Morning, everyone. I'd like to welcome you to the Resolute Mining Limited June Quarterly Results Call. Today, I'm joined by CEO, Mr. Terry Holohan, Group CFO, Mr. Doug Warden, and Group COO, Geoff Montgomery. I'd like to hand over to Terry to start the call. Over to you, Terry.
Thanks, James, and again, welcome everybody this morning. Thanks for taking the time to listen to our presentation here. As you saw, the highlights went out this morning. What I'll do, I will go through the highlights quickly and then pass over to Geoff Montgomery. Geoff is new in his position as Chief Operating Officer. However, he's been working very closely with me over the last 12 months on the operation and continues now to focus on that area. Of course, Doug, you're familiar with from the previous calls. He'll take us through the financials, and then I'll just do the wrap before we do Q&A, and we'll try and limit this to 30 minutes.
Okay, to start with the highlights. Safety, I think we're still improving there. We're quite proud of the fact we've hit what we think is a magical 0.9 rate on the recordable injury frequency. That's quite an aggressive number, but we're still focused on improvements there, and it's the lowest we've been for 12 months, which we think is quite an achievement given we did the 60,000 man-hour stoppage in the plant in the first quarter of the year. In terms of the Mali situation, we're also excited that the ECOWAS has finally withdrawn all the sanctions in early July. This was a month later than I think I gave you guidance on. We thought that would happen in June, but it happened in July. The country is presently recovering, and it's focusing on the two-year election process, which everybody is very excited about in Bamako City itself.
In terms of the security situation, we're still monitoring the situation very carefully. We've not had any scares or interruptions, and at this point, we're just carrying on our business as usual as we have over the last several years. Going straight into production. We again poured a little bit more gold than we thought we would do and planned. We are now presently running at a run rate of where we expect it to be of over 350,000 ounces per annum. I think more importantly, we've now recorded four quarters in a row of continuous improvement. That's important for us, it's important for all our shareholders, and it's having a huge impact with the operators in the field, who are starting to get excited about what we're achieving.
In terms of the operations, Mako is coming along. It's doing really well. The big story is the Syama sulfides. We talked a lot about it last quarter. After 18 months of focus on the sulfide plant, the bottleneck is now firmly moving upstream to the mine, which is where it should be, and that's where we're focusing efforts there as well. We're still looking at the plant to see where we can debottleneck it further and therefore expand the process further. The sulfide plant is now operating at run rates of about 2.4 million tons per annum. As you know, last year we achieved 2.1, and that was a record. We're expecting going forward to start hitting, knocking records over consistently.
We believe we finally, after 30 years of operating on this ore body, tick the box on the processing of sulfides, this challenging double refractory gold mineralization at Syama. I've said it before, but I will repeat it, that I think the sulfides are the future of Syama. We already have a respectable 7 million ounces of M&I on our balance sheet, and I'll talk to it a little bit later, but we are now again adding to that number at quite a rate. Now we've got a stable sulfide operation, we can finally start focusing on the operational costs and efficiencies where opportunities do exist while we are continuously looking at expanding our sulfide operations. In terms of the oxides, we talked about the rains coming early. They did. They came in June with quite a bang.
We spent a lot of time preparing our open pits, which are ready. The rains are not affecting our plan. We did a lot of work again this quarter on grade control and pre-stripping. If you remember, I mentioned that the grade control was a weakness previously, but we're now in a position where we're a couple of several months ahead of the mining, and that's important going forward, not just for this year, but for the subsequent years. The mining team, they maintain their position that they'll meet their overall plan on oxides, which is always going to be back-end loaded with the highest grades coming through at Tabakoroni in the fourth quarter. With the cost and price pressures presently being felt across all industries, this is the circuit where we are most sensitive to fluctuations.
Obviously, we are focusing all our efforts on productivities as a priority. It's worth noting that longer term, given that sulfides are our main focus over the life of mine, we are already now looking at the feasibility of converting our oxide plant to a sulfide plant by adding a flotation section. I'll hand over to Geoff shortly, and he'll give you just a little bit more color on some of those points. In terms of the costs, you'll see that the headline costs increased by 11% quarter-over-quarter. I'd like to draw your attention to the fact that our pure cash costs, excluding the non-cash adjustments, were virtually flat due to the extra units produced.
Of note, yes, the diesel prices in Mali, we saw some spikes there. That's come down now. We're in the range of $1.2-$1.3 a liter in Mali at this point. However, it's interesting to note that in Senegal, it still remains at about $0.76 per liter. We're seeing a little bit of fluctuation there, possibly part of the ECOWAS sanction lifting, et cetera, but we expect the energy prices to flatten out going forward. Some of the extra one-off costs I mentioned is the open pit, the grade control and pre-stripping. We've put a lot of money into that over the last six months, and we will see the benefits, as I mentioned, over the next six months and next year as well.
Also, some non-cash costs due to the further release of gold in circuit in the sulfide operations. That is continuing, and we still have some more material to come out there as the roaster is performing at least 10% faster than the milling circuit. We're still, as I mentioned before, vacuuming up some of our spillages that we've created over the last few years. The big story to me is the exploration. I think with the ticking the box on sulfide processing, this has become a step change for the project team at Syama. The geologists have gone rushing back out there. They started going out last year 'cause we could see where this was going, and they started to discover high-grade sulfides very close to the complex.
We returned to the original A21 pit, which is 4 kilometers north of the Syama complex. That was a very successful open pit operation prior to our involvement in this project. In 2021, we upgraded this pit's mineral resource to 1.4 million ounces at a grade of 2.14 grams per tonne. Majority of this being sulfide, and that's why it wasn't actually focused on previously. This year, we drilled a 2.5-kilometer fence line along the strike of that pit at 150 meters deep and 100 meters spacing holes. I think you appreciate that 100 meters spacing holes, they're not gonna have much impact on each other in terms of modeling at this stage, so we are infilling those holes.
What we found is, of the 97 holes that we drilled, we intersected gold on each occasion. We did publish some of the high-grade numbers, which were quite spectacular, a few weeks ago. As I mentioned, we're presently infilling this, first pass. It will take most of the rest of the year to complete to give a full mineral resource estimate by the end of the year. We are conducting metallurgical test work so we can start, converting it to ore reserve also in the second half of the year. The test work is demonstrating it's very similar in behavior to the original Syama material, open pit material. We do, however, expect to publish an updated mineral resource of easily accessible mineralization, by September.
This will give us time to develop the expansion of the underground over next year at a slower rate, we think, and gives us that opportunity to ensure we don't compromise on grade as we step up our underground mine from the 2.1 to hopefully up to 3 million tons per annum. We've also initiated a HeliMag, a low-level, high-density aeromagnetic survey over the whole 85 kilometers of strike. This is at 20 meters height and 50 meter line spacing, so the resolution's gonna be at least 3 times better than the original one carried out by BHP. This will indicate if there's any more oxides and any more sulfides out there on the 85 kilometers. Also I've mentioned, I call it exploration, it's really grade control though.
The mining guys have actually built a drilling bay at the 950 meter level underneath, at the sub-level cave, which annexes the higher grade southern section, which we've talked about in history, which originally in the exploration model was responsible for about 5% of our ore reserve. It is of note that it is high grade, and we're gonna start drilling that this month. That will be easier access to get information from an exploration and grade control point of view. We can look at long hole stoping some of this material. Also from a debt point of view, we did pay down $15 million on our RCF.
I think all in all, we think we've had a good quarter, a more consistent quarter especially if you look at our last three quarters in a row. We're now four quarters have shown improvement. We are maintaining our guidance, which I think is a first for this company for a while, of 345,000 ounces for the year for $1,475 per ounce. With that, I'll pass over to Geoff, who'll just give you a little bit more color on some of the things that we're focusing on in the ops.
Thanks very much, Terry, and good morning, everybody. I'll start with Mako, the key highlights and points from the quarter. Starting on safety, primary focus of course for us, we've achieved zero LTIs, which I'm very happy with. On the mining side, we achieved better grades from the push back area than we had budgeted, which reduced the impact from our scheduled mill stoppage. In addition to this, the TSF lift was completed. The mill optimization software project is now nearing completion, which means we are achieving a better grind and better recovery. Recoveries are up about 2% on budget, sitting around about 92.5%, which we predict for the rest of the year. With the mill optimization software.
We have now been able to reduce our 4 mill relines per year to 3 mill relines per year. The AMS contract extension is almost completed, and that will last until the end of mining. We have currently initiated a cost reduction exercise. In general, we are promoting a culture of continuous improvement. Moving on to Syama. Again, I'm very pleased to announce that we have zero LTIs for the quarter. However, it still maintains as a primary focus for us. We're focusing on costs there as well and again, promoting this culture of continuous improvement. Moving on to the sulfide circuit, starting with the underground. We're focusing on the underground fleet availability. It's not where we want it to be, and we're also looking at the type of fleet we're using.
Terry mentioned the long hole stoping in Syama South, and we're expecting to mine that next year, depending on the grades. With respect to the roaster performance, we are now putting 30% above the mill equivalent, and the roaster is performing extremely well, achieving the sulfur and carbon eliminations that we have budgeted, and in times exceeding that. With respect to tails, we are expecting to start deposition into the old Beta pit in quarter four. What that means is that the last capital-intensive TSF raise has been done, and we will not be required to do that again for a number of years.
In addition to this, one of the outcomes of the successful shutdown and the reline of the roaster is that instead of having to do biannual shutdowns, we are now able to move them out to five years. Though, we will do one in three years for this first cycle because we need to do some work on our burners and the spray cooler. However, following that, as I mentioned, it will go out to five years. We're maintaining the focus on debottlenecking this milling circuit, which is a constraint. We're utilizing a consultant to do that, and he's working on that at the moment. On the oxide circuit, we completed the wet season preparations during quarter two, and that has minimized the effect of the rains on the mining operation.
We are expecting the pre-strip at Tabakoroni to be complete in quarter three, and from that, we will see a significant reduction in the strip ratio in quarter four, reduce costs, and it will also give us access to higher grade ore. I'm also very pleased to note that grade control drilling is now several months ahead of mining, so we've got past the point of living hand to mouth. However, there will be continued focus on control of grade dilution at the pits. The other point of note, with improved materials handling in the oxide combination circuit, we have managed to achieve an additional 4% throughput. That's the end for me.
Good. Thanks, Terry. Thank you, Geoff. Doug, do you wanna take us through the financial points?
Yeah, will do. Thanks, Terry. Yeah, I'll just take a few moments to put some additional color around the all-in sustaining and cash costs, cash unit costs, cash flow for the quarter and an update on the hedge book. Look, as Terry's alluded to, the June quarter cash cost per ounce of $1,472 was broadly in line with our March performance of $1,486 at a cash level, with higher sulfur, sulfide and Mako throughputs and grades offsetting some higher cash costs, which is, you know, common throughout the industry. Additional tailings storage CapEx in the quarter of, which is detailed in the quarterly, and reduced quarter-on-quarter benefit from gold recovered from circuit also having an influence there.
While the unit cash costs were broadly in line, the all-in sustaining cost was up 11%, as we've noted, $1,540 versus $1,383 in the March quarter. This was largely due to non-cash inventory movements, which we outline on page 2, to do largely with the roaster shutdown and the large amount of gold recovered in the March quarter, and that sort of reversing itself somewhat in the second quarter. I guess, the way to think about it is for the half, notwithstanding some of these movements in inventory, non-cash adjustments, the group all-in sustaining costs in the first half was $1,463, and the total non-cash adjustment was a net benefit of $14 an ounce. I note that the June all-in sustaining cost also includes higher sustaining capital.
It was $16.8 million in the second quarter versus $10.6 million in the first quarter, and this was largely relating to the tailings facilities. That's, while not a one-off, it won't be repeated anytime soon now that we have those tailings storage facilities in place. Moving to the cash flow and the waterfall in the quarterly report. Operating cash flow of $42.3 million for the quarter. CapEx was $19 million, as I've talked about. A big chunk of that was sustaining capital exploration broadly in line with previous quarters at $4.4 million, and some really good results, as Terry's talked about, was largely the brownfields exploration programs at Syama and some at Mako. The working capital, we do go into a bit of detail in the quarterly.
That's an adverse cash flow item of $23.9 million for the quarter, and essentially relates to a pay down of creditors and as well as some buildup of inventories in the quarter. Given the inflationary environment we're facing, together with the wet season that we've been preparing for, and the ECOWAS sanctions against Mali. They're sort of contributing factors as to why we've been building up inventories a little bit, and also the pay down of creditors following the roaster shutdown and capital works in the first quarter. We would expect that working capital movement to normalize in the third quarter and to be neither a significant draw on cash or contributor to cash.
Asset sale proceeds are around our sale of Toro, a small-listed vehicle that we sold during the quarter for $4.5 million. Sold our interest in, I should say. Terry's already talked about the $15 million we paid off the revolver. The government dividend and withholding tax, that's larger than normal, because we pay an annual dividend out of Mako, and we pay withholding tax on that dividend once a year, and that was paid in the last quarter. $4.5 million of that amount was that withholding tax. Net debt as at 30 June was $182.8 million after taking into account cash and bullion balances.
Finally, the hedge book, just, a requirement as under our debt facilities is to have 30% of the next 18 months forecast production hedged. At 30 June, we had a total of 230,000 hedged at $1,875 an ounce. With that, I'll hand back to Terry to wrap up and take questions. Thanks.
Thanks, Doug. I think you'll appreciate it's been a busy 12-18 months for us, especially with the focus on Syama. We have been deeply distracted with trying to fix that circuit. We think we're there now. I certainly don't think it's at the optimal. Geoff and his team are still spending a lot of time and effort on improving it further. We're looking at debottlenecking further. We're focusing on the mine. I think the key thing is now the management have got a bit of free time to start thinking about what they're doing.
As per normal, when you get to this point in an operation, you can actually rely on your circuit. Now you can start focusing on costs, you can start looking at your operational costs, and you can start looking at, sorry, your variable and your fixed costs. That is a big area that Geoff has mentioned that we're focusing on. I think the bottom line is we are maintaining our guidance. Thank you very much for that, and I'm more than happy to take questions.
Yeah. As you know, Terry, the questions have come through in written format on the Teams call. The first one is really for me. Is there any reason why you're keeping $81 million as cash on your balance sheet when you have significant debt? Good question. We get that one a bit. Essentially, if you think about our total cash costs annually around $500 million, so twelve months' worth. I'm sort of including everything in that, exploration, capital. So if you look at that on a monthly basis, you know, it's a bit over $40 million a month.
We sort of look at it as at least around $50 million just to run the business and have enough working capital to meet our cash requirements or our creditor payments, if you like, on a monthly basis. Why is it not $50 million? Why is it $81 million? You know, also we've got an amortization profile on our debt, which is well-publicized. We like to keep a bit up our sleeve as we head into some of those payments so that we're comfortable that we've got that money ready for payment to our banks. That's the only question there at the moment, I'm not sure if there are any further questions, but please send them through if you do have any additional questions.
Just while I'm waiting to see if there's any further questions, I would add that that is cash and bullion at $81 million. The bullion balance is really just a timing thing across the month. Then we obviously convert that bullion into cash as quickly as we can, but we are pouring at the end of the month and it's sitting there as bullion balance, so it's just really timing. At this stage, no further questions. Terry, I might hand back to you to wrap up.
Good. Thanks, Doug. Again, thanks for paying attention, listening to us. I think the key takeaways from here is we think we've got a process now for sulfide. That means we can look at our balance sheet and look at how we can treat that in more realistic timeframes. It means the exploration guys are out there. The focus for us is obviously to keep improving the unit systematically. We've had four good quarters. We're looking forward to another four good quarters off here, and we expect to see improvements on our unit costs going forward. Thank you very much.
That concludes the call for today. Thank you very much.