Thank you for standing by, and welcome to the SBM briefing on FY 2021 Q1 September quarterly report conference call. All participants are in 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 the number one on your telephone keypad. I would now like to hand the conference over to Mr. Craig Jetson, CEO. Please go ahead.
Thank you very much for that, Ben. Good morning, everybody. It's great to be here this morning to share our quarter one results and some of the great work that has gone on during the quarter. Also talk through some of the headwinds that has created in some areas of our business, a less optimal result. We'll talk about some of that in detail as we go through the deck. With me on the call this morning, I have Garth Campbell-Cowan, our CFO. Mr Rowan Cole, our company secretary. Val Madsen, our executive general manager, people, and David Cotterell, manager, investor relations. I'd also like to take this opportunity at this time to recognize the First Nation people where we operate. It's clearly the First Nation people of Nova Scotia and in PNG and the Gwalia Leonora region in Western Australia.
Also, I'd like to acknowledge the employees and the business partners that support St Barbara in so many ways through our general business needs. I'd also like to point out on slide two at this stage, our standard disclaimer, and would encourage everybody to take the opportunity to go through that at your leisure. Thank you very much for that. Well, turning to slide three and to start to go through the deck, in terms of the context and what I will go through during the content pages is where we are with safety and safety always, and what that means for us at St Barbara. We'll go through these in some detail as we go through the deck. Also we'll cover quarter one, FY 2021 performance, and in particular in some detail, Atlantic Gold, Gwalia, Simberi.
I'll also briefly update everybody on our progress and on exploration and where that's, I guess, focusing and how some of that is changing. We'll also talk about our Building Brilliance initiative that we launched across the organization about four or five weeks ago now, and that will continue through the remainder of FY 2021 and beyond. I'll finish up by describing where to from here and what's next for St Barbara. Moving on to slide four in particular. At St Barbara, we're guided by our five commitments in our values, led culture. These commitments were rolled out recently into something I'm very proud of the organization adopting, and they certainly underpin all of our values in the way that we operate. Let me start with safety always.
Zero harm is our target, and we're clearly striving to achieve that outcome in everything we do in all of our assets. Empowered people and diverse teams. We are an employer of choice and are committed to inclusion and diversity. I'm extremely proud of the way the organization operates in this particular space. We're doing exceptionally well. We certainly have an environment where our talented people are happy, they thrive, they feel safe, and can fulfill their potential. In the center of this is clearly our strong relationships and the work that we do within our communities. We certainly strive to help our communities thrive, grow, and prosper in a meaningful way.
We build relationships, we invest time and energy in local communities, and certainly try to deliver and work very hard to create legacy programs in all the regions where we operate that exist and will exist beyond the life of mine. At the same time, respecting environment is clearly a commitment that we spend a lot of time, a lot of effort, and we're doing the right thing in this particular space wherever we possibly can. We're committed to caring about the environment. We think differently defined solutions and manage to neutralize our impact wherever we are because we care about the environment and the planet. I'm also pleased to announce that we have set our internal targets to become carbon neutral by 2050, and we have some very exciting programs and projects to address that carbon neutrality in the coming months and years going forward.
At the end of our commitment train, we're growing our sustainability. In terms of growing our business sustainably, makes sense, in particular with strong governance practice, means that we can add value to everything that we do to our shareholders, for our shareholders, for our peoples, and the people in the community where we work. If I can now turn to page five in a little bit more detail on safety always and what that means. As I said, zero harm is our goal, and it's certainly our target, and we're striving to achieve that. Let me briefly speak about safety and safety always. It's first of our five commitments. I have to say our safety performance has been very strong. We know we've got a long way to go in this space to achieve our safety goals.
For now, our TRIFR is reasonable and certainly holding quite steady, and we're improving quarter- on- quarter in this space and will continue to do so with focus on safety leadership and some other initiatives. Our lost time injury frequency rate in comparison to all our West Australian mining peers is very good and certainly below industry average. That's something that we're very proud of at St Barbara, and we'll continue to maintain that rate in safety and safety performance, including efforts around safety leadership. Moving now on to slide six. Working in particular through our COVID-19 pandemic and the issue that's created, not only for St Barbara, but globally, of course. It's pleasing to say, since joining St Barbara in February, we've developed our COVID-19 management plan, and it's working exceptionally well.
St Barbara's priority during the COVID-19 pandemic is the health and wellbeing of our people, our partners, and our suppliers in the communities where we operate. Today, I'm happy to say, there has been no COVID-19 cases detected at our sites. The risk remains, diligence is maintained, we'll continue to follow our management framework that's been so successful into the future. This will be long-lasting in the way that we work, it certainly will continue on for the foreseeable future. It's been a very strong plan that's been adopted across the organization. It's been very effective for us. I thank everybody that's participated in that plan, not only in the development and the design of the framework, but also the management and the adherence by all people concerned. Well done so far. Look, I think now turning to slide seven.
I guess, let me begin to talk about some of the highlights and, to be clear, some of the disappointing areas of our business that have underperformed during the first quarter. We'll talk a bit more detail on those areas specific as we go through the deck at each one of our operations. Our operational performance in particular has been well below where we'd like it to be. Certainly been down on ounces, which is clearly impacting our all-in sustaining cost in a negative way. We've launched Building Brilliance, which is an integrated company transformation program that will create value in everything we do. Production volume for the group at this point in time, due to issues mainly at Gwalia, but we've still been able to maintain guidance going forward, and we'll talk about that later.
In terms of the next two blocks on this particular page, I'll hand over to Garth to talk about the financial metrics and the capital management. Over to you, Garth.
Thanks, Craig. If we look at the financial metrics, the contribution for the quarter at AUD 27 million was well down on previous quarters, was impacted by lower gold sales. At the end of September, we had just under 15,000 ounces of gold on hand, which is related essentially to timing gold shipments at Gwalia and Atlantic. Our average realized gold price in the quarter was AUD 2,171 per ounce. We delivered just over 39,000 ounces in the quarter into hedge contracts. At the end of September, we had just over 25,000 ounces of hedging that will all be delivered by the end of December. We've got a further just under 21,000 ounces to be delivered into contracts from Atlantic production, that'll all be delivered by the end of February next year.
We finished the quarter with AUD 93 million of cash at bank, and that was after repaying AUD 200 million of the syndicated facility at the end of July. We spent AUD 61 million on the acquisition of MRRI. In the quarter, we paid the final dividend from FY 2020, which took AUD 22 million of cash. At the end of the quarter, we finished with AUD 105 million of debt, and that's AUD 105 million of the AUD 300 million facility that we have. That debt is all related to the Canadian operations. I'll hand back to you, Craig.
Great. Thank you for that, Garth. Just briefly, where we're situated from a growth perspective, in particular, the organic growth opportunity of our business is quite exciting. The Simberi sulphide feasibility study is on budget, on plan, and certainly the FS is due to be completed in December. I will take that with the executive to the March board, for potential investment decision. The environmental impact statement, impact study and survey is continuing on. That will be completed by the end of March, which is on plan. We're allowing up to 12 months for that EIS to be approved. The company Building Brilliance program and initiative for organic growth opportunities is all about value creation. It will be published later in November of what the opportunities will look like.
Things like optimal sequencing of the Atlantic Gold projects will be part of that, where the sulfide project will potentially fit into our business, and what Gwalia will look like going forward under our Building Brilliance program. Turning to slide eight. In particular, I think, Garth, if I hand back to you for this particular slide.
Thanks, Craig. There's probably not a lot to say here. The consolidated position for the quarter. As we've discussed, the production, particularly at Gwalia and also at Simberi, was lower this quarter. That's what's essentially driven the high unit all-in sustaining cost for the quarter, which I'll talk in a bit further detail later in the presentation. Overall, that unit cost is all linked to the lower production level in the quarter. Perhaps now, Craig, turn to you to the more detailed slides on each operation.
Thanks for that, Garth. Let's turn to slide nine now around Atlantic. Atlantic continues to deliver very strong results and solid results. Certainly been very good in terms of cash to our business. It's been slightly down on grade in this quarter, and that's mainly because of sequencing the pit and some different mine plans that we've had that we weren't prepared to look at earlier in the year. At the end of the day, the production has been down slightly, but not materially. It's going along exceptionally well. We're maintaining guidance of 100,000- 115,000 ounces and still maintaining our guidance at all-in sustaining. Although a reasonably slow start to Atlantic, it's certainly a very strong operation. It's certainly considering the growth opportunities in that region.
I think the highlights of the quarter, in particular, was the solid result, good cash performance, great safety performance, but the consolidation of the Touquoy ownership obviously enables our operation efficiencies and the potential for our operation, including exploration upside, which I'll talk about in later slides. The Archibald Lake decision, of a few weeks ago now, not to be proclaimed at this point as a wilderness area, certainly allows us to continue on with the permitting process and working with all the regulators, the government, and the First Nation people about water takeoff from that particular area. Work continues on optimizing the sequence of all the Atlantic projects, and I'll guide on that, what that would look like through our Building Brilliance program and release sometime late November, early December. All in all, Atlantic Gold continues to operate very strongly.
It will certainly have started this quarter exceptionally well, so I look forward to some continued strong, safe results and some good cash performance out of that asset as we go forward. Turning now to page 10, in particular Gwalia, which is not such a happy story in terms of the headwinds that site's had in the first three months of this year, or in particular, all the way through quarter one. Gwalia's result was nowhere near where we wanted to be at the end of the quarter. This has been driven first and foremost by a strategy to lower production in quarter one, increase development, and stabilize the mine, set the mining operation up for a life of mine strategy of optimization and better continuity and certainly strong cash positions.
With that downgrade, if you like, why we led the mine to a different area of development, in particular. We've had three other significant headwinds. One was a slight overrun in a mill shut that caused us a few delays, but in itself, not that material, but added to the others, it certainly adds up to an average quarter. I think the other significant one was the delay in decommissioning all the equipment underground that was associated to the vent raise. It's taken some time, and clearly the optimization of the ventilation has now commenced, and we're starting to see some good results. It had been delayed through quarter one. The most significant business interruption was the fall of ground, driven by a 1.7 ML seismic event. Unfortunately, we did have ground failure, in the Hoover decline.
It was an area of the decline that had been flagged for the next sequencing of ground control upgrade. Unfortunately, we hadn't got there at the timing of this particular seismic event, and we had fall of ground as a result. We could have got going sooner than we did, but we elected from a safety perspective and good management practices to keep the mine down and rehabilitate that last section of the decline to say all the decline in these areas now have been rehabilitated to take the time to do that, considering we've mobilized all the equipment. It's the right decision strategically, although it certainly hurt our quarter one performance. As you can see on every metric, when you don't produce at Gwalia, it significantly increases our AISC. Pleasingly, the grades held up and continues to hold up into this quarter, so that's a positive.
For now, knowing what we know with our production plan, what we have broken on the ground, what we need to move to the mill capacity, we're still maintaining our guidance. Although not a good quarter, we certainly have a strong opportunity to build through the second quarter and ramp the business up as we plan to do as well. I look forward to a very strong second quarter. As we embark on rolling out Building Brilliance from the opportunities, which I'll talk about in the next few slides, that will also be a significant enabler for that site to unleash its full potential.
Moving on to slide 11, I'll pass back over to Garth, but I think clearly the message in this particular slide is Gwalia's costs being such a high fixed cost operation, certainly gets affected when we don't produce, and particularly all-in sustaining. Garth, with that, I'll hand over to you.
Yes, thanks, Craig. This chart just gives the actual dollar spend across the various quarters. As Craig just mentioned, the high unit cost is due to that low production. In terms of our OpEx spend, that was in line with our plan. That higher production then pushed that unit rate up. We did also spend, in the September quarter, a high level of mine capital development. Mine capital development in the quarter, included in that AUD 59 million, was AUD 19 million. Overall, in the quarter, we had OpEx spend of AUD 36 million, CapEx of AUD 20 million, and then the corporate allocations, in line with the all-in sustaining cost calculation, was AUD 3 million.
It was really driven by the low production, but also a high level of mine capital development in the quarter, which was planned as part of our first half focus on mine development. I'll hand over to you, Craig, with that.
Thanks, Garth. Turning to slide 12, and in particular, a little bit more detail about Simberi and the performance in quarter one. I'd have to say, great safety result, also a solid result from an operation and production perspective. It's a little bit lower than where we wanted it to be, we have had some headwinds around reliability. In particular, the mill times are down due to a SAG mill issue that was unplanned and a significant outage on that particular mill. Also, the last section of the RopeCon had failed, and we had truck reliability issues. Without the RopeCon, truck reliability issues certainly slowed the operation down from where we'd like it to be.
Now, having said that, this quarter we've already fixed and finished the rebuild of the last section of RopeCon, and there's been significant effort going into reliability around mobile fleet in particular. The countermeasures we've put in place, we certainly should not see the reliability issues into quarter two and beyond. I think the production, as I said, is slightly down. Grade has held up to where we thought it would be, so it's good, and we continue to forge forward into FY 2021 and maintain guidance on all things at Simberi. I think with the sulfide project, with the steady operations at Simberi, the safety performance, the community, it's a very strong quarter and will continue on for the rest of this year. Just finishing up on Simberi on slide 13.
I'd just like to highlight a couple of very good and positive points on this page. That, again, is the strong cash contribution from Simberi. I know there are some challenges of working in PNG, particularly in the COVID frame that we're currently enduring. The fact of the matter is the site with extended rosters, with the COVID plan that we have, good management, has certainly delivered a strong production result, extremely strong cash result, and that will continue on. The exciting upside, as we keep talking about, is the sulfides and where that is heading. As I said previously, the FS is on budget, on plan, to be presented to me during December, which we will take to the board, hopefully, for the investment decision to be made in the March quarter of next year.
We look forward to a positive outcome on that project as we work with all government agencies, including CEPA, the environmental regulator, the mine department through the mining minister, and the local government and provinces on the success of that project. I'm looking forward to positive results coming out of that at the end of this year. Moving on to slide 14 and starting to head off the operations into our exploration space of our business now. Starting off with the focus on exploration and where we are in Atlantic Gold, in particular in Nova Scotia. As you can see, we have a very strong exploration program in Nova Scotia. The three main areas of focus, as you can see by the blue shaded areas on this map, is the Moose River corridor, the Northeast region, Southwest region and the Northeast region.
We have projects in each of those areas of Nova Scotia. At the same time, we're still drilling around Touquoy and close to the mine and in pit with our Touquoy operation in search of opportunities to extend the life of the mine at Touquoy. That program is going quite well. In total, we are spending somewhere around the AUD 10 million- AUD 12 million on exploration through Nova Scotia, which is quite an investment. Turning to slide 15, and again, with a theme of exploration, we are looking at all opportunities close, near mill, close to the operation, and in the region to be able to fill the mill. We're spending around AUD 8 million- AUD 9 million in exploration. We've certainly been drilling in the Gwalia Shallows. We're looking at near mine exploration targets and drilling progressively there as well.
Things are starting to deliver some results that we hope to be able to talk about later this year or early next year. Areas of focus, not only on exploration from the obvious of filling the mill with what we already know, but also including where Tower Hill fits. We're doing some feasibility work on Tower Hill as we speak now. There'll be more on that later. First and foremost, from an exploration perspective, we're certainly looking for opportunities in the nearby region to fill the mill. Moving on now to exploration at Simberi on slide 16. As I've mentioned before, and I did mention in quarter four of last year, that we're starting to refocus our drilling programs in PNG.
We've cut back a lot of our drilling programs in the greater Tabar group of islands to be more focused on the Simberi island itself, and more so in the region of Simberi pits, historical pits, also, clearly in the pits that we're operating around now around Sorowar or Pigibo, in particular. The reason for that is twofold. One is we know there are oxides and potential oxide targets for extension of life of mine at Simberi, and we're certainly looking forward to finding out where they are in the pit sequencing. Secondly, to get more ore body knowledge about where the sulfides fit in the pit, and so we can start to deliver a really robust and good mine plan, and a transition plan between oxides and sulfides somewhere between FY 2023 and FY 2024.
Those results will certainly be ongoing through the rest of this quarter and possibly into quarter three of this year. We're optimistic about what the close to mine exploration program in PNG will deliver for us. Just moving away from the core work of the operations for a moment is, as I've mentioned a couple of times through this deck already, in July, we launched a company-wide initiative called Building Brilliance. Building Brilliance is an integrated company transformation program. We all create value in everything that we do, engaging for our people, engaging our communities and shareholders, and it certainly works exceptionally well with our people in our operations. This is the first step towards building a brilliant global mining company that grows sustainably and creates, I guess, future positive impacts and certainly a lot of value.
Through Building Brilliance, we're identifying opportunities to lift performance by increasing productivity, reducing costs, and ultimately lifting the value that we deliver in every way. It encompasses all aspects of the operations and capital projects, supported by an operating model that prioritizes technical expertise and embeds business improvement across the organization. The significant frontline engagement to rethink our core processes and capabilities is also part of this program. We are instilling a performance-led culture that continues to prioritize safety, people's well-being, stays true to our values, enabling us to operate safely and sustainably. Our entire organization has been empowered to seek out opportunities to solve historical challenges and deliver improvement to achieve success going forward in particular. On slide 18, this program that we're calling Building Brilliance is the first step in our global strategy.
As a growing gold company with a global outlook, we're focused on creating value in everything we do. Growing our operations and business sustainably is one of our five company commitments. Each of our three assets are transforming and transitioning through unique stages of their life, with Gwalia going deeper, with Simberi and PNG with the oxides, and of course, with the sequencing and the growth potential at Atlantic. Building Brilliance will certainly bring out the best in all of our operations organically and continue to take the organization ready for future growth. Our people will certainly be coached, and we will deliver what we're calling an owner's mindset, solving all the challenges from the past, resolving constraints to take our business to the next level. We're currently identifying and prioritizing a range of productivity improvements and cost savings.
That's something that we will update in a full strategy of what Building Brilliance will deliver in quarter two. What does that mean? Moving to slide 19. Things and areas that we are heavily focused on in the first five to six weeks of our Building Brilliance launch and our program is disciplined delivery. Certainly, execution discipline in everything that we do is a focus. Short-term interval control and continuous optimization is something that you would have seen the success of quarter four last year at Gwalia. That will be embedded in Gwalia as the way we do business and right across all of our operations at Simberi and Atlantic Gold as well. People leadership, high-performing leaders in every area and every space of our leadership program. Coaching development is at forefront, and certainly recruiting high-performance leaders into our business as our business changes.
Asset productivity and utilization, maintaining equipment. Clearly some of the things that have hurt us in quarter one, in particular, is utilization of equipment, but more so the reliability area, and that certainly hurts the productivity. We're focusing heavily on all aspects of productivity across our organization, not just in equipment. Technology and innovation is something that we're very active in and certainly doing a lot of work in all of our operations and upgrading current assets to accept recent technology. There's a lot of technology on the market that we can bring in that will help us safely operate our mines more reliably, more efficiently, more cost-effectively, and certainly with production uplifts. Continuous improvement, changing our focus clearly on a continuing improvement, embedded management operating systems will certainly embed through people leadership, short-term interval control, and MOS system.
All in all of this strategy around Building Brilliance will unfold and unleash enormous organic growth. Not just organic, but focusing on organic growth at this point in time. What's next? Last but not least, on page 21. As I said before, each of our three assets clearly have got unique growth opportunities. I'm very excited to see what those opportunities are starting to look like and start to be unleashed in terms of where the Building Brilliance and our bankable plan seems to be heading. Near future term at Gwalia, including regional exploration, very, very strong. Delivering the sulfide project and feasibility, as I said before, it's Simberi. Optimizing all of the Atlantic Gold projects really does set us up for success for the future.
As I said, I'll be back out and talking about our Building Brilliance program in a lot more detail in late November, early December. All in all, in summary, that's quarter one and a snapshot of what the future would bring. Ben, if I could hand back over to yourself now.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star and then two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Nick Herbert from Credit Suisse. Please go ahead, Nick.
Thank you. Good morning, Craig and Garth. A couple from me, please, around Gwalia. Just interested in your latest thinking and learnings, if any, going through that sort of increased development around what mining rates could be achieved there. Just to be clear around the timing of when some of that optimization work and mine plan update will be made available, whether that's due with that Building Brilliance update later this year.
Yeah, Nick, look, thanks for that. It's a really good question. Look, I have to say that to wind the clock back and have another, I guess, era of looking to do things differently at Gwalia, we may have done that. Hindsight's always fantastic. The fact of the matter is, during the delivery of the projects over the last few years, we haven't really been able to come out with a mine set up for consistent delivery, safe delivery of the future, and that's something that we are changing our focus to at this point in time. I think if we hadn't have had the fall of ground, these things are all in the timing. Poorly for us, it was quarter one.
Secondly, the timing of that large seismic event in the bottom of the decline or the further decline in particular, was in the last area of rehabilitation, so it hurt us more than normal. What I'd have to say is, given some of the short-term interval control and some of the work that we did back in quarter four, how that's starting to play out now at Gwalia is very, very optimistic. I'm looking forward to better results. The Building Brilliance program will come out with a different lens on what Gwalia will look like in terms of cost performance, in terms of ounce profile, and where we are with things like Tower Hill, things like the Gwalia Shallows and some of the more detail around the drilling results of near mine. It will be integrated.
The Building Brilliance program itself will be the integration of all those opportunities, and we will bring that forward in November and December to show where we're going at Gwalia. We've started this quarter quite well and we'll continue on that strategy. I still refer back to lowering the production in quarter one, increasing the development, decluttering the mine, taking costs out, optimizing the mine now we're starting to get better ventilation, is absolutely the short-term, medium-term, and longer-term life of mine best strategy for that operation. I'll talk a bit more about that at the end of December.
Okay, great. Yeah, thanks for that. I'll wait for that. I had a second question, just interested around what those near mine opportunities were around Gwalia and what the most prospective were, and timing for those. Sounds like we probably just have to wait for that coming update for details around those. I'll leave it there. Thanks.
Yeah. Thanks, Nick. Look, I will say that we are doing some significant drilling at the 600-700 meter mark in what we're calling Gwalia Shallows. That looks like having some promising results, and I'll talk about that later. Drilling from the surface into the Gwalia Shallows hasn't been as good, but we do have opportunities to understand what the life of province is with the low-grade to medium-grade stockpiles we have on the surface. Where do they fit into the life of mine strategy? Where does Tower Hill fit? What's the opportunity in Tower Hill? We're revisiting that as we speak, and part of that will be the integrated plan later this year.
Okay. Thank you.
Thank you, Nick. Your next question comes from Levi Spry from JP Morgan. Please go ahead.
Good day, Craig and team. Thanks for the call. I'm still a little bit confused as to Building Brilliance at Gwalia. Exactly what will we see in late November, early December? Is it a new life of mine plan, or it sounds like some of the drilling is only just starting now. Will it actually include ounces from Tower Hill and some of these Gwalia Shallows and stuff like that?
Look, Levi, the answer is yes. We're currently working through what the Tower Hill potential is if the gold's been sitting there for a long time. We certainly want to integrate that into a mine plan going forward if it fits. We've got to do the work to understand where that is now. The drilling in the shallows hasn't just started. We're just getting some results back and some, in particular, have been quite positive. The Building Brilliance program at Gwalia, just from an operational perspective, not the culture and the people side, but just from the operation perspective, will clearly lay out what our organic growth will be, where the life of mine strategy, what that looks like and the ounce profile. What the cash costs and the all-in sustaining costs will be as well.
It's clearly an integrated program for the most organic growth that we have available to us in that operation long term. One of the clear things for me is Gwalia's got so much opportunity to be decluttered, restructured, and technically deliver month- on- month, quarter- on- quarter and beyond, very significant cash results to the business, the bedrock of our cash performance, and certainly stable ounces year after year if we get the development right, if we get the mine plan right, and if we can execute to strategy using short-term interval control, driving out all our waste. I'm quite excited about what Gwalia will deliver as it will happen in the other operations as well. Gwalia is clearly a focus at the moment because it potentially has been an underperforming asset for way too long, and we're going to turn that around.
Yep. Okay. Thank you. We should be able to model all that up as well in a couple of weeks. Just thinking through the processing of third-party ores, how does that fit in? What sort of volumes are these contracts for? How are you getting paid? How do we model that up?
I'll let Garth talk about the financials because I think we're quite guarded on some of those agreements, given that it's a third-party agreement. We don't want to disclose, I guess, the commercial terms we have with them. From a St Barbara perspective and Gwalia in particular, we certainly have entered into more tolling agreements this year. The reason is because clearly we have the capacity in the mill. Our processing efficiencies and recoveries and costs certainly put us in the money. It's not the best outcome. If we owned the gold, it would be a little bit better, but we don't. We can buy it in, and we can buy the production in, and we can make significant cash for the business that overall lowers our cash costs. It's a good outcome.
Longer term, I'm certainly looking and working with, I guess, the lens of JV potential, growth potential in the region from some of the juniors, whatever that looks like, including our own exploration programs. Garth, you want to comment further on the tolling? For me now, in summary, it makes us cash while we've got the capacity and we don't have the mill filled ourselves. It's a good business outcome. I'll just pass back to Garth for any further comments.
Yeah, I think because you've got a fairly fixed component of the cost in the mill. The more ore you can get into the mill, you spread that fixed cost across more tons. In the tolling agreement we get as part of the fee we charge, we get all of our variable costs of treating that ore, plus an amount well above that to defray some of our own fixed costs. That's a good outcome for us because we do make a reasonable margin over and above the variable costs for processing that ore. That's all negotiated as part of the tolling agreement. That's been our objective, is to try and get as much additional ore to cover those periods where we don't have the mill full.
Yeah. Thank you. Just so, how material is it? How will you report it? Is it in your production guidance?
No. They're all. We don't own the ounces, so it just comes as a credit to our processing costs.
Okay.
Yep.
This runs into FY 2022 and beyond?
Well, at the moment, we've got agreements that cover this current financial year. As we refine our mine plan, we'll look at further agreements. There are other ore sources. As Craig mentioned, we prefer to own the ore ourselves. We don't want to lock ourselves into agreements that then prevent us from processing ore that we might find through Tower Hill or any other opportunities.
Okay. Thank you. Just sticking to slide 20. Atlantic. What can we expect? What are the deliverables there, I guess, in late November for us, in terms of modeling?
Yeah. Levi, I think the November discussion and model will unfold is the sequencing of all the projects. Because we have some optionality, and particularly now that we've successfully purchased the 40% of MRRI, gives us more optionality. At the moment, we are doing a lot of work on sequencing the projects, working out how to extend the life of Touquoy, and what the timing of bringing on 15 Mile Stream, Beaver Dam, all those sorts of options. I think what you'll see is an integrated plan of the sequencing of all the available options that we have and a recommendation of what we will take to the market, I guess, in terms of sequencing of all the projects and the timing of that sequencing, when they're online, and, I guess the broad, aspirational targets and numbers that we'll set ourselves.
Yeah. Okay. Thanks, Craig, and just last one. Just maybe a little bit more strategically, you're listing investments in these three or four little companies. You've got 15%. I imagine they were mostly acquired pre-Atlantic. How do they fit into your pipeline, or what's the update on, strategically, what you're trying to do there?
Look, I think they still remain solid. They still remain exactly in the portfolio for the reasons that they were acquired and our buy-in at the levels that we did for now. Like all things, with the external view of what's happening in the world and where M&A potentially may or may not go and how we could grow in that space if the timing or the project or whatever came up, we would review all those options. For now, strategically, they fit quite well. We are looking at this entire organic growth program and what's in the tank first and foremost. Outside of that, I'm certainly keeping an eye with a very active business development team led by Meryl on what's happening and what are our opportunities to grow once we get pretty much our license to grow.
That would be only a few months away, depending on what's available. Strategically, they still fit, but they fit into our M&A and our business development portfolio quite nicely still.
All right. Thank you.
Thank you, Levi. Your next question comes from Alexander Barclay from Morgan Stanley. Please go ahead.
Hi, Craig and team. A couple of questions from me. The first one, just to follow up on the Gwalia optimization, particularly on filling the mill. It looks like a good opportunity there, but it's probably one that's been around for a while. Is there something that's changed to allow you to look at that now? Maybe a higher gold price has lifted the economics of neighboring deposits, or is it positive exploration of those and what you've seen in the Gwalia Shallows? Just interested on your thoughts on why this has now become such an upside opportunity.
Look, I think there's probably timing. Everybody has an opportunity when you come into these sorts of new roles. You've got a different lens, probably a different way of operating, look at things a bit differently. That's number one. I've certainly got a different technical overview of how we need to run the business for success going forward to be able to extract maximum value out of all of our operations, and we haven't been doing that for a lot of reasons. Again, not for anything other than strategic and timing reasons. You're right. I think the gold price certainly brings some of the history back into play, and we need to reassess that and have a look at it.
I think there's significant upside at Gwalia to be had with the stockpiles today, with the recovery of those being near the mine, Tower Hill, where that sits. It's just rerunning all those models in today's climate using a different deconstrained level of thinking of what we can do to fill that mill ourselves before we look at JVs or tolling agreements or acquisitions. When I look at it on paper, I'm thinking opportunity, and I'm thinking it's huge. Building Brilliance will bring that together sequentially to make sense of the value creation. I just think it's a changing of St Barbara's technical view of how we're running, and we'll run the operations into the future.
Yeah. Okay. No, that makes sense. Just a quick one on Simberi oxide and the like heading out to FY 2024. Is part of that going to be maybe some transitional material? Should we be expecting a similar blend and recovery to what you've been getting right now?
Look, the FS will give me the more accurate numbers to talk about that in detail. I think the transition material starts to come online, I believe, in around FY 2024. I think we have enough oxides, or we'll be processing oxides at a rate of about 1-1.1 million tons in the first part of FY 2024. We'll go through a transition into the oxides of around 2 million tons in that year. Processing around 3 million tons, so say 1 million of oxides, 2 million of sulfides in 2024. That's the year that we're calling the transition year.
Yeah. Just if the sulfide, hypothetically, if the project's not approved, and you're just mining from current oxide pit shells, would you be expecting similar sort of recoveries going out to FY 2024, and you would still have access to that ore out to that period?
The answer is yes, optimistically. I'm validating that with the concentrated drilling effort that's going on at Simberi as we speak, as I alluded to in my presentation. One of the things that we are finding in early drilling is, as we're looking for firming up the oxide, more opportunity to design effectively the new pits going forward. For sulfides, we're finding oxides on the way through. Selective mining for the future may even give us more upside in the oxide world than what we currently know of today. I believe by the end of this year, I'll certainly have a better view on whether we can selective mine, whether we're better off swapping over and backing ourselves into the sulfides like we intended to in the timeline that we've got. I still think it's a combination of both.
Interestingly enough, some of our recoveries have dropped off a little bit this quarter because we're getting a lot of sulfide material come through. They're always sulfides in the ore at Simberi coming out of those pits every day. It's just the amount. Look, I think our recoveries will stay about the same all the way through to the transition period. The feasibility that will be tabled in December for me will give me more of a scientific view, given the metallurgy will be completed and the CSIRO assessments will be done, at that stage to give me a better window on what that would look like.
Yep. Okay, great. Thanks for that.
Thank you, Alexander. There are no further questions at this time. That does conclude our conference for today. Thank you for participating. You may now all disconnect. Thank you.