Thank you for standing by, and welcome to the St Barbara SBM briefing on half year report conference call. All participants are on only listening mode. There will be a presentation followed by question and answer session. If you wish to ask a question, you will need to press star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Craig Jetson, CEO. Please go ahead, sir.
Thank you very much. Good morning, everyone, and thank you for joining us for St Barbara's first half FY 2021 interim financial report. Participating on the call with me today are Garth Campbell-Cowan, our Chief Financial Officer, and Mr. David Cotterell, 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 First 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 Campbell-Cowan to take you through the financials in more details. Moving on to slide five, outlines St Barbara's five core commitments.
They are key to our business success going forward. Of note, St Barbara was recently included in the 2021 Bloomberg Gender-Equality Index. We're very proud of this achievement, especially as it's our first 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 sectors to achieve this, something we're proud of.
In terms of slide six, safety always. Zero harm is always our target. During H1 FY 2021, 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 seven are some of the key achievements for the first half of FY 2021. As you all know, despite a slow start to the year at Gwalia, we've had consistent profit performance with a net profit after tax of AUD 37 million.
We've had a strong cash generation across all our operations with AUD 94 million contribution after CapEx. We've continued our focus on shareholder returns with an interim fully franked dividend of AUD 0.04 per share declared today. We've launched our Building Brilliance program at the start of quarter two. We're already a few weeks in, 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 studies in various 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 Laird Brownlie, who was our GM Atlantic Gold Operations, now moves to a newly created strategic role as GM Permitting, Government and Community Relations, Atlantic Gold Projects. At the same time, during the half, we've made changes to our technical services team to build and enhance our technical capability, addressing our past performance exposures and linking Building Brilliance into our internal growth strategy.
Moving on to slide eight. The operational performance for the company is shown here on slide eight. The first half performance, as we know, was impacted in the September quarter by the fall of ground issues at Gwalia. Simberi's grade reconciliation, lower recovery also was problematic during the December quarter. Second half production forecast is strong and being driven by Gwalia. In terms of slide nine, this slide was presented at the December investor briefing. It shows the uplifts we're looking to achieve over the next three 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 Study at Simberi. With that, I will now hand over to Garth Campbell-Cowan and discuss the financials in more detail. Thanks, Garth.
Thanks, Craig. 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 on the same period last year at AUD 94 million, 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 AUD 37 million, our underlying net profit after tax at AUD 40 million was up on the same period last year.
We closed the half with AUD 119 million of cash in the bank and debt of AUD 101 million. 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 CAD 2,050 per ounce, and those mature monthly between April 2021 and December 2022. The board approved a fully franked interim dividend of AUD 0.04 per share.
If we now turn to slide 11, where we summarize the key financial outcomes for the first half. The first half results did show a solid financial performance, as Craig Jetson made reference to, albeit that production was down at Gwalia and Simberi. Our underlying EBITDA was AUD 151 million, which was 17% 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%, Gwalia's margin was at 45%, and Simberi 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.
If you look at note three 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 Simberi was mainly due to the stronger gold price in the half, and that was partially offset by the weaker performance from Gwalia. Depreciation and Amortization in the current half was AUD 16 million higher than the same period last year. 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 Gwalia after the completion of the extension project there.
Again, if you turn to note one of the accounts, we give a breakdown of the D&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.
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 Moose River Resources Incorporated. It settled in September, costing AUD 60 million. The operations generated a combined cash contribution in the half of AUD 117 million. That was after sustaining CapEx of AUD 52 million. We spent AUD 16 million on growth CapEx in the half, together with AUD 20 million on exploration.
Our corporate and royalty payments of AUD 38 million include corporate costs, all of our royalty payments, and the cost of the Building Brilliance program incurred in the half. Tax payments of AUD 17 million relate to our pay-as-you-go payments during the half of AUD 8 million, payment of the tax provision made at the end of the last financial year amounting to AUD 9 million.
The big movement in the half was obviously the financing payments, which included the AUD 200 million that we repaid on the syndicated syndicate facility, which we drew down at the start of COVID-19. We also had the first drawdown under the loan that we provided to the Linden Gold Alliance in support of the toll treatment agreement at Gwalia, 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 eight consecutive dividend payments since recommencing our dividends in fiscal 2017. Those payments amount to AUD 226 million over that period. The interim dividend of AUD 0.04 per share equates to AUD 173 per ounce produced, gives us a dividend yield for the half of 1.7%, 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 five-day VWAP price. With that, I'll hand back to Craig Jetson to make a few closing remarks.
Great. Thanks for that, Garth. 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 all of operations. The company remains in a very good financial position, AUD 119 million in cash and AUD 101 million of debt. We continue shareholder returns, as we've mentioned on this call, AUD 0.04 for fully franked interim dividend per share. In the near term, we will outline the results of the Simberi Sulfide Feasibility Study.
Continue to advance the Leonora Province action plan and submit environmental impact statements on Beaver Dam. Building Brilliance initiatives are starting to deliver an increased productivity and cost reductions have been seen across our organization. As a summary of the half, with that, Garth Campbell-Cowan and I will now take questions. Thank you very much.
Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speaker phone, please pick-up your handset before pressing any key. To withdraw you question, please press star then two. We'll pause for a moment as callers join the queue. The first question comes from Al Harvey from JP Morgan. Please go ahead.
Good day, Craig and Garth. I might just start at Gwalia. Just wondering what we can expect in terms of news flow on intermediate shallows and extensions projects over the next year or so? Maybe also just on tolling arrangement, is there an ability to extend these beyond 2022 if there's any delays to these projects to keep the mill full? Is there any possibility that regional stockpiles could be brought on sooner to boost that milling through that?
Al, look, I think there's multiple answers to your questions. Let me start in terms of what we're doing with the province plan. As you know, about several months ago now, we changed our focus and started some regional drilling and certainly started drilling out 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 models to see what we can do with what we've got. 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. As you know, we have an 18-month, two-year agreement already in place, and we're starting to draw on that as we speak. 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.
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 and January. One stockpile in particular with others on foot to move and to be brought in.
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 Gwalia 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. We're looking at that with a lens of growth opportunity, including what it would mean if we expanded the drill.
I guess from a blue sky perspective, if you saw the de-bottlenecking continue through Building Brilliance at Gwalia Deep, for example, and we have 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? Look at these stockpiles and tolling agreements. We may be in an area where we would grow that mill above capacity.
All these things are being studied and looked at, and we will certainly publish some of that information when it becomes available. We're JORC compliant with some of their drilling results or whatever it turns out to be in the very near future. I'm quite optimistic the way that we're building the strategy for Gwalia.
That's great. Thanks for that, Craig. Just moving to Simberi. The study's due this quarter. Is that going to include an FID or is that coming next quarter? Is there any tentative date in mind for the study? Maybe just on top of that, are you still expecting permitting to be an amendment of your current ML, and can you just outline for us the key permitting steps once that FID is made, if it's made?
Yeah. 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 Simberi in the coming weeks, I'm sure. Not just on the feasibility study but also on other opportunities.
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. All that in summary, operationally, is actually technically quite simple to do, and we will expedite whatever we possibly can, but without being reckless. Secondly, your point around the permitting is extremely important.
Obviously, we've been engaging with the local landowners, the provincial government, and the state government. We've met with CEPA, the mining minister, the minister. Pretty much every minister in PNG is aware of what we're doing. 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.
What we will be doing is clearly getting the difference between, and particularly from a CEPA 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. 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 de-risks it. Given what I see the investment being versus what the payback could be, it's certainly a couple of year payback. I think, even though our ML is out to 2028, 2029, I think it's 2028, we don't have that particular issue to deal with.
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.
Yeah.
You've got a three-year timeline for permitting at 15 Mile Stream. Is that kind of what we could expect for Cochrane Hill? What's the potential impact of the designation of the Archibald Lake Wilderness Area over at Cochrane?
Yeah, look. Let me start on the ground and work it up for you. I think the move of Laird, in particular, coming out of the GM ops role to go in and lead the investor government relations side of our business on Atlantic Gold 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 Laird, certainly, lined myself up for quite a few meetings over the next two 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. It's been problematic to get into the halls of government in recent times, but that will disappear.
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, they're coming along quite well. The engagement's 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's 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 with some flexibility in that. Cochrane Hill, that's eight, nine years away before we need to start moving and turning some dirt to realize that project online. 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.
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'll be a positive outlook on that particular facility in time. These sorts of areas around permitting are always a challenge and a risk to any project.
No more than ours, 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. Of course, we've got some very encouraging results out of our tenements with our own exploration as well. The current operation's 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 when we get that far as well, and those conversations have already started. We're demonstrating that we can operate in an environmentally friendly way at Touquoy, for example, is certainly a significant pathway to success for the rest of the permits.
That's great, Craig. Really appreciate it. I'll pass that on. Cheers.
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.