Good morning, everyone, and welcome to our quarterly call. Our executive team is here with me today for the Q&A, which we'll get to very shortly. Before we start, as always, I'd like to acknowledge the traditional custodians of the land on which we stand, the Whadjuk people of the Noongar nation, as well as the First Nations peoples of the lands on which we conduct our business. We pay our respects to their elders and leaders past, present, and emerging. As always, we'll start with safety. We finished the year with a group TRIF of 1.6, compared to 1.7 at 30 June 2025, and reported three high-potential incidents in the quarter. Of course, we just can't forget the tragic loss of our colleague, Iván Manuel Vázquez Garrido from Construcciones Mary , who was fatally injured at our Magdalena mine in Spain on the 25th February.
His loss and our other high-potential incidents reinforce just how important the work we have underway to strengthen our safety, broader risk management systems, and leadership behaviors is. Nothing will ever be more important than the health and well-being of our people. Our people have a lot to be proud of. As you would have seen, we finished the year with very strong momentum. We delivered a 38% increase in group copper equivalent production in the quarter, taking annual production to 154,2 00 tonnes, comfortably achieving guidance set in July 2025. At MATSA, our team delivered 26,500 tonnes of copper equivalent production in the quarter, taking annual production to 94,500 tonnes on the back of record quarterly mill throughput of 4.8 million tonnes per annum, higher copper grades and recoveries to further entrench MATSA's growing reputation for its consistency and predictability.
The story for Motheo is arguably even more compelling. After a somewhat soft start to the year, admittedly, our team finished strongly to deliver a 65% increase in copper equivalent production in the June quarter for annual production of 59,7 00 tonnes to again comfortably achieve guidance. At Sandfire, it's just so important that we deliver on our commitments and do what we say we will do. Having lost face position following the floods of last year and worked hard with our contractors to reset expectations, we're back where we need to be. Having moved into the higher-grade ore zones within both the T3 and A4 open pits, achieved higher metal recoveries with more to come, and proven the potential of our processing facility with more than 6 million tonnes of ore processed across the year.
While like others, we've been impacted by inflationary pressures that have built since February and the onset of war in the Middle East, the quality of our assets again shone through as both MATSA and Motheo operated at a C1 level of less than $1 per pound across the quarter. The temporary, and I stress temporary, rise in unit costs at Motheo to $54 per tonne of ore processed does, however, require further context. I ask you consider our higher grade and higher cost A4 mine achieved commercial production, and its contribution rose in the processing blend as expected. We completed almost 35% of Motheo's annual sales on a contained metal basis in the quarter, and in copper's case, at over $13,000 per tonne, which led to significantly higher royalties and freight charges. Of course, our fleet, while well supplied, was fueled by higher cost diesel.
With this in mind, it's particularly important to note that we expect only an incremental increase in unit costs at both Motheo and MATSA in FY 2027. In other words, a rise of around one to $2 per tonne from the average unit cost achieved across FY 2026. What I'd really like you to take away from today is that our teams have delivered a suite of quarterly operating and financial records whilst maintaining an eye on the future. Ensuring we're set up very well operationally as we move into the new fiscal year with great confidence in the copper equivalent production guidance we've provided today of between 150,000 tonnes and 166,000 tonnes for FY 2027.
More broadly, our proven projects team has made rapid progress at Kalkaroo, having quickly established key infrastructure, including an 80-person camp and commenced our planned 130-km infill and extension drilling program that underpins our $70 million pre-feasibility study, which remains on schedule to be completed in the second half of FY 2028. Before I conclude and we move into the all-important Q&A, I should remind you that we will have a number of other important projects on foot through FY 2027, including construction of our new tailings facility that will support operations at MATSA beyond 2040, the progression of the Stage 4 cutback at T3 in Botswana that sets up Motheo beyond FY 2029, and the DFS for A1, where mining activity is provisionally scheduled to commence in FY 2029. We're also looking forward to providing a broader update on our exploration activities when we report in August.
For the avoidance of doubt, I should note that we remain on track to declare a maiden reserve for A1 as promised. To sum up, we generated record financial outcomes in the quarter as particularly strong operating performance and buoyant commodity markets combined to deliver group sales revenue of $574 million for underlying EBITDA of $343 million at a margin of 60%. To finish the period with unaudited net cash of $353 million, an increase of $277 million in the period. Our report card for the year confirms we have the right strategy. We're producing the base and precious metals the world desperately needs from two high-quality assets. Our balance sheet is increasingly strong, and we've added an attractive development option that has the potential to deliver the next wave of growth in total shareholder returns. With that, let's go to questions. Thank you.
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 Paul Young with Goldman Sachs. Please go ahead.
Morning, Brendan. I hope you're well, and good day to the board and team there. Brendan, can we start with just the performance on Motheo and also discuss recoveries at MATSA, which we typically always discuss on the quarterly calls, and they're good discussions. Just on the mill throughput at Motheo, which I think was over 7 million tons per annum run rate. I know you didn't do any maintenance in the period, but we're now talking about a mill that's running sort of 40% above nameplate, which is extraordinary in industry terms. Just want to comment around how that was achieved and is there anything to call out with respect to your guidance for next year, which might actually appear to be a touch conservative.
Look, thanks, Paul. Let's start there and we'll come back to your recoveries question at MATSA, which we always look forward to. Look, you're right, Motheo had an incredibly good quarter. It produced very well. I think it's fair to say it was set up for success. Remember that we shouldn't forget that Q3 for Motheo was probably the most disappointing quarter we've had since Motheo commissioned, and primarily because we had the issue with the OEM grate, which really meant that we had an opportunity to bring forward a whole lot of maintenance. Basically, as you should, as good miners, we took advantage of that opportunity. Therefore, again, we came into Q4 knowing that, with a pinch of luck, we were going to deliver a very, very strong end to the year. Which is why we remain confident that we could achieve guidance.
Look, we understand why the market was probably a little bit more skeptical. Look, Jason's probably best placed. He's got quite a lot of detail around this. Particularly, I think the critical thing is to why we don't want people to get ahead of themselves as we move into the next year. Jason?
Right. Thanks, Paul. Brendan's comment there about Q4 being set up for success is on the money. If we look at it, Brendan touched on it, we had a major shutdown in Q3 that was originally planned for Q4. We did a lot of work in that quarter and opportunely during that period of time to make sure that we did not have to take down the mill on a planned basis for an extended period of time coming into this final quarter of FY 2026. The other point I'll make is that we saw very much the increasing proportion of A4 into the blend, right? Processing. What we are seeing and where we are in that ore body in the upper levels, it is softer than we expect for the overall average of that ore body, so we get an overall throughput improvement there as well.
The third point I'll make is that we've stated before that we've invested in debottlenecking for Motheo plant in FY 2026. Those works were completed and largely commissioned during Q4. We saw the benefits of that work coming in, particularly around tails lines, right. Our ability to handle concentrate and store concentrate there at the back end of the float circuit gave us some real advantages there about maximizing throughput in that period of time. All those things lined up to deliver what we all consider is an excellent quarter in terms of throughput for Motheo. If I look forward and if we think about it on a sustainable basis, when we factor in major planned shutdown events over an annual basis and going into FY 2027, we have two of those major shuts planned, right, for that plant.
The other thing that we will see, and particularly with the further increase in the proportion of A4 ore going into the blend, we know that ore will get harder at depth, and it is harder than T3 ore. We had originally identified that in the feasibility study for A4. We know that will have an impact going forward as well. Then from a value point of view, I touched on the debottlenecking earlier, right. What we are seeing at the moment now, particularly with head grades sitting around about 1% or slightly higher, the overall constraint in that circuit has now moved to the flotation circuit and our ability to be able to cope with the, if you like, the copper minerals. From a value point of view, if we run it too hard on the current configuration, we'll start to see a recovery drop.
You will note from appendix A that we are forecasting 93% recovery going into FY 2027.
Yep. Okay.
Sorry, Youngy, if I could just maybe.
Yeah.
I understand this sort of bent towards a question of conservatism. Hopefully, from what Jason said, you'll recognize there's a lot of things that go into this. While we think that the guidance we're providing is appropriate, I think it's fair to say, though, that if we look back at the start of FY 2026, we knew we needed a lot to go right because we were still recovering from the floods. The team, I think, has done an incredibly good job to work through that, they've obviously had to reset some expectations with our primary contractor. I think that's now looking like it's more on foot.
The critical thing as we go into next year, I think, is, I don't think it's conservative, but what I would say is it's a lower risk year, and that's primarily because of the face position we have sitting effectively all bound in both of T3 and A4.
Yep, understood. No, that's comprehensive, guys. Look, I'll park the recovery question up on MATSA, Brendan. Actually, keen to discuss the upcoming Resource and Reserve update, and I know you did a bunch of drilling in the quarter, and looks like you'll release those drill results with the R&R update. Just curious around how you think about what copper price you're going to use in your reserve calcs coming up. I know you've been pretty conservative with MATSA to retain. I don't have the numbers exact in front of me, but I think around sort of somewhere between $3.50 and $4 a pound, and Black Butte may be a little higher. How do you think about this? Because it's obviously going to play into everything you do with respect to the mine planning and even Kalkaroo and even decision on Black Butte, where you settle on that.
Can you just step through your thinking around how you actually assess what copper price you will use in your estimates?
Yeah. Look, thanks, Paul. Again, something that we spend a lot of time thinking about. I think we're also careful to make sure we don't believe that we have some unique insight into the copper market. We're very careful around that. We can see all the pressures that are building on the supply side, all the challenges with the aging fleet, rising strip ratios, and I could go on. We've historically used a price in our, call it, our business of well less than $4 a pound. We acknowledge that the market's view of long-term pricing is rising. You won't be surprised if one of the considerations for us is a number that's more in the fours than the threes.
Now, in terms of the impact on our R&R statement, we've given you a little bit of insight as to where that's headed. You can imagine from a Magdalena perspective and even Aguas Teñidas, that sort of move doesn't have a really meaningful impact. Even at Sotiel, it's not overly significant. It really is only if you start pushing above fives. That's an interesting thing because we also note that a number of commentators in your world are talking of prices in the $500- $550 range. That actually starts to become quite interesting. When we look at Motheo, the comment around broadly replacing depletion, I said earlier on in my speech that we're on track to declare a maiden reserve for A1. We'd said historically that could be in the order of half a year. Sort of call it as a function of throughput.
I think recently we said it's looking better than that. A1 will be a big part of that initial replacement of depletion this year. Remember that we've only recently accelerated a lot of infill and extension drilling around T3 and A4. As you start looking at prices more in the fours than the threes, that becomes really important as a potential further extension life. That's why we've accelerated that drilling program in the first half of this financial year. Look, there are a lot of moving pieces. I think the other thing, Paul, Kalkaroo, I think from an investment perspective is going to be much less sensitive if we're right. We think that the economics there are compelling at a range of price assumptions.
Obviously, again, we mentioned that the existing reserve, if we put the sorts of market type prices into the model now, we basically extract 100% of the mineralization, and that is the challenge there that we need to obviously extend the drilling below 200 m along strike and hopefully significantly extend and expand the size and life of that ore body. I think, obviously, as we come back to you in August, what I'm looking forward to is providing a bit more detail around that. We're also looking forward to talking about some of the, call it, the more regional, and near mine type drilling that we've been undertaking. We're seeing some level of maturity in that program. I think we're getting more dexterity in our targeting, and there's probably a lot for us to talk about, but we'll leave that till August.
Okay. Thanks, Brendan. That's really helpful.
Thanks, Paul.
Thank you. Your next question comes from Daniel Morgan with Barrenjoey. Please go ahead.
Hi, Brendan and team. On the Motheo, obviously a very good runner, that you talked at length about that. You mentioned, don't annualize this quarter, of course, because you didn't have a shot amongst others, and you mentioned you got two shots coming up. Could you maybe just talk about when the shots are scheduled at this stage? Appreciate they can, of course, move.
I think probably the easier way for us to talk to that is when we look half on half. We're expecting a relatively steady sort of profile this year. I think, Jason, we're not expecting a heavy skew from one half to another.
Yeah.
Maybe if you can color that sort of quarterly profile in a little bit, Jason. Noting that as we said, we're well set up going into this year, and we've started the year well. We're only 20 odd days in, but it's been a good start.
That's it. At both assets, we expect our production profile to be largely even across all four quarters, and even noting that we do have major shuts there at Motheo planned, and they are planned currently for Q2 and Q4.
Thank you. Just expanding on the optionality question about how different copper prices impact what you do. Are you making sure that in everything you do, you maintain the optionality of these assets if copper prices are meaningfully higher? What steps can you do to maintain the optionality?
Yeah, look, I'll ask Jason to color a bit in. The irony with this is I actually sort of think of it the other way, that we're quite optimistic, no doubt, about the future of copper. We're optimistic for the reasons we've mentioned many times, that we think there's structural dynamics that underpinning demand, we think the supply side is challenged, particularly call it the major drivers of the supply side maturing, and the pressures that they face. Obviously the amount of capital that's needed to just get them to stand still. We believe in that. The one thing we're very mindful is, as we start to think about higher, longer-term sustainable prices, how do we make sure we don't fall into the trap as other miners? That there is volatility in this world.
Despite these structural trends, you still have deep volatility in commodity markets, how do we make sure we set ourselves up for success? What we do, Dan, is we've done a lot of work in our life of mine planning. You've heard us talk about the hill of value work we've done. We understand the levers we have. We also understand when we need to take the decisions. Now, when we think about Motheo, we're starting to build into our thinking, our plans that enable us to optimize into the longer term in the event that we see even higher prices than what the market's long-term numbers are ratcheting up to today. We know that we don't have any major decisions that we have to take with any regret for a number of years from now, right? We understand that.
Similarly, we do that work with MATSA. As I mentioned, the big opportunity, call it, with the existing ore bodies at MATSA today is still the down-tip extension of Magdalena. Because of the NSR of Magdalena, it's really not overly sensitive to higher price assumptions. Jason, anything else there?
Look, building on Brendan's comments there as well. As part of our annual life of mine planning cycle, we run multiple scenarios, and a number of those scenarios are at higher pricing assumptions. We make sure actively that we know what optionality we have in a higher pricing environment. As Brendan said, we know exactly when we need to act on those things if required. If I drill down a bit there at Motheo, given that it's an open pit operation, we stockpile separately high, medium, and low grade. Our low grade material basically factors in, and we stockpile that separately. Material that's currently not economic but is possibly economic in the future. If we look at our pit staging designs, particularly Brendan touched on there the extensions of both T3 and A4.
We've got enough geological knowledge to know at what price they start to come in and exactly when we need to start mining those areas if we're going to pre-strip it in time and make sure that they've got a meaningful contribution to the life of mine production profile. If I go on to MATSA, if you look at Magdalena, its high NSR, basically we're mining pretty much everything there. Whereas both Aguas Teñidas and Sotiel have more of a low-grade halo around that, and we do run a variable cutoff grade in our tactical planning to make sure we're not sterilizing too much of that ore, particularly at Aguas Teñidas. We're aware of potential additional ore sources that tend to sit more at depth and on the periphery there are associated with our stockwork mineralization. We've got ongoing studies there to unlock further potential at Sotiel.
I think, Dan, I've talked about in the past that my analogy for MATSA is a bit like the komatiites in the Kambalda Belt. Obviously the nickel industry. The prior owners sold out of them in the early 2000s. They ran for 20 more years. I think it's easy for us to skip over the fact that three, four years in, we're continuing to replace depletion, and we also still have a lot of belief in the work we're doing to substantially improve that position. We need to prove that to you, Dan. We need to prove that to ourselves. We haven't stepped away from the belief that the objective for us is to have 15 years of reserve life ahead of the face. We're working really hard from an exploration perspective to try and unlock that.
As I said, we'll hold a lot of that discussion off until August to give you a better feel for how that's coming together.
Really appreciate the perspectives, Brendan and Jason.
Thanks, Dan.
Thank you. Your next question comes from Levi Spry with UBS. Please go ahead.
Hey. Good day. Thanks for the extra detail on some of that stuff. Maybe I can just push a little bit harder without going too far. Just on the broadly replacing depletion point, that's pre a price change, I assume?
I think the point that I was making is that it's not an overly big driver in the numbers this year. Into next year with the infill and extension work at Motheo, it's got potential to bring more. It's not a big driver, but it's built into our R&R statement, and we'll talk to that in August.
Okay.
As you know, the problem with all these things, Levi, is there's a whole lot of lags in this. Work that we were doing 18 months ago, we drilled, if you remember, 100+ odd kilometers of infill and extension last year. Not 2026, 2025. We're only seeing that come into our R&R statement this year that we'll release in August. The work we've done in the last 12 months is actually going to come through next year. A lot of it. The work we're doing and accelerating at Motheo is only going to come through again in the next statement, not the one we'll release in August. That's one of the challenges with all of this, as you know.
Yeah. Got it. Thanks. Just back to the throughput piece. Thanks for the detail there, Jason. I get the hardness piece and obviously the major shuts and stuff. They aren't very good numbers. Is extra float a consideration?
Look, we've done the engineering and the metallurgical test work to test that. There are some options and we are looking at. We are evaluating at the moment about is there a good business case to go and invest further capital.
I think, the way I think about that, Levi, I love the question, is that these things are linked, right? The work we're doing on these extensions at T3 and A4, the work we're doing, declaration of maiden reserve at A1, the DFS at A1, understanding some of the proximal opportunity that potentially exists at A1, understanding some of the opportunity we're seeing around A4. All of these things are really important because I think what you can take away from the results today is as we uncover and as we define new reserve opportunities, we absolutely have the potential at relatively low capital cost to bring on more throughput capacity at Motheo. Loath to do it until we've actually unlocked that potential.
Yes. Thank you. This last one. On Black Butte, can you just remind us of the next steps? Or previously, I think you said you might be talking a bit more about the results. What's the next step there?
Yeah. Look, keep that one really simple. Again, I'm always respectful of the fact that Sandfire America is a public listed company on the Canadian exchange. Jason's actually the chair of that entity. Again, very mindful of that. Our strategic review, the engagements we have with Sandfire America are very, very constructive, as you'd expect. We are effectively the major shareholder with an 87% interest. We are the sole financier. You'd expect us to have a very good relationship and the support that we provide them. We would expect that we'll have more to say prior to or at the time of our August results with regards to the strategic review. We do expect to have, I guess, a clear way forward at that point.
Okay. Thank you.
Thank you.
Thanks, Levi.
Your next question comes from Adam Baker with Macquarie. Please go ahead.
Morning, guys. If Megan's online, just wondering if you can just help me unpack effective tax rates in FY 2027, noting the changes in Bots. Is there a number you can point us towards, I guess, for a group level effective tax?
Hello, Adam. I am online. Thanks for the question on tax. In terms of financial year 2027, of course, we're still working through the process of finalizing our budgets and so forth. I'm very happy to talk directionally through what people can expect in Botswana. Maybe starting with the new tax legislation, which was gazetted prior to the end of the financial year 2026. From that, we have confirmation around the key elements that will impact mining, and really it confirms our ability to deduct major construction expenditure over the life of mine period. That is helpful, but that does represent a change from the historic approach whereby we've been able to take upfront capital deductions, as I'm sure you recall.
From our perspective, given we're past the major capital intensive period with the build and construction of Motheo, the change in the legislation does not have a major impact. I think it's important to clarify that. We've utilized all of our tax losses during financial year 2026. What you would see is you did see a step up in our cash tax payments in the quarter. From a financial year 2027 perspective, it's conservative to at least assume that level of cash tax continuing into next year. Of course, the big swing factor here is metal prices. It's difficult to be too definitive because the price has a big swing factor, as you know.
Maybe, Megan, I can just add, and you can just color it in if needed. The other thing that's probably noteworthy on tax, there's been a lot of questions about the new tax legislation in Botswana. We talked about it having passed through their parliamentary system. We can confirm it was recently gazetted by the President. Without getting into all the detail, the good news is that the final version made it very clear that an asset like A1, which has a shorter life, that we can recover, if you like, our capital investment across the life of the mine through allowable depreciation or deductibility of, if you like, capital losses. That's a good outcome relative to where it may have been. We're very pleased to see that. Another good example of Botswana being, I think, a good place to do business.
Okay. That's clear. Thank you. Balance sheet, obviously, in great shape. Cash at $353 at the end of the quarter. Just jumping the gun here a little bit, how are we thinking about dividends at this point in time? Could we see that be brought back to the table? Noting that it's been that competition for excess capital plan that you outlaid a year ago. Yeah, any kind of guidance you can give us around what number we could be expecting, that'd be helpful. Thank you.
Thanks, Adam. You probably understand that I'm pretty loathe to give any indication where dividends might go, for obvious reasons. I'm sure the exchange would be interested in that. More importantly, we respect the fact that dividends and capital management really are in the domain of Board. No change to anything we've said. Very clearly, we've defined our capital management framework. We believe fundamentally that mining companies like our own should run a net cash balance sheet. We've said in recent times that the uncertainty that prevails geopolitically, obviously particularly in the Middle East, means that we're likely to hold a little bit more cash than we ordinarily would. I think historically we said net cash $1 is a target, and then we return excess cash. I think we'll look to hold a little bit more than that.
That's an important discussion to have with the Board through the year-end process. Again, make no mistake, there is no fundamental change in view that we do not wish to build a war chest in this company. We don't believe that that's the appropriate rate or run a balance sheet, the appropriate way to run a mining company. We'll look to return excess cash in the most efficient way that we can, considering the risks that exist in the broader macroeconomic and geopolitical environment. Watch this space, and we look forward to talking about that more in August.
Thanks, guys.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Tim Hoff with Canaccord. Please go ahead.
Hey, gents. Thanks for the call. Congratulations on the result today. Perhaps one for Jason. In terms of Motheo's profile and, in particular, strip rates next year, anything in there with the strip ratio coming through? I think my face off of an old or existing plan.
Thanks, Hoff. You're breaking up a little bit. I'm guessing you might be up in Noosa at the conference. Look, on deferred stripping profiles, outside of what we've provided in the tables, I probably don't want to go too much further. We'll talk more about that in August. You probably remember historically we've provided profiles. We've touched on the fact that in the last 12 months, we've really had to work hard to recover our face position at Motheo, particularly post the floods. Obviously, we've also talked about the fact that now we're moving towards that next major Stage 4 cutback and working through that at T3. What we will do is we'll come back to you in August to give you an updated profile of how we see deferred stripping playing through.
Again, that Stage 4 cutback is an important component of the capital expenditure plans for the next 12 months. We've already talked about, obviously, the strong sales volumes we've achieved. With strong sales volumes, part of the reason our OpEx is up, because we've drawn down on stocks. We've highlighted that we're going to be building some high-grade stock through next year, mainly that intermediary stockpile at A4, given that we transport down the hall road, double handle, and transport to the primary raw stock facility. There's a lot of moving pieces and a lot of timing differences. What I can tell you is there's nothing fundamentally changed from the day we opened this mine to how we look out to that life of mine plan towards closure.
In terms of the strip ratio, the reconciliation of the ore body, the grade profile, there are just a number of timing differences. We'll bring that back in August when we report our full financial results. If you can be a little bit patient, we'll provide more granularity then.
No worries. I'm down in sunny Perth with the blue skies here, unfortunately, not in Noosa. I guess the next question is, Kalkaroo, it's great to see that starting to ramp up. Can you unpack a little bit there around what we should expect over the next six months?
Really exciting time for the team. I didn't say it lightly, that we have a proven project team. I think, we are one of those few companies that can really say that with their hand on our heart, given the people who are looking to bring Kalkaroo to fruition are the people who built Motheo. We all know how successful it has been. You can see the progress we've made. We have an 80-person camp established at Kalkaroo. The rigs started turning literally sort of in the last days of the financial year. It was really nice to be able to talk to that. What you're going to see, obviously, as part of the PFS, the biggest part of our spend and, in the order of $50 million this year, of the $70 million, that's a big part of that increase in capital for the group.
That's going to be going into drilling. The large majority is into drilling so that we can be very well prepared to update the Mineral Resource and Ore Reserve estimates. That feeds into the PFS. That feeds into decision-making in the second half of FY 2028. We've said before that our expectation is that we'll provide the drilling results at Kalkaroo as they come through quasi-quarterly basis. Part of the reason for that is they're going to be arguably, from a materiality perspective, even more important to our partner than ourselves. We think that that's probably going to be the best way to navigate that, rather than getting caught periodically trying to work out what we disclose and what we don't, particularly given JORC and the need to be mindful of not being selective.
I think what you should expect is a lot of drilling results coming through in waves across the quarters that we obviously hope will underline that Kalkaroo is the best undeveloped copper and gold project in Australia.
Fantastic. Look forward to it. Thank you very much.
Thanks, Hoffey.
Thank you. Your next question comes from Paul Wiggers de Vries with Bank of America. Please go ahead.
G'day, Brendan and team. I just wanted to go back to Paul Young's question on the mill at Botswana. Given that the ore has been a little bit softer at A4, is there any potential to add additional low-grade T3 material into the mill, given that back end is constrained at the float plant?
Sorry, Paul, are you talking about utilizing or running at a higher capacity than 5.6?
Yeah, that's right. Running more material from T3, given that it's a little bit harder and A4 is softer at the moment.
Maybe if I can, I think I go back to the comment I made. There's this trade-off: Throughput versus life versus recovery. As we look into the future, as we said, ore's getting harder. We've got the two major shuts this year. The real critical aspect for us now is how do we maximize recovery of the metal that we have in the ground? That's really what we're trying to optimize for. Maybe Jason, do you want to? I think that's the key point, right?
I think it comes back to a value as part of the equation.
Exactly.
We optimize all of our mine plans on delivering basically the maximum NPV out of our projects. We know for Motheo and for MATSA. Given our knowledge of our ore bodies and our mineral resources and ore reserves, and we determine, if you like, the optimum sequence of mining and also for processing. If we were to do that, we would reduce our grade, and yes, it would theoretically give us a bit more capacity there in the float circuit. You've got to remember from a float circuit point of view, it's more around residence time and also our ability there to recover the metal.
If we did what you were talking about, we'd still be processing the same amount of material at a higher grade, but putting in additional tons at a lower grade, which would reduce our residence time, and then we'd see a fall in recoveries. This is the point I tried to make to Young earlier. That we are trying to optimize that value equation by maximizing throughput on a sustainable basis, but also maximizing metal recovery.
Perfect. Thank you. That makes sense. Just on the solar plant that's going to be commissioned in half two at MATSA. If we think of it on a percentage cost-saving basis of what's running through, how should we think about that on your costs half-on-half, given that I know that you haven't given guidance yet?
We're careful around these things because in many respects, they're commercially sensitive. I think what we've said, if you remember, we had the three elements of the strategy around the PPA, and one of those is this critical piece of the solar plant coming in. The solar plant and the agreement there actually delivered some of the lowest cost power that we'll have, on the flip side, you've got other factors that are progressively ratcheting up. I think to be brutally honest with you, and given the percentage that power represents for the cost base, at least is the way we're managing it, and I think we're managing it quite well. I think if you're trying to get down to that level of detail, you're going to probably find it difficult.
No worries. Can I quickly squeeze one more in? You said that you had shuts for Motheo in 2Q and 4Q. Was there any for MATSA that you wanted to flag?
Look, with MATSA, because we run three lines, our shuts, we will only take down a line at a time, or if you like, because we have three lines of flotation. We have basically two grinding lines or three grinding lines and two crushing circuits. The impact that we have at MATSA of taking down a part of that circuit is not like Motheo could you take out the whole plant at one time. If you like, those are largely spread pretty evenly throughout the year.
Perfect. Thank you.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Harris for closing remarks.
Well, very good. Thank you everyone for the excellent questions. We look forward to speaking with you again in August, particularly talking a bit more about exploration and where we see that heading. Look, a really important fourth quarter for us. Really proud of how everyone on the team contributed to a very strong finish to the year. We appreciate your interest and have a great day. Thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect.