Thank you for standing by, and welcome to the Northern Star Resources September 2022 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. Please go ahead.
Good morning, and thanks for joining us today. With me is Chief Operating Officer Simon Jessop and Chief Financial Officer Ryan Gurner. I'd first like to acknowledge the two recent fatalities in the Western Australian gold industry and express my sincere condolences to family, friends and colleagues of these workers.
The gold industry works collaboratively to improve the safety and wellbeing of our sector employees. We are committed to continue to share best practices to eliminate harm in our industry. I also acknowledge the sudden passing of Peter Bradford, IGO Chief.
Peter was a tremendous leader of innovation, cultural change, and promoting diversity in the resources sector throughout his career. His purpose was to make a difference, and his positive legacy will be remembered for decades to come. Now to our quarter one results.
Our September quarterly production of 369,000 ounces at an all-in sustaining cost of AUD 1,788 per ounce was slightly below plan, with some delayed production expected to be recovered in future quarters. We made significant progress with our growth projects advanced during the quarter, and we maintain our full year guidance with weighting in the second half.
Our safety performance is sector leading with LTIFR of 0.7, but we are seeing numerous incidents that have led to an increased focus on training, competency and safety leadership. This is a challenge for the industry on the recovery of a state skill shortage and high turnover of staff levels.
Simon will speak to the Australian operation shortly, but at Pogo we are meeting the mill throughput rate of 1.3 million tonnes per annum, with a major shut completed in quarter one and development ore grades contributing to the lower produced ounces there. We finished the quarter with 13,000 ounces of gold in circuit and will reduce that over the coming quarter.
Last month, we conducted an investor and analyst visit to Pogo on the back of the Gold Forum Americas conference, and it was pleasing to highlight the significant improvements made at Pogo, which are the foundations for the growth ahead. We're also very excited about the exploration upside within the mine and regionally, which continues to be explored and extended. Ryan will speak to the financials.
However, one highlight during the quarter was the announced AUD 300 million share buyback, of which we have completed 15% during the quarter. With our first quarter completed, I'm extremely pleased with the progress of our growth projects that we've advanced, the simplification of our operations and the outlook of the opportunities ahead. Now over to Simon. Thanks.
Thank you, Stuart. For the Kalgoorlie Production Center, including KCGM, Carosue Dam, Kanowna Belle and South Kalgoorlie, we sold 215,000 ounces of gold at an Australian all-in sustaining cost of AUD 1,762 an ounce, slightly up on gold sales from the June quarter and 2% lower on costs.
This production produced a mine operating cash flow of AUD 170 million, while we also spent AUD 91 million on significant growth capital projects. Of this major growth capital total, AUD 60 million alone was spent on KCGM open pit mine development. At KCGM, open pit material movement increased 29% higher than the June quarter at 20 million tonnes, with trucking hours also increasing 21% as our training and recruitment plans continue to be successful.
Grade in the mine ore was lower due to planned grade control drilling and limited access into Golden Pike South. The pleasing open pit physicals have shown we are on track to deliver and in fact are now delivering into our strategic goal of 80-100 million tonnes of annualized movement.
Progress in the OBA area continued as planned when we commenced mining through the historic 2018 fill zone during quarter two. This key growth area remains on track for reestablishing FY24 access back into Golden Pike North's low cost ounces.
Underground mining for the Kalgoorlie region was steady compared to the June quarter at 1.52 million tonnes, but at a higher grade for 119,000 ounces. KCGM's Mount Charlotte operation physicals were steady while Carosue Dam increased underground ore tonnes and grade as stoping volumes improved.
Kalgoorlie operations Kanowna Belle and South Kalgoorlie produced lower volumes at a higher grade as grade quality was targeted at our South Kalgoorlie operation over volume. Processing volumes in the Kalgoorlie region was 4.7 million tonnes, or 3% lower than the June quarter, due to a planned major shutdown at KCGM and placing the South Kalgoorlie mill into care and maintenance.
The KCGM shutdown maintenance works were successfully completed early in the quarter. Going forward, all mined ore from South Kalgoorlie will now be processed at Kanowna Belle on a campaign basis. The personnel from the South Kalgoorlie mill and some of the mine personnel have been redeployed back into KCGM and Kanowna Belle. These have been completed within the quarter with a new operating model successfully embedded.
At our Yandal production center, including Jundee, Thunderbox and Bronzewing, we sold 102,000 ounces of gold at an Australian all-in sustaining cost of AUD 1,584 an ounce, down 18% on gold from the June quarter and up 12% on cost.
This production produced a mine operating cash flow of AUD 81 million, while we spent AUD 67 million on growth capital projects, which is down AUD 27 million quarter-on-quarter as we close in on finishing the Thunderbox mill expansion. The mill expansion itself spent AUD 11.4 million of major growth capital during the quarter. Our Jundee operation continued with a strong development performance of 6.2 kilometers and an average mined ore grade of 4.3 grams per ton.
Ramone underground mine, currently operated by Northern Star Mining Services, achieved a new quarterly development record for the operation of 1,609 meters with one jumbo, and commenced ore stoping at quarter's end. Total jumbo development was also a new Jundee record of 8.1 kilometers for the quarter.
And will continue to be a key enabler both on drill platforms and increased stoping areas. Processing throughput increased 28% back up to 747,000 tons, and nameplate as less open pit Jundee clay material was fed into the blend. Thunderbox underground operation continues to increase the stoping mining fronts with 450,000 tons of ore mined up 2% on June quarter.
Ore tons mined from both underground and the open pits was 1.32 million tons, which was 100% above the actual quarter milled tons of 670,000 tons. Mined ounces was also 54,000 and steady quarter-on-quarter versus a recovered gold of 27,000 ounces. The increased ore tons on stockpile and ounces is in preparation for the expanded mill project.
The Thunderbox mill expansion completed the major tie-in and commenced milling on the new SAG and existing ball mill at quarter's end. The project remains in line with expectations, despite many obstacles over the last 18 months, and will systematically ramp up over the course of quarter two. We are pleased to see some initial results from the early commissioning data showing nameplate metrics in all areas.
We expect to be achieving the nameplate six million tons per annum run rate during H2 of FY23. This project remains a key focus until we deliver consistent throughput with the increased gold volumes to the Yandal region and lowers the overall processing costs. I would now like to pass on to Ryan, our Chief Financial Officer, to discuss the financials.
Thanks, Simon, and 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 three on page seven, with cash and bullion of AUD 473 million at 30 September. We remain in a net cash position of AUD 173 million following the payment of AUD 155 million in stamp duty and AUD 132 million in dividends.
With AUD 300 million in bank debt drawn from our corporate facilities. Pleasingly, our assets generated positive free cash with capital expenditure fully funded. Figure six on page eight sets out the company's cash movements for the quarter, with key elements being the company recording AUD 301 million of operational cash flow.
Looking ahead to the remaining quarters, this is forecast to rise with the completion of TBO mill commissioning, Q2, and stronger margin contribution from Pogo across the remainder of the year. Quarterly investment in sustaining capital, growth capital, and exploration are tracking to plan.
In respect of the plant expansion at Thunderbox, at 30 September, approximately AUD 30 million remains to be paid on the project, which will be disbursed over the coming months. In respect of stamp duty on the merger, as previously indicated, AUD 155 million was paid during the quarter. As announced with the FY22 financials, the company has initiated an on-market share buyback. During the quarter, 6.1 million units totaling AUD 45 million over the 11 available trading days were bought back.
We intend to restart the share buyback program following the end of the company's blackout period at the close of market today. During the quarter, the company paid its final FY22 dividend of AUD 0.115 per share, totaling AUD 132 million net of our dividend reinvestment program.
To other financial matters, depreciation and amortization are in line with expectations at the upper end of the guidance range at approximately $700 per ounce sold. For the quarter, non-cash inventory charges to the group are AUD 56 million. As mentioned previously, the majority of these non-cash inventory charges relate to the milling of acquired stockpiles at KCGM.
In respect of costs, we continue to apply sharp focus and drive cost-saving initiatives by leveraging our supply chain and relationships with suppliers to source lowest cost items and receive best terms. The company is not experiencing shortages or material disruptions to its supply chain. Lastly, in respect of hedging, table four, page eight, sets out the company's committed hedge position at 30 September.
With the overall book being 1.3 million ounces at an average price of AUD 2,600 per ounce. During the quarter, the company extended its hedging policy to include an additional year, meaning commitments can be placed out to four years, previously three years.
Per the policy, the fourth year minimum hedge commitment is nil and maximum is 20% of annual production. In respect of that, during the quarter, the company placed 200,000 ounces in FY26 at an average price of $2,815 per ounce. I'll now hand back to Ashley for the Q&A session. Thank you.
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 Al Harvey with J.P. Morgan. Please go ahead.
Good morning, guys. Just to follow up on the hedging, I just kinda wanna get a sense of what the key driver of that extension out to four years is for. Is there a particular project that's concerning you? Do you think once we get beyond that growth phase, you're like you'll be likely to pull that back to a three-year timeframe?
Yeah, look, it's quite light in the fourth year there, Al, so 0%-20% of production. And what we saw was, you know, some ability to put in some AUD 2,950, 2,900 hedges. We obviously added 200, about 2,800, a bit over 2,800. With a view of what we see CapEx coming off the next couple of years.
But we've also got to make the decision around the Fimiston mill expansion the next year. You know, consideration of that gives us that sort of time horizon that we're looking at. Yeah, some of the highest cost mines, obviously, you know, Kanowna Belle, South Kalgoorlie, we're conscious of.
We can't hedge necessarily the costs, but we're just sensibly giving ourselves a bit of a taper there in hedge profile so that there's not large shocks across the business. We can continue and complete our current growth plans.
Cool. Thanks Stuart . Just on the Super Pit expansion, can you just remind us of the study timing and if you've got any incremental updates on how we should be thinking about that?
Internally, the next quarter, we're still getting some finalization, and really just looking at the scope and the risks side of it. Getting circled up values on that feasibility level, for that expanded to 24 million ton case, you know, the sort of 70% renovation, I guess, that's the case we're really circling up on.
We'll update in the second half our findings on that, but we haven't committed to any investment decision date at this point. We wanna see Thunderbox mill absolutely cranking. We wanna see Pogo's production delivered and at that rate, just simplified portfolio before we commit to that.
Cool. Thanks Stuart . Just slip one last one in. Just on the Carosue Dam underground, are you able to give us a sense of the split of open pit and underground ore and the impacts we could expect on the grade profile, I guess, over the next year or two?
Yeah, I think Al, the profile is fairly consistent going forward. As one mine starts to slow down, we start to commence another underground operation. You know, during quarter two, the current quarter, we're expecting to you know start Porphyry underground operations. You'll see consistent volumes from the Carosue Dam underground operations going forward.
Thanks. Thanks, gents.
Your next question comes from Daniel Morgan with Barrenjoey. Please go ahead.
Hi, all. Sorry, I'm just taking myself off mute. Firstly, I mean, maybe a conceptual question across the group. You know, what areas of your business are running ahead of your plan or expectations? You know, what areas might be a bit behind? Thank you.
Thanks, Dan. I wouldn't say anything's terribly ahead. We're on track. We knew we'd have a second half-weighted year, and the growth plans are, I guess, well advanced during the quarter. As Simon highlighted, the volumes, you know, 20 million tons moved at KCGM, hits that magic 80 million per annum run rate.
Very pleased with the volumes there. Very pleased with the progress and actions on the east wall remediation. Did a large lift fast and rectified that first step down on the top of that scarp. That was really, I wouldn't say it's ahead of plan, but it's on plan.
And then Thunderbox mill expansion, you know, it's up and running. It's really getting that better down consistency and sort of range testing it to make sure we're just bedded in and keep that consistent production for the second half of the year. We're pleased that hasn't slipped.
It's really now about getting that volume maintained at that six plus million tons per annum, which we've demonstrated we're doing. It's just the feed on that. Pogo, we're maintaining the 1,500 meters a month, which is great. We pulled that extra jumbo out. I still wanna reduce total cost to that site, so that's the focus.
We're just a bit cautious about pulling that too early and retreating backwards. You'll see grades driven by development and more waiting on development ahead of the plan. You know, cut-off grade's 4.3 grams. A lot of that material that's been fed to get a six-gram quarter is the development ore going in.
We still probably would say we're a bit behind on where we'd wanna be with Pogo, but we're confident the quality of the system, the ore body, the reconciliations, the stope and grades we're seeing that the second half weighting comes in and the exit rate to move into a 300,000 ounce plan is there. Yeah, generally ups and downs. I would not say we're ahead of the plan on anything, but we're pleased with the progress we're simplifying and fewer things moving at the moment.
Okay. Thank you very much.
Your next question comes from Levi Spry with UBS. Please go ahead.
Good morning. Thanks for your time, Stuart and team. Lots of focus on cash margins, I guess. I think Ryan, you kind of addressed it, but maybe you could just talk us through the waterfall one more time and what we can expect through the rest of FY23 in terms of, you know, expanding operating cash flow margins, maybe the CapEx falling off a little bit and what else could in place of the stamp duty payment that you had in that quarter, we need to be aware of for the next three quarters. One question, but.
Yeah, thanks, Levi. Yeah. Looking ahead, I guess, you know, this quarter at KCGM, for instance, yeah, we'll get back into more material from Golden Pike. Low cost ounces, low strip ratio, higher grade. That's helpful. There'll be, you know, this next quarter, obviously we had the start at KCGM and Pogo. You know, we've also had, as Stuart mentioned, there's been a bit of gold held up in the Pogo circuit, so that'll come through. TBO is ramping up and, you know, Ramone there at Jundee, as Simon sort of alluded to as well, will start.
There's a few things there that, you know, when you talk about margin and I guess contributions, that's what we expect to see over the coming sort of quarters. In terms of sort of, you know, bigger hits, you know, around stamp duty. Stamp duty's all paid, so that's done.
Now that's an interim assessment, so you know, we've still got on our balance sheet, you know, and another sort of AUD 70 million potentially that could be paid, but we're unsure about when that'll be because, you know, the Office of State Revenue's got to assess it. Now, that could be in years' time. We're sort of holding that.
Other than that, you know, tax, which is asked a lot about, you know, we don't expect there to be a large balancing payment in the second half of this financial year. We will likely go back to some tax installments. They're not gonna be large, but that's sort of, that'll probably be sort of more in April to June for this financial year. Other than that, there's no big hits, I guess you could say to the cash flow.
The other thing I'd add, Levi, just on the realized gold price was just under 2,500 for that quarter, as we've taken some of those lower hedges in. You'll see the hedge profile on page eight that starts to average up. We make sure we consume those lowest hedges and that averages up. Some of the cash flow there is not realizing exact spot in this quarter. We're consuming our lower hedges, probably impacts about AUD 20 million-AUD 25 million a quarter.
Roger. Thanks, guys. Good answers. Thank you.
Thanks.
Thanks, Levi.
Your next question comes from Kate McCutcheon with Citi. Please go ahead.
Good morning, Stuart and Simon. Can you talk me through Jundee a little bit? You've finished Julius pit, is that correct? What does the feed look like into guidances here in terms of underground open pit mining areas? Thanks.
Yeah, thanks, Kate. Simon here. Yes, we finished the Julius open pit last quarter, but we've still got stockpiles of that material over the next couple of years going forward. At the same time, during the H2 of FY22, we started the Ramone underground. Stoping's just commenced for Ramone, which is previously an open pit, mined a few years ago.
It's now well-developed, and we're into starting the stoping phase of that. Going forward, the main Jundee mines are consistent, and then we've got Julius stockpiles for the next couple of years, and it's really just Ramone stoping going forward.
There's about 180,000 ounces in stockpiles at Yandal there that show that feeds and you blend it through.
Yep.
Jundee's underground and stockpiles going forward.
Correct. Yeah. Fed off the main Jundee complex, Ramone, and then just top up of stockpiles over the next few years. Yeah, fairly consistent production profile. It's always just how that two-thirds, one-third. Two-thirds underground fleet, two million tons, and then the extra one million coming out of stockpile, so it's regional satellite pits.
Okay, that's helpful color. Thank you.
Your next question comes from Matthew Greene with Credit Suisse. Please go ahead.
Hey, good morning, team. Hope you're all well. Got a couple on KCGM. Just your comments on the accelerated waste movement. Sounds like there's a bit of a catch-up there. How should we be thinking about that total material movement there at 80-100 million tons? Where do you expect the operation to be placed for the remainder of the year?
Yeah, thanks, Matt. It is actually spot on plan. This year we're targeting 80-85 million tonnes of movement from KCGM. Last year we did 66 million tonnes. We've been building. We did the fleet replacement in the last 12 months. We only really completed that in quarter four.
Quarter one is the first real quarter that we've seen the full new fleet as one, you know, large fleet really starting to move a lot of material. Really pleased with the large tick up of 29% more material movement for KCGM. It's spot on in line with our plan. Yeah, that's what we're targeting this year, 80-85 million. If we annualize quarter one, it's an 82 million ton run rate, and we'll continue to see more optimization, and more benefits of the new fleet going forward. Very, very pleased with KCGM open pit material movements.
Cool. Thanks for clarifying that, Simon Jessop. Just on those new trucks, have you seen? I mean, you flagged in the past the productivity gains you expect. I mean, how is that sort of flowing through a year? I presume, I mean, obviously you've seen some of it already, but are we seeing, you know, the full productivity over a number of quarters yet? When do you expect that to fully flow through?
Yeah, look, we have seen, you know, 5% reduction in diesel and sort of close to 15% improvement in speed on ramp heading up. Really when we're back into Golden Pike South at the bottom of the pit, that's the longest haul. That's where we really start to see the advantages of the new fleet compared to, you know, trucks that were 20 years old, overheating and high maintenance costs. We're pretty excited to see the optimization of that new fleet going forward.
That's great. Just on Golden Pike South, Ryan, you mentioned again back in there this quarter. Do you expect to be mining from that for the balance of the year? Then just on diesel prices, what are you observing there? You flagged, I think it was $70 an ounce previously. Are you still sort of seeing costs around that level?
In terms of Golden Pike South, it comes and goes. Last quarter we mined a small amount of ore from Golden Pike South. We had a big grade control program in the base of the pit. Really at quarter's end we got back into mining into Golden Pike South. It comes and goes depending on the cycle down in Golden Pike South.
It's not continuous mining down there. The other piece around the diesel and the costs is we took the cost from quarter four into our budget. We've probably seen, you know, fairly consistent diesel price compared to what we put in our cost assumptions for the FY23 budget.
That's very helpful. Thanks very much.
Your next question comes from Peter O'Connor with Shaw and Partners. Please go ahead.
Hi, Stuart. Three questions. Firstly, on hedging, just the shape of the forward curve relative to spot and your comments about adding a fourth year of hedging into your book. What level or what type of discussions have been had by the board in terms of changing, lifting the hedging profile more robustly given that backdrop and opportunity?
It was really just the addition of that fourth year. It can be nothing. It was, you know, the minimum 0%, and the maximum is 20% of the forward production outlook. You know, with a 10-year reserve backed mine life, 20+ with a resource conversion, you know, we're thinking long term.
When we look at decisions around like the Fimiston mill expansion, you know, it takes a couple of years to be built. You wanna make sure that your paybacks are, you know, coming in on the back of that once it's done and to build it and charge it every year. That's just the view of what that fourth year is about.
No change in the shape of the curve in the early years, given that gap up in the forward curve above spot?
No. As we consume on a quarterly basis, you know, you're pulling down probably 100,000 ounces in a quarter. You're replacing that, but you're replacing it out 3 or 4 years out, right? You're keeping the same profile consistent. We've got a band obviously to move within, but it's really around pricing also.
We've seen that contango pick up about AUD 100 a year on that forward curve. It's not about just trying to stuff the sack in the first 12 months. You know, picking up AUD 2,800, AUD 2,900 dollar Aussie hedges in the third year when our all-in sustaining costs projections go down.
That's pretty good, margin expansion and view on some of the payback on what we're doing with the evaluations of these investment decisions. That's actually really helping us give confidence to make those calls.
Stu, to the buyback and the cadence of the buyback, it would appear to a casual observer that your buyback is slow. Could you just map out what's the strategy for buying, what percentage per day, or what measures do you use when you buy back stock, and what do we expect going forward? Is the last quarter a reflection of that process?
Yeah. We hand that over to obviously a third party to be managing within that realm. I think what people didn't understand is from the announcement, we needed to give 14 clear days to the market, advising of that. Once we came out with that full-year results, we were essentially blackout for 14 days, so we couldn't be buying.
We only really achieved 11 days of buying in the quarter. In that, we achieved AUD 45 million of buyback, so in 11 days. We sat anywhere between sort of 8%-12% of the daily volume. We can't move VWAP. There's VWAP rules, there's percentage daily rules, and we've given instructions to the third party who's buying. It's gotta be open, transparent for shareholders to understand that. That's, you know, that's 11 days of buying AUD 45 million. We'll turn that back on tomorrow, 24 hours clear of this announcement today.
Yeah. I
Okay.
The 8%-12% would be a good guide for the buying pattern going forward.
I don't know at this stage. 10-20%, you know, 10%'s pretty sensible, but, you know, we've got ability to tick that up or down, but it's really driven by the VWAP not materially changing or working without that VWAP.
If you're looking to VWAP guidelines, you'll buy every day?
No, Pete, that's right. There's a limit to what we can buy based on it. We can't buy where the five-day VWAP is above 5%. Yeah, we're limited. There's a regulation around it, as Stuart said. We've been in the market between sort of 10 or eight, I guess, percent to be exact, 8%-12%. It's just mechanical. You know, we intend to start tomorrow and get back to it.
I understand. I know the VWAP rule, but I just wanted to understand, will you buy every day or will you be buying on a pattern of days, just to be random?
No, because we have to sit inside those rules, and when we can buy, we will be buying, but we're already restricted. I mean, these are the premises behind all these buybacks is the company shouldn't be able to influence materially influence the share price.
This is about us buying back our own shares with our own cash, you know, shareholders' money to get that return because we see ourselves at a discount to our corporate model. It's not about trying to compete with everybody else out there buying and selling. It's about a sensible way to return capital, you know, shareholders' capital by buying and canceling those shares at a discount.
Okay. Got it. Glad to get a confirmation. Lastly, the skills issue in WA, Stuart. Other companies have brought it up over the last one or so weeks. How does this play out? You can clearly get bums on seats now for more dollars, but skills aren't necessarily there. Is this a multi-period process to get skills up? Does that mean the industry's got a drag in terms of productivity for an extended period?
I mean, absolutely. It takes years. You can get people to a competency, but to get them operating at full, you know, full efficiency, full speed. You know, for a lot of our key frontliners, it's decades to get them really to that frontline A-grade. The strength we have is the internal mining services division. We've kept a very stable team there and are performing at very high and high quality, high safety.
Those challenges are for the sector where there was a skills shortage. There has been a dilution across the sector in that regard for everybody. We have to increase efforts, energy, focus, training, supervision, and sometimes, you know, things just stop because you're not prepared to go forward in that regard.
That's when you are even through COVID impacts, which are minimal now. You're basically triaging what your activity you're doing on a day. You're not just asking people to do more with less or cut corners. I think they're the things that people need to be patient with. It will take a number of years to raise the overall competency.
I think Dan's question from the start saying, "Are we ahead on the plan?" No, we're on the plan, and there's some things that are behind, but we've consciously said, "Don't do it," and redirect traffic. If we're behind on something, it's been almost a deliberate reallocation of resources to make sure we're doing fewer things well in recognizing that skill gap.
Does that mean the normalization journey to lower costs or more normal costs is slower because of that?
Absolutely. It's written. You'll see that. You'll see that some of them on exploration spend, where you can't get rigs or you can't get assays through. You'll actually see reduced overall spend. That's not necessarily a good thing because you're not getting activity done. You will see that.
You know, if you back into kind of 15,000 ounces into this quarter for us, our costs come back into the midpoint of guidance. You know, a lot of that gold in circuit comes back into the plan in future quarters, restores us and gets it back in check. It's not materially off the rails, and we've got ability to flex, and it's quarter one. You've seen this before.
Adapt to change and modify things along the way, but at the moment, we're still sticking to what we set out to achieve. I think the great highlights, things like the volumes at KCGM. You know, it's only one quarter ago, we still didn't have the new trucks commissioned.
We were still losing 20, 40 truck drivers to the iron ore players, you know, in a quarter. Still had 10% vacancy across our workforce. You know, within a quick 3 months, we've actually met the volumes, manned up the trucks and hitting those metrics. Yeah, things can move back relatively quick with attention.
Thanks so much, Steve.
Thanks, Peter.
Your next question comes from Al Harvey with J.P. Morgan. Please go ahead.
Yeah, follow-up, guys. Just at KalOps, I guess, looks like we're seeing a bit of efficiency improvements quarter on quarter roll through. Is that a product of literally just switching off the Jubilee mill, or is it those efficiency gains from shifting personnel around? I guess, you know, is today's numbers, you know, about 40,000 ounces at AUD 2,100 an ounce, is that kind of the go forward rate, or you think you can improve that further, especially on the cost side?
Yeah, thanks, Al. Simon. Yeah, look, it is pleasing to see some cost reduction in the Kalgoorlie Ops. We probably see that looking a bit better going forward. We have made the changes, turned off a very high-cost mill at SKO and even with trucking costs, we're in front by treating that ore over at Kanowna Belle.
Plus it's using rather than being short at two process plants on people and personnel. We've now filled up a lot of vacancies across the board. You know, the reason we decided to do that was a 30,000-ounce reduction to the Kalgoorlie Ops region, but at the end of the year, we'll be AUD 20 million better off cash flow. That's the processing side.
Obviously in quarter one, we were still running for sort of half the quarter, the South Kalgoorlie processing plant. We turned it off, and there's some care and maintenance costs at the back of the quarter. We're pretty well executed that now. Going forward, it'll all be just treated at Kanowna Belle.
The other side of the coin is on the mining side, so really focused on quality and grade at South Kalgoorlie and pulled a jumbo and associated equipment and manning out of that operation, and redeployed at Mount Charlotte, where we see huge underground growth going forward. As well as some pretty, you know, pretty interesting areas around Kanowna Belle higher up in the mine.
I think going forward, it's, you know, it's representative in terms of ounce production of what we've done last quarter. We should see lower costs going forward from the Kalgoorlie Ops. A good step forward on the decision that we made in July around the mill and the mine.
Yeah. Thanks, Simon. Just one more from me. The AUD 37 million of exploration spent in the quarter, obviously annualizing higher than the AUD 125 million guidance. Is that just a product of access at Pogo or is there something else, and anything particularly exciting from the exploration front you guys wanna talk about?
Yeah, thanks, Al. My 300 geologists get a bit excited straight out the gates in July. A lot of it is seasonal profile on the spend. You'll see through obviously the winter months in Pogo the surface stuff cease. You'll see again wet season in Tanami, a few of those sort of things where we just don't get out on ground. It is a bit front loaded, but we've still got the AUD 125 for the full year there, mate.
Cheers, Steve.
Your next question comes from Neil Wilkinson with Kalgoorlie Miner. Please go ahead.
Yes. Good morning, gentlemen. I'm interested specifically in the East Wall remediation situation at Super Pit. Can you tell me how far through that process you are, when you expect it to be completed and once complete, what effect that will have on production at the Super Pit?
Yeah. Thanks, Neil. Simon here. In terms of the east wall remediation, we're about 60% through in terms of material movement through the wall. Really pleased with how that's been progressing over the last period. Going forward, we've still got probably you know 12 months-ish to finish that.
But as we get lower through the east wall, we'll gain further access back into Golden Pike North. Our plan all the way along was FY24 reestablish access back into Golden Pike North, which is the northern end of the bottom of the pit.
Yeah, on track for really 1.2 million ounces in Golden Pike North at very low strip ratio and high grade. That's been a key focus for us over the last few years. Yeah, about 60% completed and, you know, on track for FY24 reestablishing access again.
That Saturday's blast meal was an excellent sort of start to show that remote boring, remote access drill and blast, and that obviously can be seen from the lookout, huge progress on that first main shot coming back down through that stope. It's a fantastic achievement. Taken a lot of work to get to that point for the team.
That was the Saturday just gone, was it?
Correct.
Yeah, sure.
Yeah.
Any sort of unexpected challenges that you've found during this whole process so far during dealing with the ore remediation?
It's not something that's written in a textbook. The team have consistently needed to risk assess, you know, re-redesign, re-look at all the information and take it step by step. Yeah, again, they've taken that approach and it's working. This is not something that is just standard work. There's been.
Right.
A lot of brains on fixing this. Yeah, very pleased with the progress that's been made.
Excellent. Thank you very much.
There are no further questions at this time. I'll now hand back to Mr. Tonkin for any closing remarks.
Great. Thanks for joining us on the call today. As you've heard this morning, it's clear we're advancing our growth projects to deliver a strong half two. We have some efforts to reduce costs underway as we deliver growth across Pogo and Yandal in the near term and KCGM over the subsequent years.
We're maintaining our profitable growth strategy to two million ounces by FY26, while measuring success by maximizing shareholder returns through disciplined and responsible investments. Have a good day. Thanks.
That does conclude our conference for today. Thank you for participating. You may now disconnect.