Thank you for standing by, and welcome to the St. Barbara SPM Briefing on Half Year Report Conference Call. All participants are in listen only mode. There will be a presentation followed by a question and answer session. I would now like to hand the conference over to Mr.
Craig Jetson, CEO. Please go ahead, sir.
Thank you very much, and good morning, everyone, and thank you for joining us for St. Barbara's First Half FY 'twenty one Interim Financial Report. Participating on the call with me today are Garth Campbell Cowen, our Chief Financial Officer and Mr. David Cottrill, our Manager, Investor Relations. Attending the call with me today is Val Madsen, EGM People and Evan Spencer, our Chief Operating Officer.
As always, I'd like to begin by recognizing the traditional owners and the 1st nations people in the lands of which we operate in Australia, Canada, Papua New Guinea and pay my respects to the elders past, present and emerging. I would also like to provide a short overview of the first half results before handing over to Garth to take you through the financials in more details. Moving on to slide 5, outlines some barbers 5 core commitments. They are key to our business success going forward. Of note, St.
Barbara was recently included in the 2021 Bluebird Gender Equality Index. We are very proud of this achievement, especially as it's our 1st year submitting data, and it is testament towards our commitment to gender equality. St. Barbara is one of 10 Australian companies within a total of 300 companies globally covering 11 secondtors to achieve this, something we're proud of. In terms of slide 6, Safety Always.
0 harm is always our target. During H1 FY 'twenty one, we launched our CARE program to embed our safety behaviors across all of our operations globally. CARE stands for control, action, respect and engage. Acting with CARE is how we always put safety first. We've also developed an infectious disease critical risk control standard in this half.
We have not had a great start to H1 safety performance, but our care program will go a long way towards making a difference as we strive for building brilliance in the safety space. Next on slide 7 are some of the key achievements for the first half of FY 'twenty one. As you all know, despite a slow start to the year at Qualia, we've had consistent profit performance with a net profit after tax of $37,000,000 We've had a strong cash generation across all our operations with $94,000,000 contribution after CapEx. We've continued our focus on shareholder returns with an interim fully franked dividend of $0.04 per share declared today. We've launched our Building Bridges program at the start of quarter 2, already a few weeks in and we're starting to see some really nice improvements.
Our organic growth options, we've reviewed the Leonora province and developing that into a strategic action plan. We will maximize value from our tenement and with more discussions around that later this quarter. The feasibility study of Simberry's sulfide project is on track and is scheduled to be reviewed by the Board late this quarter. Atlantic Gold Projects are progressing quite well and we plan to resubmit our EIS for Beaver Dam this quarter. During this half, also Evan Spencer joined us as the Chief Operating Officer And Lair Brownlee, who was our GM Atlantic Gold Operations, now moves to a newly created strategic role as GM Permitting, Government and Community Relations of Atlantic Gold Projects.
At the same time during the half, we made changes to our technical services team to build and enhance our technical capability, addressing our past performance exposures and linking Buildium Brilliance into our internal growth strategy. Now moving on to slide 8. The operational performance for the company is shown here on slide 8. The first half performance, as we know, was impacted in the September quarter by the fall of ground issues at Igalia. Sembere's grade reconciliation lower recovery also was problematic during the December quarter.
2nd half production forecast is strong and being driven by Gualia. In terms of slide 9, this slide was presented at the December investor briefing. It shows the uplifts we're looking to achieve over the next 3 years across all of our operations. As I outlined in the December quarter briefing, we are executing to plan and beginning to see some improvement. The recent tolling process agreement at Leonora shows we're on track to deliver the first uplift on our strategy over time.
We remain on schedule for delivery of the sulfide feasibility project at Cymbri. With that, I will now hand over to Garth and discuss the financials in more detail. Thanks, Garth.
Thanks, Craig, and good morning, everyone. Just turning to slide 10, where we set out the financial highlights for the half. Group EBITDA margin was up on the same period last year at 42% with Atlantic Gold making a very strong contribution to that percentage. Cash from group operating activities was well up from the same period last year at $94,000,000 and this was in part due to the lower tax payments in the current half. While statutory net profit after tax was marginally down at $37,000,000 our underlying net profit after tax at $40,000,000 was up on the same period last year.
And we closed the half with $119,000,000 of cash in the bank and debt of $101,000,000 As noted on the slide, the only hedging the group has remaining is the 78,000 ounces of gold call options at a strike of CAD2,050 per ounce and those mature monthly between April 2021 December 2022. And the Board approved a fully franked interim dividend of CAD0.04 per share. If we now turn to Slide 11, where we summarize the key financial outcomes for the first half. So the first half results did show solid financial performance as Craig made reference to, albeit that production was down at Gwalior and Sembari. Our underlying EBITDA was $151,000,000 which was 17 percent higher than the same period last year with a very strong contribution from Atlantic Gold.
The EBITDA margin at 42% for the group can be broken down as Atlantic Gold reporting a strong margin of 69%. Volia's margin was at 45% and Simbere also achieved EBITDA margin of 45%. The difference between the statutory and underlying net profit after tax is significant items and those related to costs associated with the Building Brilliance program and movements related to the mark to market value of those gold call options, which get recognized through the income statement. And if you look at Note 3 to the half year accounts, we give a breakdown and explanation of those significant items. Now just turning to Slide 12, where we have a waterfall showing the movement in the underlying net profit after tax for the half.
A strong contribution from Atlantic Gold and Simbere was mainly due to the stronger gold price in the half and that was partially offset by the weaker performance from Gualia. Depreciation and amortization in the current half was $16,000,000 higher than the same period last year. Now the key changes being the higher charge at Atlantic Gold related to assets acquired in 2019 and from the MRRI acquisition and the higher asset base at Qualia after the completion of the extension project there. And again, if you turn to note 1 of the accounts, we give a breakdown of the D and A across those three operations. There was a positive variance from lower financing costs and foreign exchange movements and those foreign exchange movements relate to mainly the appreciation of the AUD against the Canadian dollar and that impact on our Canadian dollar debt.
If we now turn to Slide 13, where we give a breakdown of the movement in the cash over the period. You can see there the acquisition of the MRRI that settled in September costing $60,000,000 The operations generated a combined cash contribution in the half of $117,000,000 and that was after sustaining CapEx of $52,000,000 We spent $16,000,000 on growth CapEx in the half together with $20,000,000 on exploration. Our corporate and royalty payments of $38,000,000 include corporate costs, All of our royalty payments and the cost of the Building Brilliance program incurred in the half. Tax payments of $17,000,000 relate to our pay as you go payments during the half of $8,000,000 and payment of the tax provision made at the end of the last financial year amounting to $9,000,000 The big movement in the half is obviously the financing payments, which included the $200,000,000 that we repaid on the syndicate facility, which we drew down at the start of COVID. And we also had the 1st drawdown under the loan that we provided to Linden Alliance in support of the toll treatment agreement at Guaido, which we talked about in the December quarterly report.
The last slide for me is Slide 15, where we set out our shareholder returns. You can see from the slide that we've now had 8 consecutive dividend payments since recommencing our dividends in fiscal '17. Those payments amount to $226,000,000 over that period. The interim dividend of $0.04 per share equates to $173 per ounce produced, gives us a dividend yield for the half of 1.7 percent or if you annualize that, it's 3.5%. The company continues its dividend reinvestment plan, which allows shareholders to participate in receiving shares for their dividend at a discount of 1% to the 5 day VBOC price.
And with that, I'll hand back to Craig to make a few closing remarks.
Great. Thanks for that Garth. So look, in conclusion, we've had a reasonable start to the first half, including the launch of Building Brilliance. We've maintained strong cash performance from the law of operations. The company remains in a very good financial position, dollars 119,000,000 in cash and $101,000,000 of debt.
We continue shareholder returns, as we've mentioned on this call, dollars 0.04 per fully French interim dividend per share. In the near term, we will outline results of the Synberry Sulfide feasibility study, continue to advance the Leonora province action plan and submit environmental impact statements on Beaver Dam. Building buildings initiatives are starting to deliver and increased productivity and cost reductions are being seen across our organization. So as a summary of
the
half, with that, Garth and I will now take questions. Thank you very much.
Thank you. We will now begin the question and answer session. The first question comes from Al Harvey from JPMorgan. Please go ahead.
Good day, Craig and Garth. I might just start at Qualia. So just wondering what we can expect in terms of news flow on intermediate, shallows and extensions projects over the next year or so. And maybe also just on tolling arrangement, is there an ability to extend these beyond 2020 2 if there's any delays to these projects to keep them all full? And is there any possibility that regional stock could be brought on sooner to boost that $1,000,000 in throughput?
Look, I think there's multiple answers to your questions. And I think let me start in terms of what we're doing with the province plan. So as you know, about several months ago now, we changed our focus and started some regional drilling and certainly started drilling at the shallows, in particular, to understand the ore body more. And that's continuing on, although most of the drilling in these target areas are now complete and they've been put into some into models to see what we can do with what we've got. And I'm erring on the positive side and potentially looking at what that strategy would be over the next few weeks and coming out at some stage late this quarter and talking in a lot more detail about what our drilling results in particular have found in that province.
The second part of that, to answer your question around the tolling arrangement, the answer is yes. And as you know, we have an 18 month, 2 year agreement already in place, and we're starting to draw on that as we speak. But there are other opportunities coming online in the region that we're actively progressing and looking into to see what the cash position is for us if we embark on these sorts of exercises. So that's coming together quite nicely. The lower grade stockpiles that are certainly cash positive in the region, we've already moved on some of those and brought them into the mine and processed in December January, one stockpile in particular with others on foot to move and to be brought in.
And I guess where I'm going with the province story, strategically, we'll come out at some stage late this quarter or the next quarter with what that could look like for GLALIA with a lot more data and, I guess, opportunity on the table published. The other side, as I mentioned during the December quarter, was the opportunity to grow our business model in that region to be a processor for many different tolling arrangements or purchased or whatever we decide to do commercially. So we're looking at that with a lens of growth opportunity, including what it would mean if we expanded the drill. So I guess from Blue Sky perspective, if you saw the debottlenecking continue through 1,000,000,000,000 at Wailea Deeps, for example, and we had better productivity and we get back to some good milling rates with some good gold grade. What's available to us potentially in the shallows?
Then look at these stockpiles and tolling agreements. We may be in an area where we would grow that mill above capacity. So all these things are being studied and looked at. And we will certainly publish some of that information when it becomes available. And we're jaw compliant with some of their drilling results, whatever it turns out to be in the very near future.
So I'm quite optimistic the way that we're building the strategy for Gwalior.
Great. Thanks, Philip Craig. And just moving to SYMBIRI. So the study is due this quarter. I mean, is that going to include an FID or is that coming next quarter?
And is there any tentative date in mind for the study? And maybe just on top of that, are you still expecting permitting to be a amendment of your current ML? And can you just outline us what's the key permitting steps over your next once that RFID is made, if it's made?
Yes. Look, the decision certainly will be made shortly after we get Board's approval. Obviously, I'm sitting on a lot of information at this end of the feasibility study as it draws to a conclusion. I still remain extremely positive on the opportunity. And there'll be a lot to talk about, Simbury, in the coming weeks, I'm sure, not just on the feasibility study, but also on other opportunities.
But I think I'll be keen to given what I know now of the project and what I can see technically the project will deliver, I'm certainly keen to get moving on the development, the financial investment and complete the engineering. Now all that, in summary, operationally is actually technically quite simple to do, and we will expediate whatever we possibly can, but without being reckless. And secondly, your point around the permitting is extremely important. Now obviously, we've been engaging with the local landowners, the provincial government and the state government. We've met with SIPA, the Mining Minister, the Minister pretty much every Minister in PNG is aware of what we're doing.
So that's going exceptionally well. We're getting a lot of support, positive feedback. Mining Minister and others are certainly interested in what we're doing and keeping a close eye on that. Now what we will be doing is clearly getting the difference between and particularly from a super perspective, the difference in the transition of ore from oxides into sulfides and what that means environmentally, and we have all the technical solutions to that. So I think the best way to look at it, this is an amendment to a permit and a change to our current environmental operating system.
It is not a new application for a mining tenement. So that takes that noise and complexity and derisks it. Given what I see the investment being versus what the payback could be, it's certainly a couple of year payback. So I think even though our ML is after 2028, 2029, I think it's 2028. We don't have that particular issue to deal with, although the mining act is still sitting there churning away.
We don't know what that is. And we were certainly keeping a very close eye on that. In our financial assessment of the project, we're looking at all different scenarios that will affect the viability of that project and making that very clear to all the stakeholders on the way. At this point, we've got significant support right across country to make this happen.
Thanks, Craig. And if I might just take one more on
Atlantic. You've got
a 3 year time line for permitting at 15 Mile Stream. Is that kind of what we could expect for Cochrane Hill? And what's the impact of the designation of the Archie Bald Lake Conservation Area over Cochrane?
Yes. So let me start on the ground and work it up for you. I think the move of lead, in particular, coming out of the GM ops role to go in and lead the investor government relations side of their business and Atlantic projects and making sure that we're working very closely with the First Nations people, all the government people, including, of course, the regulators. So we understand what the impacts of delays in permitting and sequencing will mean. That's gone very, very well and led to certainly line myself up quite a few meetings over the next 2 weeks with the government people.
The complexity at the moment is the current government has changed its leader and they're going through whatever the new leader will go through. So it's been problematic to get into the halls of government in recent times, but that will disappear. But we're doing all the groundwork and all the communication that we need to do to make sure we understand the impact. In terms of, I guess, Cochrane Hill in particular or 15 Mile Stream, and they're coming along quite well. The engagement is going well.
Permits are certainly well advanced in their application stage. Now that's about all we can manage. We need to make sure that the community engagement is right, the permitting process is lined up to when we need the ore and hopefully in most cases before we need the ore. That's the plan that we're working towards. There's some flexibility in that.
And Cochrane Hill, that's 8, 9 years away before we need to start moving and turning some dirt to realize that project online. But we've started the environmental work now. We've submitted some of the documentation already this month. And we're doing the community engagement, government engagement. In terms of it sitting there, the reason that it's sitting there and not a protected wilderness area at this point is because of the many different reasons by the government, but the government yet haven't been convinced that we can mine environmentally friendly or we can't.
And given, I guess, we need to prove that we possibly can and take the government on the journey that we can, we believe that there will be a positive outlook on that particular facility in time. So these sorts of areas around permitting are always a challenge and a risk to any project, no more than ours. But we certainly have the right team, the right strategy, the right engagement plan to be able to make sure that these mines come on sequentially and there is no gap in between. And of course, we've got some very encouraging results out of their tenements with their own exploration as well. So the current operation is going exceptionally well.
It's creating enormous employment. The Cochrane Hill community have certainly reached out and are very interested in local employment, local training and youth development and training in their region and they get that far as well. And those conversations have already started. So we're demonstrating that we can operate in an environmentally friendly way at Tukoy, for example, is certainly a significant pathway to success for the rest of the permits.
That's great. I really appreciate it. And I'll pass it on to you.
Thank you. Thank you. This concludes the question and answer session and today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
Thank you.