Good day. Thank you for standing by. Welcome to St Barbara FY 2023 Q3 March quarterly report and presentation. At this time, all participants are in the listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you need to press star one one on the telephone. Please be advised that today's conference is being recorded. I would now like to hand the call over to your first speaker today, Mr. Dan Lougher , Managing Director and CEO. Thank you. Please go ahead.
Thank you very much, good morning, everyone, and thank you for joining us today for St Barbara's Q3 quarterly report briefing. I'm pleased to join you on this call from Perth, the land of the Whadjuk of the Noongar people. I have Lucas Welsh, our CFO, and Andrew Strelein, our Chief Development Officer, also on the call. Today, I'll be taking you through our safety performance, the key points of the quarterly and details on the performance of each of our assets. Lucas will take you through our financial position. To finish off, Andrew will outline the recent announcement of the sale of our Leonora assets to Genesis. Please note the disclaimer on slide three. I would just like to do an acknowledgment of country.
I would like to begin by recognizing the traditional owners and First Nation people of the lands on which St Barbara operates in Australia, Canada and Papua New Guinea, and pay my respects to the elders, past, present and emerging. As always, safety is first. As we are moving into a significant change at St Barbara, it is critical that we maintain focus on our safety, bearing in mind that we are running two operating offshore operations, and as you're all aware, Gwalia, which is now, you know, mining sort of at down to like 1.8 km with our decline development. Quite a, you know, a deep operation, and safety and how we perform at those operations is critical to the success of the company.
I am pleased to see a reduction in our group TRIFR, down from 4.7 to 4.3. Whilst it's sort of downward trend, there's still a lot of hard work that we need to do, and we still managed to have three recordable injuries during the quarter across the group, which is three too many. We will continue to work at our operations to make sure that all safety aspects are well entrenched in the workforce, and we will ensure that at Gwalia and Leonora operations similarly, if when the deal goes ahead in July 1, that the operations will be in good and excellent condition, for our partners. I'd like to just touch on a few of the Q3 snapshots. The third quarter was another challenging quarter for us.
We produced 59,000 ounces of gold at a all-in sustaining cost of AUD 2,523 an ounce. As we announced previously, we've had some issues at Gwalia in our stoping areas, which has impacted on obviously our tonnage mining rates, which delayed the overall tonnage coming through to the mill and also delayed accessing other stoping districts whilst we, I guess, repaired or fixed the stopes that we poorly blasted. Obviously there's room for improvement.
The issues which we are resolving with equipment and also with on-site training for personnel in, you know, accurate drilling of long holes and also with the basically the loading of the explosives as well, ensuring that we get good quality blasting, which is critical to in the mining of, I guess, three lift stopes, which is somewhat a bit more complicated than just one blast per stope. Then straight into bog, et cetera, et cetera. We are working on that and I am sure that we will be seeing signs of improvement in the June quarter. Pleasingly though, the other two assets have performed mostly in line with the expectation.
We did suffer some production shortfalls in Simberi due to lower mining rates, and that was associated with poor truck availability and long haul to waste dumps. Atlantic has performed actually quite well in completing mining at Touquoy and transitioning the milling now from two stockpiles, which we've generated over the last 12 months. Our costs on per ounce basis came down despite the lower production, which of course is a great result, driven predominantly by lower corporate costs, and sustained CapEx and better cost performance at, as I said earlier on, at Atlantic. Sustaining CapEx was lower predominantly at Atlantic, which in the previous quarter needed to complete the final tailings lift, which enables us to process stockpiles until August, September this year.
As I've mentioned many times, we have downsized and are currently downsizing our corporate office and reducing our overall costs in this area. Whilst this will take, I guess, several quarters to actually get to the final sort of numbers of people and personnel, and obviously bearing in mind the potential transaction effective first of July as well and how that impacts across the group as well. On April 4th, we did announce an update to our Leonora and group production guidance, and we retracted the cost guidance. Today, we've updated Leonora and group cost guidance to reflect the production that we mentioned on April 4. The Leonora guidance now will be AUD 2,650-AUD 2,750 an ounce.
The group guidance, as a consequence, will be AUD 2,500-AUD 2,650 an ounce. Atlantic and Simberi production and all-in sustaining costs has been maintained, though we are now guiding that Atlantic will come in at the bottom end of its production guidance and probably as a consequence, again, towards the top end of its cost guidance. We generated AUD 30 million in cash from our operations this quarter, AUD 26 million coming from Atlantic and Simberi. You can do the math to work out what came out of Gwalia. I think it's AUD 4 million. The news we announced two weeks ago marks a new era for St Barbara. The sale of our Leonora assets to Genesis, I believe, is the best path forward for our company.
The transaction produces the debt-free vehicle for delivering a fully valued Simberi and Atlantic while giving our shareholders direct access to the Leonora consolidation through the distribution of Genesis scrip. Andrew will address the transaction shortly, firstly, I'll go through some of the details on how each of assets performed in the quarter. We're currently on slide number eight which is the Leonora Q3 results. Leonora produced 31,000 ounces of gold in the quarter. Disappointing, which as we had anticipated this to be a much stronger quarter than Q2. As I mentioned earlier on, I guess, a domino effect of not achieving good outcomes in some of our blasting, in our big stopes meant that access to other parts of the stoping fronts, were not available to us.
Not going into too much detail, but the rework to actually reaccess the stopes and to basically blast the ore that was left, and which should not have been left behind, unfortunately takes a bit of time, and that knock-on effect basically pushed us into what we got as our Q3 result. Obviously, we have to work hard to ensure that these poor practices don't continue. As I said earlier on, you know, it's not just a one area, it actually impacts through the full cycle of drilling, loading explosives, firing, and then getting in and bogging, and then obviously finishing off with doing the paste filling. Some of these stopes have up to like 60,000-70,000 tons of ore. We don't wanna leave any of that behind.
Unfortunately, it does mean that there's a knock-on effect with the delivery of the quarter. Additional development ore was mined in an attempt to offset the reduced stoping tons, and we should be moving into a much better FY 2024. We did talk about other drivers in terms of where we are in the mining sequence and having some, I guess, grade reconciliation issues which we are now resolving. We've done a significant amount of grade control drilling on the 1820 level, which will give a lot more confidence into the sort of next four years' production. You know, that's work in progress.
The all-in sustaining cost for the quarter was marginally higher at AUD 2,809 per ounce, compared with AUD 2,796 in Q2. Not a huge cost increase, but really, I guess, the production ounces being lower was the main driver there. We've also, with that our sustaining capital guidance has been changed from AUD 60-AUD 70 down to AUD 50-AUD 60 due to some changes in the philosophy of the development CapEx versus the operating development down below the current stoping fronts. Our growth capital guidance was reduced down AUD 5 million-AUD 10 million from AUD 10 million-AUD 15 million with really driven by deferral of some of the Leonora provincial province plans that we had in early in the year.
We have had some success at Gwalia with rationalization of contractors in terms of removing one of the contractors in the upper part of the mine, and that transition has gone extremely well with no extra equipment, et cetera, and reduction in basically staffing levels. As I mentioned earlier on, one of the key areas is to maintain our maintenance over the equipment so we can get them down into the stopes and into development. That's another part which we're in discussions with our incumbent contractor. I believe that these are starting to pay off and we will see even better improvements in this area going forward as more and more of the initiatives are entrenched at Gwalia. Moving on to Simberi.
Simberi's production was marginally lower than the prior quarter due to a short haul with dumping options and lower truck availability. The main driver there is really we had a massive truck engine failure on our trucks and we had to import, I think, in the order of 10 new engines. We're under investigation to find out what was the issue with 10 engine failures. We will be reviewing, obviously, the type of trucks for our future operations. You know, with Simberi, everything that fails, you've got to import, so the logistical chain is quite important. Anyway, overall a very satisfying result from Simberi. We now turn on to Atlantic operations. As mentioned, we have completed the open pit at Touquoy in early February and now only processing stockpiles exclusively.
That was a very good team effort in getting to that point. It produced 11,371 ounces of gold for Q3, 5% higher than previous quarter. Some of the grades coming out of the pit were higher grade in the final benches, that basically pushed some good grades into the mill for the quarter. We have had quite severe weather earlier in the year, but it's actually been quite mild in recent times, not really having the major storms that they'd suffered in previous years. Although they did suffer one in October, which stopped production for several days. Again, Andrew Strelein will cover off on some of the strategic drivers that we'll be looking at Simberi and Atlantic now.
You know, all hands on deck. I will now hand over to Lucas to go through the cash balance on slide number 11.
Thanks, Dan, good morning, everyone. Our cash position increased-
Hello? Sorry, no. Go on.
Okay. Thanks. Our cash position increased to AUD 60 million over the quarter. This is largely due to the AUD 20 million drawdown in January that we did from our syndicated debt facility. As you can see, the operations generated about AUD 30 million of cash flow. You know, majority of that was coming from Atlantic and Simberi. With Atlantic generating AUD 13 million, but, you know, it's result of the consistent production we're seeing through there. You know, with the cash, we're getting the benefit of the reduction in mining costs, as now they've completed the Touquoy pit, we now transition to processing stockpiles only. Simberi also generated AUD 13 million.
Although production was lower compared with the prior quarter, Simberi is able to reduce the buildup in gold circuit, which we'd seen over the prior six months, returning this GIC to normal operating levels. This has allowed us to sell more gold than it produced during the quarter. At Leonora, the AUD 4 million cash generation, you know, that really reflects the lower production that we saw during the quarter. As Dan mentioned, you know, we've commenced the process to reduce our corporate costs during the quarter, largely through reductions in our corporate office. This resulted in a reduction of our corporate costs from about AUD 7 million in the prior quarter to AUD 5 million in this quarter.
Obviously, we'll continue to review our corporate activities to ensure that the office and overhead is appropriate for the requirements of the company going forward. That was all I was gonna highlight there. With that, I'll hand over to Andrew, and he'll take us through the recently announced transaction with Genesis.
Thanks, Andrew.
Thanks, Lucas. On April seventeenth, as you probably all know, we announced the sale of the Leonora asset to Genesis for AUD 600 million. Just to recap, under this revised structure of an asset sale, we've agreed to sell the Leonora assets for a headline value of AUD 600 million. The consideration comprising cash of AUD 370 million, Genesis scrip of AUD 170 million at the announcement date, and additional scrip of AUD 60 million, which will be contingent upon Tower Hill achieving first production. Again, those numbers were at the transaction day share price. Results in St Barbara shareholders having exposure still to 19.5% of Genesis of the Leonora consolidation.
Barbara itself will be free of debt, strong pro forma balance sheet with approximately AUD 197 million cash. There'll be a clear focus for the company on delivering the full value from Atlantic and Simberi, where there's still 5.9 million ounces in mineral resources and 3.5 million ounces in reserves. We also announced, or Genesis announced, that the raising of AUD 470 million, including AUD 70 million via unconditional placement, which has already been offered and filled. A few clarifications in relation to the previous structure. There'll be no cross-shareholding under the current proposal, whereas previously there was a 20% cross-shareholding. Obviously, there's additional cash sitting in the St Barbara entity.
The royalties that we're gonna apply over Atlantic future production have been removed. Of course, it's a much simpler transaction, giving us a much shorter and clearer path to close. There's no net debt, I'm sorry, condition precedent, and there's a much simpler pre-deal arrangements with the removal of the requirements for a scheme of arrangement. The asset portfolio, as I mentioned before, we've still got 6 million ounces of resource and 3.5 million ounces of reserve left in St Barbara in those two projects, which gives us a lot of gold to work with, particularly at these gold prices. There'll still be pro forma FY 2023 production guidance.
Ex-Leonora will be 110,000-130,000 ounces, so still quite a relevant producer in the ASX gold sector. The combination of cash and investments provides us with the strong liquidity and flexibility we need to implement the strategies we've outlined for Atlantic and Simberi. In terms of the strategic focus, we're now on slide 17. Taking the opportunity to reset the corporate culture and identity will be a smaller focused organization with the two overseas assets. The overarching strategy, I'll run through the key points. Advancing Fifteen Mile Stream with Atlantic, and including repurposing of the Touquoy processing plant. Resource extension drilling at Simberi is crucial this calendar year.
With that, plus a number of parallel studies, we'll be refreshing the project development concept next year. We'll be actively managing the portfolio, so we'll have a decent list of investments and royalty and exploration portfolio which will get greater sunlight. Atlantic specifically, we've mentioned in the earlier announcements back in December, and then again earlier this month, outlined the key priorities for us in Atlantic and Simberi. I won't repeat them on the call. They're in front of you. Yeah, quite an exciting phase for us with the balance sheet to match. With that, I'll hand back to Dan to close.
Thank you, Andrew, and Lucas. Just to summarize what we've just, I guess, seen on the preso. It was a difficult quarter, but I believe there are encouraging signs and with some improved cost performance, but despite lower production. We've targeted cost and productivity at site, especially at Leonora. At corporate, we've reduced the size of our corporate office. As I said, that's still ongoing. That benefit will come through in our sort of future quarters. You know, Simberi and Atlantic did generate some good cash, and I'm pleased with how that went. Andrew's covered off the actual transaction, but I'll just quickly reiterate. St.
Barbara shareholders will receive AUD 600 million in consideration for the Leonora assets, which compares favorably to our enterprise value of AUD 639 million. St Barbara will retain 100% of the 5.9 million ounces in mineral resources and 3.5 million ounces in reserves at Atlantic and Simberi. Very importantly, we will be free of debt, with, you know, a great asset portfolio as well, in addition to the gold in ground. Our shareholders will retain exposure to a consolidated Leonora province through the distribution of Genesis shares. I'm quite excited by this transaction between St Barbara and Genesis, and I do truly believe it to be the best way forward for our shareholders. With that, we will now open up for any questions.
Thank you. As a reminder, to ask a question, you need to press star one one on your telephone. To cancel, you can press star one one again. Please stand by while we compile the Q&A roster.
Thank you.
One moment for the first question. The first question comes from the line of Gopal Hedge. Please go ahead.
Hey, good morning, everyone. Thanks for the presentation. I am not following the quarterly reserves as an investor. I'm a very detailed investor, like mom and dad investor. I have invested in SBM almost an average rate of AUD 2.40. I'm not asking your professional advice on about my investment, but as a board or as a managing people of the company, what are the chances that we will get back to that kind of share price? I know we have reduced the debt. Of course, we have diluted the asset also. With all that in mind, I just want to ask a straightforward question, like, you know, AUD 2.40 was my average share price I bought. Now we are sitting at I mean, AUD 0.60.
What is your take about the shareholders, retail shareholders mainly?
Thank you. Yeah, look, that's a good question. I mean, I think that firstly, I guess where we're sitting at AUD 0.60 today, there are many reasons, I guess, and one of them is, I guess you could argue is, very poor performance and across, you know, and more recently, specifically Gwalia with two quarterly downgrades. That hasn't helped. We are in a much stronger gold, I guess, environment now. I guess as the board, you know, post July 1, we have what we believe to be, you know, reasonably good ounces in the ground at the two sites. Now the job of the board is to put in a strategy to deliver value on those two assets.
You know, you could argue that we've always had those two assets, but the position of, I guess the financial position of the company has been quite heavily indebted to the banks. I, you know, not being able to tell you exactly how many dollars we could or couldn't have put into growing those assets, but now we have a clear sight of being able to, you know, put more, I guess, focus on Fifteen Mile Stream, for example, over in Nova Scotia, and getting into drilling, the sulphide resources and converting those into reserves, and reviewing our previous sulphide plan for Simberi. There is gonna be some reviewing on, you know, capital requirements.
I guess, you know, we've been asked, "Well, Dan, that's a lot of money you've got, AUD 200 odd million." We do have a rehabilitation bond that we have to back, and we will be working through that right now with the regulators in Canada. Your point is really valid. I mean, you know, you know, the market, I guess most gold stocks did have a bit of a plunge in, you know, not sort of the last month or so because it's been really probably stronger. Aussie gold miners haven't really done as well as other miners across in terms of value-adding, which may be to do with our cost structures in, you know, where we're mining.
I can tell you that the focus for all shareholders, including retail shareholders, is paramount. The return of the AUD 170 million in Genesis scrip is, you know, obviously a part of adding, giving our shareholders more value back. Yeah, look, I don't think I can give you a, you know, hand on heart, whether I, you know, we'll get to AUD 2.40. There's a lot of things in play and of course one of that is the gold, I guess, future view of where gold price could eventually get to, which will drive all share prices up. I'm not sure if that's answered your question, but thank you for the question.
Thank you for the questions.
Thank you.
Once again, to ask question, please press star one one on your telephone. This time there are no further questions from the line. I'd like to hand the call back to the management for closing.
Thank you for that. Seems like it's a busy day with Newcrest coming out today. Good luck with that. Yeah, as I said one more time, I mean, disappointing, but I think the transaction provides us with new focus going forward. I think that's what we will be working hard on now and also ensuring that over the May, June months that we deliver as well as we can at Gwalia before, you know, if the deal goes through. Also making sure that Simberi and Atlantic get a reviewed, revitalized focus on the future projects, et cetera. Thank you for that. Have a great day.
This concludes today's conference call. Thank you for your participation. You may now disconnect.