We'd now like to hand the conference over to Mr. Bryan Quinn, CEO and Managing Director. Please go ahead.
Thank you all for joining our quarterly call to present our quarter one results. We'll be presenting the presentation slides that were released within the ASX announcement today. We are actually presenting from Peak Mine, where some of us are presenting from Peak Mine, and others are presenting from Federation in Brisbane based. I'm joined today by our Chief Financial Officer, Martin Cummings, our Chief Development and Technical Officer, Andrew Graham, and our Project Director for Federation Project, Michelle Tracey. Before I take you through the quarter results, I want to thank all of our stakeholders and shareholders for their ongoing support. As we are presenting from various locations, pay my respects for all the traditional owners, past, present, and emerging for our locations, and thank our other important landowners who host our operations also.
As we've presented before, FY 2024 is about building a stronger Aurelia Metals through redefining the vision and the strategy of the organization, with strategic focus on delivering with confidence, improving our margins, right people, right mindset, and optimizing the Cobar Basin to set up Aurelia to fill our minerals with low cost and high-grade ore, while confidently delivering our business guidance results in 2024 and beyond. So if we can get you to turn to slide three. Our Aurelia team and contracting partners have continued to deliver the business plan and deliver strong production results on the back of some retreating base metal prices. Our good financial results were underpinned by production exceeding our quarter one plan and delivering well within guidance, and also our continued focus on cost efficiencies and cash generation across the operating assets and corporate office.
Some of the highlights include our revenue was ahead of plan at AUD 70 million for the quarter. Our cash balance is strong at AUD 100 million, with current operating cash flow from the operations delivering AUD 12.6 million for the quarter. Our cost efficiencies have delivered mining unit costs for Peak, reducing to AUD 127 per tonne from AUD 180 per tonne 12 months ago, representing approximately 30% improvement. Our development meters across Peak and Federation continue to increase quarter-on-quarter, which is de-risking the FY 2024 and FY 2025 production volumes and setting us up for further growth. Our key growth project, Federation, remains on track to deliver our first key milestone for first ore in Q1 2025, in line with our approved budget.
Our exploration team continued to deliver some positive results, supporting our growth plans around the Peak Mine, with high quality results as reported in the ASX last week. We continue to also restructure our corporate organization with good cost reductions from October onwards, so the AUD 3 million per annum annualize, and the board is progressing their reduction in line with right-sizing, right skills, and reduced costs, as was outlined in the chair letter in FY 2023 annual report. We are progressing our strategy to fill our minerals as soon as practicable and considering commercially sensible options. The focus of that has been to lock in the cash flow potential from this asset and harvest cash till mine life end, and Martin will talk through some of our hedging process we have commenced.
So lots of pleasing progress for the business over the quarter against my CEO 100-day plan. Looking ahead, it's pleasing to advise that guidance for the remainder of FY 2024 is unchanged, and impacts from inflation will be offset from volumes and cost efficiency programs. I'll just turn to slide four on overall production costs. We remain focused on delivering safe and stable production with increased cost efficiencies, and the cost efficiency programs are currently forecasting better costs than within our guidance. Gold price continues to increase, and base metals remain consistent while waiting for China to release policy to improve demand. The results we are presenting today and the work looking forward for the Q2 forecast provides clear context that we're on track to deliver our commitments around FY 2024 guidance for production and costs.
The operations have achieved strong gold production in this higher gold price environment, and we are set up to increase base metal tonnes and grades for the remainder of the year in line with guidance. We also expect the cost efficiency programs and organization changes planned to continue to progress over the coming couple of months, with cost efficiency benefits realized each quarter for the remainder of the year. So turning to slide five, safety and environment. Our underlying safety principle is our people go home safe from whatever shift, and we minimize the impact on the environment and work with our community as a good neighbor. We had four recordable injuries in quarter one, which is far too many, and unfortunately, the majority of which were slips and trips.
We're committed to take the necessary steps to ensure these incidents do not happen, and our teams are ramping up efforts of field leadership, making sure our business plan is being done before any work starts, and improvements in training are being rolled out for inexperienced team members as we increase our resourcing in line with our growth plans. Also, our operational maintenance is ramped up and will continue to mature over the coming 12 months to be normalized in how we make decisions, to really assess and ensure threats to our business and operational areas are well understood and in control. We'll continue to bring third-party expertise to allow us to mature at the right pace for these initiatives. Turning to slide six, Peak Operations. Peak has significantly increased development rates this quarter, with further plan to increase these rates going to Q2.
Development improvements really helped the business in terms of having confidence for the next 12 months-18 months, which continues to provide confidence also in delivering our volumes and upside in FY 2024. The cost efficiencies have also been a priority focus at Peak, as reported in our CEO 100-day plan. The team has delivered a 30% reduction over the last 12 months on a cost-per-ton basis, and continued to implement various operating efficiency initiatives that have been identified in our Working Smarter program, which are mainly IT support on the shop floor. Overall, utilization and availability of the mine equipment has improved substantially now that Peak's resourcing is approaching target levels.
The AISC, the all-in sustaining cost for Peak at $1,584 per ounce, reflecting cost efficiencies have started, and the higher expected base metal production for the remainder of the year will drive cost down as per our plans. So this quarter, the focus on the operations has been mining the lead-zinc stopes from the South Mine, both Kairos and Chronos, which has yielded good gold results. For quarter two, we completed the lead-zinc stopes, which carried over from quarter one, moving to copper stopes in Perseverance Deep in the South Mine and Jubilee in the North Mine. This will be followed by commencing high-grade lead-zinc towards the end of Q2.
Copper and gold stopes are a couple, currently in production drilling, and all development is progressing well in the Upper Cronus, which positions Q2 well for guidance targets. Development is also currently underway in Jubilee and Upper Cronus to prepare for Q3 copper and lead zinc stopes, to meet our Q3 numbers. Turning to slide seven, Dargues operations. At Dargues, we continue to sustainably maximize the cash from this business while setting up for closure in 2025, and our current quarter two forecast shows we are well on track to deliver guidance results based on the planning and delivery underway. Dargues development meters has been to plan and will finish in Q2. We should continue to de-risk the complexity of the mine, with increased grades switching to production, drilling, backfilling, and then mining the remaining high-grade ore pillars.
Obviously, as the mine is within 12 months of depletion, the focus is on retention of good, good people to work at Dargues, and we are working with our contracting partners to retain the people, but also applying a hybrid employee and contractor model to try and keep the best people working for Aurelia. Obviously, we'll be working and looking to continue to attract good quality talent that we can to bring across to the Cobar region in the future, where our growth will continue to occur. Turning to our critical minerals growth process on Federation, which has been reported as one of the highest-grade metals projects in Australia, with a resource grade of approximately 6.7 zinc equivalent. We've commenced the project well with 0 recorded injuries and happy that we are tracking very well with development meters and construction works on the surface.
In fact, I was actually there yesterday and very happy with the standards and the quality of work being achieved by Aurelia management and the Redpath team. The focus for Aurelia, under the leadership of Michelle Tracey, who's on the call today, has been to de-risk the project costs and schedule by bringing on high-quality, capable staff with expertise across various work packages of mining, shaft sinking, surface infrastructure works, and project management of construction activities, as well as commercial areas. The team is actively searching for companies to partner with, with strong backgrounds and credibility in the delivery of these work packages. As highlighted in the presentation, all the work packages are in progress, and the scopes continue to be refined, with the ultimate goal to build the mine well and achieve first ore by Q1 2025 as our first milestone.
Also, in the presentation, you can see the green arrow highlighting the work completed till the end of Q1, and the yellow is the work completed up until Sunday of this week. During this quarter, we've also mobilized drills on site to assess our potential upside on extensions to the west, and in Q2, are planning on installing a drill rig in one of the cuttings to commence drilling underground. Currently, we're happy to report we are on track to deliver the overall project on budget and schedule, while managing the inflationary pressures across the industry. Turning to slide nine, exploration. As per the release last week on the ASX, we continue to invest in exploration near Peak, with numerous high-priority targets, and continue to be pleased with the results that our programs yield.
For those who know the region around Peak, this is not very surprising and keeps giving and demonstrates the prospectivity of our business. In the South Mine Corridor, assay results from the Upper Cronus, Perseverance Zone A, and Perseverance Deep, areas of confirmed continuing extensions of significant mineralization on the upper northern and well-known Perseverance deposit. The strong grade intercepts, as shown on the presentation and ASX release, are particularly encouraging due to striking similarities with the Cronus deposit. Acknowledging this is deep, but these grades could offer extensions for filling our mills in the coming years. Moving to the North Mine Corridor, assay results from the Chesney South deposit has confirmed extensions of mineralization south of the Cherokee deposit in close proximity to the recent reported maiden mineral resource at Burrabungie.
This area has significant further potential for exploration success due to the presence of this known mineralization. The high copper and gold grades intersected in these near mine locations are the subject of further exploration and evaluation activities in the medium term and are well located for existing underground infrastructure. At this point, I'll pass to Martin to speak through the financial slides.
Thanks, Bryan, and I'll be talking to slide 10. You know, the key message on this slide is that our balance sheet now is in great shape. We have AUD 110 million of cash on hand, and that was really driven by some major milestones in the quarter, as I updated in the results call recently, with the receipt of proceeds from the retail entitlement offer and the cash backing returned after we reached financial close on the Trafigura facility. Our cash is expected to be boosted further this quarter from a tax refund of around AUD 21 million. Please remember, our loan note facility remains undrawn at $24 million, providing further liquidity. For our operations, it was a solid start to the year for both Peak and Dargues.
Peak operating cash flow was AUD 9.2 million, benefiting from strong gold production and from lower operating costs and capital spend. Our copper production was also higher, and pleasingly, we were able to send a copper shipment during the quarter. Our lead and zinc production was slightly down, driven by grade, but as Bryan said, we expect that will increase in the coming quarters from a combination of higher ore mined as well as higher-grade ore. Our Dargues cash flow was AUD 3.4 million, which was lower than the prior quarter. In this quarter, we had planned to have one more shipment depart, but that will instead depart in the December quarter. Our costs were higher due to planned realigns of the crusher and ball mill, and also from the impact at our new electricity contract, which commenced on the first of July.
The new rate in that contract is approximately 60% higher than the previous rate, but I must stress that this increase was included in our budget and is factored into our cost guidance. During the quarter, we also completed planned component replacements on our mobile fleet, and given that fleet has a useful life post-Dargues at either Peak or Federation, we'll continue to maintain that equipment in accordance with the standard maintenance regimes. The team at Dargues are doing a great job to ensure that we maximize cash from the operation during its remaining life. But at the current gold price in Australian dollars, it also presents an opportunity to enhance those returns relative to our plans. To lock in that opportunity, we have commenced a hedging program for up to 100% of the payable gold production from Dargues out to September 2024 quarter.
To date, we've done about 40% of the planned volumes, and we'll look to add to that in the near future. For context, Dargues produces about 50% of our group gold production, so we still have a meaningful unhedged gold position at Peak. To accompany those gold hedges, we considered it prudent to also hedge some base metals. Our plan is to hedge up to 25% of our lead and zinc payable production from Peak, which will provide some price protection to our byproduct credits. Again, we're looking at the time period out to September 2024, which coincides with first stope ore from Federation. For lead and zinc, we haven't executed any hedges yet, but we'll look to do some soon. On Federation, it was a really pleasing start to the project, led by Michelle.
As said earlier, development meters are ahead of plan, and the team have made some really good progress on the other main packages for the road upgrade, ventilation, and raised boring. We've spent AUD 10.6 million in the quarter, and pleasingly, that was funded from the operating cash flow generated by Peak and Dargues back in the quarter. Spend is planned to ramp up in the coming quarters as development rates increase and we progress with those major packages. Just to remind you, we've guided capital for Federation of AUD 70 million-AUD 80 million for FY 2024. In closing, it's been a really solid start to the year from our operations and our projects, generating good cash, and really, we now have the balance sheet position to support those growth opportunities. Thanks for your time, and I'll hand the call back to Bryan.
Thanks, so to summarize the Q1, looking forward to Q2, we're focused on improving our current HSE performance and ensuring we have tight controls in place for all our key risks to our business, both HSE and financial. Our cost efficiency at Peak to improve cash flow and also unlock the 90 million tonne of resource at the mine is a large prize for us to go after. Delivery of the cash flow from Dargues and the sustainable system there is obviously paramount. Delivery of the rapid advancing development of Federation and the raised boring projects is well on track and a key focus. We continue to invest in drilling, which is yielding very positive results for our future, both in the near proximity to Peak and also in the Nymagee region.
Our progress on the Great Cobar Project for this financial year will be a key deliverable towards the end of the year, and we'll continue to be in the Cobar regions and leverage our assets, focusing on filling our mills with high-value ore, while also working through various synergies and cost savings in the region to improve our business if it makes commercial sense. So I'd like to hand it over to the operator to now look at questions and answers section of the presentation, please.
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 William Taylor, from Ord Minnett. Please go ahead.
Yeah, good morning, Bryan and team. Thanks for the call. Just touching on Federation, look, obviously, you've noted development ahead of schedule. Are you able to provide some color in terms of how the other parts that sit in the critical path of Federation are at the moment? So kind of looking on items like raise bores and infrastructure, how do you kind of see contract availability and timing looking in those kind of places?
Yeah, thanks, Will. Look, I'll, I'll briefly answer, then I'll hand over to Michelle to put some more color on the question. In terms of the development, as you say, yeah, we are ahead, and that's a critical path to getting to first ore, as is having ventilation through the raised bore. At the moment, you know, the team has started pretty much on the first of August to, to get those tenders out and, and seek, the best companies to, to work with us that have like HSEC standards and, and can do the job, have the equipment, and the, the resourcing at the right price, obviously, to, to make that happen. So the team's been going through quite an intensive process to get those tenders out and, and get to the final stage.
So that's been across the board for both the raise bore, the ventilation, the ventilation band, and also the roadworks. At this stage, they're all sort of moving in the right direction and not impacting our critical path, but that's where they currently all are at work. But Michelle, would you like to answer any additional comments to that or just add?
Sure. Thanks, Bryan, and thanks for the question. With respect to the raise bore rigs, we are in the final stages of securing the contract. We have the rig and the people secured, ready to mobilize. The pre-construction of the raise bore collars have started in the field, so that is all well progressed. On the road, which is just off the critical path, that is an important community project for us as well. We are hauling pre-crushed materials onto the road, and so we've seen good signs of good progress and construction commencing.
Does that answer your question well, okay?
Yeah, no, it does. Yeah, absolutely. Thank you for that color. Maybe just touching on Peak, just looking at those development rates, what's driving such an increase? Is it, is it just a volume basis where you, where you guys are targeting more headings, or is there kind of continuous improvement initiatives that are kind of unlocking a lot of latent capacity there?
I think there's a combination of all of the things you mentioned, Will. I think there's definitely an efficiency drive in terms of putting the Jumbos in the right headings, in the right sequence. We've also got, I guess, a Jumbo on both the South Mine, North Mine now, which is unlocking the potential for the mine. The focus is really about getting meters in the plan, which will give us sort of good security of production over the next 12 months-18 months. That will roll over and continue to roll over. A large part that's also getting. We've done a transition, if you recall, from contractor to owner-operator early in the calendar year.
Resourcing, bringing the right people in, having the right management schedules, and having the right mine plan to the engineering themselves is very important.
Okay, excellent. I'll pass it on. Thank you.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Roy Gill, private investor. Please go ahead.
Hello, Roy here. Yep, I was very interested in the Dargues plant and what is the plan for that after the mine is closed? Is it gonna be used elsewhere, say, at Peak or whatever? And another question is, your ore body at Federation, is it transitioning from low grade ore at the top down to high grade, or is it pretty much, you know, an abrupt change? Yeah, just like those answers, thanks.
Thanks, Roy. I'll open up the answer then hand back over to Andrew on both the questions. In terms of the Dargues equipment, so obviously we've pulled together a project plan for closure at Dargues. That involves looking at where best we can use the equipment in the Cobar region, obviously. If we can utilize equipment, which we have identified, some of which will come across, and be used both at Federation and at Peak, and hopefully for future projects as well. And where it doesn't make sense, we'll obviously look at a sales process for equipment and I guess remediation will occur for any other equipment left behind.
So at the moment, there is a project on that, doing an assessment and trade-off for which is the right direction to put things, but actively look at. So for example, we're looking at if, for emergency egresses out of Federation, can we use any emergency egress equipment out of Dargues that will be effectively demobilized after we retrieve certain parts of the mine? So as an example, we're looking at those things on an ongoing basis to see where we can obviously use the equipment elsewhere and save money. But like I said, there's an overall project being formed at this point in time, in between now and Christmas to finalize that.
In terms of the ore body for Federation, the work we're doing right now is to look at the delineation or the extension potential to the west of the ore body. We're putting a driller again in the second quarter inside the mine itself to continue that work. Andrew, do you want to talk through the rest of the question around the grades that was discussed?
Yeah, no problem at all, Bryan, and, and hi, Roy. Look, I think we, when we put out the feasibility on Federation, we included quite a detailed plan for the life of mine around tons and grade. If you, if you look back at that, it's probably worth just finding that on the ASX. But, you know, we, we are in reasonably high grade straightaway. It's not a case of starting on low grade and waiting to get deeper to, to get higher grade. We do get good grade out of Federation ore body. You know, as Bryan mentioned, from drilling underground, we're going to try to get a better handle on things like gold and copper. It doesn't necessarily 100% align to the zinc grade.
And, and getting a handle on that will help us think about what we do with that ore, and get best, effectively, return from it through, processing options. Just to touch on your first, question as well, then following from that, Bryan's also just, stepped through. As you mentioned, we are, active on a piece of work on that. One thing we are conscious of is not trying to fit a round peg in a square hole. So just because, say, we have a ball mill at Dargues, trying to find a place for that, it may not be the right thing for us in Cobar. But that said, if it is, and we do have one in the group, that's certainly, useful. And, you know, when I look at the Dargues' plant, it's, it's near new.
It's got a great three-stage crushing circuit at the front end. It's got a good ball mill, good float cells, filter, those sorts of things, all of which may have a use for us in the Cobar Basin, either at Peak or as we look to turn Hera back on.
Thank you.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone. We'll now pause a moment to allow for any final questions to register. Thank you. Your next question comes from Rodney Sweetman, private investor. Please go ahead.
Yeah, thank you. Good morning, all. Just in relation to Federation, in a couple of the announcements or information packages that have come out previously, there's reference to the potential for there to be a dispute with, with Glencore. Can you tell me what that's about and where it's at, and if in any way this is an overhang from 2015? Thank you.
Hi, Rodney, it's Martin here. If you refer to our equity raise presentation on the 31st of May, we actually just provide some details on the situation. You know, there is a difference of opinion as to where Federation offtake should go. There is a process to resolve that, but that's probably as much as I can say right now. I must stress, though, that as we did through the equity raise, you know, our financing package with Trafigura is not contingent on the outcome of that process. And so, you know, we confidently move on with developing Federation, and we'll look to get resolution on that in due course.
Thank you.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Quinn for closing remarks.
Look, it's a final thanks to all of the Aurelia team members on the call, today. I've noticed there's a few on here, which is great, and also our contracting partners, and other key stakeholders. Like I said at the start, for the ongoing support and hard work people are putting in to really look at how we can get Aurelia Metals driving value, going forward. As I stressed at the start of this presentation, you know, we are on a journey, and I believe we've got the right, sort of plan in front of us, and we're definitely on track to deliver our guidance and all the various components within that are on track at this point in time.
So I want to thank everyone for dialing in, and we look forward to presenting at the end of the second quarter our results, and hopefully we can have some more conversations about some of these projects and issues underway. So thank you all for your attendance and questions. We'll speak soon.
That does conclude our conference for today. Thank you for participating. You may now disconnect.