Managing Director, Paul Cmrlec.
Announced that we've got some change happening at the OK Mine, where Redpath will become the principal contractor for all of our underground operations at Norseman and WestAuz Mining will transition out as of the 1st of May. The Gladstone open pit is now at the stage where it's producing ore and that's a big change to the current quarter, where we're effectively finished off the Princess Royal open pits and had the majority of the quarter relying on lower grade stockpiles while Gladstone gets up and operating. We've seen some excellent ongoing exploration results, particularly in the Mainfield where we've announced that we will be starting an additional underground mine in the near term. Also, extending the life of the Gladstone open pit and also the Scotia mine.
Finally, we have modified our production guidance during the quarter and we'll talk some more about that as we go through. First of all, I think when you're looking at those results, our key focus is really important. We will continue to focus on maintaining strong margins and profitability, regardless of that production level, and I think we've done that again this quarter, as I say, with that strong EBITDA and the strong cash and gold position at the end of the quarter. We've continued to deploy our capital, as we see necessary, to achieve the overall growth at Scotia and we continue to aim to achieve that 200,000 oz per annum over the next couple of years. As I mentioned, we commenced that buyback.
The AUD 38 million that we added to cash and gold, we did reduce by AUD 4 million in the buyback and that buyback has continued throughout the quarter. Looking at safety and community activities. I think community activities, first of all, we continue to be very involved on the educational side of things, both at a tertiary level and working hard to assist the industry with bringing more professionals, particularly geologists and mining engineers into the industry and also rising up at school level, particularly in the Norseman area. Adding a lot of support to the school there.
Obviously, other community initiatives ongoing, but I think an important one is we are working with the Perth Mint to help them to clean up and rehabilitate the old Norseman battery site, which is currently a bit of an eyesore in Norseman. On the safety side of things, pleasing to see all of those stats continuing to head in the right direction. It remains a real focus on site and reducing the incidents right across the board continues to be a real focus for our team. In terms of the operations overall, as I said, we have had lower ounces than previous quarter and lower than we expected. We put an announcement out at the start of March during the previous quarter.
We did have a significant flooding event associated with Cyclone Mitchell. We had subsequent heavy rain events right throughout February and March and they resulted in a large number of charter flights being disrupted during the quarter. To give you an idea, we've had more flights disrupted and diverted to either Kalgoorlie or Esperance during this calendar year than we had in all of the last calendar year. Hopefully, we're through that and, you know, we don't see the big disruptions when we don't land in Norseman itself, and we have to bus people.
We've also, with the transition of Redpath coming into OK Mine and WestAuz moving out, understandably there's been some changes in personnel there and I think that we've seen the majority of the changes that we're going to see through that process now. Redpath is ready to commence work as of the 1st of May, so we should see a good uplift there. As I mentioned, the Gladstone open pit is now in ore. We should see it significantly adding to the next two months of production and from there on, over the next couple of years. That's a really big driver between the previous quarter and this current quarter. Moving on to the individual mines now. Scotia, first of all. We saw impacts with flooding there at Scotia.
We have also seen the contractor being behind with their development slightly. You know, as a result of that, we have mined some lower grade areas during the quarter, overall reducing the ounces that have come out of the mine. We also saw a reduction in tonnes with the contractor getting areas up and ready for production. Where we stand now though, we have started producing in the northern side of the mine. You can see the two red circles on the right-hand side of the page there. We're developing ore levels in the northern deeps, which is where the vast majority of the ore reserve lies at Scotia and also in the extensions to the historical workings up in the top part of the mine there. It adds a couple of additional working areas.
We announced after the end of the quarter, some significant extensions in Scotia Central and we'll also advise that we're putting in another couple of levels in Scotia South. As of now, we do have more working areas than we've had historically at Scotia. We expect that to continue to improve as we move forward and we continue to push on in both Scotia Central and Scotia North with independent working areas. We've also been drilling in that Taurus area that is shown to the far right of the screen there. You can see the decline has started developing towards there.
The position at Scotia will continue to improve over the next 12 months as it has over the previous 12 months. In terms of the results that you see there, we're just over 50 m below the existing Mineral Resource. That will all be a direct addition. It effectively gives us another year of development and then production in that central zone while we're developing the northern area. There's nothing geologically suggesting that mineralization stops at that depth either. As we continue to push forward, we will continue to drill depth there and fully expect to see the Scotia South and Scotia Central areas continuing to grow as we continue to drill and develop both in those locations and in the northern part of the mine.
At the OK Mine, not a whole lot has changed at OK. We have now got full access on the lower levels from the ends of the ore body. People that have followed us will recall that we have transitioned from a central access into our ore drives to end on access to manage increasing ground stress as the mine progresses deeper. That transition has been, I think, well- managed by the guys on site and now in place. We have a full seismic system in place now and using that, you know, the stress activity that we see to guide that design going forward. So, OK is in a good position. The production again has been lower through the quarter.
When we referenced lower workforce numbers during that January school holiday, that was primarily at the OK Mine. Obviously with the change of contractor, we saw some people making the decision that they were moving out during that period. Saying that, Redpath has managed to retain a majority of the workforce moving forward, and they're fully manned, ready for commencement in later on this week at OK. I think that brings some really great synergies across the site. We'll have the Scotia Mine, the OK Mine, and the Bullen Mine all being operated by Redpath.
All of the training and procedures are common across those sites, so there's now a real ability to transfer personnel and equipment on a day-by-day basis as necessary to the various mines to achieve those production goals as we move forward. Staying on the underground theme, the Mainfield has really continued to deliver what we expected it to deliver in terms of the large growth program that we've had ongoing for a long time now. For just over a year, we've been rehabilitating the Bullen Decline. As everyone is aware, we're close to getting to the base of that Bullen Decline, which will allow us to kick off and start developing the O'Briens and the Crown South Reef.
We, in addition to that mining, we have drilled in the Butterfly area. You can see a separate location to O'Briens and Crown South there. They'll be independent mining areas. The first round of drilling in that Butterfly area has been very strong. We have more drilling to do in there, but t hat drilling is from a decline that has been developed by Pantoro solely for exploring and then developing that Butterfly decline. It means that it's very well- placed for commencement of development into that area and to have another independent zone there. We're also looking at some large existing areas that haven't been previously mined in the Mararoa Reef that are accessible right now.
Our intention with the Mainfield is over the next little while, we will generate a new resource and reserve for the Crown Reef, which will include the main Crown Reef, Crown South, and O'Briens. That will go into the long-term mine plan, which we're expecting to put out early in the second half of the calendar year or first half of the next financial year. The Gladstone open pit has progressed as we've expected in terms of the budget. As I've said, the open pit ore sources were depleted from Princess Royal a little earlier than we originally planned, and that's the result of getting a slightly lower tonnage from both Scotia and the OK Mine. In the meantime, we've been drilling Gladstone for Stage 3.
You can see the stages of the open pit there. The yellow and the green areas are Stages 1 and 2. They were the areas that we were approved at the start of the quarter to be mining and going ahead with. We've now got enough drilling into Stage 3 , which is shown in blue there, to commit to Stage 3 as we move forward, and that adds a full year of production to the Gladstone open pit. We're looking at plus two years now, and we're still going ahead to drill Stage 4 in that open pit, to extend that life further.
I think Gladstone's in a great position to be our primary open pit ore feed for the long term now, despite the fact that we have multiple other opportunities as far as open pits go. Finally, before I get to a conclusion, we announced last week a partnership with MEGA Resources on the Rama Open Pit. Rama lies approximately 250 km from Norseman, but it is very high grade. MEGA has advised that they are intending to deliver ore parcel over an approximate six-month period, which is going to grade at an average of just below 5 g/t .
The way that we've structured this deal, we are providing some cash advance to MEGA that is provided at a 5% interest rate and is paid back over the period that those ounces are being delivered to us. In addition to that, we receive between 20% and 30% of the revenue from the open pits, depending on the grade that is delivered to the mine. Pantoro is responsible for the processing of that material. All of the other costs up to delivery on our ROM pad are the responsibility of MEGA. By structuring the deal in the way that we have, we see significantly stronger margins on this ore than we do compared with the lower grade stockpiles that we're currently processing.
It really fills that gap while we get the Gladstone open pits into full ore production. Over the next period, this ore will replace some of that low-grade material which will ultimately be available for processing at any time in the future with some higher-grade material that will see the ounces climb and the cash flow climb as well. As far as our forward plan, we've maintained that guidance of 86,000 oz-92,000 oz. The site has delivered schedules that see us in the mid sort of range of that guidance level. The budgeting process is happening right now, as you would expect.
We're expecting that late in June, we'll release to the market some revised guidance in terms of where we see the next year. Shortly after that, we'll be aiming to issue a new five-year plan. We've had the longer-term plan in place since we commenced the growth program back in September 2024. I think happily, we've met the objectives of that growth plan in having the new underground mine starting at the Mainfield. We think that that growth is able to be achieved, but we're going through that full formal process with all of the planning and budgeting happening on site ahead of the releasing all of those results to the market.
There will be an increase in the Mineral Resource and ore reserve from the Mainfield. We're expecting sometime shortly after the commencement of the new financial year to have that Mainfield reserve and mine plan sort of published and then the overall site Mineral Resource and ore reserve in September as we usually issue it. I think, look, in summary, we're in a very strong position. We have no debt. We closed the quarter with just over AUD 250 million in cash and gold, and that's after commencement of the share buyback where we spent bang on AUD 4 million during the last quarter. It only started during the month of March.
We've continued that buying and intend to continue as we move forward now. We expect the production lift from Scotia bringing on those additional areas now that should have come on earlier than they have, but they are online there now and should give us that flexibility that we expected during the last quarter. On top of that, we have ore coming from the Gladstone Mining Centre. I think we're in a good position to get to where we expect to for the full year. Thank you very much for your attention, Sam. Very happy to answer any questions if people have submitted any.
Well, we've had a couple come in while you've been presenting. The first one asks, "Trying to understand what the key drivers are to achieve what looks to be the bottom end of revised production guidance."
Okay. Look, I think hopefully I've covered that fairly well in the presentation. There's a big shift in the open pit production with Gladstone now in ore where we had the majority of last quarter relying on the stockpiles that we'd built from Princess Royal, both higher grade and lower grade. Scotia is another important driver where bringing some of those additional stoping areas online has been behind target for various reasons, and we've published those in our quarterly reports and in previous announcements. Those, you know, none of those ounces are lost. They were pushed back while we got those additional areas up and ready for production activities and we're there now.
Again, we think we're in a pretty good position to achieve that.
Scotia's grade came in below reserve grade. Is this a function of stope sequencing or dilution? Could you just provide a bit more color on what drove the grade decline and how we should be thinking about it going into Q4 and into FY 2027?
Yeah, look, again, I think I covered that during the presentation in that that development being behind where we expected and not being in those additional areas that we had budgeted for the quarter resulted in us taking additional blocks on the levels that we had ready for production at Scotia. You know, that resulted in us mining some lower grade material than fully expected. In saying that, you know, Scotia is not a simple ore body relative to the majority of Norseman. Most of Norseman is a single quartz vein. When you're in the quartz, you're in very high grade.
In Scotia, we see large areas that are mineralized that don't necessarily have those visual sort of indicators with quartz being a real marker quite often in the country rock with very minor alteration. We do see some grade in Scotia. We're continuing to do a lot of grade control drilling at Scotia, and that will continue into the future. That is giving us better and better pictures on where that high grade stands and exactly where we should be mining, you know, we see that continuing to get better and better as we move forward and our knowledge of the ore body gets stronger. You know, certainly the areas that we've mined have reached the grade that we've expected them to.
We think that we will get more and more efficient at identifying those areas at the mine design stage.
The next one also on grade. Approximately what average grade do you expect to mine during H1 FY 2027?
At Scotia or at, for the entire operation?
It's a general question, probably across the entire Norseman project.
That answer will be given, I guess, when we put out our guidance during late in June. All of that budgeting is happening right now. What I can say though is that there is mineralization coming in from the Mainfield, which we've sort of, you know, signaled is +6 g/t . We expect Scotia to be at +3 g, and we expect the OK Mine to sit around where it has been at that sort of between 4 g/t and 5 g/t . You know, overall, we'd expect the operation to be well in excess of that sort of 3 g-3.5 g mark and achieving that sort of growth that we've expected.
You know, I'd sort of caveat that with all of those plans happening right now and we'll give that guidance when we have a bit more accuracy in the forward schedule
The final one is around the MEGA deal. The MEGA tolling deal makes it seem like the mine plan had a hole in it. Why were more open pits not mined earlier?
Look, we've, you know, had the open pits laid out for some time and, you know, having lower tonnages from Scotia and OK over the period did push that area out a little bit. We've got a huge amount of work going on on-site. A lot of that work is in the Gladstone area and so, you know, that has been our focus and it's the fastest access to that additional open pit ore. You know, the original plan saw a smooth sort of schedule as far as that all goes. Having slightly lower tonnages out of the underground mines did accelerate what we did with the open pits there. The additional open pits are quite large undertakings and, you know, involve whole additional workforces.
At the same time that we have the operations expanding, we have accommodation expanding, we have our flight schedules expanding. It's not as simple as just pushing a button and turning on an additional open pit. As we move forward into the next year, those considerations will certainly be in the budget going forward and, you know, whether we're just mining Gladstone or some additional open pits, we will reveal when we put that guidance out for next year.
That's all we've got from the questions side, Paul. I'll pass back to you for some closing comments.
Sure. Thanks, Sam. Look, I think we've covered fairly succinctly where the operation's at and how we're moving forward. I think there is additional underground mining which has been our target for some time now that'll be commencing from the start of the new financial year and the open pits that we have, we've continued to grow and have a really good line of those pits going forward. In terms of the MEGA deal, I think that it is a great opportunity to bring some additional ore forward. The margins are pretty similar to mining our own open pits, and we will continue to look at those opportunities if and when they present.
You know, overall, we will ensure that our budgets into the coming year are fully self-sufficient and any of those additional opportunities will just be offsetting all that we are otherwise putting in from our own sources. Thanks very much to everyone for their time this morning. It's great to have these quarterly updates and we'll continue to do so as we move forward. Thanks very much.