I'd now like to hand the conference over to Mr. Darren Millman, CFO. Please go ahead.
Thanks, Darcy, and good morning, all. And thanks for taking the time to join us this morning, and, firstly, apologies on the link issue we had this morning. In addition to the quarterly report, we've released a presentation that we're speaking to during this call. It also encompasses information from our exploration update released last week. Both documents have been uploaded to the ASX platform and will be available on our website shortly. As some of you may be aware, Mark Zeppner, our CEO, is not on the call today. He's taking some well-earned leave. Mark will be back on deck come February. Initially, I'll be speaking to the highlights for the quarter, then we'll pass on to Tim Blyth, our COO, who will speak to the details of our operational performance for the quarter.
On some of the operational slides, we have included some important exploration results received during the quarter, to which Peter Ruzicka, our Executive GM of Exploration, and Jake Ball, our Group Resource and Mine Geology Manager, will add some commentary. We have done this deliberately to provide an indicative on how exploration success might influence the production profile details in our five-year outlook, released in October last year. I will then provide an overview of the financial results for the quarter and upcoming H1 financial reporting. While the presentation is relatively high-level, I do note that a lot more detail can be found in both our quarterly report released today and the exploration update released last week.
As usual, there will be an opportunity for listeners to ask questions at the end, whether that be through the teleconference or the webinar, depending on how you have joined the call. For those that have the presentation deck handy, I will now be initially speaking to slide 3. Gold production for the quarter was 46,510 ounces at an All-in Sustaining Cost of AUD 1,977 per ounce. Production and costs were in line with our expectations, with both metrics impacted by a lower milled grade, as flagged in the prior quarter. Tim will talk further to mill grades and expectations for the remainder of FY 2026 shortly, but importantly, our FY 2026 guide remains in place and unchanged.
Pleasingly, our high-grade exploration strategy is delivering results with new discoveries, some of which we will highlight shortly, but I, but I do encourage listeners to have a look at our recently released exploration update, if you have not already. The operations generated AUD 149.7 million in cash flow, with underlying cash flow of AUD 54.7 million after growth, capital, and exploration investments, along with a put option purchase during the quarter of approximately AUD 12 million. Some analysts may, in fact, not include this hedge payment in calculating free cash flow. Our closing cash and gold balance was just shy of AUD 700 million. I will talk this through in more detail shortly.
In regards to our project work, we hit several milestones in the quarter with the release of the Never Never PFS, along with our plan for upgrades to the Mount Magnet plant, the completion of Rebecca Roe DFS with an FID board approval received, subject to environmental permitting for Roe. Lastly, late in the quarter, we executed a native title agreement for the Rebecca Roe projects. With the studies now complete, showing compelling financial metrics, we are now getting on with the job, initially increasing mill throughput capacity at Mount Magnet, followed with construction of Rebecca Roe. From a corporate point of view, we announced a AUD 250 million buyback program, along with an increase in our minimum dividend to AUD 0.02 per share, both applicable over FY 2026 and FY 2027.
We are focused on increasing returns to our shareholders, even though this period of relatively heavier capital investment, and we have the balance sheet to support such initiatives. Slide 4 shows a breakdown of our ore sources during the quarter. What really excites me the most in the short term is adding Dalgaranga into the mix, with initial infill drilling results boding well for initial ore to be delivered to Never Never, of Never Never to our Mount Magnet hub. That's enough from me, and I'll pass it over to Tim.
Thanks, Darren. Good morning, all. I'll move on to slide 5. I'll discuss the production metrics. The December quarter saw us mine 550,000 tons of ore, comparable to last quarter, but at a slightly lower grade. The grade's in line with the lower grades at Cue. The model's still performing well, as we progress into fresh rock and some of the bigger pits there. At Galaxy, our mine grades were comparable to the prior quarter. Over at Penny, we saw a higher grade compared to the prior quarter. At the processing plant, tons processed were up compared to the prior quarter, and that was a combined benefit of the new lifter design, which introduced at the start of the year, optimizing our ore blend feed, and we had high mill availability.
So overall, a higher throughput rate than the last quarter, without sacrificing recovery, which remained above 95%. The resulting gold production for the quarter was just over 46,000 ounces. On Slide 6, let's take a more detailed look at Mount Magnet. From a safety perspective, we had four restricted work injuries at Magnet, so some significant room to improve there. Our safety focus continues to be on our application of critical controls in the field, including that vision with our contract partners, with respect to our principal mining hazards. We continue to drive towards a proactive safety culture, and it's one of our key objectives for the next few years.... Open pit mining continued at Cue, and late in the quarter, we commenced the Never Never open pit mine at Dalgaranga.
The Never Never open pit, which was highlighted in the A scoping study released with the Never Never underground PFS, is a small open pit. We'll mine that over 12 months and contains approximately 15,000 ounces of gold. Underground mining activities across Mount Magnet continue to focus both on Galaxy and Penny. Looking forward, production is expected to be slightly lower in Q3, with a planned preventative mill shutdown, before production increases in Q4, when we have the high-grade material from Dalgaranga displace low-grade material in the mill.
In the quarter, the team's focus at Mount Magnet on operational excellence and cost management continues to deliver strong results. This is evidenced by the fact the quarter, when compared to prior quarters, there's a lower production. We still managed to deliver a sub-AUD 2,000 all-in sustaining cost, which is well-placed amongst our peer group.
We'll move now on to slide 7 and talk about Penny. We saw a significant improvement in mining metrics at Penny in the quarter, with 59,000 tons mined at a grade of 9.85, an increase of 63% and 20% respectively on the prior quarter. Processing largely aligned to the mining in the quarter, with a recovery of over 97%. For the remainder of the financial year, challenges are expected to align with this quarter at a slightly lower grade. I'll now pass over to Jake for a few comments on exploration at Penny.
Thanks, Tim. Morning, everyone. A lot of focus this past quarter has been on extending the remaining mine life at Penny. We suspected there to be another high-grade plunge on Penny North lode to the south, just 50 meters from the planned development. The underground drilling confirmed that the existence of a Penny West style laminated quartz vein, although the strike extent was limited to less than 100 meters, where gold grades were reduced significantly further to the south. Where the quartz vein was confirmed to host mineralization, we saw reasonably high gold grades, such as 0.7 at 41.7 grams per ton, 0.8 meters at 77.1 grams per ton, and 0.5 meters at 16.7 grams per ton. We are now in the process of modeling and assessing the viability of a Penny North extension.
Overall, the mineralization at Penny is controlled by a northerly trending structural corridor called the Penny Shear Zone. The plan figure on the right side of the slide shows the association of surface gold geochemistry of the structural trend, highlighting the Magenta/Columbia area to the north of Penny. Recent exploration drilling at Penny or at Magenta has returned results including 3.4 meters at 6.94 grams per ton, 0.7 meters at 15.5 grams per ton, and 0.62 at 14.1 grams per ton. The mineralized system remains open down plunge, and further work is being planned.
Thanks, Jake. For those familiar with the Ramelius story, Penny's production under our existing five-year plan is due to cease at the end of this financial year. The exploration at Penny North, we are looking to conceptually extend this into FY 2027, whilst Magenta and the other close regional targets will need further work. But grades of just under 7 grams a ton, very encouraging at this early stage. So moving from Penny over to Cue on slide 8. So at Cue, we mined 341,000 tons at a grade of 1.44. Both metrics being down in the prior quarter due to the aforementioned mine grades at Cue and the operation focusing on the Break of Day stage 2 cutback, a little at first productive in that cutback.
Haulage to Mount Magnet was uninterrupted in the quarter, with 240,000 tons being processed at a grade of just over 2.
I'll just add a few words for Q, Tim. The resource definition and exploration drilling is ongoing at Q, with the aim of converting and extending inferred resources beneath the Break of Day planned underground mine from the Twilight and Velvet lodes. We've also begun some near mine exploration along the Starlight Basalt corridor, which extends several kilometers to the north. Due to the relative size of the area, we suspect that there could be another deposit within the same style as Break of Day and White Heat within the basalt, and we're testing that hypothesis now. Some remarkable results from the Twilight and Velvet underground extensions included 4.6 meters at 15.2 grams per ton, 7.5 meters at 35.8 grams per ton, and 1.8 meters at 139 grams per ton.
And that's all from within the currently inferred mineral resource area, as well as 1.2 meters at 27.1 grams per ton from beneath the currently estimated resource.
Thanks, Jake. Again, in relation to our five-year outlook, current production profile has the Break of Day underground coming in in FY 2027, and currently only has one year of production. However, the grades just mentioned by Jake, in addition to any early drill hits, of the early drill hit of 6.2 meters at 60.3, validates that we've got continued mineral, mineralization below the existing underground mine designs. And whilst they're still conceptual, we're quite upbeat on extending the mine life. Moving from Cue now to Galaxy. Mine tons and grade were in line with the prior quarter, 132,000 tons at a grade of 2.17. We processed 155,000 tons at a grade of 2.18, and a recovery of 92.4%.
Just under 10,000 tons of recovered gold from Galaxy. Processing obviously exceeded mining the month, and we had some existing stockpiles that we were able to draw down upon.
While looking at the resource definition and exploration activities, you can also see that both the surface and underground drilling at Galaxy was very positive, along with the results that we had from underground drilling beneath the Saturn and Mars plant developments. The drill results we've had observed so far, including the 5.1 meters at 47.3 grams per ton, 1 meter at 238 grams per ton, and 4.4 meters at 13 grams per ton, continuation of the high-grade plunges within the discs that host the deposits.
Based on a continuation of the calculated ounces per vertical meter contained in the resource estimate, we envisioned an exploration target beneath Saturn and Mars in the range of 6-7 million tons at a grade of 2.1-2.6 grams per ton for 400,000-600,000 ounces. In effect, we aim to double the current resources estimated at 6.2 million tons at 2.7 grams per ton for 530,000 ounces from the planned drilling shown on the slide.
Thanks, Jake. As you can see, we're looking to double the resources here so we can extend Galaxy for many years beyond FY 2028. As we highlighted in the past, the current Mount Magnet plant is running at capacity, so if we can displace any lower-grade material in the medium term, that makes a lot of sense. In FY 2029, our existing plans at the Mount Magnet hub, we have 1.9 million tons lower-grade material grading at 0.8. Given the exploration target here has a midpoint of 2.3 grams a ton, the great opportunity to increase the overall mill grades from FY 2029 onwards. Now I'll pass on to Peter to discuss Hesperus.
But just before I do that, it's just worth highlighting on slide nine, on the right-hand side picture there, how close Hesperus sits relative to mining activity at Galaxy. Thanks, Peter.
Thanks, Tim. Morning, all. I'll initially be speaking to slide ten. The Hesperus Pit sits just to the south of the Saturn pit, southern end of the Galaxy mine area. Our drilling has been focused around a mineralized granodiorite sill called the Hesperus Sill, and expanding outwards to other adjacent target areas. Worth noting here that the intrusive hosted geological model is one based on other significant deposits in the Boogardie Dome area of Mount Magnet, including Eridanus and Bartus East. And the significance of that comparison is that those deposits contain high-grade zones in areas of favorable structure, and we're looking for the same high-grade controls at Hesperus.
It's exciting that we're seeing some high-grade validation with recent results, including 22.7 meters at 10.8 grams per ton gold, 35 meters at 3.14 grams per ton gold, and 0.5 meters at 8,590 grams per ton gold. And those latter two are shown on the cross-section there. On the following slide 11, we have a photograph of the high-grade intercept at Hesperus that I've just mentioned, 0.5 meters at 8,590 grams per ton gold. It's one of our highest assay grades ever. It comes from quartz vein within a mafic, just below the mineralized granodiorite. Again, just refer to this section for some geology background there. And this is just another reiteration of the high-grade potential of the area when we have the right structure.
Thanks, Peter. Back to operations, so focusing on Dalgaranga on slide 12. The key highlights for the quarter at Dalgaranga include, we completed 1.6 kilometers of lateral development to date and the commencement of ore mining, development material only at this stage, from the Never Never underground mine, which totaled 16,000 tons at a grade of 3.52. The ore's being stockpiled, awaiting haulage to the Mount Magnet processing plant. On the long section on the left-hand side, you can see we're pushing both the incline and decline for Never Never, and we've established three production levels. We're commencing stoping late in this quarter. And I'll note the picture on the right-hand side shows the Barminco Rhino Rig cutting the first box hole for our first stope.
As noted earlier, we also commenced operations at the Never Never open pit in the quarter, with ore mining that are commencing in this current month. Our recent five-year plan included this open pit in FY 2027. However, we took the strategic decision to start this earlier to set ourselves up for future success at Dalgaranga. Waste material was moved at the Never Never pit in the quarter, with ore mining commencing this month. Establishing this pit now gives Dalgaranga optionality for another access point for mine access, haulage, or ventilation options. Mine development and site infrastructure remain in line with our plan, and we're very excited to get this all into our processing plant imminently.
All right, on to slide 13, and the resource definition and infill drilling taking place at Dalgaranga.
... Underground infill drilling continued in the upper levels of Never Never, and some resource definition drilling took place at Four Pillars. Some outstanding results received included 13 meters at 38.4 grams per ton, 35.3 meters at 16 grams per ton, and 11.3 meters at 22.9 grams per ton. At Never Never, as well as at 4.2, at 3.35 grams per ton at Four Pillars. All the drilling conducted during the quarter confirmed that the average thickness, position, and grade of our current mineral resource estimate, with potential for upside, where the ore controlling Never Never fault was found to be further to the north than expected. The resource definition drilling at Four Pillars aims to convert the existing Inferred Resources to indicated, and we aim to provide a reserve update once the drilling is complete.
From an exploration lens, Dalgaranga remains a corridor for future discoveries, as noted on slide 14. The broader corridor remains a key target for both resource addition and new discovery. We have a significant budget expenditure of AUD 19 million allocated to Dalgaranga in FY 2026, and that includes extensive underground programs at Four Pillars, West Winds, and Applewood, all shown on the previous long section. As well as surface drilling along southerly extensions of the Gilbey's system at Sly Fox and Plymouth. An exploration evaluation of a 6-kilometer long mineralized corridor extending northwards from the mine area. The southern Gilbey's area is a structurally complex area with a number of mineralized trends interacting with an antiformal fold closure. Structural complexity is always a favorable outcome for exploration upside.
Significant results of 4 meters at 42.6 grams per ton gold has been reported from surface diamond drilling at Plymouth, extending and adding confidence to mineralization. With that, I'll now hand back to Dan.
Thank you, Tim, Jake, and Peter. I'll now be speaking to slide 15. The December quarter has been another strong quarter for Ramelius, with AUD 54.7 million free cash flow being generated. While overall, this is down on the prior quarter, we're in a period of reinvestment into the business. I will talk to the cash flow for the quarter in more detail shortly. The all-in sustaining costs for the quarter did increase slightly, partly due to lower grades milled, but also the higher gold price, which, as noted, in the quarterly report, at approximately AUD 30 per ounce for the quarter. Pleasingly, the all-in sustaining costs of AUD 1,977 per ounce remained below the AUD 2,000 mark and leaves us well-placed compared to our peers.
During the quarter, we sold 55,610 ounces at an average realized price of AUD 5,175 per ounce, which includes a mix of spot and committed forward sales. This resulted in total sales revenue for the quarter of AUD 236 million. The realized price for the quarter was up 14% on an improved spot price and less hedged commitments. The Aussie gold price itself improved 11% over the quarter. The resulting all-in sustaining margin, which is the average realized gold price, less the all-in sustaining, was AUD 3,198 per ounce, and represents an all-in sustaining cost margin of 62%, with both metrics improving on the prior quarter and being the best ever achieved by Ramelius.
Looking forward, our hedge book commitments on a monthly basis are between 1,000 to 3,000 ounces and a total of 21,000 ounces over the calendar year, increasing our exposure to remarkable gold, gold price over the year. Moving on to slide 17 and the cash flow for the business for the quarter. Operational cash flow was AUD 149.7 million, slightly down on the prior quarter on lower production. It is also worth noting that the cash flow includes the purchase of a put option for FY 2028 production, which cost AUD 12.3 million.
This operational cash flow funded growth capital for the quarter of AUD 91.51 million, which mainly related to the underground development at Never Never, the commencement of stage two cutback at Break of Day, and the infrastructure across both Dalgaranga and Mount Magnet. Our investment in exploration or resource definition for the quarter totaled AUD 24.8 million and was focused on Dalgaranga, Mount Magnet, and Penny. As highlighted by Jake and Peter, we are seeing the returns on this investment in our exploration results today. The resulting underlying free cash flow for the quarter was AUD 54.7 million. From this, a total cash payment of AUD 60.3 million was made by way of final fully franked FY 2025 dividends of AUD 0.05 per share.
The total amount was AUD 95.7 million, with that being a 30% take-up on the dividend reinvestment plan, which resulted in the stated cash dividend payment. Lastly, we've paid a total income tax for the quarter of AUD 127.8 million, with 118.2 of this relates to FY 2025, and the balance being income tax installments made in advance of FY 2026. Importantly, we do not expect this large final tax payment going forward as we are now paying income tax in advance. The resulting closing cash and gold position was AUD 694.7 million. On Slide 18, we show our track record of generating significant cash flow.
This has underpinned our ability to reward shareholders through our recently announced AUD 250 million share buyback program, and an increase in the minimum dividend to AUD 0.02 per share, both across FY 2026 and FY 2027. We see the business generating significant cash flow once this investment period at Mount Magnet is complete, and we are focused on increasing shareholder return with those cash flows when those cash flows are realized. All of this while maintaining a robust balance sheet and self-funding the development of Rebecca Roe. As you will see, we have AUD 0.9 billion in available equity, which is made up of cash and gold at 31 December, and the available undrawn debt facility, which leaves Ramelius in a very healthy position.
On slide 18, while not technically required, regarding the quarterly reporting, I wanted to take this opportunity to provide some guidance around the H1 FY 2026 earnings, specifically the impact of the Spartan acquisition. Two key points to be made here: firstly, the existing private royalties over the Dalgaranga mine, which were reduced to 2% in Q1. Upon the acquisition of Spartan, we are required under accounting guidance to recognize the future royalty liability on our balance sheet, determined at fair value. The primary driver, which is the prevailing gold price and production profile. At the date of the acquisition, the fair value of those royalties was approximately AUD 80 million. Now, a lot has changed since the acquisition date in July.
Specifically, we've increased the confidence in the ore body with the release of our maiden ore reserve of 1.6 million ounces, and the consensus forward gold price over the life of Dalgaranga has increased 36% from AUD 3,789 per ounce at that time of the acquisition to AUD 5,147 per ounce at the end of December. The combined impact of this, we expect a fair value adjustment of between AUD 35-45 million, which is required under accounting standards, which will be expensed in earnings during the quarter. This is not a cash cost for the current reporting period.
Secondly, the costs related to the Spartan acquisitions, which are estimated at AUD 135 million, and includes an estimated stamp duty of AUD 130 million-AUD 132 million, are required to re-recognize and expense to earnings in the quarter. On slide 19, we have summarized our key focus areas for the remainder of the year. We want to continue to improve our safety performance. We acknowledge we have to-- we have some work to do in this area. Progress the environmental approvals for Roe, noting that approval is already in place at Rebecca. Significantly increase exploration activities. We have 12 service rigs, 12 surface rigs, and four underground rigs drilling at the moment. Our increase in exploration of AUD 80 million-AUD 100 million for FY 2026 is paying dividends, as noted today.
Continue with the excellent progress by the site, made by the site team at Dalgaranga and the development of Never Never underground, the open pit and infrastructure across the site, and importantly, get the ore to the processing plant at Mount Magnet, which we expect in the March quarter. And finally, commence the plant upgrade works at Mount Magnet. These are the key areas that will drive value and will be our focus. We'll now open up the line for questions, if you could please, Darcy.
Thank you. If you would like to ask a question by the phone, you'll need to press the star key followed by the number one on your telephone keypad. If you would like to cancel, please press star two. If you'd like to ask a question via the webcast today, please type your question into the Ask a Question box and click Submit. Your first question today comes from Adam Baker from Macquarie. Please go ahead.
Morning, Darren, Tim, Peter, Jake. Just a couple on the exploration, if I may, since you've got the whole team here. Just firstly, on the exploration target at Galaxy, the 67 million tons, looks like you got pretty high confidence in extensions to the mineralization at depth there. I saw you previously called out OVMs of around 2,300 per meter. What are you seeing at depth here? You know, are you seeing grades in line with historical norms or what are we seeing with the grades? Are you seeing an increase or decrease? And in addition to that, is there any kind of change in the structural nature of the mineralized resource? Thank you.
Yeah, Adam, yeah, good to hear from you. I think that, overall, the grade seems remarkably consistent at, Saturn and Mars. So, they're very similar structures to what was mined at Hill 50, although they seem to be, laterally discontinuous, they are offset by maybe, less than 10 meters and then continue at depth, as we trace those dips down. So, you know, once we've located them with drilling, the, overall, mine grade and reconciled grade, from the areas that we've, mined so far are consistent, and we're still seeing similar results, even though they, they, you know, they look quite outstanding. But once we do the estimations, we're, more or less seeing those same grades come through in our, in our current mineral resource estimation.
We expect to see similar grades at depth, not generally increasing or decreasing.
That's clear. And, do you have any timings of when you could see that getting integrated into the... in, into a resource? Obviously, a lot of drilling ahead, but any kind of rough timeline?
Yeah. I think, I think we're gonna probably target sort of late August, early September for our next reserve and resource update, so we'll look to incorporate additional drilling we've done then. At that time as well, we'd probably look to update that sort of four-year guidance being FY2027 through to FY2030. You know, at the moment, as you know, I think, at the moment, FY2028 is the timeline in which the Galaxy mine was due to finish up. And obviously, given this exploration target... and, you know, our ability to displace this lower grade material, you know, we do expect potentially to have production, you know, extending out beyond that.
Okay, that sounds great. And secondly, on Penny, some pretty positive drill intersections of depth here, along this new laminated quartz vein. Just wondering if you could call out what's in the life of mine at Penny at the moment? What's the current mine life at Penny? And in addition to that, what's the likelihood of these new mineralized veins being incorporated to an updated mine plan to potentially give you a bit more of the mine life?
Yeah, I asked the same question to Jake, sort of a week or so ago, so I can answer that one. So basically, you know, it pinches out at depth, which we've sort of seen from time to time at Penny. We are undertaking a study, a desktop study on that work. The final results will be, you know, looking to be incorporated in that August, September timeline. At the moment, Penny, operationally, as Tim mentioned, is due to finish up at the end of FY 2026. In an ideal world, we extend that into FY 2027. You know, our expectations, you know, at first glance, it won't be a long extension into FY 2027. You know, whether we can get somewhere between, you know, three to six months is probably what we're currently expecting.
But once again, just caveat that we need to do the work.
Okay. Thank you. And maybe just finally, just one for you, Darren. Not much of a hedge book remaining, only 21,000 ounces, but you know, have you given any thoughts to just pre-delivering to you know, to clean the books up?
Yeah, it, it comes up every sort of board discussion, and, and then the gold price runs another $100 an ounce. So it's a little bit more costly. So, when you reflect, you know, we, we were quite impacted in this quarter, probably hit us, you know, around AUD 50 million in the context of additional free cash flow that could have been generated. So it's not a small number. As we head into Q4, or, or the back end of actually the H2, the percentage of production that's being hedged is only around 13%, as we flagged. So it, it will hurt us a little bit, but, the hurt won't be as big as we go forward.
That being said, you know, we may clean it up, but we'll probably chat with the board on that, you know, end of February and make a call. But as I said, it's not gonna hurt us as much as it has this quarter and previously, but it still hurts.
Thanks, guys. I'll hand it on.
Thank you. Your next question today comes from Levi Spry from UBS. Please go ahead.
Good day. Yeah, thanks for your time. Maybe just a couple of quick ones, firstly, on Dalgaranga. Can you just remind us of the ramp up in volumes there over the next 18 months as you start stoping later this quarter? And maybe talk to any potential upside of the you know amount of ounces you can pull out of there in the short to medium term.
This financial year, we've got a target around 200,000 tons of ore, and then the ramp up, the following year. So about three years we're at the run rate. And obviously this is our first production at a new mine, so we're being conservative in nature, but we're quite confident that we'll achieve that 200,000 tons mined this year and getting that over to Mount Magnet.
Okay. Yeah, nice one. Thank you. And then just on Edna May, is there any updates on any processes that may, may be running there at these high prices?
No update at this stage. Yeah, we're pulling together the data, making our own final call whether it's continue to be part of the portfolio or a process potentially may run. So, that's yeah, that's sort of still in progress at the moment, Levi.
Okay. Thank you. Thanks for your time.
Thank you.
Thank you. Once again, if you would like to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question today comes from Hugo Nicolaci from Goldman Sachs. Please go ahead.
Morning, guys. Thanks for the update. A couple from me, if I can. Just sort of extending from Levi's point on Never Never. You highlighted in the release that you're gonna potentially declare commercial production earlier as partially a function of gold price, but then how much of that is just the mine tracking ahead? And to your point, around the 200,000 tons being reasonably conservative, you know, can you elaborate just in terms of how conservative you feel you've been there? Thanks.
I'd say we haven't-- we're, you know, stopes are ready, so I think we're kind of a bit conscious not to count the chicken before they hatch, so to speak. So I think, as Tim said, we're on plan. There might be some upside, but we'll see how we go the next several months. That'll be a telling stage. So I think come April, hopefully we'll have that, you know, we'll have that data, we'll see the grade reconciliations, and we'll provide more of an update then, I think, on that particular issue. Obviously, we've had some pretty strong infill results. You know, 16s, 22, 38, 25 grade, you know, as we mentioned in the exploration update. The reconciliation at the moment is looking positive.
You know, don't be expecting Q-like reconciliation grades of about 30%, but once again, we won't know the final until we start getting it through the mill. So we'll know a lot more come April, and share that, but, but everything at the moment is on track. Grade reconciliation on the infill looks good, and we'll see where we sit, you know, come end of April as we do a report out.
Got it. That's helpful. And then-
Oh, sorry. Sorry. Sorry. Yeah, sorry, and the other piece is the commercial production. So, at the moment, it's largely purely driven by where the gold price sits at this point in time, versus where it was when we put out guidance for FY 2026.
Can you just remind us what you're planning on sort of capitalizing on the development in the second half of this year in terms of what we should think about, sort of shifting magnitude over to, to AISC?
Yeah. Obviously, we've-- we'll look to provide a bit more color on what that breakout is, at the moment on that state growth capital we've spent. But, you know, predominantly a lot of that today is on Never Never. We'll call it 80%, even potentially been as high as 90%. So, we are ramping up the, underground development, 600 meters a month, so, you know, it will be slightly higher. So, you know, we'll be similar levels, as we did in the quarter. It just depends on whether that gets, capitalized. But yeah, that's kind of the ballpark, on, on what potentially will move from, growth capital to sustaining capital. It's still be capitalized, it's just that allocation.
So what we're trying to flag here is, okay, well, there may be potential push of some of that into All-in Sustaining Costs because it's sustaining capital, and that might hurt us in the context of simply, you know, that reporting metric, but it's a positive overall in the context of the mine and the profitability.
Fantastic. That's helpful. And then just to some of the things you highlighted in terms of financial impacts for the first half, can you just clarify whether those sort of come through your underlying result or whether they're considered one-off? And then just, can you just confirm if I'm interpreting the comment correctly around the stamp duty, that that will also hit your PNL this half?
Yeah. So, so the one-off is on the stamp duty, and the initial acquisition cost associated with that. On the royalty, we'll see that big, big hit, happening. The initial acquisition won't go through the balance sheet, but any change in gold price and/or extension of mine life will continue to make, have to make on a recurring basis, every quarter or every sort of six months from an external perspective. So we'll look to establish, we'll call it normalized earnings, and flag that to the market as we go forward, just so it's clear, because as I said, it is a non-cash component, when we report out publicly.
Got it. That's helpful, guys. Pass it on.
Thanks.
Thank you. As there are no further phone questions at this time, I'll now hand back for any webcast questions to be addressed.
Thanks. Yeah, we just checked. There's no webcast questions logged in. So, with that, I'd like to close the call. Thanks all for dialing in. Thanks for some color this quarter from Jake and Peter and, yeah, we'll look to provide sort of some more color on exploration as we deliver some high-grade results. So thanks all and have a great day.
That does conclude our conference for today. Thank you for participating. You may now disconnect.