Thank you for standing by. Welcome to the Northern Star June 2023 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 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.
Thank you, good morning, and thanks for joining us today. With me is Chief Operating Officer Simon Jessop and our Chief Financial Officer, Ryan Gurner. I'm pleased to present our exceptional June quarter results today, that contributed to our delivery of group production and cost guidance for FY 2023. During the June quarter, we delivered a production result of 426,000 ounces sold at an All-in Sustaining Cost of AUD 1,700 an ounce. I would like to extend an enormous thank you to our teams and contract partners that contributed to this outstanding result, which for the full year, delivered 1.563 million ounces at an All-in Sustaining Cost of AUD 1,759 an ounce.
We've now completed the second year of our five-year profitable growth plan to 2 million ounces per annum. We have made significant progress across each asset, which underpins the platform to deliver continued superior returns for our shareholders. During the quarter, we announced the decision to expand the KCGM processing plant to 27 million tons per annum, which will lift production there to 900,000 ounces per annum and reduce costs to AUD 1,425 an ounce. At modest gold price assumption, this returns an IRR of 19%. It is funded from cash flows. It is paid back in under five years. This investment at KCGM will lower costs, extend mine life, and be an enabler for future opportunities to drive superior returns for shareholders, placing it as a top five global gold mine.
Today, we've provided our FY 2024 outlook for production and costs, with guidance for costs for gold sales of 1.6-1.75 million ounces at an All-in Sustaining Cost of between AUD 1,730 and AUD 1,790 an ounce. We will invest growth capital of between AUD 1.15 billion and AUD 1.25 billion, including the KCGM plant expansion. On exploration activity, we have allocated AUD 150 million. I'd like to remind listeners that we are able to maintain these growth investments given our strong operational cash flows and balance sheet, whilst also servicing our dividends that are based on 20%-30% of cash earnings. Simon will speak to the Australian operations shortly, but first, to operations in Alaska at our Pogo mine.
Pogo delivered an exceptional June quarter with gold sales of 80,000 ounces, representing an annualized production rate in excess of 300,000 ounces per annum. Pleasingly, the uplift was through consistent monthly performance across mining and milling metrics. Development averaged above 1,700 meters per month. Stoke production was two-thirds of the ore mined, and the milling throughput approached an annualized rate of 1.4 million tons per annum. Impressively, mine operating cash flow for the quarter was $61 million. It is very pleasing to celebrate these milestones with the Pogo team, and I thank them for the efforts to date to demonstrate the exceptional quality of this long life asset. I believe we will start to see the market assign greater value to Pogo, given its performance and significant resource and exploration upside. Now, over to Simon for the Australian operations.
Thank you, Stuart. For the Kalgoorlie Production Center, including KCGM, Carosue Dam, Kanowna Belle, and South Kalgoorlie, we sold 224,000 ounces of gold, up 18% at an Australian All-in Sustaining Cost of AUD 1,666 an ounce. This production delivered a mine operating cash flow of AUD 280 million, while we spent AUD 112 million on significant growth capital projects. Primarily, AUD 57 million was spent on KCGM open pit mine development and new tailings storage facilities. At KCGM, open pit material movement was 21.8 million tons for the quarter, along with our new quarterly record of 66,000 trucking hours as we continue to optimize the load and haul fleet.
This quarterly movement, combined with the previous Q3 , resulted in 83 million tons moved for the year as a new record and is in line with our total annual material movement. Grade of mined ore and volumes both increased for the highest quarterly volumes of FY23. Underground mining volumes for the Kalgoorlie region were again steady at 1.56 million tons, while grade increased 5% compared to the March quarter, driven from Kalgoorlie Ops and Carosue Dam to deliver 130,000 ounces. KCGM's underground Mount Charlotte operation stabilized production with 1.04 million tons mined in the second half, which is above our annualized 2 million ton per annum target run rate. We will continue to grow this operation to 3.5 million tons by FY26.
The Carosue Dam Porphyry underground mine continued development as the next major underground ore source, averaging 390 meters a month for one jumbo. Kalgoorlie Operations, Kanowna Belle, and South Kalgoorlie, underground ore volumes and grade volumes were stable quarter-on-quarter, showing strong cash flow margins from these assets. Processing volumes in the Kalgoorlie Production Center returned to planned volumes with increased grade, resulting in the 18% uplift in gold sold by 224,000 ounces. Carosue Dam's processing plant milled 1 million ton for the quarter, a new site record, and finished with over 70,000 ounces sold as an outstanding result for the team. At our Yandal production center, including Jundee, Thunderbox, and Bronzew ing, we sold 122,000 ounces of gold at an Australian All-in Sustaining Cost of AUD 1,647 an ounce.
This production delivered a mine operating cash flow of AUD 124 million, while we spent AUD 61 million on growth capital projects. Primarily, AUD 26 million was spent on the Orelia open pit and new tail storage facilities. Our Jundee operation achieved a new underground mine record of 829,000 tons of ore, up 21% on the March quarter. Development continued to be consistent at 7.8 kilometers for an annual total of 31.5 kilometers developed. As a result, mined ounces was an impressive 101,000 ounces for the quarter. Processing throughput was also a new quarterly benchmark at 789,000 tons, while for FY23, Jundee milled over 3 million tons, which is 11% over the previous record.
These exceptional mining and milling physicals delivered 320,000 ounces of gold sold and over AUD 300 million of free cash flow generation. The recently announced renewable project for Jundee is exciting as we've commenced works on the 24 megawatts of wind and 16 megawatts of solar generation, which will also include a 12-megawatt battery storage. This is part of our carbon reduction target of 35% reduction by 2030, with Jundee an important first major step forward. Thunderbox underground operation continued to be the high-grade ore source for the mill, with 525,000 tons mined in the quarter and the highest physicals to date. For the full financial year, the underground and open pit operations successfully mined 6.5 million tons of ore tons, which is above the nameplate of the newly expanded process plant.
We will continue to bring on life of mine ore sources in order to provide high-grade feeds to the newly built 6 million ton per annum process plant. The new Thunderbox process plant achieved 1.03 million tons for the quarter due to the first major reline and shutdown activities, which were successfully achieved. Thunderbox also had 2 separate downtime events, totaling one week each, to rectify a variable speed drive, electrical repair. No further downtime has been experienced since the final repair in June. The throughput ton per average for the quarter lifted to be in line with the design nameplate, which was very pleasing. Recovery also did improve 3% from the last quarter as the gravity circuit issues were resolved late in the quarter.
Thunderbox, over FY 2023, successfully built, commissioned, and milled 4 million tons, and is a new step forward as we look forward to a full 12 months of runtime in FY 2024. I would now like to pass over to Ryan, our Chief Financial Officer, to discuss the financials.
Thanks, Simon, good morning to you all. As demonstrated in today's quarterly results, Northern Star remains in a very robust financial position as we enter FY 2024, which is poised to be another exciting year for the company. Our balance sheet remains strong, as set out in Table 4, page 10, with cash and billion of AUD 1.25 billion at 30 June. On the back of a great performance this quarter, we have built upon our net cash position, which now stands at AUD 362 million. The company has generated record full-year cash earnings of AUD 1.22 billion-AUD 1.24 billion, pleasingly, we saw a material uplift in the second half as we continue to focus on cost optimization and lowering sustaining CapEx across the business.
A reminder that the company's policy is to pay 20%-30% of cash earnings in dividends. After a very strong final quarter, we achieved our full-year group sales and group cost guidance. Consistent with our profitable organic growth strategy, we continue to invest capital across the business where we see positive returns. During the quarter, work programs advanced ahead of expectations in three key areas: early works and procurement of long lead time items for our recently approved KCGM expansion project, additional resource drilling at Jundee, and commercial production being declared later than planned at the Otto Bore open pit operation at Thunderbox. Figure Nine on page 10 sets out the company's cash flowing and investment movements for the quarter, with key highlights being the company recording AUD 557 million of operating cash flow, which is up 50% on the prior quarter.
After deducting CapEx of AUD 223 million relating to plant and equipment and mine development, and AUD 34 million in exploration, quarterly free cash flow generation was a company record, AUD 300 million. Proceeds from the successful 144A bond issuance during the quarter was used to pay down corporate bank debt, resulting in a net cash inflow. Including cash and bullion and undrawn facilities, the company has AUD 2.2 billion in available liquidity at 30 June. All three production centers generated free cash flow, with capital expenditure fully funded. Kalgoorlie contributed more than half of the group's free cash flow performance. Pleasingly, Pogo's strong quarterly performance contributed over AUD 70 million in net mine cash flow, the highest contribution since acquisition, reflecting the delivery of the Pogo team's optimization plans at the asset.
Group net mine cash flow for the quarter was AUD 302 million. On other financial matters, depreciation and amortization are in line with company guidance provided of AUD 600-700 per ounce. Full year depreciation amortization is at the mid to upper end of the guidance range, at approximately AUD 670 per ounce. For the quarter, non-cash inventory charges for the group were AUD 12 million. As mentioned previously, most of these non-cash inventory charges relate to the milling of acquired stockpiles at KCGM and are a component of EBITDA. A full reconciliation of all understanding costs of EBITDA is included in the back of our half year financial results presentation. In respect of the company's on-market share buyback, no additional shares were purchased on market following the company's Q3 release.
The buyback program remains open until September 2024, with a blackout period applied until our FY 2023 results are released in August 2023. Following the strong Q4 performance achieved, the company is well placed to deliver production and cost guidance for FY 2024. Overall, total capital expenditures for FY 2024, including sustaining growth and exploration investment, are forecast to be broadly consistent with FY 2023 levels, excluding the KCGM mill expansion capital. In relation to growth capital expenditure, we are guiding FY 2024 to AUD 1.15 billion-AUD 1.25 billion, which includes the AUD 525 million relating to the KCGM mill expansion. Figure 5 on page 4 outlines the key areas of growth capital activity across the production centers to deliver our profitable project pipeline.
Exploration is guided to AUD 150 million in FY 2024, with investment focused on KCGM and Jundee in-mine exploration, including drill drive development. At Pogo, additional drilling at the star discovery is planned. Importantly, with the company's strong liquidity position, our capital projects and exploration investments are fully funded. Finally, in respect of hedging, Table 5 on Page 10 sets out the company's committed hedge position at 30 June. The overall hedge book stands at 1.457 million ounces, at an average price of AUD 2,811 per ounce. I'll now hand back to Melanie for the Q&A session. Thank you.
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 Alex Barclay with RBC. Please go ahead.
Thanks. Mornings, Stuart and team. Just a quick overall question on KCGM through FY 2023. It doesn't look like it's come in light versus your guidance commentary without really having a major issue throughout the year. You know, is it fair to say it's underperformed, and how would you think it shifts going into FY 2024?
Yeah. Yeah, thanks, Alex. Simon here. I suppose, if I look at Q4, we returned to normal processing for KCGM. Q3 was a difficult quarter for us, but really pleasing that we saw Q4 come back and execution of the, of the mine plan at the end of the year. Really, processing was the challenge for us over the course of FY 2023, but we exited FY 2023, you know, back at nameplate and things stabilized as usual.
Okay. No, no sort of impact going into next year. Just a quick one on Thunderbox. Thanks for those comments around Q4. When should we expect that sustainable 6 million tons per annum plus in the next year? Maybe Q2 onwards, or how should we think about that?
Yeah, with the Thunderbox, quarter four was the Q1 we did the full major shutdown and also completed some redesign of a few areas and, you know, beefed up wear packages in certain parts of the plant as we build our experience of running that. Pleasingly, we got through the shutdown really well, see some optimization in that going forward. We, we really just had the variable speed electrical issue during the quarter. Post that fix, we've seen...
... tons per hour at nameplate, and we're very confident going forward at Thunderbox, because we still see that sprint capacity, over and above nameplate. It's now just stabilizing the plant.
Yeah. Okay. Thank you. I'll leave the questions there and end it on. Thanks very much, guys.
Thank you. Your next question comes from Daniel Morgan with Barrenjoey. Please go ahead.
Simon, maybe just a quick follow-up to that last question on the Thunderbox throughput. A lot of the issues you just answered have been resolved, but I just wasn't clear on whether, you know, you'd be running at 6 million tons for the whole of this year, or is there still, you know, you'll be short of that for this fiscal year? Thank you.
Dan. We're running at those rates now. It's whether we will maintain that throughout the FY 2024. I think importantly, what you're, you, Daniel, are probably trying to back calculate the answers, is we've guided AUD 520 million-AUD 570 million for the Yandal contribution for FY 2024. That's with some buffer at TVO to ramp up, ramp down and sequence grade. The guidance over the full year is second half weighted, and that's with some planned shutdowns in the mills in quarter one, as we typically do. That's also some range testing and ramping up of that plant. We were able to run TVO today, at those 6+ million tons per annum run rates. We just have had some, obviously, commissioning, setbacks in the last year.
Okay. Thank you. You've earmarked a number of shuts for the September quarter. Could you just drill down onto which shuts those are, and is Thunderbox included in that for any rectification work, or is it, when you look at Yandal, is it the Jundee mill that has the shut? Thanks.
Yeah. Most of them are hinged around the main mill relines. We typically do 2 major shuts per annum in just the wear rates. You can appreciate it's wear driven, not time driven. We monitor them closely and, you know, sometimes they, you know, do it in 5 months instead of 6, which means you've actually got more throughput through in that period, so you get a benefit for it. Unfortunately or fortunately, by design, every mill is getting a shut this quarter. We've incorporated that into our guidance, and that's when we've said, you know, 1.6-1.75. Consider that around the entry rate and the exit rate throughout the year and the second half weighting of production, with that planned maintenance.
Yeah. Thank you. A relatively simple question, I think, total CapEx guidance. Have I got the math right that it's about AUD 1.7 billion, if I put everything together, is that about right?
Are you counting sustaining? Growth, AUD 1.15-AUD 1.25, including AUD 525 of the KCGM mill expansion in year one.
Yeah. The AUD 1.7 is the, including growth, sustaining, exploration. Is that accurate, AUD 1.7 is?
What number, Dan? Did you say 1.7? No, it'd be lighter than that, Dan. It'd be AUD a couple hundred million lighter, I'd say. I mean, you've got, well, the midpoint we're guiding is 1.2. You talk exploration, if you want to throw that in there, depending on whether you are or not, AUD 150 million. You know, if you look at, I sort of mentioned in my, I guess, talk, that our CapEx, including sustaining, would be similar to this year. Our sustaining CapEx is about AUD 200 an ounce. You know, we've got a little bit more ounces this year.
If you use that AUD 200-220 an ounce sustaining CapEx, and you look at our ounce profile, if you take the midpoint, that should be able to do the math to get you there.
Yeah. growth plus sustaining at AUD 200 an ounce, plus exploration, which I think you've included, will get you close to that AUD 1,700.
Yeah. Okay. Thank you. Thank you for all your answers.
Thanks, Dan.
Thank you. Your next question comes from Levi Spry with UBS. Please go ahead.
Good day, team. Thanks for your call and your time. A few of us probably are focused a little bit on FY 2024 guidance, and particularly for Yandal, which is a little bit different to mine. I think you addressed the production, but can you just talk through AISC and then and where the growth capital is going into that hub over the next year or two?
Levi, Ryan here. Obviously the guys have spoken about production. I think, you know, from a weighting perspective of ounces, you know, Thunderbox is a slightly higher cost mine than Jundee. That obviously, that weighting impacts the overall AISC of that group. Look, there's no doubt just broadly across the business, there's still challenges in costs, you know, throughout our business, our, you know, the sector we're in, and the wider industry. You know, that's allowing for some cost increases across some items in our business. Broadly, I think it's the, you know, the fact that Thunderbox is a higher cost operation than Jundee, and that's obviously contributing more production.
From a CapEx perspective, you know, most of the investment is around that pre-production of the Orelia open pit and establishment of the Wonder underground there, which are high grade feed sources to the Thunderbox mill.
Page four of the quarterly gives you a bit of a percentage breakdown of those CapEx spreads. And the ASCAT, Yandal, obviously, Jundee's impressive, and you've got the higher cost of TBO as we haven't got the throughput. That's what's averaging it out at that sort of AUD 1,655-1,700. As we get the throughput up and the ounce profile up at TBO, it balances back that whole Yandal belt, gets above 600,000 ounces per annum and brings ASC down. That's, you know, beyond 2024.
Yep. Yep. Okay. Thank you. Just pushing that a little bit further. Like, what growth capital comes sort of in the coming years then, if we're getting to AUD 600 next year?
No, we haven't got guidance yet.
Yeah.
25, mate.
Okay. Thank you.
Thank you. Your next question comes from Alistair Harvey with J.P. Morgan. Please go ahead.
Good morning, team. Just want a bit more clarification on the growth CapEx. Yeah, figure five does indicate 20% of group CapEx is going to sustaining waste movement. I was just trying to get some clarification on that categorization there. Obviously, it's in the growth bucket, but.
Yeah.
Sustaining waste materials.
We're just continuing, not sustaining CapEx. It's continuing. Yeah, maybe poor use of the word sustaining in that, but it just means continuing waste movement at those levels to get that southern cut back, opening up those reserves to the south of the super pit. It's continuing, but it is growth expenditure.
It probably can't pull anything out of, you know, our sustaining CapEx number as a bit of an offset there, sounds like?
No. No.
No worries. Thanks for that. Just briefly, the hedge positions, it's come down 125,000 ounces in the quarter. Just want to get a sense of how you're thinking about risk management for the KCGM expansion at the moment.
Yeah, not really changing that policy, but maintaining it. As we consume hedges in a quarter, we typically add them. Obviously, spot's kicked up again and, you know, you're getting 3,300+ ounces at the back of the plan when KCGM gets turned on. You know, we only did the IRR was at AUD 2,600 an ounce. It got 98%, and you can hedge at that point at about AUD 3,300 an ounce. We're not changing that policy, but we're certainly keeping it maintained around that sort of sub 20% of production over those 4 years.
No worries. Thanks, gents.
Thank you. Your next question comes from Matthew Frydman with MST Financial. Please go ahead.
Sure. Thanks. Morning, Stu and team. I just had a couple of questions to further unpack the FY 2024 outlook. The first one's around the Kalgoorlie hub in particular. If we look at the implied year-on-year production growth, that's really the one hub where you're not saying or where you're saying there's not going to be that much growth on a year-on-year basis. You have also called out that obviously KCGM is going to be working into the Golden Pike North area in the second half of FY 2024. You know, I would have thought that KCGM should be providing a pretty material lift there year-on-year in terms of production for that hub. How do I interpret that?
Does that mean you're implying that maybe Kalgoorlie Operations is going to be a bit of a drag on a year-on-year basis or perhaps Carosue Dam? What's the breakdown of that hub in terms of the production growth?
No, both CDO and the Kalgoorlie Operations, which is obviously contributed from South Kal and Kanowna Belle, relatively flat throughout the year. You know, definitely KCGM, it's a better year than this year because we don't have to put a 3 in there. But there's still a lot of work to be done at KCGM before it lifts back up to that 650 plus thousand ounces in, you know, FY 2026, so 2025 onwards. This is still a flat year in production-wise. Yeah, the whole Kalgoorlie region guided at 20 to 900, probably isn't that different to what we've, what we've said or planned. The growth is all about KCGM, and it comes late in the five-year plan.
Yeah. Got it. Okay, thanks, Stu. That's pretty clear. Even though you're accessing Golden Pike North in the second half of FY 2024, doesn't necessarily have a big step up in ounces until, you know, just perhaps longer dated.
No, you know, the carat mill throughput, it's really a great driver that changes the ounce profile, right? That 13 million tons per annum, and then obviously the year after, we kind of hit that 650,000, 700,000 ounces, we get the contribution of the expanded plant to lift it another 250,000 ounces. That's we're capped out on grade sequencing on the ounce profile for KCGM, and you'll find that AISC obviously links very closely to... Well, relationship with AISC is heavily driven by the denominator of gold sold. As we get that, we get that improvement in the back of the 5-year plan.
Yeah. Thanks, Stu. Yeah, that's pretty clear. It also leads into my next question, and Ryan did make some comments there, which I guess were probably more specific to the Yandal hub, but you know, clearly you are growing production at the group level in FY 2024, but you're guiding to flat All-in Sustaining Costs, at least at the new point. Obviously a pretty good outcome to have flat costs, but it does imply that there is some creeping costs that isn't being offset by the denominator or the higher production. Just wondering if there's anything in particular to call out, you know, at the group level? Or is that being driven by, you know, increasing stripping at any particular assets, perhaps?
Is that more just, you know, general industry cost inflation and, you know, labor costs, consumable costs, et cetera, as Ryan seemed to imply?
Costs going sideways is what we've planned. We actually do expect that on some levels, it's capped out, and we may get some relief. We just haven't factored that into guidance. We, like you, see them at an elevated level. We don't like it, like you, it's, you know, there aren't tangible actions in there to say, "Here's a qualified reduction in certain costs." You know, we control a lot of the labor costs, so we understand what they're doing. Obviously, consumables, energy costs are up very high at the moment, so we don't think that they will last at those levels. We're careful to not guide improvements in costs without, you know, tangible actions to sit behind that.
Even when you're always looking at AISC here, but some of the all-in costs are very impressive. The gap between AISC and AIC is, you know, shallow, and the cash margins generated from these assets is significant. Back to the point of the strength of balance sheet, net cash position, all of our growth is fully funded. When you look at the all-in costs, at mines like Kanowna Belle and South Kalgoorlie are sub AUD 2,000 all-in costs, so you know, AUD 2,900 Aussie gold price. They are generating significant cash, which is contributing and funding the growth plan. I think AISC is one metric, obviously standardized, but it's also to understand the genuine cash flow that the asset's doing.
Yeah, that's very fair, Stu, and good to hear that, you know, your view is that hopefully there's at least some conservatism built into that outlook on costs. Maybe just finally, if I could ask you quickly on the Stricklands transaction, obviously, you probably haven't had a chance to talk about that much to the market. I guess the comment that I would make that the price tag, AUD 67 million, that's nearly half of your FY 2024 exploration budget, and you've purchased a 340,000-ish ounce resource. You know, that's nearly AUD 200 an ounce to pay for that resource.
I would have thought that your discovery costs from that exploration budget would, you know, you would've, you would hope for a better discovery cost than that in your exploration spend. Just wondering if you can maybe expand on the rationale behind that acquisition and I guess where it fits into, to Jundee and why that was an attractive, yeah, an attractive purchase.
I won't talk on that transaction because it's not complete. I just will say, you know, a resource or a reserve that you know, versus one that you spend exploration to find, are very different prospects. In hindsight, you can say what the value of discovery is. You know, something that is in resource or reserve, versus something where you're putting under AUD 50 million into an area with, you know, good planning and good geos trying to identify it, is a different prospect in that regard.
Yeah. Okay. Thanks. Thanks, Stu.
Thank you. Your next question comes from Hugo Nicolaci with Goldman Sachs. Please go ahead.
Morning, Stu and team, and thanks for the update this morning. I was maybe a follow-up on costs and maybe getting into some of the assets, just maybe looking at Kalgoorlie Ops and the cost performance there in the quarter, and marginally so, lower sort of mine volumes at, you know, production and mill tons kind of proportionally out. Just wondering what maybe the cost pressures were there in the quarter, and to what extent you see those cost pressures potentially kind of continuing into FY 2024, both at the asset and then kind of across the group. Thanks.
Yeah. Hey, Hugo, thanks for the question. Look, in relation to Kalgoorlie in particular, probably the one I'd call out is power. Costs were higher this quarter than what we expected. That's probably the main, you know, call-out that I would say at that asset. You know, Stu spoke more globally about costs. Look, we're not, as Stu sort of said, we're not building into our guidance cost relief. Broadly, costs we see have stabilized. Yeah, I mentioned it before that we are experiencing, you know, and will experience some, you know, higher costs in some parts of our business. No doubt they will, you know, whether it's labor or contractors, we, you know, we're forecasting probably some uplift in those.
Broadly across the board, in the basket of our costs, we are anticipating them to be sort of flat. The power costs at the asset, at Kalgoorlie in the quarter, was the main driver of those higher costs this quarter.
Yeah, great. Thanks for that clarification. Just on that power piece, is that more kind of your electricity contracts and maybe reflecting sort of domestic gas prices in WA, or is that linked to anything else in particular on power?
Probably, yes, in essence, not, I guess it is all interlinked because it's a balancing price that we essentially pay for. It would be linked back to the infrastructure at the, you know, at the state level. Then obviously gas prices have rose, yes. I mean, our gas at other sites like Jundee, Thunderbox, where we contract gas, they are contracted over a medium term, they're not assets that we see large fluctuations in pricing. Kalgoorlie, when we're on grid, across, you know, South Kal, KB and Casey Gem, we do see variable pricing.
Great. That's helpful. Maybe just a second one, if I could, just around the growth capital. Appreciate you've touched on kind of across the assets, but you called out that 82% of the growth capital is going to the major growth projects. I was just wondering if you might be able to give a bit more color around where that other 18% or roughly AUD 200 million is going in FY 2024. Thanks.
Look, broadly it'll be, it'll be largely, drill drives, mine development, you'll see across the business. That's really spread, Hugo, across the asset.
you know, where we're opening up areas, declines across the business underground, that'll be where basically the spend is. What we've tried to do here is just outline the, you know, the larger components, you know, particularly at Casey Gym, obviously the waste stripping, which is a multi-year project. Unlock the high grade Golden Pike North and Fimiston South. Obviously, Yandal will be really a pit, and Wonder I spoke about feeding the Thunderbox mill. You've also got Porphyry and Wallaby open pit feed for Carosue Dam. Broadly, they're there. I would just say across the business, there's just, you know, mine development, as I said, accessing new areas would be the thing that I would call out.
Great. Thanks for that. I'll pass it on.
Thank you. Once again, if you wish to ask a question, please press star one. Your next question comes from Kate McCutcheon with Citi. Please go ahead.
Hi, good morning, Stuart and Ryan. Since Matthew asked on M&A, you've got a lot of liquidity, but also have a lot coming up with KCGM, et cetera. How are you thinking about the portfolio here? You've said three to five assets is a strategic goal. Are you actively looking at anything else, or for now you're focused on the organic growth for the near term, I guess?
Yeah. Thanks, Kate. Look, we see some of the most compelling returns on our organic opportunities. Obviously we've gives us confidence to commit to things like the Fimiston mill expansion. We do have strong liquidity and strong balance sheet strength. We always assess opportunities, but we're fussy and we obviously don't need to do anything. We still expect to see that sort of a lower end of the small cap space, lots of jostling and, you know, collaboration or, you know, consolidation at that end. That's not typically the space that materially changes our world. We, we just will keep that view on our long-term strategy around having that sort of three to five assets and maintaining the lowest cost, portfolio we can attain.
We'll always evaluate opportunities as they come up.
Okay, got it. Pogo Q4 numbers were great to see. What's been the key driver of that pickup or the step change that's enabled the Q-on-Q lift? Stoping tons look flat, but you picked up those development meters again. The second part of that question is forward looking: What's the next operational target to hit at Pogo? Is it still pulling costs out, or is there more to go on head grade upside to reserve?
Yeah. Thanks, Kate. I was hoping for a question around Pogo after 20 quarters of-
I know.
80,000 ounces for everyone. That is absolutely outstanding result, and impressively, not just delivered from grade. We're not even producing at the reserve grade, because it's still a third of the ore feed is development ore, and obviously the stoping grade is higher. I think it's really testament to the consistency of development meters. We said above 1,500 per month, and we obviously average 1,700 per month in the quarter. Building out those new mining fronts, giving more flexibility in the mine plan so that you're not hand to mouth, that you've got capacity, we've got the underground ore bins and getting that consistent feed to the plant. Obviously, in quarter three, we had the mill motor failure that got rectified.
That allowed us also to sort of look at the main flow sheet and critical elements within that aged plant to put some investment back into. For us, it's around stabilizing, maintaining and stabilizing at these levels. Obviously, we've guided 260,000-280,000 ounces at Pogo this year, with a focus on optimizing costs and inputs, so, you know, resourcing levels around equipment, people, reagents, consumables. Really importantly, you know, last quarter did $1,250 US All-in Sustaining Cost, really working hard to get the unit costs down and then take the growth on the back. You're sitting there with, you know, 7+ million ounce resource, huge exploration success with things like Star to drill out.
I really think people will look at the quality of this asset and at, over $60 million US operating cash flow in the quarter. This will start to become more important for people to look at in the valuation.
Okay, thanks for the color.
Thanks, Kate.
Thank you. Your next question comes from David Radclyffe with Global Mining Research. Please go ahead.
Hi, good morning, Stuart and team. I've just got a quick question on KCGM and recoveries. During the quarter, obviously, milled tons was up and so was grade, but the trend of overall low recoveries over the last year is continuing despite higher grades. Just trying to understand really what's going on there, you know, what the expectation is going forward. Is this the new level until the new sort of mill is in place?
Thanks, David. Simon. Certainly not, don't drag right on quarter four in terms of recovery. If you look at the year, early in the year, we were, you know, 86%, 85, 86. In quarter four, we had some flotation circuit issues and gravity circuit downtime, which really they're the two things that hurt us on recovery at KCGM. They've since been rectified and fixed. We're back to normal recovery. Over the full year, we averaged around that 84%, and that's consistent for KCGM. Certainly quarter four was not the low quarter for us over FY23 and historically. Back to normal levels of recovery at KCGM.
Great. Thanks for that. Cheers.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Tonkin for closing remarks.
Okay. Thanks for joining us on the call this morning. It's very pleasing to close out FY 2023 on a high and be in a position of strength as we embark on FY 2024. I look forward to updating you as we continue to advance our profitable organic growth strategy. Have a good day.
That does conclude the conference. Thank you for participating. Now disconnect.