followed by the expanded Fimiston plant, adding 250,000 per annum through FY2027 to FY2029. So yeah, it's another growth year, FY2025, and the commitment, as we've held in our five-year strategy, is to grow to that profitable two million in FY2026, and we're a majority way through that plan, and a lot of those actions have been delivered. So yeah, very pleased with how we're tracking. It's not a straight line. I'll remind people about our planned shutdowns. We occur in quarter one, so it's second half weighted, and quarter one will be the softer quarter of the year.
So yeah, it's not a straight line, but we're still on our growth trajectory, and it's working well in cash generation.
Okay. So AUD 2 million is a target of?
That's FY2026. FY2026. I haven't given guidance for FY2026, but that is our five-year strategic plan to deliver two million ounces from the three assets in FY2026. So what we've guided today is the checkpoint in FY2025, which is 1.65 to 1.8 million ounces.
Yes. Okay. So it's not an exit rate. It is a production number for the full FY2026.
Yeah. So the final last piece, really, for that to be delivered is the grade coming from the Golden Pike to lift KCGM from 450,000 to 650,000 per annum, complemented by the other assets being in a steady state. So Pogo at 300,000, Yandal at $600,000, and obviously the balance being Kalgoorlie, but KCGM is the major step change in that last year, and Simon's updated on the progressive access of the East Wall remediation, plus the access to that high grade and destacking those benches in the better graded gold pipe.
Okay. Perfect. Thank you very much. Appreciate the clarification. My second question just relates around, yeah, again, you've called out that September quarter, the shuts, and that'll be the weakest quarter. The quantum sort of sometimes it's down around sort of somewhere between 7% to 15% on the June quarter. Is that sort of a fair range, or can you give us any quantum of the quantum of those shuts?
Yeah. Middle mass is good. That's about right. So if you look at our quarter one last year, that was our lightest quarter. That was sub-400. I think what we'll call out in this is Pogo's mill essentially is off for five weeks at a derated throughput, and that's to do substantial project work, which has commenced and is tracking well at Pogo presently. So Pogo's probably the lightest site's performance coming off a strong 91,000 ounces. It steps right back down with five weeks out of the quarter, and then those other planned major shuts across Yandal and Kal occur as well. So the full year, the run rate of the last three quarters is a very good indication to give us confidence as to how we pull into FY2026, and most of that expectation step back is around the impacts of quarter three.
It is planned work, well-run work. We're always asked to design it differently, but this is how the overall plan has played out each year, and the strong quarter four was delivered. We're not falling off a cliff in quarter three. It is planned work in this first quarter, but it's just the work that has to be done that secures these assets over the years ahead.
Perfect. Appreciate it. I'll pass it on. Thank you.
Thanks, Mitch.
The next question comes from Kate McCutcheon with Citi. Please go ahead.
Hi. Good morning, Stu. Just at the Super Pit, you've given some material movement guidance previously, and I think 2024 was supposed to be that peak of 85-95 million tons, but it looks like that came in short. Can you just talk to what the stripping looks like this year and next year, and then what portion of the stripping is that guidance chunk for KCGM this year?
Yeah. Thanks. I'll let Simon answer. Yeah. Thanks, Kate. We'll have a look to give a good update on the KCGM movements and where we are at the site visit in a couple of weeks' time. So we'll look to, as we've guided previously on strip ratios and things like that, we'll look at that on the site visit just before diggers. But in terms of the overall year, quarter three was particularly hard with rain, significant rain throughout the quarter. So what we did was just prioritize where we worked during the pit during that quarter. So we dropped away some material movement, which we can catch back up in the Fimiston South area, and really prioritize on the high-value OBH areas and the East Wall remediation because that's the biggest driver of value.
You also saw us accessing Golden Pike North, partial access to it slightly ahead of plan. So we brought some of that forward, which is obviously longer haul distances for the trucking fleet. So not concerned at all. We still guide to $80 to $90 million ton, and that's where we'll consistently sit moving forward.
Okay. Got it. And then staying on CapEx, so I guess it's hard on our end, visibility on modeling this continued CapEx to open up some of these ore sources at Yandal, for example. So I think there's an extra AUD 50 million this year opening up some of those pits, and you've given us some color for Thunderbox in your slide decks. How do we think about this CapEx going forward? I know we've just got 2025 guidance today, but does it step back next year, or what sort of color can you give around when additional pits need to come in? I mean, opening up Cook-Griffin, for example, unless I missed it, wasn't really on my radar as CapEx that had to be spent this year. So just sort of if you can talk through some of those mining areas that come in.
Yeah. Thanks, Kate. I'd agree that it doesn't have to happen. We are trying to always build contingency into the plan such that we can deliver consistent guidance over the forward outlook. So when we can bring it through approvals and accelerate, and we have the cash flow to do that, we do bring those projects online so that we've got those diversification of production centres, etc., so we can manage through weather events or approval timelines slipping or other things. So yeah, Cook-Griffin, great opportunity. We're starting that underground with the Northern Star Mining Services. We did a very similar thing last year, obviously with Yandal starting it early, I guess out of the timing. And then probably the other CapEx lift is the TSF down at Kalgoorlie coming in early because of the expanded mill plant. These things are in our life of asset plan.
They're all scheduled and sequenced, but ideally what we want to do is de-risk. So when the cash flow's there, the budget's there, we've got sequence and priorities, but we will bring these things in early. We're happy to, it's not an oversupply, but certainly de-risk it, develop it, build stockpiles near to our mills so that on any given day we have that blend of ore that we can send in. So I acknowledge that the CapEx has stepped up from consensus in FY2025. I also believe directionally it gets over this hump, and we've de-risked and built golden stockpiles and golden circuits. I think it sits now over 3.5 million ounces, which is a good thing for investors: security of forward earnings, a security of material close to our plants, and we always try to stay ahead of that investment. It is also, I would say, discretionary.
If things change in the environment, we can actually dial back some of this investment, but in this environment, we're going as hard as fast as we can to build that contingency in. So I know you're looking for the returns on the back of it. I'd be confident that we're looking at it through a returns lens, and we're seeing multi-digit IRRs and our decisions around these things is improving our margins and improving our overall returns. That's the lens we look at these organic investments through. And that's versus a question that'll probably come up on the call around M&A, our organic opportunities trump every other thing we've been looking at, that this is our business, this is our work, and this is what complements shareholder returns.
Okay. That's helpful. Thank you, Stu and Simon.
Thanks, Kate.
The next question comes from Levi Spry with UBS. Please go ahead.
Good day, Stu and team. Two questions, please. Firstly, just on Thunderbox, sorry, I'm catching up with you with a few callers all at once. Can you just sort of run us through what was so good? It seems like things are back on track. Maybe just a bit of detail around that, please, Simon.
Yeah. Thanks, Levi. During the quarter, really, we just focused on that availability and really lifting the crushing circuit availability to get stability into the process plant and the milling. And you saw that with the 795 tons per hour average for the quarter. So nameplate 750 tons per hour. So we saw even in June sprint capacity of the whole June average, 820 tons per hour. So we're continuing to work on the availability. We still believe there's five or six% more availability to eke out of that infrastructure. And we know what the areas of focus are, so it's known where points, but really pleased with the team in terms of just constantly working through areas that fail and then putting long-term rectification pieces in place.
It was a big year for the team, but really pleased to get 1.5 million tons for quarter four and start FY2025 in a strong position from a process plant perspective.
Yeah. Nice one. Thank you. Thanks, Simon. Maybe just on the capital question, just extending some of those quick questions there previously, how can you help us in the sort of three to five-year timeframe, Stu?
Look, we don't guide out that far, but what I'll say is growth CapEx gets you growth. So FY2026 at two million ounces, you've got visibility of the capital to deliver Fimiston. So we're in the second year this year, AUD 530 million being spent this year. So you've got the tail of that CapEx going into 2026 and then a slight piece in 2027 on Fimiston, so another AUD 500 million 2026 there. But the remainder of the to keep that two million ounce profile across those assets is sort of an open pit or an underground being turned on each year, and then TSF lifts that, a multi-year lifts, so whether it's dollars in a year that get amortized over the future life asset types of things. So I would also say we're seeing a huge amount of opportunity.
So we're going to up our exploration expenditure, AUD 180 million to AUD 200 million this year. If that liberates things like the Hercules discovery, just less than 20 km from Fimiston plant, you'll get capital in a hurry to develop that into a mine and get that gold into the mill. So there's still, I guess, for analysts, investors, it's hard to say, "Well, you haven't got visibility out five years and talking about things we never heard about." We're still discovering things like Hercules this year that I will prioritize and fast track, and it will attract capital, but it will attract superior returns because of the success of the exploration team. So sort of bear with us a bit that there is a sustaining capital to maintain a 200, sorry, two million ounces per annum, and typically it's we're a year ahead.
Our capital is a year ahead of when the production comes in. We'll build a stockpile. Develop a mine, build a stockpile next to one million, and the ounces will come the year after. And that's the thing. But yeah, this is still a very heavy lifting capital year FY2025, as we acknowledge.
Yeah. Thank you. Thanks, Stu. And maybe just sneak one in on assets. So how do we think about that in the context of the volume growth?
Yeah. So look, again, we've given AISC at AUD 1,850 to AUD 2,100, and that's considering where the gold price is and the cost that it attracts and the behaviours that it drives. I'm also thinking with the backdrop of the nickel reduction, lithium reduction, even some gas out of iron, there's potentially some cost plateauing or even potentially some retraction savings across energy, across labour. So we haven't baked that into anything across our costs in dollar millions. And then, as you pointed out, economies of scale or denominator of gold sold, just as a see-through on Pogo, it delivered in the quarter AISC at $1,090 an ounce. So you've got over 100% to AISC margin of the US price to AISC, and then on dollar millions, it's still sitting at over $30 million per month US.
I sort of spoke about we've still got the new trucking fleet to be brought in to take from sort of 10 trucks to 6 trucks and drop labor and drop maintenance costs around that fleet. So there's some improvements we are seeing to make true step-down changes. And then, as we've reduced stripping ratios across the business and get into the primary ore of these pits, we're also seeing some benefit there. But I've maybe been conservative in dragging costs right. When we look across the consensus peer group, we're probably seeing the same trend and expecting staying still is a good thing in this environment. We'll still migrate down the cost curve, but we have to see most people's reporting on AISC.
Okay. Thank you. Appreciate your time. Thank you.
Thanks, Levi.
The next question comes from Daniel Morgan with Barrenjoey. Please go ahead.
Hi, Stu and team. My question just relates to the Pogo, the outage or the mill maintenance period that you're doing in, well, I guess, as we speak. What impact does that have on accommodation? I'm just thinking through once you get it complete, will accommodation constraints mean that development rates and mining rates suffer a little bit as a hangover or consequence? Thank you.
Oh, thanks, Dan. So there's a few things that happen throughout the year to be able to sort of disconnect activities because we're very hand-to-mouth there. So a lot of the great work team's done to be able to, when the mill's off, to not stop mining where it used to sort of back up within a day or two. So obviously, the ore passes in this season, surface temporary stockpiles can be built, prioritizing of waste development and grade. But last quarter, we averaged over 1,600 meters a month, so we're ahead on the development rates, and a lot of good work's going into doing that. So I don't see any mining impacts throughout the five weeks. That means that we're behind the game. In fact, we'll build contingency up to be ready to turn it on well.
And we're also running on a SAG-only case, we're at about 30% to 35% of the general throughput, which is good for gold production, but it's better that you're keeping all the rest of the plant running so that it's not sitting idle. And yeah, so just keeping it all moving and keep the team employed in that period. So that's all useful. And then the major project work that's underway right now future-proofs the asset. So that motor that failed back in February last year, we have obviously put a full rewind on that motor and have a replica spare. Then a lot of work on the ball mill and all of project work around coarse ore bins, fine ore bins, to make sure that these things don't trip us up throughout the year for the remainder part.
So yeah, accommodation and all that sort of stuff, the construction crew, they're all there. That'll all be closed out and done and gone in four weeks and then going back on. So yeah, pretty impressive outcome. I just can't highlight enough 91,000 ounces at $1,090 AISC US$ an ounce, $107 million, reminding people we paid $260 million for this asset five years ago, and we're sitting there with multi-decade outlook. So it's a fantastic asset. So it's worth investing in.
No. Thank you very much for your perspectives.
The next question comes from Matthew Frydman with MST Financial. Please go ahead.
Sure. Thanks. Morning, Stu and team. Can I just carry on from Levi's questions on the all-in sustaining cost base of the business? And I guess really thinking about things more in dollar million terms, you spent about AUD 3 billion on all-in sustaining costs in FY2024. Your guidance implies that's going to lift to about AUD 3.4 billion in FY2025, so about a 15% increase. Can you just talk through what, I guess, kind of high-level drivers across the business are that are driving that increase? Stu, you mentioned labor costs, energy, consumables, all of those things have gone up, and potentially there's some conservatism in your guidance around those. But to my mind, that doesn't really drive a 15% increase to the sustaining cost base.
My interpretation is that it's more driven by, I guess, increased material movements across the business, bringing on new feed sources, maybe a larger proportion of higher cost underground tons as well. Is that a fair assessment of what FY2025 looks like? And then looking beyond that, should we expect that your sustaining cost base is going to continue to grow ahead of, I guess, what we would consider to be industry cost inflation in order to deliver that two million ounce target? Is it a case of continuing to needing to bring on some higher cost feed sources in order to achieve those numbers, or is that increase something that's a little unique to FY2025? Are there factors to call out there that are somewhat unique? Thanks.
Thanks, Matt. A lot packed into that question, but I'll address it. So our exit rate, obviously, for the year, the 1.621 million ounces delivered at mid-$1,850 AISC. And then when you look forward, we say, well, the bookends are 1.65 to 1.8 and the AISC being $1,850 to $2,100. I get the point saying it appears that there's a big step up if you're taking midpoint, midpoints, etc., from what we've just delivered. There's a couple of things in that. We have visibility of renewed contracts with escalation. So there are some known costs that we have negotiated, long-term contracts with major suppliers who are doing a fantastic job, and with valid cost impulse, we've recrossed those contracts. So we've got that. We also see the elevation of what gold price is doing to flow through costs around royalties and other things that it attracts.
We'll also see the introduction of things like traditional NSR royalties that start to come in more earnestly this year. So they're impacted in there. We've got a higher escalation or view of where some energy input costs are for the year. We may not see those, and we may enjoy a reduction of those, but yet to plan. I'd rather be a little bit conservative on what we've historically seen there. There is still some grade-driven things in the interim to get to that full thing. So you pointed out saying it's higher cost tons, higher cost undergrounds. I guess it's not. It's that lower-grade material is now materially profitable. And I'm not going to say mind the margin, but I'm going to say that grade denominates that. So when you drop it by decimal points, your AISC will go up.
But when the gold price is $3,500 an ounce and you're doing your reserves a bit over 2,000 and your resources around 2,500, there is a lot of headroom for profitable material that's in and around the activities that we're mining. It can change strip ratios. If you've got mill capacity, it can change cash flows, all those things. So we're also conscious about those grades and the incremental material that can be milled, albeit at a higher AISC, but generating significant cash flow from those tons. So some of that incremental material sits in that plant. And then, yeah, look, this is a checkpoint on the way to the sustaining long-term part. So Simon talked about Thunderbox, getting stability, but we've still got 5%+ availability to get out of that. We've saturated it with maintenance labour.
We'll get it up, get it stable, then we'll start pulling away some of those resources. So there's some expensive ounces at the moment just because we're putting in contingency. But if you look across the sector, I think we're still pretty healthy compared to the average of increases that you're starting to see. So I'm not saying we're the best of the worst bunch. I'm just saying it is what happens when the gold price goes up. It drags the costs up as well. So yeah, midpoint is still sub $2,000. And when you start looking at the margins to that, it's very strong. So hopefully, comprehensive answer to your comprehensive question, Matt.
No. Appreciate that. Thanks. Obviously multifaceted, so appreciate the additional detail. Maybe just quickly, can I ask on the buyback? And I know Ryan touched on this in his remarks, but obviously you guys have been quite judicious in exercising that. You've obviously been constrained by blackout periods as well. Can you just remind us, I guess, how you think about when you choose to enter into the market in the buyback? Obviously, you're sort of recutting your view on the value of the business based on gold price movements, etc., etc. But I mean, broadly, in a gold price environment, all else being equal, should we expect that you would re-enter into the buyback at similar levels if you weren't constrained by blackouts?
Yeah, Matt. Look, it's opportunistic, mate. I mean, I sort of mentioned we're sort of nearly 20 million units purchased at average price of under AUD 9. So I guess we're not just saying, "Pin that in the ears, just buy the rest of it out." We're trying to be opportunistic. Obviously, there's volatility in our own price, and there's also competing capital. So I think the best way to put it going forward is it's a board decision on whether we extend the buyback, increase it, or completely walk away from it from here. But that'll be wrapped up in the context of the next few years, the outlook, and all these things. So I guess in a nutshell, we're opportunistic on it, and I think it's worked well so far.
Thanks, Ryan. Thanks, Stu.
Thank you.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. The next question comes from Hugo Nicolaci with Goldman Sachs. Please go ahead.
Morning, Stu and team. Thanks for the update this morning. My first one, just digging into POGO a bit more, I was wondering if you could provide any extra color around the strong performance in the quarter. How much of that do you think was running the mill hard into the major shot versus maybe some optimizations you've been able to get out of the plant that maybe you can carry forward from here? And then I'll come back with the second. Thanks.
Yeah. So look, to deliver that strong quarter, I guess everything was working really well. So the mining physicals were performing above the plan. The mill throughput performed above nameplate and very consistent throughout the quarter. Grade obviously was achieved throughout the quarter pretty consistently. So all of those things, controls and stability delivered that exceptional outcome. You can see our dollar millions costs are still elevated while we're transitioning fleet and also getting change management settled and stability into things. So there's still opportunity to be able to reduce overall input costs. But we're also working hard to all the planning and preparation to manage this plant shutdown and refurb on the plant in this quarter. So a lot of the thinking went into that. So yeah, I wouldn't share that to say there was only one single thing.
I think the whole team across each department absolutely nailed what they did. They've done it before, just not for 90 days in a row. So I'd give the credit as we've always seen the highlight of a week, a month, two months. Then there'd be something either due to age of fleet or some other hand-to-mouth issue which sort of eroded, impacted a week or two, or the mill motor failure, those sort of things which when you zoom out, looks like a low average. But we always saw the highlights of mine development, stoke grades, milled grades, mill throughput, run rates. So we're pleased to see it very consistently, which has obviously delivered +360,000 ounce per annum run rate. That's what I think people need to look at it with this asset is we're trying to get it to a stable 300.
It just delivered a 363 run rate in the quarter. So we're not asking it to do that.
Great. Thanks for that extra color. And then my second one is just coming back to the FY2025 cost piece. Could you provide any extra clarity just around how much of the all-in sustaining cost guidance might get impacted by inventory adjustments through things maybe like shutdowns? And then any extra color on the point you touched on around royalties increasing on some of the assets from things like native title and that sort of thing this year?
Yeah. So some of those things around gold price impacts, it'd be less than $50 an ounce. I'd put to that. And I'm not going to ever disclose what they are, but between state and third-party contributions, it'll go through in that sort of magnitude. But when you look at inventory adjustments, there's no smoke and mirrors or sort of games on AISC or growth capex or whatever. You just look through to our cash flow and see where money's been spent. Ryan, do you want to just talk of the treatment of the 5-week Pogo? Yeah. I guess, yeah. So I mean, Pogo will carry yeah, its cost will be high because it will be carrying the cost while the mill shut.
But I think on the inventory adjustments, I think over the year, we will likely build more stockpile than well, build more stockpile because we'll be mining more than we mill. And really what that does is it does carry a little bit more cost, I guess you could say, in AISC because the operating costs, while they're backed out, the capital obviously that goes through each month and we spend on the business isn't. So when you're denominating less gold sold, you've still got your capital spend there. So that's a bit of it. I think I'm just saying cost, just the macro landscape obviously is we're still seeing cost increases, as Stu mentioned. I think if you look at the midpoint to where we landed this year, it's 3% in all-in sustaining cost land per ounce. So yeah, there's still challenges out there.
I guess we're hopeful that, as Stu sort of alluded to, we're hopeful that as some other unfortunate sectors are winding off, that maybe there's some opportunities there for us. But we can't bank them until we see them occur.
Thanks there, Ryan. Just another one on costs around the reprice contracts. I'm just confirming there's probably still rise and falls in those. If costs across the sector do start to come off, you can benefit from that to a large extent.
Yeah. There's rise and fall mechanisms in them. I don't know if we've ever experienced a fall. I call them rise and rise. It's obviously index-driven. And Hugo, just on that, I mean, I think what I'd say is we are very fortunate that we have Northern Star Mining Services in our business because we are not experiencing the same, I guess, cost increase that we are getting from our third-party contractors.
Yeah. That's a great point.
That's something at least that we're really rapt with. They're a growing, I guess, they're growing the activity in our business. It's really helpful there.
Yeah. So we do well over AUD 1 billion. So we're nearly probably AUD 1.5 billion of underground activity across our business. And over half of that is done by in-house Northern Star Mining Services. And there's still results like Simon highlighted, go 500 meters a month for jumbo, Wonder. We're getting huge unit cost savings and getting to ore bodies quicker. We've got the two best contractors in the land, in our Northern Star Mining Services and Byrnecut, doing the primary work for us.
Thanks. Stu and Ryan.
The next question comes from Neil Watkinson with Kalgoorlie Miner. Please go ahead.
Good morning, gentlemen here from Kalgoorlie. Thanks for your time. I just want to focus first on the FY2024 guidance where Kalgoorlie has hit, Pogo has hit, the overall has hit, but Yandal's just down a bit. Was that mainly due to the fire at Jundee or were there a series of factors that just slightly constrained Yandal in the FY2024?
Yeah. Thanks, Neil. We kind of recall being flooded in on an island there in Kalgoorlie during the first part of the year.
Yeah. It was a bit wet, yes.
Yeah. So I don't know if you've got it, tinny, but you would have needed it. The Goldfields were flooded for a large part of that year. So a lot of the haulage of open pit material to mills was substantially impacted across the gold sector. We utilized stockpiles that were close to our mills throughout that period, which were obviously at different grades to our primary plan, but we were able to keep going through that. That was obviously Kalgoorlie, but also Carosue, including the Northern Yandal mines of Jundee, pulling Orelia material down to a Thunderbox, etc., plus Wonder being trucked up. So that was probably the primary impact. The secondary was this throughput run rate of TBO, which is now being delivered at six million ton nameplate for quarter four. We're very pleased with that.
There were certainly impacts related to the gold room thermal event at Jundee, and the team did a fantastic job getting that back online. But in that process, we were able to utilize other infrastructure that we had to continue to produce gold from that carbon, loaded carbon. So yeah, it certainly had impact for the team to get that contained and rectified in great order. So yeah, Northern Yandal had a lighter year on that overall guidance. That is the strength and beauty of having diversification of production centers, flex in the business plan, contingency of production sources that we do ducks on the water. We're kicking pretty hard, and we're able to restore and deliver into that guidance as a group. And it's great that sometimes those cylinders all fire together. Sometimes they're firing at different times.
But we've seen Pogo really shine in this quarter, and that's subsidized some of the setbacks that we got with the seasons here as well. So I think it's just pleasing to see the portfolio as a whole, with this contribution and no passengers across the group.
What caused the fire?
Pardon?
How did the fire start? What was the cause of it?
Yeah. Yeah. Neil, Simon here. It was a scrubber unit on the back of the gold room. So you look at it, it's a very small piece of infrastructure. And the team did a great job containing that within about an hour and a half. But it was just that part of the plant. There's a lot of electrical cables, so it took some time to rectify it.
Just a second question on KCGM. Just gold sales down during the quarter. Was that expected? And also, how confident are you that you can wind up to 650,000 across the next financial year? 650,000, sorry.
Yeah. So I think your point is good on timing. If you're going to look at gold produced versus sold, there's obviously more overproduction of gold there. So timing's everything. You've usually got a 2- to 3-week lead time on a refractory plant to get gold through concentrates and then through ultrafine grinds back into gold rooms and gold bars, etc. So unless the grade goes through three or four weeks before the end of a quarter, you're not seeing that in a gold bar sold at the back end. And that was some of the impacts we've had with power, etc., across the Goldfields. And timing's everything. So there are events. What was the other question?
Yeah. Just looks like KCGM is key.
Oh, 650,000.
Getting up to your guidance this financial year, winding up to 650,000 ounces. How confident are you feeling that you're going to be able to achieve that in the coming financial year?
I'm always confident, Neil. The guidance with the plan that's there, we have clarity of the mine sequence. It's obviously driven by the material from the Golden Pike, the grade from the bottom of the pit, as well as growth out of Mount Charlotte and Fimiston underground being brought into the feedstock. So the backstop is always the low-grade stockpile. If you go and look at the group, we have 3.5 million ounces in stockpile in and around our processing facilities. And the majority of that is sitting on KCGM. So we've got years and years and years ahead of security of supply. And therefore, it's the rate at which we get that milled and produced. The 650,000 ounces is fundamentally we've taken it from a 450 up to midpoint around 550. And then 650 is the last piece of getting into that grade.
That is still only a checkpoint when the expanded mill turns on at 27 million tons per annum, gets ramped up, 24.5 up to 27 over two years. And that'll take KCGM to 900,000 ounces per annum. So that's the ultimate game. 650 is a checkpoint. And by FY 2029, it'd be knocking out over 900,000 ounces per annum from KCGM, which includes the open pit contribution, large undergrounds continuing at Mount Charlotte, and new undergrounds at Fimiston, as well as the supplemented low-grade stockpile to deliver that major top five global gold boom.
Excellent, gentlemen. Thank you very much.
Thanks, Neil.
The next question comes from Jarrod Lucas with ABC News. Please go ahead.
Good morning, guys. Looking forward to the Diggers site trip. Just wanted to expand on you slightly mentioned just how the nickel environment's changing the labor markets. Have you seen that with the closures we've had so far this year in nickel? Has that reflected the labor market yet, or are we yet to see that flow into the market?
Absolutely. We've already seen our vacancy rate reduce. So the ability to get staff in, we've seen turnover reduce because obviously there's not jobs to go to. And we will expect to see again September, October a flood of labor that's available. It doesn't necessarily mean it relates through to changes in costs or labor reductions, unit rates, all those sorts of things. But it just takes away some of that pressure. It's sad to say, like we're beneficiaries of that retraction. But it also was unique that all the cycles peaked at once when we had, with two years of border locked, that we had iron firing, lithium firing, nickel firing, and gold firing all at the same time with inability to get imported labor. And the state was short 25,000 resource workers. That's why you got cost escalation. So this is the opposite side of that hill.
Again, we've reached out to those proactively to say we're interested in our growth trajectory and gold's cleaner and greener and a nicer place to work in the Goldfields, as you know, Jared, than the Pilbara. So we're encouraging people to look at our business and multi-decade outlook and secure their residential homes at Kalgoorlie and move there.
Thanks for that, Stuart. And I can attest it was an island for a while. And just one more, if it's all right, on the Jundee renewable project, if you could expand on how, I guess, that's progressing. I see the first of the four wind turbines is up. And once that's operational, is that going to have a material impact on your cost base at Jundee with electricity, obviously?
Yeah. So the overall mix of the solar wind battery will displace about 55% of the power inputs for Jundee. And ultimately, it's a similar or an improved unit cost. Given we amortize the project and have a power agreement, but it's important it'll be the solar's all up and running and connected. The wind tower, one of four, is done. And by December, we'll have those four erected and commissioned and contributing. So yeah, pretty pleased with what the progress is being made. And ultimately, this is about our commitment of 35% reduction by 2030. And this is a major contributor to that. So we've already got the big solar field at Carosue. This is now big solar in and the wind coming. And then we're obviously evaluating the broader Goldfields project that'll feed KCGM as well as Thunderbox.
Thanks, guys. Appreciate it. Look forward to seeing you at Diggers.
Thanks, Jared.
Thank you. There are no further questions at this time. I'll now hand it back to Mr. Tonkin for closing remarks.
Okay. Thanks. Thanks all for joining us on the call. And appreciate, obviously, it was a very busy morning. Look forward to updating you all as we continue to advance our profitable growth strategy. Thank you and good morning.