Welcome to St Barbara, creating a leading Australian gold house conference call. All participants are on a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by one on your telephone key keypad. I would now like to hand the conference over to Mr. Daniel Lougher, Managing Director of St Barbara. Please go ahead.
Good morning, thanks for dialing into today's teleconference. As always, I'd like to recognize the traditional owners and First Nations 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. Joining me on site at Gwalia mine in Leonora today are Raleigh Finlayson, Managing Director of Genesis, and Andrew Strelein, Chief Development Officer of St Barbara. Today, we are pleased to announce the merger of St Barbara and Genesis to form Hoover House, a new leading Australian gold company, 100% focused on the prolific Leonora district in Western Australia. Consolidation of this world plus gold district makes tremendous sense. In today's presentation, we will highlight the unique industrial logic in pairing St.
Barbara's Gwalia Mine and Genesis's Ulysses Mine, just 30 km down the highway from where we are calling today. St Barbara will also undertake a demerger of Atlantic, Simberi, and other non-Leonora assets to St Barbara shareholders to form Phoenician Metals. Phoenician represents an attractive premium for St Barbara shareholders on merger, Hoover House will retain a 20% shareholding as a supportive cornerstone investment in this new company. Genesis is to raise AUD 275 million to de-risk and grow Hoover House with a raising conditional on the merger and demerger becoming effective. Ultimately, Hoover House and Phoenician will be dedicated vehicles with dedicated management and, most importantly, simplified business models. During today's call, we will be referencing the presentation placed on the ASX platform earlier.
I'll now hand the call over to Raleigh, who will be the managing director of Hoover House. Raleigh?
Thank you, Dan, and thanks, everyone, for joining this morning. I'll just draw your attention to the presentation. Hopefully, you can see the slides here. Initially, on the investment highlights, the proposed merger of St Barbara and Genesis to form Hoover House. I'll talk about the origins of that name in a second. Hoover House will be exclusively focused on the prolific Leonora district. We'll have circa 15 million ounces in mineral resources and over 3 million ounces in ore reserves. It's important to note that Genesis will be initiating our inaugural reserves in the June quarter as well. We'll be fully funded, capital light for a production target of circa 300,000 ounces per annum. This will be coupled with the demerger of St Barbara's non-Leonora assets to St Barbara shareholders to form Phoenician Metals.
Andrew will talk to this origins of this name again in a second. Phoenician Metals will be focused on realizing long-term value of its portfolio, including the Atlantic and Simberi operations, a portfolio of St. Barbara royalties and $34 million worth of listed investments and $85 million of cash. In total, that's $119 million of cash and investments and no debt. Courtesy of the GMD Genesis equity raising of AUD 275 million, that will tip $65 million into cash reserves and repay the CAD 60 million worth of debt. We'll be articulating a simplified business model with a dedicated vehicle and dedicated board and management teams for both. Looking at the transaction overview, the merger will be via a scheme of arrangement under which St.
Barbara will acquire 100% of the shares in Genesis, with the exchange ratio representing a nil premium to respective 30-day VWAPs. Genesis is to raise AUD 275 million in new equity at Genesis' last closing price via replacement of AUD 164 million contributed from AustralianSuper , with a scaleback of up to AUD 32 million and AUD 75 million committed from RCF. It's important to note that this commitment is conditional on completion of the merger, and both RCF and AustralianSuper are taking on five months of time risk under this proposal. St Barbara to demerge Simberi, Atlantic, and other assets into a new vehicle, Phoenician Metals, which will be intended to list on the ASX.
I'll cover off the board and management in one second, but it's important to note the scheme has been unanimously recommended by the Genesis board and the issue of St Barbara shares under the scheme and the demerger will be unanimously recommended by the St Barbara board. The scheme and capital raising is subject to approval by Genesis shareholders, and the demerger is subject to approval by St Barbara shareholders. The transaction is expected to complete by May 2023. Just by way of post-merger and demerger transaction structure, this shows the ownership and operation and assets in each of the companies. It's important to note on the right-hand side, I've mentioned Phoenician Metals' ownership of Atlantic and Simberi. The other Australian assets will include shares in Catalyst, Kin Mining shares, Peel shares, and the royalty portfolio.
On the left-hand side, it's important to note that Genesis intends on extending our offer to Dacian shareholders for a further 1 month to the 16th of January, enabling Dacian holders the opportunity to become Hoover House shareholders. Just by way of overview and looking specifically at this picture on this slide, this is a bird's eye view of Gwalia. As Dan said, we're beaming to you live from the Gwalia admin building, which is on the top of that screen on the left-hand side, the green roof building. We'll be here and then moving directly to our most important stakeholders, the people, and running them through the proposed merger. Adjacent to the admin building is this historic Gwalia Museum.
For those who know the history of this asset, will see the Sons of Gwalia headframe, which many will remember was the logo for Sons of Gwalia, operated by Peter and Chris Lalor, who are my uncles, and gave me my first job on this mine in 1996, working on the plant. Directly adjacent to the headframe is the historic Hoover House, which was designed and commissioned by Herbert Hoover, the Sons of Gwalia mine manager in 1898. He later became the 31st president of the United States of America. Just looking at the map on the right-hand side here. I personally grew up on a sheep station just at the very bottom of this map, just north of Menzies.
North of that, again, you have the Genesis assets, which is 2 million ounces of gold, which has had the benefit of not having milling depletion over the last 10 years. Out to the east, you have the Dacian assets, specifically the Mount Morgans tenure, which has got a 3 million ton processing plant, which is perfectly suited to the St. Barbara's Tower Hill deposit, which I'll step through in a minute, plus an extra 2.2 million ounces of resource. To the northeast of Leonora, you have the Dacian's Redcliffe assets, which are approximately 45 kilometers north of Leonora and will be available for processing through the Gwalia Mill at 45 kilometers versus 150 kilometers that would be trucked across to Mount Morgans.
Of course, central to all this, right in the heart of the Leonora District, is the Gwalia tenure, which I'll talk you through. This transaction is very much on strategy. For Genesis, it accelerates our five-year vision to become a 300,000 ounce producer that we articulated to the market in April this year. For St Barbara, it's a realization of the Leonora Province plan, and credit's due to Craig Jetson and very much his vision soon to come to fruition. This is a very clearly articulated and delivered strategy. With regards to Genesis vision, which we articulated in April, we quoted we wanted to become the premium Australian gold producer, sustainable high quality, 300,000 ounce per annum, and this transaction enables that to occur. Wanted to do that via two operations, which we've done here, seven years of life and prioritizing Western Australia.
From an M&A perspective, we have always talked about being disciplined first. This has taken 9 months worth of DD on both sides, but we've arrived at a sensible transaction for both sets of shareholders. The thesis was around Leonora District, long milling, short ore, and having a home ground advantage. Consolidation here does make sense, and we have been open for business, and we've done 2 deals inside the first 9 months under the new ownership management of Genesis. We've been very clear in our jurisdiction that we will prioritize Western Australia and hence the demerger. We're also leveraging our bulk mining, open pit mining experience and the skill set we bring to the Tower Hill deposit. It's clear to say that this GMD strategy stems back to pre-Genesis when Saracen owned 4.9% of the tenure Genesis.
Credit is also due to Andrew Strelein, who I'll go through in 1 minute. The strategy and the structure of this deal was very much his vision, and it's becoming a reality, so credit where credit's due. Just as far as alignment on core values, we have common values in the themes of safety, integrity, and respect. In particular, St Barbara's safety first resonated extremely strongly when Andrew Francis and myself spent 2 weeks on-site here DD-ing, and we can see that absolutely on the shop floor. From a people and culture perspective, we bring a dedicated and proven management team. There will be unique remuneration opportunities that will absolutely align with shareholders. We'll encourage Hoover House people to think and act like owners. We wanna target 100% equity ownership for our employees.
We want those who run the mine to own the mine. We have a small company DNA. Everyone is important. Everyone's impact values. We'll be thinking big. We'll be building the capacity for future growth. We'll be focusing on career development opportunities. We'll be committed to developing talent. We'll be hiring for attitude and training for talent. We'll have a particular emphasis on the local community and growth opportunities, employment opportunities for people that reside in Leonora. We want to become one with the community like I remember back in 1996. Hoover House will be open for business. We will be hiring in 2023. From a personal perspective, I'll be contributing an extra AUD 6 million into this transaction via the conversion of options. That will bring my total cash investment into Genesis and Hoover House to AUD 14 million.
I'll be putting a voluntary escrow on a 2 million option, performance rights, that vest under a change of control under the transaction, despite there being tax liability up front on that change of control.We'll be also putting to shareholders four and five -year retention rights for the management team of Hoover House to show our long-term commitment to the growth of this business. Hoover House will also benefit from St. Barbara's industry-leading sustainability initiatives. St. Barbara has the best in class on a greenhouse gas intensity, CO2 emissions per ounce pro-produced. This is pre a bunch of renewable projects that are currently under investigation at Gwalia. A way of key newsflow coming forward, post the deal, hopefully going through by both sets of shareholders, we'll be intending to run a capital markets day in the September quarter, 2023.
Between April and that date, we'll be developing a bottom-up strategy, which will clearly articulate Hoover House's vision, core values, and this will be driven from internal stakeholders as well as external stakeholders. On that day, we'll also be articulating our five-year outlook for the business and how we intend to grow it from here up to 300,000 ounces. One of the key mottos that will be driven, but the only thing that I'll insist on in the new business, is one of our core drivers will be safe delivery matters most. I'll now run you through the merger rationale, the why, if you like, and I'll provide six compelling reasons as to why this transaction works so well for both the sets of shareholders. If there's only one slide to print out and stick on your wall, this would be that slide.
This will be the reminder as to why to vote in favor of this transaction. Having said all that, I will now skip past it, and actually go into detail on each one of these six points as to the why this transaction is so compelling. Firstly, on to the Hoover House board and management team. We'll have initial board of seven people with greater than 40% female representation. Tony Kiernan will be the chair of the merged entity, and I will be the managing director and CEO. St Barbara non-exec chairman, Tim Netscher, will join the board, but wishes not to seek re-election at the next AGM. I'd like to thank Tim for his persistence in the last 9 months as he worked tirelessly to bring this transaction to a point where we've got to today. St.
Barbara non-exec director, David Moroney, will transition over to be chair of Phoenician Metals. I'd also like to take this opportunity to thank particularly Mick Wilkes, Michael Bowen, and Gerry Kaczmarek for their contribution to the Genesis board. Mick's joined us recently from as being the chair of Dacian, has brought a wealth of corporate and operational knowledge to the group. Gerry Kaczmarek, I've had a long personal history with Gerry, having been previously the CFO of Saracen, and has been absolutely diligent and a sensational contributor to our business. Michael Bowen's been my rock through all this day. Initially, getting us into the recapitalize of Genesis, an integral player in the Dacian transaction, and even more integral player through this transaction as well. Dan Lougher has agreed to join and stay on the board, which is fantastic.
Dan will also step across and join the Phoenician board. He brings a valuable experience around underground mining, and we're delighted to have Dan stay on board with us. Kerry Gleeson and Stef Loader will continue on and join into the Hoover House board as well. Lastly, but certainly not least, Jackie Murray will join the board as a new appointment. Jackie's got a geotechnical background, and it's been an absolute pleasure working with Jackie and her team over the last nine months doing due diligence on this project. From a senior management perspective, Morgan Ball will be our CFO, Troy Irvin will be the Corporate Development Officer, Sarah Standish will be General Counsel and COSEC, and Andy Lindsay, the newly appointed Gwalia GM, will report directly to the MD and CEO.
This is a genuine win, win for St Barbara, Genesis, and Dacian shareholders. The benefit to all three sets of shareholders, operational flexibility and reduced risk. The matching of the right ores to the right mills. Having the ability to target quality over quantity mining strategy as a high-grade Gwalia asset. Complete reset of corporate costs and associated cost savings, benefits on tax depreciation and upside from further consolidation in the Leonora district. Benefits to St Barbara shareholders will be a focus on 100% of the simplified business in Leonora. Access to capital, pointing case being the AUD 275 million placement at market with time risk. AUD 400 million of CapEx deferral, which I'll step through. Access to the Mount Morgan's plant, an ex-Saracen owner operator model, which can be applied to Tower Hill.
Benefits to Genesis shareholders and potentially Dacian shareholders who wish to become Hoover House shareholders. Get access to ongoing production and cash flows at Gwalia. Addition of St Barbara's high-grade 10 million ounce resource and 3 million ounce reserve portfolio. Potential to enhance our metallurgy recoveries by the treatment of Ulysses at Leonora. Access to St Barbara's industry-leading sustainability initiatives. Point three is an AUD 400 million CapEx win. We'll have reduced near-term execution risk and funding requirements through the merger. Specifically, the Zoroastrian mine can be deferred with Ulysses being accessed only 30 kilometers down the road, deferring AUD 30 million. The Leonora mill expansion to 2.1 million tonnes per annum will be deferred and reviewed with the ability to access the Mount Morgan facility.
The Aphrodite and Leonora mill Albion expansion can both be deferred with circa 10 years of free milling ore available up front. The Tower Hill mill will not be required. There's an estimated AUD 100 million, AUD 180 million of costs. This was under consideration within St Barbara internally, but has not been publicized to the CapEx burden. Now won't be required with access to the Mount Morgan's mill when approvals are sought and development starts at Tower Hill in circa two to three years' time. Personally, I'll be spending my time based on site from the completion of the merger through to the announcement of our strategic plan in the September quarter. Point 4 is increased scale and relevance. 15 million ounces of resources and 3.2 million ounces of reserve.
As I mentioned at the outset, it's important to note that Genesis will be publishing our inaugural reserves in the June quarter. We'll have significant coverage universe with 10 brokers covering the combined companies. Key point number five is matching the right ores to the right mills. The color coding here, you can see the milling facilities on the left, color-coded by yellow, your St Barbara assets, and the blues being the Genesis and Dacian assets. Firstly, at Leonora, currently running at about 1.1 million tonnes per annum. There is minimal capital to be able to expand that up to 1.4 million tonnes per annum, which enables, with the onset of Ulysses, enables Gwalia to target quality over quantity, targeting margin over ounces.
We can actually run at a reduced mining rate of 0.7-0.8 million tonnes per annum, targeting high-grade ore. With the addition of Ulysses targeting a run rate of 0.6-0.7 million tonnes per annum, the combination of Gwalia and Ulysses is targeted to fill the 1.4 million tonnes mill by FY2026. In the interim, we can access open pit sweeteners, particularly the Hub deposit, which is a fantastic risk management lever and is also closer to the Gwalia Mill. Across at Mount Morgans, we have the benefit of time. We're currently milling stockpiles. We have the ability to update our resource at Jupiter, having just completed all the drilling, and we'll be updating our reserves in the June quarter as we look at the addition of the Genesis Mining Services to reduce cost.
At Tower Hill, this is perfectly paired with the Mount Morgans plant. 20 million ounces in resource and 10 million ounces in reserve, which would take anywhere between 10-20 years to treat if only available to treat through the Leonora mill. There'll be capital savings, elimination of time to construct a new plant, and we'll also get to reevaluate the reserves with a larger mill and lower mining costs. Just by way of outlook for 300,000 ounces, this will be a doubling of our production profile and will be fully funded. We'll have growth to 300,000 ounces per annum with 3.2 million ounces in ore reserve.
I've stepped you through the plan for the Leonora and Mount Morgans mills, it's important to note that production profiling excludes the upside from the Genesis open pits, which will provide either additional life or increased production rates. Also a longer term strategy is the ability to access refractory ores, namely those from Harbour Lights and Aphrodite. Before I hand over to Andrew, I'll just run you through some asset-specific information relevant to Leonora. Firstly, at Gwalia, this is a world-class deposit and has the enviable track record and a trifecta of grades, widths, and continuity. The asset runs at a phenomenal 5,600 ounces per vertical meter. If you notice the image on the right-hand side, all those drilling sets on that long section remained unmined.
It shows you the growth potential ahead of us, but also numerous intercepts further up the mine that we can access from existing infrastructure. The addition of Ulysses enables us to target quality over quantity, margin over ounces strategy. We'll be future-proofing this asset and de-risking initiatives. The more conservative production profiles will be targeting reduced costs of both fixed and variable. We'll be prioritizing developments and waste haulage from underground, and we'll be targeting smaller, higher grade stopes that reduce geotechnical risks. A wise man once told me, "Do less with less." How do we do this, how do we do this with less, sustainably? This is where we enter Ulysses. This is a two strategic asset located 35 kilometers due south of Leonora. It's a shallow ore body, runs at 2,400 ounces per vertical meter, per vertical meter.
It's free milling, has competent geotechnical conditions. It's on granted mining tenure and it's open along strike and at depth. We are targeting first ore from this deposit in FY 2024. Pre-development activities and future-proofing is underway, specifically grade control drilling designed to completely de-risk this asset. In the June quarter 2023, we will start mine developments, and we'll also be publishing maiden ore reserves on this asset. We'll look to ramp up this to full scale mining between 0.6-0.7 million tons per annum to feed into the Gwalia Mill.
Ulysses provides a unique opportunity to restore Gwalia up to 200,000 ounces with lower cost and lower risk. The combination of Gwalia and Ulysses being treated as one enables Gwalia to operate at 0.7-0.8 million tons per annum, targeting 120,000-130,000 ounce per annum. It's important to note that quarters to date or year-to-date production at Gwalia is running around 56,000 ounces, which is a run rate of 135,000 ounces, which is actually above the rate required under Hoover House forward prediction. Ulysses' full-scale production of 0.6-0.7 will deliver 60,000-70,000 ounce per annum, giving us a combination of 180,000-200,000 ounces per annum. We'll be sharing fixed costs across the group.
The excess equipment and people that are currently on site at Gwalia that were brought in to target an increase in production to 1.1 million tons per annum can now be redeployed 30 kilometers down the road to kickstart Ulysses. It's important to note that Ulysses' haulage from the bottom of the mine to the mill on a round trip's around, on a direct trip's around one hour, compared to about 1.5 hours coming from the bottom of Gwalia. We can absolutely treat this as one operation. The lower vertical advance rate will mitigate geotechnical risk, the 650,000 tons less production required to come out of Gwalia results in 10,000 less trucks coming up and down the decline of Gwalia every year.
It's a pressure relief valve, it reduces congestion, reduces ventilation and cooling, reduces costs, and increases efficiency. I shouldn't have favorites, but this is one of my favorite assets in the portfolio, specifically Tower Hill. It's absolutely right in the Genesis wheelhouse. Large scale, open pit, slightly higher grade than we're used to. A lot like Thunderbox, and a lot like Super Pit, which had some environmental obstacles ahead of it, which is a good thing. It's the reason why it's still there. The deposit boasts 21 million tons at 1.8 grams per ton, for 1.2 million ounces in resource, sitting within an AUD 2,500 pit shell. The current reserve is 560,000 ounces, but it was delineated and estimated on the basis it went through the lower tonnage, higher cost Gwalia mill.
As we get access to Mount Morgans, we expect to see a sharp increase in that ore reserve in the future. The asset runs at a very impressive 4,000 ounces per vertical meter. The magenta zone on that image long section on the right-hand side there runs at an average of 35 meters at 1.8 grams per ton, which is 63 gram meters, and has further underground potential at depth. Moving on to a couple of cross-sections. We have the opportunity to apply the unique Saracen open pit mining model with owner/operator and low costs, and a track record of meeting or exceeding guidance for eight years. Our Genesis Mining Services is being manned up, led by Lee Stevens, who is ex-Karaseba, Thunderbox, and Carosue Dam , and Matt Walter, who will start in January, who's ex-maintenance manager and mine superintendent for Carosue Dam .
We had the chance to re-evaluate ore reserves using lower cost mining and milling I mentioned earlier. It's important to note that the railway line relocation is an important first up task for Hoover House. Conversations with key stakeholders is well advanced, but we are expecting a sort of two to three -year approval development delay before we can start accessing Tower Hill. We had a similar issue when we started, when we purchased Dacian with the Thompsons South approval likely to take three years, and we were able to get that inside nine months. It's important to note also on the intercepts on the left-hand side of this image, the bottom half of those intercepts averages 40 to 50 meters, with the lowest being 2.5 grams per ton and the highest intercept being 5.5 grams per ton.
Tower Hill is simple, it's high grade, and it's all from a single pit. The graph you can see here is West Australian mineral resources in excess of 1 million ounces. Of note, the four highest grade projects on the left-hand side of that graph. Tower Hill was the only single deposit within that group, and has over 1 million ounces in resource and will be able to be accessed through the Mount Morgans plant. I'd now like to throw to Andrew Strelein, the newly minted MD of Phoenician Metals. Andrew's had about seven hours sleep in the past three days, hopefully he can get through this.
Thanks, Ralph. Thanks, Dan. Phoenician Metals just walked you through all the advantages for the merged Leonora operations. On the Phoenician Metals side, its purpose will be to realize the full potential of St Barbara's overseas assets and the domestic investment portfolio. We have a dedicated team lined up with funding and a slight strategic reset, which we'll walk through shortly. The Phoenician Metals will have 6.2 million ounces in mineral resources and 3.7 million ounces in ore reserves across the two operations. There are AUD 34 million approximately of ASX listed investments, it'll also take over St Barbara's royalty portfolio. There's a good exploration portfolio across those operations, but also in New South Wales and the broader Nova Scotia. There'll be.
We have a strong balance sheet with AUD 85 million cash pro forma and nil debt. On this slide, it's worthwhile mapping out just the assets that are coming across to the proposed Phoenician Metals. Again, we've just walked through the reserves and the resources for each operation. Both operations are in production at the moment, with Atlantic on track with guidance of 40,000 ounces-50,000 ounces this year. Simberi on track for guidance of 70,000 ounces-80,000 ounces this year. We've mapped out the investment portfolio on this slide. The proposed board and leadership team, so for Phoenician Metals, so four or three of the current directors from St Barbara are coming across. David Moroney is proposed to be stepping up as chair.
Stef Loader, Dan, of course, and I will be becoming Managing Director and Chief Executive Officer. We also have Lucas Welsh, the current Chief Financial Officer of St Barbara will join. We then expect to select the people from, primarily from St Barbara to man up Phoenician Metals. We already have very established teams at the operations, and they're well led by Randy McMahon and Merrill, so the operations are in good stead. Yeah, we'll intend to have a small corporate team that will support the growth objectives of those two projects. I mentioned before, We are well-funded. There's a team that's gonna be dedicated to these assets, but there will be a slight strategic reset. We have announced or included the announcement with Atlantic.
We have paused permitting on Beaver Dam. We've made that decision. Engagement continues with the stakeholders there. With more time still required for those engagements, we've concluded that we will not be able to achieve first ore from Beaver Dam before completion of the stockpiles at Touquoy. This does allow us, however, to return our focus to the main project, 15 Mile Stream. It's the bigger asset, and it has the bulk of the future value for the Atlantic operations. With that, our slight strategic reset becomes prioritizing that development of 15 Mile Stream, and we'll now target that for development in FY 26. It does give us the opportunity to investigate repurposing the Touquoy plant.
Rather than have two plants, we'll be able to revert back to having one main operation for grinding and milling. We'll intend to complete processing stockpiles at Touquoy by the end of 2024. As I said, we'll pause the permitting to allow more time there, but we'll accelerate exploration at Mooseland Southwest and Goldboro East. And at Cochrane Hill, we'll also advance the work there. We have always wanted to bring on that second hub to the east in Nova Scotia, we've got more work planned at Cochrane Hill. At Simberi, we had good success with the extension of anticipated oxide production. This has been through the strategic review that we announced earlier in the year.
We are winding up the sale process as a result. We didn't get any proposals that we thought were compelling enough to take us away from our own strategy here of extending the oxide production through FY 2025 and into FY 2026. We wanna go back and finish the drilling on the mineral resource and ore extension, ore reserve extension. Previously, we pulled up the drilling at Simberi sulfides because we thought there was enough for the feasibility study. We still have some encouraging higher grade zones that we would like to push the resource out into. That's on our plan.
We'll plan to revisit the sulfides expansion development plan, we wanna do that by FY 2026, incorporating the new resource extensions and reserve extensions. On that basis, we'll look to prepare for investment decision. I've said here, you know, in plenty of time for the mining renewal in FY 2028, obviously, as soon as we can get that, the reserve and resource extension in place, we can revisit the plan and then work with the government for an earlier mining release if possible. Just in summary. We have the Phoenician Metals will have two operating gold assets. As I said, we've got this financial year production of 110,000-130,000 ounces, both with significant organic expansion options.
We'll have a strong and flexible balance sheet, pro forma, AUD 85 million cash, no debt, and a portfolio of liquid investments to help along. We've got the team, we'll have the resources to get us through this strategic focus and realize the full potential of these assets. Rel asked me to mention the background of Phoenician Metals. Phoenicians were antiquity's greatest metal traders. They were spread around the known world at the time. It was a little bit similar to the asset portfolio we'll be advancing. With that, I hand back to Ral.
Thank you, Andrew. I'll just now run you through the equity raising before we throwQ&A. There will be a conditional placement to raise up to AUD 275 million. The placement is interconditional with the merger, and the raising price is at AUD 1.20 per share, which represents a 0.4% premium to Genesis' last close of AUD 1.195. The placement is subject to Genesis shareholder approving the new issue of shares under the placement and the scheme being effective. As I mentioned at the start, it's important to note that RCF and AustralianSuper are taking on five months of time risk, and that's because we have high levels of confidence in this transaction. AustralianSuper has committed AUD 164 million subject to scale back, and RCF has committed AUD 75 million.
Other institutional investors, including Paradice, Australian Capital Equity, and Eley Griffiths Group, have an aggregate committed $36 million. I'd particularly like to take this opportunity to thank AustralianSuper and RCF for the support, resilience and assistance over the last six months whilst we've conducted DD. Sternship Advisers has acted as our financial advisor. Thomson Geer is our legal advisor. I'd like to thank all the legal teams and advisory teams for this transaction. Euroz Hartleys and Canaccord will be assisting on the roadshow that we'll embark on through both the Melbourne and Sydney, as well as the U.K. and the U.S. the latter part of this week. Just by way of use of funds, specifically the Gwalia reset future-proofing, it's about progressing organic growth opportunities across Gwalia. As I mentioned previously, prioritizing waste development, waste removal, and cost reductions to the order of $50 million.
Tower Hill early development. We're targeting approvals, and the rail relocation is high priority task there. The Phoenician Metals working capital, AUD 65 million of general working capital comes via the placement of Genesis to appropriately capitalize Phoenician into the future. Likewise, AUD 90 million will be put to debt repayments at the Atlantic operations to leave Phoenician in a very well-capitalized AUD 119 million of cash and investments, and we'll be debt-free. Another transaction costs of circa AUD 50 million, totaling AUD 275 million. I'll just quickly summarize the transaction and the benefits to Hoover House and Phoenician before I open to Q&A. Hoover House is a genuine win-win-win. It creates a leading ASX gold house, extensive position in the prolifically in order to seek the 15 million ounces of resources and 3 million ounces in reserve.
We'll have a capital-light, fully funded production growth target of 300,000 ounces per annum. There is high investor appetite for sensible regional consolidation, and the merger benefits both sets of shareholders. There's a capable management team, financial flexibility and invest the mandate to grow their Western Australian assets. This company has the ability to re-rate and fill the gap to the ASX 100 gold producers. Phoenician Metals will provide a diverse new company with industry-leading resources, reserves and exploration upsides. It has a high-quality board and management led by Andrew. It is well-funded with a strong, flexible and unlevered balance sheet. It will become the natural owner of these outstanding growth and development opportunities at both Simberi and Atlantic. It allows Hoover House to focus 100% on Australia, the Western Australia's Leonora District.
Hoover House will remain a supportive 20% shareholder in Phoenician and also has the potential to re-rate with a clear disconnect between market cap and its very large gold inventory. On that note, I'd like to throw to Q&A. Thank you, Rachel.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from David Radclyffe with Global Mining Research. Please go ahead.
Oh, hi. Good morning, Dan, Raleigh and respective teams. I've got a few questions. Maybe starting with the Gwalia Underground. That's likely a big cash flow lever for the new business. Maybe could you expand on the benefit of slowing the Gwalia Underground down, taking the pressure off the mine, especially in terms of grade development, reliability going forward, which has been an issue, and costs. Could we see maybe grades substantially better going forward in the midterm than, you know, current reserves, which are half what they used to be?
Thanks, David. Look, really, you've just gone straight to the crux of why this transaction works so well for both sets of shareholders. Obviously the benefit of bringing Ulysses on 30 kilometers down the road, it takes a lot, as I mentioned, takes a lot of the pressure risk off Gwalia. As you can recall, the asset's been running at sort of 700,000-800,000 tonnes per annum for about the last five or six years. There was a target to 1.1 million tonnes per annum as the grade has come off, in reserves, as you can see. For me, personally, that's adding more equipment condition down the hole. As I mentioned earlier, we can treat Gwalia and Ulysses as one mine, take some equipment out of Gwalia, put it 30 kilometers down the road.
Essentially our cost base will remain very much the same, but we get the benefit where we can bring Ulysses on and take a lot of pressure off Gwalia. Of course, that's gonna sustain that asset over long term. If you think about that production rates across 2.1 million ounces of reserve, we're looking here for a very long life asset with a combination of Ulysses coming on.
Then maybe in terms of a bit of the broader strategy, I mean, St Barbara's talked a lot about processing of refractory ores and aligned themselves to a degree that way. This looks to have now been deferred. Is there a place for Hoover House to develop process refractory assets? If so, what's the timeline there?
Yeah, great question, David. I think the key point there is, you know, if you look at the forward outlook for St Barbara, there was quite a lot of CapEx coming through the business. When you think about Simberi CapEx, you think about Beaver Dam CapEx, and then you think about bringing on Zoroastrian and Aphrodite, expansion of the plant and the Albion Process. One of the key tenets of this transaction is our capital light focus. We're removing AUD 400 million of immediate capital demands, as well as taking a lot of risk out. Simply at the moment, we wanna focus sharply on Gwalia and making this a sustainable long life asset, and obviously the benefit of bringing on Ulysses.
It's not to say that Aphrodite and Harbour Lights are absolutely future possibilities that we look to explore it and they'll just simply be deferred as opposed to forgotten. Just use a bit more time to optimize that and see how to best capitalize on those assets.
Okay, cool. If I could just maybe just sneak in one last one. Tower Hill's made a lot of sense for a very long time, but it just has never progressed due to the constraints. What are you gonna do differently here, I guess, 'cause you're still talking about a two, three timeframe. Do you have a sort of an estimate of what you think it would cost to actually move the rail line? If that's not possible, do you sort of, you know, what's Plan B? Do you go back to thinking about this as an underground, which, I seem to remember talking about in the past.
Yeah, look, we're really just dovetailing off the transition, if you like, the pivot that St Barbara did a few months ago, where it converted from a underground reserve, moved it to an open pit resource. You would've seen in the last quarterly report, they actually published their open pit reserve. As I mentioned during the presentation, what it didn't have the benefit of is being able to access a larger, lower cost mill as far as that analysis on cutting those reserves. As part of this transaction, again, one of the key tenets is being able to access the Mount Morgan's mill in time. I'm noting it's sort of two to three years away for approvals. Obviously that enables us to get a potential step change in reserves.
If we couple that with applying the Genesis Mining Services open pits owner/operator costs, we might see a step change again. As far as costs and timelines, you know, obviously we're clearly articulating that we're gonna do a market briefing in September quarter. We'll come out with a five -year plan and CapEx, OpEx, production rates, mill strategies, all that will be articulated, A, once we've got the keys and obviously spent some more time on the ground before we articulate that in the September quarter.
All right, great. Thanks for that. I'll pass it on.
Your next question comes from Alex Barkley with RBC. Please go ahead.
Thanks. Morning, everyone, and congrats on the deal. Question to Dan and then St Barbara management, I guess. Just sort of wondering why bring Genesis in and, I mean, you could have almost gone a sort of regional play on your own. There's obvious synergies with the Dacian Mill, but, I think you had your own numbers there. AUD 180 million for a 3 million ton per annum Tower Hill mill. You know, why not maybe a big capital raise on your own or create your own sort of regional hub strategy? Why did you think, you know, Genesis was the best option to get that value? Thanks.
Yeah, good question. look, I think that when you look at the, I guess, the CapEx bill going forward, you look at the availability of ores around Leonora, the requirement to, I guess, reset Gwalia mine, which is one of my main focuses right now, which we can chat a little bit about. The bottom line was that, yes, we could have gone alone, and we could have gone and it would mean that we would need to do a significant raise. When we look at the overall picture, though, it's, you know, we can do the Ulysses. It basically brings Gwalia, you know, at a lower cost.
At the end of the day, we believed as a management team that, you know, the Genesis guys could go and do the raising of AUD 275 million at market with very strong cornerstone sort of, you know, underwriting that. I guess you could argue, but we believe that this is a much clear-cleaner and then allowing Phoenician Metals to be spun out as a, I guess a bit of a premium to the St Barbara shareholders and allows us to go back and refocus on, you know, bringing in the Tower Hill project based on a revised strategy using, you know, the Dacian Mill.
If we were to do that alone, I think you'd find that, you know, it would be a significant capital bill without actually then talking about the refractory ores. I guess, yep, you could go another way, but we believe that in the long term for shareholder value and to get that across the line, I think is much cleaner and I think it's a good deal for all shareholders.
Yep. You sort of touched on the premium there. I suppose obviously you have a view on the relative valuations of the two companies. Pretty similar market caps, I guess. Did you think maybe you deserved a little bit more of the synergy benefit? Maybe there should be a premium for St Barbara or, you know, just very happy with nil premium. Is that the best way to get it over the line? And, you know, happy for your thoughts as well, Ral.
Look, it's Andrew here. Firstly, I'll throw to Ral. I mean, when we talk about nil premiums, nil premium really are the Leonora assets and putting those together. I mean, Dan just talked about how that comes together. Bringing on the funding from these sources at nil discount really was. This still meant that the right combination of those assets. I think the Phoenician assets, you know, they're underappreciated. It doesn't get full visibility under St Barbara. It's a fairly healthy premium when you look at it. When you've got the two assets, there'll be AUD 65 million put in on top of the AUD 20 that's sitting in that, and the investment portfolio.
Just those alone to pursue the other two assets and their development potentials, we think is quite a healthy return to the St Barbara shareholders. I'll let Ral finish off.
I think it's important to look at that. I think that equity raising bit is really important because obviously that's coming in from Genesis holders. Again, acknowledging the cornerstones are taking on five months of deal risk here. That creates, in my opinion, a really attractive premium to St Barbara shareholders when you think about particularly, you know, Canada in its new strategy under Andrew's ownership to have that well-funded. If you think about, you know, what that asset could be worth into the future, that's for the benefit of St Barbara shareholders, I think that upside's significant. Frankly, that's why we're retaining a 20% holding in that company under Andrew's stewardship. I think that's a really important point.
I think the other side of the equation is looking at it and going, you know, you can see the stress that Gwalia is under, you know, 56,000 ounces up to November. To be able to take the pressure off that asset by bringing Ulysses on, which has got significant life, can share a lot of the equipment. People, as I said, it's gonna get quicker to get down to the face at Ulysses than it would be down the face at Gwalia coming from the same camp. I think that's actually the benefit to both sets of shareholders that we can't lose sight of as well. It enables us to properly utilize that plant, which is well suited to both ore bodies.
As we've said, you know, having Mount Morgans available to unlock the value at Tower Hill is a significant step change as well. I think there's actually 2 sides of the equation here that need to be properly looked at.
Yep. Thanks. It's just a quick one on Atlantic. Is it right that Fifteen Mile Stream will be coming on before Beaver Dam now, FY 2026? Is that right? What exactly is the issue at Beaver Dam? You know, why the delay, and how long is that gonna take?
Yeah. Thanks. Andrew here. On Beaver Dam, we're in primarily two areas. We're in engagement with First Nations Group that are affected by that potential project and also the Department of Fisheries and Oceans. There's probably two main consultations that are ongoing. At this stage with, you know, we need further time with those stakeholders. At this rate, we can therefore foresee that we won't be able to maintain continuity. Obviously, continuity was important. It's, you know, it's a lot of value in keeping the operations running in a steady state, and that was what Beaver Dam offered. It's relatively close. Well, it's roughly midway between the two sites.
The idea was that that all from Beaver Dam would be trucked over to Touquoy and provide feed after the stockpiles had finished at the end of 2024. The bigger value project has always been Fifteen Mile Stream, and we've been pursuing that through permitting and studies in parallel. Although, you know, Beaver Dam being the most pressing one, that was the main one spoken about. Fifteen Mile Stream becomes... It really just becomes our focus for the near term. Beaver Dam, once we've resolved the matters with the stakeholders, we can look at then the development options then.
It does open up for us the opportunity that we didn't have if we were gonna have Beaver Dam going to Touquoy, is that we can look at repurposing the Touquoy processing plant for application at Fifteen Mile Stream. Fifteen Mile Stream is probably about a 2 million ton per annum proposition. The Touquoy plant is above that scale, so it would be more than sufficient. We'll look at repurposing that and coming up with a more efficient capital design for that project.
Okay. All right. Thanks very much. Thanks again, everyone.
Thank you.
Cheers, Dan.
The next question comes from Peter O'Connor with Shaw and Partners. Please go ahead.
Good morning, Raleigh, Andrew, Dan. Congratulations. Big deal. It's a long time coming, but congratulations. Raleigh, to you first. Couple. The nil premium issue. If you look at the ratio of Genesis and St Barbara's going back not one month, three months, six months, but one year plus, two years, it was about three to one . Now, it's been at nil premium for a while. Looking at the scheme ahead and that time risk of five months and the fact that 12.5% of the register can effectively scuttle the scheme, how well placed are you with the minorities at St Barbara to be comfortable you'll get the requisite voting or there's no rejection to scuttle the scheme?
Like I said, I think the as I picked out in this presentation, we're targeting all shareholders to get them to endorse this deal as including obviously Genesis shareholders have to vote this 75% in favor for it to happen as well. You know, we're very much focused on the fact that, you know, we think this is a very compelling transaction for St Barbara shareholders on the premium of Phoenician, as we've talked about. The value you can unlock at Gwalia, you know, to think this asset can get back to 200,000 ounces per annum with similar cost base to what we've currently got, I think is a massive lever that is really compelling for both sets of shareholders.
There's obviously a 50% vote required from St Barbara to vote through the demerger of Phoenician as part of this transaction, which, you know, again, it's, I think it's an opportunity for them to properly assess the business and obviously have a look at what the combination looks like. Hopefully we've articulated all this information clearly into the presentation is why we think this is pretty compelling. Now, we've been in the detail, but, you know, we're super excited about what both companies look like, frankly.
Well, is this bid last and final, this scheme?
As you can see, we're trying to thread the needle here. We're obviously trying to get both companies comfortable with, you know, how the transaction looks and making sure that it's appropriately funded on both sides. Obviously, the Cornerstone. You know, this is the plan that both boards are recommending unanimously to shareholders.
To be clear, this is the last pricing of this scheme, the last terms of this scheme?
No. We haven't said that it's the last pricing on the scheme. Again, the scheme.
It's not the last or final pricing on the scheme. Okay. It's still available for variation if needed.
Yeah, if needed. I think at the end of the day, like I said, we've, we think this is actually really finely balanced, and we've done a pretty good job of making sure that both shareholders are, getting a really good outcome here, including Dacian shareholders that want to be a part of Hoover House, as I mentioned at the start. Again, that's what's been recommended to, both sets of shareholders.
Just you mentioned about Dacian. Your most recent transaction there has been not quite so clean with Kin Mining. Does Kin Mining have any influence on the use of the Mount Morgan mill or any of the resources? Does your stewardship with your current holding give you enough certainty this can play out the way that you're suggesting?
Independent of this transaction, as I said, we're at 77% of Dacian. We're very comfortable that obviously the Dacian board is there to act in the best interests of Dacian holders, all Dacian holders, including us at 77%, Kin and the other minorities. That remains unchanged. You know, we'll keep the bid open if Dacian holders think it's compelling to become a Hoover House shareholder and be a part of all the merger benefits. They'll have the opportunity to do that in the next month. We're very clear even prior to this transaction that the Dacian board running the process of expressions of interest on the plant.
Once that was received, there was them acting in the best interests of the best interests of Dacian holders, most likely would enable us to be able to get access to the plant. Obviously Dacian will be able to get access to our Genesis Mining Services. You know, we saw that as a good viable strategy and obviously this has been enhanced with the transaction we're announcing today.
Well, before I go to Andrew, the escrow period for the holding that you've got in Phoenician, how long is that? Is there that in the document anywhere? I searched for it. Just struggling to find it.
if it's not in the document, but the escrow period we've been talking about is two years.
Two years.
I'll. Yeah. I'll try and find it for you and point that out. That's a two-year escrow period on the 20%.
Andrew, also got you. Simberi, the sale process, how many bids did you receive? Where were they from? Were they cash? Were they stock? Were they a mix? Why weren't they, in numeric form, compelling?
I obviously won't share with you how many and what the bids were. That's confidential for us. We had 2 rounds. I can probably give you a little bit of color. We got proposals in each, but none of them are really compelling. Again, I know strategic review sometimes gets seen as code for sale process only, but the strategic review was actually also reviewing our opportunities, and the outlook for Simberi, given that we decided not to go straight into final investment decisions.
I think given the excellent work that the team have done to give us confidence in the extension of the oxides, and given the opportunity that we were basically promoting to the potential, you know, people expressing interest on the resource upside potential in the sulfides, I think that's best for us to keep going under this structure and with funding.
When you say compelling, this wasn't compelling versus factoring that future upside of both the sulfide and oxide?
Correct. Compelling, I mean, we also obviously we've had a long presence on Simberi Island, so we also wanted the right future, development proposal for the island and PNG. Financially as well, we didn't, you know, we didn't see sufficient reward in accepting any of those indications of interest.
Last one from me. Simberi, life of mine, the mining license, FY 2028. It's an old St Barbara problem. Do we value this asset to 2028 or do we value it on the option that it may go ahead? Thoughts?
It's a mining lease renewals, so it's not a start from scratch and no expectation. This can, with cooperation from the government, can be renewed earlier if the right decisions need to be made based on that. Certainly, you know, I do want Phoenician to be in a position that by the time we're having those renewal discussions, we've fully proved up the potential and can make our FID, our final investment decision, based on that new information. I think the timeline, as you say, there's option value in the sulfides project that isn't currently recognized.
The cash flows in the near term, I mean, the emphasis for the oxides is to, you know, be cash positive and contribute, so we can get the exploration funding in. I think the real value in Simberi is the project upside.
Okay. Thank you, Andrew. Thank you, Raleigh.
Your next question comes from Alexander Papaioanou with Citi. Please go ahead.
Mm-hmm.
Hi, Alex. Your line is live into the call. You may have yourself on mute. It doesn't seem like he's there. I'll just go to the next question. Your next question comes from Nick Evans with The Australian. Please go ahead.
Good day, guys. Just one for, I guess, Dan and the St Barbara side. I mean, St Barbara brings the only operating gold mine, roughly 75% of the reserves. And, you know, the market caps are roughly equivalent. Why would St Barbara shareholders vote for this deal?
Okay. Andrew here. I think just re-emphasizing the premium firstly. I'll come back to the question of the asset contributions. We are actually, you know, pulling off the St Barbara overseas assets and significant amount of cash and the equity investments which get overlooked into Phoenician Metals. That's how we've structured essentially what we think that the St Barbara shareholders should be rewarded with is the upside. I think we also, when we talk about the reserves and the production assets, Ulysses is actually substantially measured, indicated. If once you dial in the access to the mill, that'll obviously be converted. I think the expectation is the maiden reserve coming up.
Obviously, when we look at the mineralization, we're looking at the measured indicated status and the viability of it coming to Gwalia Mill as well as the other, the other assets. I think it's, probably, you know, the headline numbers on reserves is one thing. We look at behind that in terms of the economic value of the measured indicated material and how it'll be converted, once it has access to the processing plant.
I think, I think the Leonora assets combination, together with the expectation that we'll be able to make arrangements that are beneficial to all the various shareholders in terms of the Towhill development and the access to Mount Morgans, we think that that combination brings about a greater sum of the elements.
Nick, it's Raleigh here. Just one other point to add to that. You know, bear in mind that the Phoenician demerger is obviously the St Barbara shareholders as their premium, but, you know, the intention is for that asset to be listed. I suspect we'll let the market decide, you know, where its value is. I think we probably shouldn't lose sight of a few points. One is obviously the Genesis placement of AUD 275 locked in at a slight premium, with five months of time risk there. He's contributing AUD 65 million of cash into that vehicle, as well as repaying down all of its debt. It's actually creating a really clean, well-funded vehicle, obviously led by Andrew.
If you think about the scale and scope, you've got a 6 million ounces in resource and impressive 3.7 million ounces in ore reserves. You know, any sort of comparison on similar assets or that scale of asset, I think there's the opposite argument could be that's a pretty impressive, you know, premium, which we need to count on the other side, getting Genesis shareholders to vote 75% in favor of the merger as well.
Why not allow those St Barbara shareholders who supported this deal to take part in that placement? I mean, why not structure it so that those supportive shareholders can sort of get themselves, you know, through St Barbara, position themselves a little bit better rather than, you know, sort of running all of this through the takeover target, which is effectively Genesis?
Yeah. I suppose the key point on that is, thinking about that AUD 275 million funding, it's all conditional on the deal, and there's obviously five months of time risk here. Obviously having the cornerstones of AustralianSuper and RCF, having done DD and being so supportive of this transaction with that time risk, I think is a really big, you know, tick and endorsement for this transaction. I think that shouldn't be lost on people. I think as well, you think about, what comes of that, you know, combined entity, obviously having the funding benefit going into the offshore assets, but also what happens back home with, you know, Ulysses coming on stream, taking a lot of the risk out. There's compelling arguments there.
Obviously AustralianSuper have also committed to a scale back, which we'll get access in the next 24 hours to talk to those, to those larger St Barbara shareholders to enable them to participate as well. We've got to bear in mind that we need to have cornerstones in here for this transaction to take place with that five months of deal risk hanging out there.
I'll pass it on and come back around. Thanks, guys.
Sure thing.
Your next question comes from Paul Kaner with Ord Minnett. Please go ahead.
Yeah, thanks, gents, for taking my question. Raleigh, just on that synergy value of AUD 200 million, it seems like AUD 65 million-90 million of that is a tax benefit. Am I right in thinking the remaining value is made up from deferred capital and corporate cost benefits?
Yeah, that's right. Yeah, deferred capital is obviously a component of it, and I think the tax benefit's around AUD 65-AUD 90, from memory. Obviously, the benefit of bringing the two organizations together from a corporate cost saving is the other part of it.
Yeah, no dramas. Then just on putting that Ulysses material through the Gwalia Mill, are there any sort of mineralogical differences in the ore types that requires any further changes to the existing Gwalia Mill?
Actually the opposite, very well-suited. You know, the deposits are 30 kilometers apart, sort of similar strike, similar dip. For us, the mineralogy is actually very similar and actually perfectly suited to the Gwalia plant. The Gwalia plant runs at anywhere between 75 and 90 microns. The Genesis plant runs up to 120. It is ideally suited running Ulysses through this plant. Obviously having a blend of Gwalia and Ulysses with some top-up from, you know, assets like Hub, you know, takes, A, takes some risk out, B, increases the metallurgical recoveries, and most importantly, C, takes a lot of pressure off Gwalia.
Yeah, great. No, that's it from me. Thanks, guys.
Your next question is a follow-up question from Alex Barkley with RBC. Please go ahead.
Yeah. Hi, guys, just a quick one around the timing of Zoroastrian and Ulysses. I thought sort of, Zoro in FY 2024 might have been that diversifying ore source. Is Ulysses gonna be replacing that sort of FY 2024, and then Zoroastrian would be delayed until a Mount Morgan mill restart? Is that the new plan?
Yeah, look, probably the best thing to look at that 0.5 in the rationale, the focus on Leonora. We obviously have Gwalia continuing, Ulysses is coming on, which is starting in FY 2024, will be at full scale by FY 2026. What we talked about is the gap filler, if you like, to put through the Leonora plant, potentially comes from the, you know, open pit sweeteners, particularly the Red Cliff assets. Hub particularly is one of the key short-term opportunities, which is obviously a benefit to St Barbara as well as Genesis as well. That's one strategic option as far as Zoroastrian.
It will feature in the life of mine plan, but obviously at the moment we've got, situation where Ulysses and Gwalia, is perfectly suited to the size of the mill and the met recoveries that we've spoken about. It is in the life of mine plan, but after Ulysses.
Yeah, okay. Maybe a comment from you, Dan. Is or sort of why is Ulysses the pick there?
Well, I think it's about 100 kilometers closer. Look, it... Yeah, look, it really comes down to, you know, what is the best fit for our mill here. I mean, we are reviewing that we can make that mill up to sort of more like 1.4, 1.5, which we think is doable with very minor capital. I mean, Zoroastrian really in terms of its, you know, life of mine and stuff, will be mined, and it will come in at some point. The fact that we've got the, I guess the Ulysses project, future mine just down the road, we can increase, you know, obviously that will produce around about 600,000 tons.
It's so close that, you know, admin costs, you know, will go down because we can share a lot of the admin costs. of course, you know, but as we mentioned earlier on, the optimization of Gwalia Underground will require some equipment to be taken out of the mine, and that can actually then be deployed straight down at Ulysses mine. there's a lot of pros for bringing, you know, bringing the Ulysses ore up to here. As Raleigh said, mineralogically. God, we hardly say that word this morning. mineralogically, it's a perfect fit for our mill. one would then assume that, you know, we're getting a huge amount of benefits on recoveries.
You know, as we all know, the costs then will go down and at part of that synergy that we spoke about earlier on. Ulysses, you know, it's got a huge resource base, you know, sort of close to 0.8 million ounces. It's got a good grade of 3.4, which will complement the Gwalia grade. Look, I mean, what we'll do is, at the end of the day, we'll go back as a team now and work through a lot more detail around the projects and project timelines on what's best fit for, you know, the Leonora. There are a lot of other potential operations that probably have not been ignored, but probably didn't quite fit into the Gwalia Mill sort of.
You know, capacity and quality of ore. Andrew, do you wanna comment?
Just clarifying. The early comments. For Zoroastrian, we were expecting to bring on about 200,000-400,000 tons per annum, and it's for about three years in our plans. Obviously with Ulysses, that's looking at more like 600,000 tons per annum plus and a longer life. I mean, lower costs, higher annual tonnage that can be produced and sufficiently close that essentially the two underground fleets will be shared and the management shared. Whereas Zoroastrian being 100 kilometers further away was gonna require, you know, a different approach. It makes enormous sense to switch those two as part of this plan.
Yeah. Okay, perfect. That's a very helpful comment. Thanks, everyone.
Your next question comes from Matt Greene with Credit Suisse. Please go ahead.
Hi. Good morning, all. Just a question on Morgan's Mill, rail, if I can. You mentioned Tower Hill permitting two to three years. Can you just touch on the Leonora open pit, Jupiter open pit? What's the permitting status of those three?
Yeah, thanks, Matt. As I mentioned at the outset, we are currently updating our resource position at the Jupiter open pit, having done an extensive drill program there. We'll be looking to publish reserves also in the June quarter. That's obviously with the benefit of the larger Genesis Mining Services fleet, which we look to use there and obviously then utilize it at Tower Hill to make, you know, good use of that equipment. That will be published in the June quarter, as I mentioned, along with all the open pits within the Genesis tenure, which currently are a bit of a flux capacitor. It depends on, as I said, we'll come out with our full five-year outlook in the September quarter.
numerous options ahead of us, whether we, you know, start with Jupiter and bring those pits on or if, you know, we wait till Tower Hill comes online. They're the types of things we'll be obviously knuckling down and optimizing over the course of the next six months before we come out with that five-year plan in September.
Okay. just to confirm then, the Leonora open pit and Jupiter are fully permitted to go ahead. You're just waiting on Tower Hill on the permitting side.
Yeah, that's right. The only caveat on that is if there is a significant step change on Jupiter, we would require an updated mining proposal. Again, the timing of that would be pretty short considering it's on a mining lease that obviously already had mining undertaken on it. Again, they're good problems to have.
Yeah. No, understood. I mean, it sounds like permitting is quite a headwind facing the industry in WA at the moment. If we assume Tower Hill does take sort of three years perhaps, is there risk here that you can't fill the Morgan's Mill?
Yeah, just on Tower Hill, to be clear, I think the permitting is actually pretty good order. It is on a granted mining tenure. It's probably more around the infrastructure. As I mentioned, the rail line. To be clear, we're not talking about a relocation. The actual rail line only terminates about 2 kilometers away to the north. It's actually about setting up a new intermodal hub to the south of the line. That line would become redundant. You know, Andrew and Brett Ascott have done a heap of work on that the last 12 months particularly. We'll just be running with that work. That's probably the key item. Again, everything else will come through.
Again, for us at the moment it's about pulling all that data together, we'll come out with all of our disclosure about exactly what we'll do when in that September quarter. It's probably a bit early to comment at this stage.
No, that's great. Thanks for clarifying, and congrats on the deal.
Thanks, Matt.
Thank you. We've come to the end of the Q&A session. I'll now hand back to Mr. Lougher for closing remarks.
Thank you, Rochelle. Thanks again for joining us. We are delighted to have had the opportunity to make this announcement today. We are looking forward to ongoing collaboration between St Barbara and Genesis as we work towards completion of this compelling transaction. Please be assured that I will continue to safely drive improvements at all of St Barbara's assets over the coming months, irrespective of the outcome of this opportunity. As I said earlier on, Gwalia is a key asset in whichever way you slice and dice, this area. We look forward to talking with many of you later this week and into the new year. That now brings us to the end of the presentation. Once again, thank you very much for listening and taking part. Thank you.