Thank you very much, and warm welcome to everybody today. What I plan to do is very quickly take you through the highlights, then go through the operations exploration. Sorry, with ESG first. Then I'll hand over to Doug, on the finances. We'll take questions, and then I'll do a wrap at the end of it. I think starting with the highlights, I think there's quite a lot there. I'll go through them relatively quickly. Safety, I think we're hitting some really good numbers there. Numbers that I've never seen for a long time in mining operations, especially when you have 4,000 people on the ground. These are sort of numbers that you normally I've seen in refineries, not in mines. I think we're doing exceptionally well on safety. Net debt, that's on track down.
Probably be 120-something at the end of the year. Going well and going to plan. The gold production, these are numbers that we've last seen in December 2020 when we were putting at Syama open pit 3-gram a ton through the oxide plant, and it was relatively easy to do this sort of stuff. We're really pleased to see we've had a good quarter there, despite the fact it rained spectacularly during the quarter. Unit cash costs starting to move now. If you remember on the calls, I said we started to focus on costs in Q2. It's very difficult for people, especially in a Syama background, when they're trying to get the operations working correctly, to focus on cash at the same time, but they're starting to now, and we're starting to see the benefits come through.
I expect to be able to report improved numbers again on the next quarter. Sales, we averaged at $1,809. This is where your hedge book really starts to kick in. It's always painful on the up, metal pricing when you're climbing the curve, but when it's coming down, this is where it actually helps you a lot. Some good sales there. You remember we put out the mineral resource. This is really exciting. This thing is growing on a daily basis. We're getting results on a weekly basis, not only on the infill, but expansion wise. We're going a little bit deeper. Given the geography there, geology there, I think we can go down to 200 meters plus.
We've only got down to 150 at this stage, and we're still adding gold at reasonable grades there, and some very high grades. As a result, we've commenced our pre-feas and looking at all the options we can do over the next couple of years with low CapEx to optimize what we've got, given that at this point in time, the mine is a bottleneck. However, when Syama North comes on, we can start mining that in Q2 next year 'cause we are mining areas of it at the moment. Suddenly the plant becomes a bottleneck again and focuses back onto the mills. We've got updated forecast productions with Syama North coming through.
We have withdrawn some of our guidance for the next couple of years, with a view that we will review it and put it out again in Q1, and we expect some upside there. In terms of repayment, Doug will take you through this syndicated loan. The Bibiani money came through a little bit later, but there's good reason why. That's still coming in, and we'll get the next two installments. One we've received already, post quarter, but the next one will be coming in on time. Then we've had both audits on the ESG side with Moody's and World Gold Council, and we're looking good on both of those. In terms of the gold forward contracts, we're averaging $1,900 an ounce, which is very healthy.
161,500. Remember, as part of our covenant, we hold 30%, as covenants on the debts, we hold 30% on the hedge book. The bottom line is, on all this, that we are still maintaining our cost and our production guidance at 345, all-in sustaining costs of $1,425. I know the analysts are saying we're gonna produce a little bit more 345. I agree with that. Obviously, the trick is now, with all this pre-strip work we did in Q1 at Syama on the open pit, we're starting to see those costs of the oxides coming down very quickly. We still think we can get to that number. All in all, we think it's a solid quarter.
Production has improved for four quarters in a row, so we see now five quarters of steady operation. That despite the rainy season, the Q3 that normally catches us out, we were way ahead of the game at this point, we thought. Exploration, it's discovering a game changer at Syama, and that's why we're withdrawing our guidance, and we need a little bit more work to look at the options there. I think that's gonna guarantee our future and increased production. As I mentioned, the costs are starting to reduce. Given that we've got the revenue side of the equation under control, we're really starting to focus on costs. Let me go through, I'll go through ESG first. As I mentioned, ticks in the boxes. Moody's, they say we're robust on ESG, we're ahead of the pack.
More importantly, they've given us a lot of information on what we need to do to get to improve our situation. In terms of the Responsible Gold Mining Principles with the World Gold Council, we're at 84%. More importantly, we're on track for the June 2023 to get to the 100% level. It does get tough from 84 onwards, but we're confident we can get there. We're also on track for ISO 45001 certification in Q4 at Syama and Q1 in Mako. If you go back to the safety stats, it's quite remarkable if we stop and think for a moment that Syama, they have not had a lost time incident for 1,350 days. That is 3.8 years, and that is quite a remarkable stat.
That includes, and I keep mentioning it, the 64,000 man-hours when we rebuilt the plant in Q1. I think they're really doing exceptionally well and brought our TRIFR numbers down to what is a record for us at 0.62. On the production side, I'll start with the Syama underground. As I've been talking to you, been reconfiguring the underground mining in the right directions based on geology. That's taken us over nearly 14 months to get that right. What we're starting to see is, and when I arrived we were at 2.4 gram a ton tracking up, but we've been producing underground mine run-of-mine now at 2.71 for the quarter. These were slightly higher than my guidance thoughts.
If you remember, I was talking 2.6-2.65. Those are my targets. The guys are exceeding this, and I'm not gonna say that it's always gonna be at 2.71, but it's a significant improvement. We are next year gonna go through a slightly higher grade patch, so you're gonna see some slightly higher numbers on the next level that we're developing, but it's actually resetting and more importantly, the modeling that we're doing now, we're actually seeing accuracies of ±4% against the model of what we're actually achieving. We're really starting to understand the sublevel caving and being able to predict it accurately.
Once you've got these grades, only then are you comfortable to seriously look at expanding the operation, and that's something that we'll be looking to do over the next two years. In terms of the plant, as a result of the high grades, we've averaged 2.8 going into the plant, and that gave us 45,000 ounces coming out of the sulfide circuit, which is, in itself, a record. Sorry. The other major record is the roaster. Again, it's still humming along. I'm gonna probably stop mentioning the roaster in future calls. We hit a record 52,000 tons. Engineering-wise, we have confirmed we can increase this throughput more if we put an oxygen plant on there for our future expansions. Subsequent to quarter end, we actually started doing our in-pit tails.
If you remember, I said we're doing the final lift on our main tailings dam up at Syama. We spent about $60 million fixing that last lift. Now we've spent all the capital and put the piping into one of our older pits. We are gonna have a bit of a holiday on the CapEx for a couple of years on capital on tailings. It's only in about year three that we have to start putting capital into that in-pit to raise it up a little bit. In the Syama oxides, grades improving, and strip ratios. If you remember, we did all that pre-strip in H1. We had low waste required to be removed during the quarter.
That's really set us up, not for this quarter, so much as the rest of the life of mine on the oxide pits. We've now got the grade control ahead of the game. We've got the pre-stripping ahead of the game. Now when we went through the rainy season, we weren't trying to mine the bottoms of the pits. We were doing the tops of the pits. We're starting now to see the grade coming up, and I expect to see further improvements over Q4. Mako, we increased the ore mined despite again, the weather, and we did go through a slightly lower grade patch. We expected that, and as we're speaking, the grades are starting to return back to previous years. Sorry, previous quarters. To move on to exploration, we've wound up the Guinea work for the year.
Mako, we're still looking to find another area to mine in four years' time. As I've always mentioned, that I think could be a bit of a photo finish, but the guys have got four areas that we're focused on there and work is ongoing. Then the big story is Syama North, 2 million ounces and counting. Of that, we've discovered about 188,000 ounces of oxide, which actually it will probably take precedence over existing oxides that we've got lined up for the next couple of years. Then we've got transitional sulfides of 127,000 ounces and 1.7 million ounces. Now this is still mineral resources, so this is all blue sky when I'm talking about it. 50% of it is still inferred.
However, we expect by the end of the year to have over 85% of it in M&I, and then we'll be able to put it through the feasibility study. In terms of drilling, we are infill drilling. We're going to 50-meter spacings now. It was originally 100-meter spacings when we stepped it out. We are also doing the extensions at depth. We're doing some work now where we're going beyond the 150 meters. We're still confirming that the large section that we noticed around hole number 538 is still increasing. We're still hitting some 30 meters around it, so it looks like that's quite a large block of ground, which is quite exciting. We also completed our air mag on the whole of our belt, and that work is.
Sorry, that information is now being processed by the engineers and we should have that information to look at from a structural point of view this quarter now. We also did an earn-in agreement with African Gold right up at the top of the belt. It's contiguous to our operations. It does actually bifurcate at the top there. If it's adding on 5 kilometers, in my layman's terms, I tend to say it's 10 kilometers because it's two sections. We certainly think there's a lot of potential up there, and we did do the Aeromag over it. That leads us to the pre-feasibility study. As I mentioned, we have put some of the Syama North material through the plant before back in 2018, so we've got some broad information about it.
We've done some tests in the laboratory on it. It's not unusual, or it's to be expected. We have got a Canadian laboratory doing some metallurgical testwork on it now. I would suggest it will be a little bit softer than underground material, so it should go through the plant a little bit faster. It's higher grade, but because of its closeness to the operation, it should be more economic than going out to the underground material. This gives us a huge amount of flexibility on the plant, where we can take the underground a little bit slower and controlled and then compete with the open pit.
I think with all the options going forward, as I mentioned, we've pulled in our guidance on year 2024, 2025, 2026, etc., until Q1, because I think there'll be some exciting numbers coming out in Q1. I think that's about it on the process side. I'm sure there could be quite a few questions on that, but I'll hand over to Doug, and he can take you through the financial section.
Thanks, Terry, and good afternoon, everyone. I'll just take a few moments as normal to take you through the all-in sustaining costs for the quarter and cash costs. Also to touch on the cash flow and net debt position at the end of September. Terry's largely covered the asset sales and hedge book. Then I'll hand back to him to wrap up and take questions. The September quarter unit cash costs were $1,389 at a group level per ounce, which was 6% lower than the June quarter, we benefited there from lower waste stripping, the Syama oxides and processing costs at Syama, together with slightly higher production, as well. Offsetting some of these factors were some increased costs at Mako.
We moved more material, 7% more than June quarter, and we're also experiencing higher explosive costs across the group, where we've seen upwards of 30% increase in those explosive costs. We, you know, continue to feel cost pressure across the board. Diesel prices have stabilized and started to come down, particularly in Mali. We haven't had the same escalation in diesel prices in Senegal as the government smooths the prices there, as well as being buffeted by the CFA, which is pegged to the euro. With the euro falling against the US dollar, that has provided some insulation. We were paying diesel prices in Mali upwards of $1.45 a liter a few months back. That's now fallen into the mid $120s a liter.
HFO, which is more significant at Syama than diesel in terms of volumes, is around $0.90 a liter. We are getting some relief there, if you like, if you can call it relief, versus diesel for the power plant. On a year-to-date basis, group all-in sustaining costs are at $1,483, and we have a non-cash expense there of $35 an ounce. Turning now to the cash flow for the quarter. Pleasingly, operating cash flow up a bit at $50 million for the quarter. We had CapEx of $16.7 million. Just a bit of a breakdown on that.
There was just under $5 million of that related to tailings facilities at Syama, $5.7 million for stripping at Mako, and approximately $3 million relates to open pit stripping at Syama on the oxides. Exploration at $3.1 million, slightly below the previous quarter. Terry's already talked where the focus there has been, obviously around Syama North, particularly. Working capital of $12.9 million, that really relates to a build in consumables and critical spares. Given the inflationary environment, we've seen ongoing outlays to maintain adequate levels of fuels, reagents, consumables, etc., and that's reflected in that working capital number. Asset sale proceeds was $10 million, relating to Bibiani.
The second $10 million tranche was received as we announced post the quarter end, and $1.8 million in cash related to our Oklo shares from the B2Gold acquisition of that company. We also received 1.2 million shares in B2Gold as part of that takeover, which we actually sold in the last day or so, for a US dollar value of about $3.5 million. That wasn't included in, obviously, the September quarter numbers, but will be added to the balance sheet for the December quarter. Debt repayments of $35 million.
The term loan installment of $25 million in September, plus the $10 million from Bibiani went down on the RCF, as was previously flagged. Government dividend and withholding tax, small amount there, relates to the installments paid to the Senegalese government from the dividend paid from Mako. Before asset sales, debt service and government dividends, the business generated $17 and a half million in free cash flow during the quarter. Leaving us with net debt at $156 and a half million, which was a reduction of $26.3 million from quarter two. As Terry said, the hedge book has served us well in the quarter.
We were left with 161,500 ounces at the end of September at an average price of $1,901. That's it from me. With that, I'll hand back to Terry to wrap up and take questions.
Thanks, Doug. I think we think we've had a very exciting quarter. I think a lot of the technical issues are now sorted out. We are finding more economic deposits, and obviously we're reviewing operations now to really focus on costs and try and get our costs into a far better position. I think the four takeaways from today's call is it's a fourth quarter of production improvement. Our exploration is discovering a game changer, and we're finding gold now at $10 an ounce compared to $25 historically. Our costs are starting to reduce, and we have maintained our guidance for this year at 345-1,425, and we've withdrawn the next few years, and we will tell everybody the good news in Q1 next year. Thank you. Please, I open the floor to questions.
Thank you to Terry and Doug for the presentation. At this time, I would like to remind everyone, in order to ask a question, please press star, then the number one on your telephone keypad, and we will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Reg Spencer from Canaccord Genuity. Your line is open.
Thank you. Good afternoon, Terry and Doug. Well, actually, you're in Europe, Terry, so good morning to you. My first question relates to-
Good morning.
My first question relates to working capital. If we go back last quarter, Doug, I think you mentioned that you were expecting that working capital build to unwind into this quarter. I know you mentioned that higher cost inflation has meant, you know, you're having to spend more on still reagents and consumables, but does this mean that that unwinding of that working capital is effectively pushed out another quarter? Or how much more of these buildups in working capital we expect?
Sorry. Yeah, Reg, thanks for that. Look, I think, you know, it'll bobble around, but I guess the challenge in this inflationary environment is the guys are just trying to get ahead of it. If there's price increases coming down the tunnel, then they obviously order appropriately. It's a, you know, it's not a normal environment or not one that we've been used to in the past, that's for sure. You know, we're obviously acutely aware of it. It consumes cash. We want to return those cash flows back to the balance sheet as best we can.
You know, I think going forward, we should see it come back to more normal levels and not be a drain on the business.
Okay. Understood. Thanks. The next question relates to Syama North. I'm conscious that you will be putting out a pre-feas early next year, where I'm sure we'll get many of the answers that we seek in the interim. If you can maybe help me for a little bit, if we have a look at a cross-section at Syama North, yeah, how should we think about the strip ratio if we wanted to, you know, do some indicative modeling of what this might look like with a mill expansion? What do you think that strip might land at?
If I eyeball it, and it literally is eyeballing at the moment, I think it's gonna be between six and seven. The width of the stuff is averaging over 10 meters. My sort of rule of thumb at 45-degree angle is you should be able to get down to about 200 meters plus on that. I think on the wide sections where we're sort of seeing 30, 50 meters widths, and you can go a bit deeper, but then you've got to be careful on your design of the pits, 'cause once you go past 200, you have to change the top angles of the pits. I would sort of work on 200 meters. What we should be able to get down to 220. That's my sort of-
Okay.
Rule of thumb. With strip rates of 6.5 on average. Some of the thin sections, we would probably consider going underground for those. You know, thin, high grade sections.
Okay. Yep.
It's gonna be a combination. That's the trick on the study, is what is the best combination for that. Certainly, we'd like to, you know, go in open pit and get some of that large but sort of 1 to 1.8 to 2.1 gram a ton stuff, and then go in underground and get that +3 gram a ton stuff, you know, as a sweetener. That's where the PFS will come out with it.
Okay.
It's not as-
Next question.
It's not as easy eyeballing it, I can tell you.
Yeah, no, I tried to do the same, Terry, but I thought I'd just ask you the question.
Yeah.
Just the.
It's tough.
Yeah. Understood. When you say low CapEx for Syama North, how low is low? If we have a look at Tabakoroni Underground, I think you've earmarked AUD 100 million for that. Now, there are obvious benefits of looking to develop Syama North over Tabakoroni Underground. I think that's clear. You know, if we ballpark, would it come in under that AUD 100 million that you had put aside for Tabakoroni Underground?
Oh, yes. Yes, significantly.
Okay.
Less than 100. Yes. I don't wanna use a number because you appreciate it'll get out there before we've got the study, but it's less than 100.
Okay, great. Look, last question from me is, you've got an oxide plant there, which you've highlighted may be utilized as part of the expansion of the sulfide circuit, mainly for the crushing and grinding, if I'm not mistaken. Are there any other bottlenecks in the sulfide circuit which would need to be addressed? You mentioned that the roaster can handle more throughput with a bit of oxygen. Are there any other parts of that circuit that would need to be optimized or expanded as well?
Just a little bit at the back on the elution side, just to take the extra gold, and that would probably be the opportunity to split that into, two different plants, sulfides and oxides for the first time. 'Cause as you know, we have one common-
Yeah.
leaching circuit for both. So that's small capital.
Yeah.
The oxygen plant, I mean, the oxygen plant will be. We're putting one in at Mako at $2 million. This would be a little bit bigger, so let's say $4 million. We need to do some work on our crushers and put a flotation section on. But these are
Yeah.
not large capital items, generally. You know, this is what I would classify as small CapEx for the returns you'd get.
That was certainly less than a big underground mine like you might have otherwise been considering at Tabakoroni.
Yeah.
That's great.
Correct.
Well, thank you.
Correct.
Thanks, Terry. Thanks, Doug.
If you look at the-
Appreciate it.
Thanks, Reg. The original mine, as you know, we had a long development area, you know, development before we got down to the ore body. That was a large capital sunk up front. You know, this one is small capital, but you get almost immediate return for it rather than waiting a year.
Again, if you would like to ask a question, please press star then the number one on your telephone keypad, and we'll pause for a moment for any further questions. There are no further questions at this time. I would like to turn the call back over to Terry for closing comments.
Thank you very much. I look forward to Q4. We're already into Q4 right now. The rain is slowing down. We did have a slight reduction in tonnages in Q3 compared to Q2, but grade really pulled us through. I think the Syama guys are really starting to hit their stride now. We're looking forward to a good Q4 to finish the year off.
Thank you very much for your time today. I know it's a busy day for all of you, and I appreciate your time. Thank you.