I'd like to hand the conference over to Mr. Stuart Tonkin, Managing Director and CEO. Please go ahead.
Good morning, and thank you for joining the call today. With me is Chief Financial Officer, Ryan Gurner, and Chief Operating Officer, Simon Jessop. We provide an operational update today, given a weaker production performance quarter- to- date, which makes achievement of the full year production guidance challenging. While several factors will continue to have a meaningful impact on the full-year result, the company's best estimate at the current time is that FY 2026 production will be above 1.5 million oz. Significant and ongoing operational challenges remain with the existing Fimiston processing plant, which result in difficulty of maintaining throughput, and we have considered this variability, which has led to a revised outlook.
At the onset of FY 2026, we planned an annualized throughput of 12 million tons through the Fimiston plant, which was a reduced level from historical performance of 13 million tons, recognizing the age and condition of the plant as we operate until the new expanded facility is commissioned in FY 2027. Numerous unplanned outages, disruptions, and the consequential production losses will likely result in the plant achieving 10 million tons for FY 2026, which is materially below plan. At the end of February, stockpiled high-grade ore ready to be milled totaled approximately 2 million tons at 1.6 g per ton for 100,000 oz. This recognizes that mining activity from both the open pit and the undergrounds are tracking to plan and will be available for future processing. At the existing Fimiston plant, we have added breakdown maintenance labor to assist with unplanned downtime.
We continue to assess and balance preventative maintenance tasks to preempt and mitigate disruptions, and we will continue to do so until the new plant is commissioned in early FY 2027. Pleasingly, the new Fimiston expanded plant is tracking to schedule with the added labor resources we have applied with over 800 people working on the plant and over 400 people on enabling works, including the tailings dam construction. These staffing levels, and the complexity reduces over the coming months as completion nears. We are focused on ensuring that this exciting project is not interrupted by current production setbacks or actions to deliver short-term guidance. Now, at Yandal, our year-to-date progress is also below plan. This has resulted in high-cost production, and the company is undertaking an operational review aimed at reducing costs and prioritizing higher-margin ounces there.
Jundee, which has traditionally been able to scale quality with quantity, is becoming more capital intensive, which is evident in activity and costs. As part of this, an operational review, there's opportunity to redeploy surplus personnel and equipment to higher margin operations, and we expect these changes to occur over the June quarter. The company has also commenced work on producing medium-term forecasts. We're listening to investors on that requirement, and we will plan to release prior to the end of the calendar year. The opportunity today is to go through the detail of this and answer questions that we can. With that, I'll pass over to the moderator, and you've got myself, Stuart, you've got Ryan and Simon here.
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 Hugo Nicolaci with Goldman Sachs. Please go ahead.
Look, morning Stuart and team. Appreciate being able to ask some questions. Few bits to work through here. Look, firstly on this year, I get not wanting to chase FY 2026 and then sort of risking the outlook into next year and beyond. If I extrapolate your sales for January, February of 220,000 oz and call the March quarter 330, you're sort of then implying to get to that 1.5 million minimum that you need to get back to June last year of sort of 440, despite the uncertainty at KCGM and Jundee here. Can you help us sort of piece together how you get to that 1.5 million oz outlook for FY 2026, please?
Thanks, Hugo. Look, January and February aren't representative of quarter three. We do expect a stronger quarter three than you've quoted there on the exact straight line run rate. With this guidance update today, we've considered how we're tracking in March, what's in front of us, as well as the outlook and forecast. There are two main drivers. One is the underperformance of throughput at KCGM that we were expecting to restore with the efforts put in. We've kind of dragged right, and really it's a throughput rate of nearly 9 million tons for half two instead of going to deliver to 10 for the full year. There's upside opportunity there as well as downside risk.
The other element was, as we've traditionally done throughout each year, not by design, but by activity of the hockey stick, not expecting an outperformance out of Jundee in quarter four has really pulled some ounces out of that quarter four. We're really looking at this from a risk lens. How bad can it be, if we don't get out performances? Really scrutinizing the contributions from each of the assets. Today is important for this disclosure to talk about KCGM mill and our outlook on Jundee. We feel the rest of the operations are tracking to plan and are okay.
Stuart, I can just clarify then in terms of March that you're saying that January, February is not indicative. I mean, for the March quarter, then, is it something like 350-400, sort of the range that we should expect, and then we can extrapolate the fourth quarter from there?
Correct.
Got it. Thanks. If I can, just on turning to Jundee. You know, sort of reprioritizing a higher margin material and relocating people across the portfolio. I mean, what do you think then is the outlook for that asset going forward here? What does that mean for the Yandal Hub target of 550,000 oz over the medium term?
We're probably—it's probably premature to give that outlook today. We're doing the work. We need to do that deep dive on the asset. I'd say it can operate up and down those ranges, but at what cost? I guess what we're saying today is at 300,000 oz, which was our aspirational running rate, it's a high cost, high intensity, high development, stoping, drill demand. We don't believe that's the best place for Jundee to sit. We've got to do that work. Once that's complete, we'll update. There's no risk on you know the redeployment of people and equipment. We can send that into other operations. This is around a reset fundamentally for Jundee, which contribution into Yandal. We'd already taken a bit of a reset at Thunderbox.
This is really the combination of those two things. We've just got to do that work.
Got it. Thanks, Stuart. I'll pass it on.
Thanks, Hugo.
Thank you. Your next question comes from Kate McCutcheon with Bank of America . Please go ahead.
Hi. Good morning, Stu. Apologies, I must have messed up the company name there.
No worries, Kate.
Not yet. At least 100,000 oz lower for the FY versus what you thought two months ago. How much of that delta is KCGM versus Jundee or the other assets? That would be helpful.
Yeah. I would say we when we updated, we planned for some uplift at Jundee, likely 20,000 oz-25,000 oz of windfall of high-grade stops in quarter four. You've seen Jundee swing. You know, it's nuggety ore body. You've seen that performance historically before. And same as a Pogo where you've got, you know, these nuggety ore bodies that you can you can have those swings, those high grades. That's what we've pulled out of that. I'd say the bulk is KCGM. The opportunity is also to get, you know, every 100,000 tons effectively up or down is 5,000 oz. If we're able to afford that uptime or keep things running through that plant, the ore is there on the ROM in front of it.
There's a bit of a time lag in getting it into concentrates and into doré sales. That's why we've had to sort of really taper back. That really hinged on KCGM as the bulk part of that step down.
The bulk of the lower ounces is KCGM?
Correct.
The magnitude. Right. Okay, cool.
2/3 would be KCGM and a third of that really is Jundee.
Yeah. Okay. Got it. Thank you. No update on cost today. Is there anything fatally flawed in taking the million-dollar number implied in the higher guidance with the lower denominator? Is there anything else to think about for the all-in sustaining cost there?
Oh, look, year- to- date, we're tracking within the guidance that we have stated and restated or reset, I guess, in January. If we're to depart from that, we would have included that in today. What we don't know going forward is impacts around oil. Well, guess what we do know that it has impacts and so we look at sensitivities to it. In the scheme of things, we still feel it's ounces as the, you know, the denominator of gold sold. It's more effect on the AISC. Our dollar millions are largely committed with resources to these levels. We're spending that effort, that energy, that work. Really it depends on the ounce profile to get to that.
Year- to- date, we're tracking within that AUD 2,600-AUD 2,800 AISC.
Okay, got it. Thank you, Stu.
Thank you. Your next question comes from Daniel Morgan with Barrenjoey. Please go ahead.
Excuse me. Hi, Stu and team. Question, my first question is just, Jundee. Can we just understand what's going on a bit more there? You know, is it ore body related in that it's deeper or more narrow, becoming harder to reconcile, and just an old, tired operational asset that, you know, we need to rethink fundamentally how big it is? 'Cause the market has 250,000 oz in its numbers for the next few years, which sounds like redeploying people and equipment. Sounds like a significant haircut needs to be taken to production and possibly life. Thank you.
Yeah, thanks, Daniel. We're not meeting the grade to plan. There's some slight downgrades on some of those things. We're understanding of why. It's obviously, even over its decades, we've operated and owned it. You've seen that decline. Question is, I think it's pretty evident on previous quarterlies, the departure from grade to reserves. We understand the higher grade upper levels that we're putting in the base plant start bringing that higher grade of pillars and remnants material in. We will look closely at the overall resource and reserve again, as we do at the close of March, and publish that. This is more around the nearly 3 km of development a month, you know, 150,000-160,000 stope tons a month.
It's very intensive. Got 13 diamond drills there to, you know, from a discovery-powered way to replace depletion. It's just a busy place for, you know, the same or less ounces than we developed a decade ago. It's a big system. What I'd say is maybe that creep has, you know, kept us going, and we just wanna actually do a bottom-up overall plan review. It'll take a number of months, I guess, us going through that information. The site are doing the best they can do with what's in front of them, but we need the intervention, and that's what we're prepared to do is go through and really look at the detail.
I know you say that there's a consensus of 250,000 oz. We can operate the mine at those levels, but it's at what cost? Therefore, we're saying as an overall contribution to Yandal or the group, is that the right level for us?
I guess as a broader question, I mean, you commenced a formal operational review on Jundee. I guess there's been productivity issues with some other assets and, you know, missing guidance, et cetera. Just wondering, you know, should there be a full, you know, operational reviews on other assets or strategic reviews or, you know, why only Jundee?
Yeah, fair question, Dan. I think we're really calling this out right now of expected new plan going forward for that asset. We need the time to do the deep dive. We are doing operational reviews always as just part of our normal business. It's usually when you've got an outcome or a clear view of what's not working, then you've got decisions in front of you to take. That's really why we're calling out this asset right now. The current plan afoot is gonna be an expensive cost one, and expect a different plan for that. If I give the other example of Pogo, we can see around the dilution of the grades that have occurred.
We get things right, the plan's robust and secure. It doesn't need a bottom-up analysis review. I mean, we've done that to arrive at the plan we've got, and it's around the controls we can see in front of us to get the benefit. We've seen improved grade at Pogo, and we've still got work to do, but you know, we don't see that fundamentally as an issue, whereas we see the current plan at Jundee is gonna get harder and more expensive and more intensive. Let's intervene now and look what it looks like in the coming years.
Yeah, Dan, if I could just.
Okay.
Add to that, it's from Simon. It's more around the Jundee, the execution risk as well of the, you know, pulling all the different areas together. As Stuart said, we're 2.7 km-3 km a month. It's trying to find where's that balance between execution risk and delivery, along with the grade variability. We do need the time and space to do that deep dive, but it is around execution risk at the higher ounces.
Right. Maybe, I mean, a big driver today is the mill performance at KCGM. Can you just help us understand a little bit more? 'Cause you've got a very complex thing you're achieving this year, where it's gonna be effectively, mostly a brand new mill next door to an existing mill. You've got those two things happening in parallel, an operating mill versus a project. You've got people running the existing mill, and you'll have to have people run the new mill. Like, is the challenges here people related and trying to do too much at one time?
Is it the old mill is old, clapped out, unreliable and you know, it's not worth it from a returns perspective to be patching up and applying capital to a piece of equipment that's gonna shut down in several months' time? Like, just help me understand, you know, what is at the core, what is driving this problem?
Yeah. Thanks, Dan. It's Simon, if I cover the mill, you know, KCGM's 37 years since the asset first produced gold. We are struggling with lots of different areas across various maintenance areas. We have a lot of bogging events. You know, 30% of our downtime's sort of in bogging events, which is from a complicated circuit for five mills. You know, only one of those mills goes forward. The flotation circuit has a lot of mechanical issues, so that's sort of roughly 30% of our downtime across the group. You've got aging electrical areas, which is giving us a lot of grief at the moment. That's, you know, 20%-30% is the electrical and air. They're the broad areas, but it isn't.
Like, quarter two was one key area, which was the crusher. Since the 5th of January, we've had zero issues with the crusher. That's performing. It's after the new SAG through the rest of the plant is where we're having lots and lots of stoppages. It's just sort of gives us instability in the plant, and we've just got large pieces of downtime. In terms of KCGM, the new mill and the old mill, they are separate teams. The new mill is running in parallel, completely isolated to the existing personnel running the old mill. Over the next few months, we have already started the ops readiness training for operators. The maintenance systems for the new mill is all, you know, have 18 months of work on it.
It's tracking very, very well and we wanna maintain the focus on preparation for the new mill in FY 2027. At the same time, as Stu said, every 100,000 tons we can get out of the old mill is 5,000 oz, which is large revenue. They are two separate teams. We're just seeing much, much lower throughput than we have historically. We budgeted for that, but we've seen a material departure from what we budgeted at 12 million tons.
Daniel, I mean, this, the question of the people on the stretch and the interactions. I mean, this has been something that management and the board have been really closely in front of mind, is that one impacting the other. You know, Simon's saying they're separate teams. There's, you know, literally physically ring-fenced the activity. You know, the bandwidth of making sure that near-term short-term decisions doesn't compromise the delivery of the new plant, that's really important and that's what we're reinforcing as well across the group. It doesn't mean we've surrendered or given up on delivery of near-term targets and guidance.
We still work on that, but we isolate the go forward new plant has the attention and efforts, 'cause end of the day, that's the multi-decade multi-year investment. That's the multi-decade sort of uplift that is the step change for the group and the company. We are very close. I mean, the back end of the three-year builds and it's looking great. I was walking around the plant week ago, looking at the to-do list. It's impressive quality and, you know, we're excited to see it turned on. It's even more pleasing when you look at the old plant and the deterioration of it, that we've made this decision three years ago to replace it.
We thought we could get this plant, you know, really, the existing plant, you know, singing right up till the point. There are elements of the existing plant we may utilize and repurpose in the future, so we don't want it to fall in a heap either. Those decisions around keeping it going, there's never a financial case to say let it fail and stop it prematurely. Unfortunately there's always, you know, there's always a point to keep it rolling. At the moment, efforts and energy on both of those, but they're separate teams.
Okay. Stu, Simon and team, I appreciate your perspectives. Thank you.
Thanks, Dan.
Thank you. Your next question comes from Levi Spry with UBS. Please go ahead.
G'day. G'day, Stu and team. Two questions please. Firstly, on FY 2027 guidance, I guess, thinking about the KCGM plant, can you just step us through what's still on that to-do list and what are the assumptions behind the 23 million tons for next year? Or what other assumptions are in there? Yeah.
Thanks, Levi. I'd say those things haven't changed from what we've said. Today's announcements about the here and now of the existing plant. The expectations for the completion of the new build is you know a ramp up during quarter one of FY 2027. Ideally we're at the early part of that quarter. The 23 million tons is related to the full year with planned and unplanned assumptions on the downtime. What I believe we will provide is a bit of a ramp-up curve that shows and explains quarter one shouldn't be times by four. You know, every plant around the globe that's been commissioned in this case has those ramp ups.
You've got a McNulty Curve that basically says, you know, early when you're building these things, you need to settle them in. At, you know, the start rate isn't the exit rate, but these are all dependent on the final tie-in. A lot of the labor, there's nearly 900 people there that's decreasing in the next couple of months as we close out these projects. Really that labor by the end of June should just be starting to move across to the stage two, which is all where the ultra-fine grinding circuit to redundant jig happens. We should be powering up and turning over and getting flows through the new plant.
Those are the things that are still on track. We've obviously added the cost and the labor to achieve that timeline, and we're pleased with that progress to date.
Okay. Yeah. Thanks for the extra color. If I just think about, you know, the works towards producing a medium-term forecast. The steps are a reserve resource update at the end of March, guidance between seven and 10, and then feeding into that medium-term forecast at the end of the calendar year, with Jundee potentially the main moving part. Is that the summary?
Yeah, Jundee, but I guess we should have greater information on timelines for Hemi as well. The way we would explain medium-term is what investors listening to investors, what's the request, and rightly so. Multi-year production costs and capital. The real levels is that multi-year ramp up of KCGM, the new plant, coupled with the build of Hemi, and then the rest of the assets at what go forward level they are at, which would include options that we'll assess for Jundee, how big it is it and what is its cost profile. That's how we would talk about the multi-year. Your point is absolutely resource reserves is a key bookend.
We get that end of March, we do the work in quarter four around budgeting outlook forecasts. Ideally, we've completed this deep dive on Jundee with decisions, and then we're able to provide the market with medium-term being multi-year, costs, production and capital.
Perfect. Yeah. Thanks. That's what I was after. Thank you.
Thanks.
Thanks.
Thank you. Your next question comes from Matthew Frydman with MST Financial. Please go ahead.
Sure. Thanks. Morning, Stuart and team. Can I just follow on from that question, I guess on the FY 2027 ramp up at KCGM, and you know, understanding that you'll provide us a bit of a ramp up curve in time. Can you maybe sort of break down roughly or conceptually how much you're assuming throughput from the new mill in FY 2027 versus how much from the old mill in your prior guidance? I guess I'm just trying to understand, you know, what is the likelihood or the range of outcomes if these issues at the old mill, you know, continue into FY 2027 through the crossover period. Does the old mill represent, you know, 10% of the production that's at risk of ongoing failures, or is it 25% or?
Yeah, if you could sort of give a ballpark on that'd be helpful. Thanks.
Look, good question, Matt. I think we looked at it from also the SAG capacity and more the weight in the back part of the year of the new plant. At a very reduced rate, even a 50% performance out of the new plant outstrips the old plant. We expect a better outcome, clearly a better outcome, than that to get 23 million tons. All I'd say is that we wish to switch over to the new plant and lean into it as soon as possible, and the reliance on the old plant not being there. Yeah, I think the run rate of 9 million tons in H2 should not really continue into FY 2027 and deteriorate the overall outcome.
If we were not to achieve 23 million tons from the new plant in FY 2027, either because of a delayed start or because of unplanned downtime throughout the year, one offset from that is the differential in grade feeds. So the tons that would be displaced would be the lowest grade stockpile 0.6 kind of grams, and we would preferentially put in your underground and your Golden Pike high grade feeds. So even if it wasn't 23 million tons, it doesn't mean the ounce profile is proportionate. So that's one lever. And then ideally, you know, we've built a 27 million ton per annum plant. Our attitude is we've given ourselves multiple years to get up to that consistent rate.
Day one, when we turn it on, it should do that, and then it gets turned off, gets fixed or adjusted or talked up. All of that planned downtime is why it's 23 million. It's not running at that rate. It's running at a 27 million tons per annum plant, or better, and then it's been deliberately brought down or the reliability as we set several things in, embedded in delivery in a full year, a lower overall tonnage. There's lots of moving parts in it all and assumptions. It's never smooth. We'll try as best we can to show people how the ramp up would look like, and we'll try to provide as much transparency as we can.
It could be lumpy, but I'll just explain that this is a three-year build that's, you know, a AUD 1.5 billion construction, AUD 1.6+ billion. It's there for multiple decades. We want to get that right because it is a real step change, you know, benefit to the business and the value creation.
Yeah. Understood. Thanks, Stu. Just to be clear on that, you're saying that the 23 million tonne target is purely what you expect to put through the new mill in that first year. You know, hypothetically, anything that you get out of the old mill is separate to that or on top of that or? I suppose I'm guessing that you don't have the opportunity to, you know, it's either running one or the other, the distinct cut over. You don't have an opportunity to potentially squeeze a bit more out of the old mill.
Yeah. Correct. It's running one or the other because part of the stream feed through the crusher and SAG is the new part of the new circuit. There's minimal downtime with the switchover, but there aren't. You can't run both at once.
Yeah, got it. No, that makes sense. Thanks. Maybe secondly, a bit of a broader question. You know, Simon described the various issues that you're facing with the old mill, which I guess effectively could be summarized as an overall issue of asset integrity at, you know, probably unfortunately the most important asset in the whole business at the moment in terms of the amount of revenue that it produces anyway. I guess the broader question is, you know, is there anything that needs to change in the business to prevent this kind of issue going forward?
You know, do you see this kind of string of downgrades as just a confluence of events which have been outside of the control of, you know, the site team or the executive team, in terms of, you know, an influence those outcomes, you know, that have led to these short-term issues in your view? Or are there things that you think you can do going forward that can be changed structurally or culturally or, you know, whatever the case may be to drive, whether it's, you know, drive better compliance to plans or better compliance to guidance or, you know, improved asset integrity outcomes or those sorts of factors? Thanks.
Yeah. Well, we take accountability for that, for those downgrades. They've been, you know, largely within our control on, you know, the things we've tried to manage and the risks we've understood. When you're managing risks, you're putting in all the mitigants and, you know, sometimes they get realized. There are external factors that impact, you know, even now, if I get a phase shift on a power outage in Kalgoorlie, you know, a nanosecond of power blip, and I can have hours or days of cleanup and bogging of pumps in that plant because the tech in it can't deal with it. Now, I can blame power systems and lightning, but ultimately it's the integrity, understanding operability of that existing plant.
As that example, you know, pleased that the new plant should be able to manage these type of things as we get that sort of battery storage and those other things that sit behind it, we don't get impacted in those ways. That's how we've thought about it. You know, when we talk about multiple downgrades, each of those are finite events and that have been updated as best we can when they occur. We're not trying to second guess or predict or game messaging. We're working hard to, you know, growing business, which is never a straight line, to give transparency on what we know when we know it. That's really what today is too, is right now with the performance today, we can't see.
You know, we see great risk in delivering the lower part of the guidance. We've explained, you know, we believe we can do about above 1.5 million oz with the continuing outlook we have for the next four months. These are the examples. If we go back to, yes, on this, on the, you know, the second of January, on the first we had the sales, we had lots of things in place and plans. We updated the market when we were aware of those things. When we've calculated the costs, we update the market on the costs that we calculate. I'd say our learnings out of that, we don't enjoy bad news as anyone else. We're working very hard to get it right.
We absolutely are learning and have learned from these experiences, and we intend to incorporate that into our looks going forward. It doesn't mean we're sandbagging. It doesn't mean we're trying to put in buffer, but we certainly need to give you, the audience here, the basis of the assumptions of why we call out what we call out. I get that on the external, it appears that we haven't been forthcoming with information. It's not the case from our side. Everything we've put out, you know, we're a technical team. We've got science and background and assumptions based on plans, contingencies, et cetera. If I was sitting here, you know, in January, I absolutely thought 1.6 million oz was a very comfortable floor that we would clear and as is our team.
To be sitting here right now saying things haven't gone well, I get it. It's as disappointing for us as this audience and we've gotta learn from that.
Got it. Thanks. Thanks, Stu. Thanks for your thoughts.
Thank you. Your next question comes from Ben Lyons with Jarden. Please go ahead.
Thanks. Yeah, might just carry on that train of thinking, Stu. I mean, it's very disappointing, but to then tell us it's gonna take 12 months to give us what we want when you've got all of this science and all the technical capability and aptitude and everything else you just mentioned that sits behind it, haven't you just embedded a 12-month overhang on the stock price?
Well, that's not for us to decide, Ben. What I'm saying is we've given enough time for us to do that thorough work. I think it's important we need the resource, the reserves. These things take time to go through and look at plans. When you look at things like Jundee, you know, we wanna work out the current development that's there, get the best out of that, and do things in an orderly fashion. This isn't irrational kind of immediate changes. It's around shifting in an orderly fashion structurally that asset to a better place. It will take time. I've said out there that, you know, calendar year is when we'll give that update. Our traditional outlook comes in July or August on the year's guidance.
We ideally will have, you know, greater visibility around things like Hemi. They are things that are out of my control. When we've got it, we'll let you know. At the moment, if you believe there's no overhang or not, I think people voted today on the market open. I don't know if you could call that an overhang.
Yeah. Cool. Okay, cool. There's other management teams that can build a processing plant within a 12-month period, but I'll leave that.
Okay.
KCGM. You know, I don't want to put pressure on them by adding them in a public forum, but as soon as they get their environmentals, yeah, I reckon 12 months or a couple million-ton circuit. Anyway, we're just talking about an investor day and the disclosure that really I would have thought should have been at your fingertips already. Like, the second question, just on KCGM. Is it just tonnes or is it also grade that we're talking about here? I mean, we've been habituated, I guess, to think of Golden Pike North as a 2 g ore body. Charlotte as a 2 g ore body. But your high-grade stockpile is at 1.6 g on the ROM today. So have we got a grade reconciliation issue at KCGM we need to discuss as well?
Is it just simply tonnage through the mill? Thanks.
Yeah, Ben, Simon. Look, the grade of Golden Pike is performing exceptionally well. The reason the average grade of that 100,000 tons we've got on the stockpile of one point. 100,000 oz, sorry, at 1.6 g, is because it's still got some grade from OBH and some grade from Fimiston South or Great Boulder. The actual Golden Pike is performing very well. Our reconciliations have been 99% of late. The GP down the bottom is performing 2 g , so very happy with the reconciliation. The only reason the average is down is because there's other grades in there.
Okay, cool. Thanks, Simon. I'll leave it there. Thank you.
Thank you. The next question comes from Jon Sharp with JP Morgan. Please go ahead.
Yeah, morning, Stu and team. Maybe just to dig into the comments you made from Kate's question. Just beyond KCGM and Jundee, is Pogo achieving the grade required to support FY 2026 guidance or is it, you know, in your view, is it underperforming? Is it less than adequate? Just interested in your views there.
Yeah. Thanks, Jon. I think it was part of the first half delivery was below plan. I think we called that out in January. We've considered it to date and how it's gonna go into quarter four in this update today. It's improving. Actions are working. We're okay. We're okay with that. We will look closely at that reserve grade given some of the mining factors on it. End of the day, we don't see it as broken or reconciliation being an issue. We identified some of the mining factors that were diluting that grade today.
Jon, just to add to that, I was over at Pogo a few weeks back and had a really good sit down with the team there, and we've seen great result. We certainly did in December, and January and February have been good months. The team's put some really good work into rectifying the October, November issues that we did have in terms of dilution. Pogo's tracking to plan, and we've factored that into our operational update.
Okay, thanks for that. Just sort of to follow on from Matt's question, just with the planning and guidance framework. Now, I know you said at the start of the year you're pretty confident in hitting guidance, but what needs to change to ensure future plans are more realistic? Probably more important, how do you balance between, you know, sandbagging your guidance versus overpromising? Is it planning? Is it, you know, what is it?
Yeah. Thanks, Jon. Look, it often comes out of the stability of the asset. You appreciate over recent years we're growing, investing in growing and expanding assets and they're changing from areas. That's where, you know, you're extrapolating, you're not inside the range. You see, you know, other businesses and companies generally that can keep these, you know, the needle pretty tight on stability. They're not growing, and they're maintaining, or even harvesting. When we get those assets to those happy places, that gives us greater consistency. It's the rate of change and the shifting of things at the moment which has made that forecasting difficult. Perhaps we've been too optimistic on, you know, success.
They, you know, maybe some more contingency and realism in some of the ramp-ups. I'm not calling that sandbagging, but I'm saying, you know, both ups and downsides that are realistic. They're the things that we can start to incorporate into future outlooks. Just for, you know, giving as much disclosure on the assumptions so that when, you know, when things move or change, we can update and provide that. Equally, people can do their own math on
It reflects those things in their models.
Okay, great. Thanks for the insight.
Thank you. Your next question comes from Hayden Bairstow with Argonaut. Please go ahead.
Good morning, Stuart, and team. Just a couple from me. Just on the KCGM stockpile. Simon, you mentioned the sort of 1.6 g, but how much of that is can you grade stream while the mill's only running at, you know, effectively, I guess a 9 million ton run rate for six months? Is there a fair bit of 2 g dirt that you can push through to get a better grade for this half to offset some of it?
Yeah. Thanks, Hayden. We are doing that. We are, you know, putting aside the lower grade portion of that. It is purely the throughput. Yeah, we can see head grades of, you know, 2 g day in, day out. It's purely down to how much volume we can get through there. There's not much more we can grade stream realistically above that. There's, you know, the odd block in the pit that's, you know, 3 g and things. We do get pieces of that. You know, yesterday we mined 4,000 oz at 3.4 g out of the open pit, but it's not gonna be that average consistently. We are trying to grade stream as best we can.
There is no stockpile material going into the feed at all. It's purely around how much volume we can get through the process plant.
Yeah. Okay. Almost, you know, 30%-40% of the feed's from that higher underground grade, I presume. We can't get to a 2 g head grade for the whole mill when the flows are on?
Yeah. The underground is getting some of that push to the side because we're still ramping up the underground. The underground's tracking at sort of that, you know, 1.7 g year- to- date. And that's because the stoping contribution is still building as we're developing a large mine. Some of the underground grade is put to the side, and we're feeding as much of the open pit high grade material through the process plant as we can to get the right blend.
Okay. Just a finance question. I mean, you've obviously got plenty of debt facilities to draw upon, but do we assume then that over the course of this calendar year, you are gonna be drawing down on some of that AUD 1.5 billion of debt? Just looking at the fact that where the cash flow might be through this final phase of the build, and also you've still got that outstanding stamp duty stuff. I think the total between De Grey and Saracen was still like AUD 330 million. Have we got any idea on the timing of when that stuff has to be paid?
Hey, Hayden. It's Ryan . Yeah, it's uncertain, I'll say, but my expectation is not this financial year on the stamp duty. A bit more color on the quarter. We are free cash flow positive for January and February, just above that breakeven. We have increased our cash and bullion holdings for the two months. Obviously, you know, the next four months, you know, we're telling you based on the math that there's gonna be an uplift. I'm confident that our free cash on that basis will be positive.
Okay. Obviously a dividend payment to come, with end of June.
Dividend payment to come. Yeah.
Yeah. Okay, cool. Thanks a lot.
Thank you. The next question comes from Mitch Ryan with Jefferies. Please go ahead.
Morning, Stu and team. Just, can you help me from a strategic perspective? I guess given underperformance of the stock relative to global peers, and your view of the long-term inherent value of the company, what are you doing to prevent the company being taken over at a discount? Has the company received any approaches this financial year?
Thanks, Mitch. Today I seem to feel more vulnerable with this. You know, these are things and questions we'll be looking at and discussing with our board mates. Yeah, absolutely. You know, we've got to knuckle down and perform. Our attitude around this is we see enormous long-term value. So we've gotta work to restore that and build that up. Yeah, I won't comment on, you know, vulnerability or otherwise, or takeover risks, but my attitude is we've got work to do. We know what we're doing. It's gonna take some time, and it's something the board, you know, takes seriously and reviews.
Okay. Thank you. Appreciate your perspective. That's it from me.
Thanks, Mitch.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Tonkin for closing remarks.
Okay. Well, thank you so much for your time joining the call today. Have a good morning and we look forward to talking to you soon.
Thank you. That does conclude our conference for today.