Normal, generally the same format, just covering off the June quarter, which has just finished, and the results we released last week. All right. Just a reminder, the corporate overview, focus on mineral sands, predominantly on Kimberley Mineral Sands, the Thunderbird mine, and that's what we'll speak mostly about today. We do still have the option for the South Atlantic Project. However, as we've previously highlighted, we've retained the option, but we're not currently funding that. All of our cash reserves and our focus is currently on making sure that Thunderbird is a success. Just some pictorial updates for Thunderbird, where we are in June. Left-hand picture is the mine, an aerial view of the mine. Just wanted to highlight a couple of things here. This area here, that's where we started mining. That's actually our first input tailings cell.
The wall's largely complete, the infrastructure's being installed. We expect to be starting input tailings deposition during the September quarter. We're currently mining in this direction here, that's an area we're mining in currently where there's very little hard overburden. It's free digging, we're not actually having to do drill and blast at the moment. We're able to just dig the pindan overburden off the top, that is expected to continue for the best part of FY2027. That's quite positive from a cost perspective. We're working our way in that direction, we'll follow that, basically go back up in the opposite direction, generally not having to do drill and blast for most of the upcoming financial year. On the right-hand side, the picture of the process plant, a lot of ilmenite stockpile on the stockpiles and so on.
No real change with the process plant. In terms of the business plan, you'll remember from March 25, when we highlighted what our plan was. We obviously had a couple of rougher quarters, we'll cover that off as we go through the presentation. In terms of implementing this plan, the progress, we'd previously done the drill and blast. Although we're not drill and blasting at the moment, we are in a position to do so when required. The waste contractor large fleet has been working for over a year now is very effectively able to clear waste at a rate fast enough to sustain higher mining. In May, in the quarter just passed, we separated ore mining and DMU operation.
It was an important step to improve the availability of both the ore mining fleet and the DMU, we are seeing that benefit in the current quarter's production. There is still more work to be done, we are continuing to do some refurbishment works on the DMU to make sure that that enhances the availability going forward. Overall, we still expect to achieve this plan. However, now later in FY2027 rather than Q1, given the challenges we had earlier in the year. In terms of mine throughput. Blue line at the top, ore mined, significant step back up in the June quarter compared to March. March, to a lesser extent, the December quarter were impacted by both DMU and fleet availability. Both of those sort of situations have improved significantly in the current quarter.
Grade's fairly consistent. As a result, we ended up with improved rougher head feed production for the quarter. The other benefit of the fourth quarter over the third quarter or June over March was that in the March quarter, we have is when we have the main weather impacts from the wet season. June quarter, very little weather impact. In terms of the process plant recoveries, significant improvement quarter-on-quarter, basically back to around design and what we've been achieving historically. The basic issue there from a recoveries perspective, returning the plant back to its original design parameters, then reoptimizing from there.
Generally, a focus on plant hygiene to ensure that we're getting optimal separation particularly in the WHIMS units, the wet high-intensity magnet units. That appears to have overcome those challenges. We now feel comfortable that we should be able to maintain the design recoveries going forward. I touched on ore production previously, so showing it in another form, but including the forecast for the current quarter. As I said, we've got the KMS improvement plan underway. We have seen significant improvement in Q4, in the June quarter, over the prior quarter. Noting that April was actually a similar month to the first quarter. April was still fairly heavily impacted by both DMU and fleet availability. Really that better quarter, largely reflects a stronger May and June, not over a full three months.
The fourth quarter forecast is to either achieve that or do better, either side of 3 million tons. We still have some refurbishment works which may impact ore mining during the quarter, hence the wider range of potential production for the coming quarter. In terms of zircon concentrate, the production was up quarter-on-quarter, largely reflecting the fact that we mined more ore and we had the improved recoveries. Shipments lagged that improved production, mainly due to one vessel. We had a co-load of ilmenite and zircon due to ship late in the quarter. The vessel in the end was booked and arrived early in July. Those sales slipped into the September quarter. The forecast for the September quarter is to at minimum achieve around about the production we just achieved and a comparable amount of sales.
With the potential to do up to an extra 10,000 tons, depending on overall mine availability, et cetera. That would reflect, if we were to achieve the upper end of our guidance, that would be a record quarter for zircon production. Ilmenite concentrate production, a similar story in terms of the production rebound, higher ore mined, and improved recoveries. Again, the deferment of that shipment from June to July did impact the shipments. We expect to do a catch-up shipment here in Q1. Expecting a further improvement in ilmenite production quarter-on-quarter and higher ilmenite shipments as well. HiTi, briefly touch on this. We've only produced it a couple of times, once a year or so ago, then starting in the December quarter into March.
However, by early June, we could see that the market was relatively weak for this product. We stopped producing it. However, we did ship what was produced. The reason for the market weakness was that that product is, for a reasonable amount of the value in it, is actually monazite as well as zircon and higher titanium ilmenite. The market for monazite-containing concentrates in China weakened a fair bit, as a result of some changes in the permits or the availability or the ability to sell monazite concentrates on to monazite processors within China. There's been some changes in the regulations there. There has been a reluctance from processors to buy monazite-containing concentrates. We will look to restart that should the market upticks.
It's not a core part of the product suite, but if we are able to sell it does allow some additional revenue. In terms of cash costs, fairly similar quarter-on-quarter. There is a very strong focus on cost at KMS. With the restructuring of some contracts and so on, the KMS team is continuing to drive savings, which we would expect to see flowing through to these figures going forward. Partly higher volumes, but also lower underlying costs in a number of the key contracts. From a cash flow perspective for the quarter, showing it as negative operating cash flow. You may remember in March, we had a deferral of a supply payment, which then occurred in this quarter. There's a fair bit of movement quarter-on-quarter.
I think as a rule, until we reach steady state, the cash flow will tend to bounce around a little bit from quarter-to-quarter. Overall, I think where we stand right now is we continue to be, at current production and certainly at current pricing, operating cash flow positive on the basis of selling what we produce. It's a bit of an artifact of the numbers that shows the negative operating cash flow. The reality is if the revenues and costs were properly, the timing was aligned correctly with the periods, then the operating cash flow would be positive. To put that in context, we do have a monthly cost burn, circa AUD 20 million. Even if it's only a couple of weeks of costs that are deferred, that's a pretty big swing on these cash flows.
I think that's all I had in terms of prepared slides. Before we go to Q and A, just probably worth touching a little bit on the zircon market. I don't have a slide on it, the market for zircon concentrate. We did note in the quarterly that we had seen prices increase quarter-on-quarter again from June over March, and that reflected the fact that it's really a supply-driven story. Demand in China has held up okay for zircon, predominantly from non-ceramic applications. There's a lot of industrial production in China, so there's reasonable demand for foundry and chemical-based demands, not so much ceramics. The Chinese market has a much higher share of market for those non-ceramic applications than what you see in the rest of the world. The demand held up quite well despite the fact that ceramics is weak.
Supply, as we know, there's been a number of unplanned supply disruptions around the world, and while some of those operations have restarted to a greater or lesser extent, there has still been less supply around than people anticipated. We continue to see strong interest for product. That seems to be likely to be sustained at least through the current quarter. I think overall, the outlook being shared by a number of industry commentators is that previously there was a sort of view that, yes, this year was going to be stronger for a couple of quarters, but no one really knew what the back end of the year would look like. There seems to be a bit more confidence that the market will hold up at sort of at or even above these levels for the foreseeable future, which is encouraging.
It's certainly reasonably significantly higher on where it was year-on-year. At least the back end of last year as prices came off. We have seen a reasonable price recovery since then. I'll stop there and can take questions.
Awesome. Thanks, Bruce. Just as a reminder to everyone, the Q and A button, it used to be on the dashboard at the very bottom in Zoom. For whatever reason, the software's changed, you do need to click on the More button and then the Q and A button, then you'll be able to submit questions. Just for those of you who want to submit some. We have had one come through already, Bruce.
Yeah.
This is on the waste mining being now put onto shifts and drill and blast being suspended. They're asking, when does stripping resume and if it has any impact on the C1 guidance for FY 2027?
There's a bit to unpack there. We're currently not drilling and blasting. We are waste mining. We are waste mining day shift only. That's been the situation since, I think, February this year. The current mine plan, which sees us continuing in the same direction and then coming back, would see that situation effectively staying the same for most of FY 2027. We haven't put guidance out for the full year. The guidance for the quarter showing relatively similar unit cost quarter-on-quarter does include that cost saving or that we're not spending that extra cost on waste mining. At some stage, we will resume drill and blast mining, and we will go back into ground where the strip ratio is higher and therefore we would need to mine waste day and night in order to shift enough material. We don't expect that to change for FY 2027.
Okay. Interesting. Just on the recovery plan, Bruce. You're mentioning separating ore mining from the DMU operation. What does that actually entail, and how is that different to what you were doing before?
Physically, it's not different. We still mine ore and push it into the DMU. What it is operationally where we were previously was the DMU was being operated by the ore mining contractor. Effectively, the DMU was being run as part of the mining operation. By separating the contract, we now run the DMU as part of the KMS operations. There's a couple of benefits there. One is that you then, it's not the tail wagging the dog. You're running the process and then making sure the ore is fed to it that way. It's actually a logical split. The other piece has been being able to take control of operations also means that KMS has direct control over the maintenance, the decisions about how to maintain the maintenance philosophy in terms of preventative versus reactive and so on.
I think that's what we're seeing now is the emphasis is on doing a bit more refurbishment work, scheduled shutdowns, and that's designed to give us more predictability and more uptime. We've already done a fair bit of that, and we're already seeing that benefit in the current performance, there's definitely more potential to improve the availability and utilization further.
Okay. Amazing. That actually covers one of the other questions that have just come in as well. Bruce, you were talking about there's some further works being done in this quarter, which is why the range is I guess a little bit wider than usual in terms of output. What sort of work's being done in the quarter going on at the moment?
Yeah. The range is probably wider on ore mined than we might have done in the past rather than the concentrate production. There's sort of work. The DMU consists of two halves effectively, in crude terms. There's an apron feeder to sort of the, from the ore hopper to the top of the screens, there's the screens themselves. We did a screen replacement in November last year. The whole screen deck, strengthened that. A stronger screen deck. Now, there's basically some refurbishment works on the apron feeder. We've been operating for nearly three years. It needed a bit of work. That's the main outage this quarter. One thing we are able to do, was always there, we're now, there's a focus operationally on, now that we're more on top of the mining performance.
When the mine is running, the mine and wet concentrate are running flat out, they have a higher capacity than the concentrate upgrade plant. That means we build an HMC stockpile at the process plant. What that means is when the mine is down, or the wet concentrate is down, we can actually continue to make concentrates from the stockpile. We see, what we expect to see is more stability in concentrate production than ore production. That will sort of help level things out going forward. That is a reasonably significant piece of work we need to do on the apron feeder. We're allowing for that to have a wider range of ore mined outcomes for the current quarter.
Yeah. Okay, interesting. Right. We are currently out of questions, if anyone does have any questions, please feel free to submit them, well, as soon as you can. I guess there's not much you can say on the refi or anything along that, those sort of lines at the moment, is there, Bruce?
Not really. I think as I've said before, things like refis are a bit all or nothing. You can't really provide updates on the discussions. Well, we've obviously continued to secure waivers from the lenders for each of the previous quarters. We continue to have a constructive relationship with the lenders. I think they, like everyone else, were looking to see that the operations would return to the level they were and that, obviously, if we'd continued to run at a low level, that would've been a challenging situation for the business. It's important that that happened. Now we continue to have those discussions. They take time. It's complicated. You've got a number of parties involved. Ultimately, it's about getting an outcome, a good outcome for all concerned. That can take a bit of time.
Okay. Another question come through. Essentially the question is around, obviously, you had the other, the facility drawn down, AUD 10 million. They're wondering how they should be thinking about liquidity within KMS moving forward, I guess, towards the end of the year.
Yeah, look, I think, the way to think about liquidity is, we obviously came through a period where both the market prices were weak and our production performance was weak. We, coming out the end of that, particularly with the June quarter, you see where the production, we're getting back on top of production and the prices are firming. In that environment, we expect to be building, or generating operating cash flow. There would be an expectation that KMS can build some liquidity. There may still be the odd management of timing. One of the things we do is work with customers, Yansteel in particular, but others as well, to look at, can you accelerate payment for product to manage timing?
It is a relatively lumpy You make a couple of shipments a month, one of each product or a couple of each product. That's sort of managing the short term. We would expect now to be, within reason, building a little bit of cash in the business. Ultimately, as part of the restructure, we would expect that the business would need a reasonable minimum operating balance. That's part of the sort of debt restructure discussions. In the interim, to the extent KMS generates positive cash flow, that goes to building up a bit of an operating buffer within the joint venture.
Good. I think we're out of questions, Bruce, but it sounds as though with the higher zircon price and the operation sort of turnaround, things are looking a bit further up. Any final closing remarks at all?
It's certainly a much better quarter to be talking about than the prior quarter. The turnaround is real. It's been a relatively quick turnaround. As I said before, it was really only two strong months in that quarter. April was still quite a weak month. Operationally very encouraging. What's happening in the market is encouraging. There's still a lot of work to do. The business can definitely continue to improve, get back on our original sort of plan to increase the mining rate so that we keep the plant full all the time, and that's still the plan. It feels like we've taken a significant step towards delivering that. Ultimately that forms the basis for the debt restructure, et cetera, is those future cash flows.
Those future cash flows are based on, can you perform now, gives confidence that you can perform in the future. We're certainly in a much better place now than we were three months ago.
Nice. Good. Bruce, thank you so much for your time. Thank you to everyone who has viewed this. If you want to re-go back over any of it is recorded. It'll be on YouTube. It's on the Sheffield Resources YouTube channel. There's contact details on the screen. They're on the website as well. Yeah, no, Bruce, thank you very much, and thank you everyone for joining.
Thanks, everyone. Thank you.