Thank you for standing by, and welcome to the Red 5 September 2023 quarterly activity report investor. Participants are in a listen-only mode. There will be a presentation followed by a question session. First for teleconference participants, followed by online questions from webcast participants. For teleconference participants, if you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. For webcast participants, if you wish to ask a question, please type this in the live Q&A section located at the right-hand side of your webcast. I would now like to hand the conference over to Mr. Mathew Collings, Corporate Development Officer. Please go ahead, Matt.
Thank you, and good morning to everyone on the call. We're doing things a little bit differently today on our end, dialing in from the Darlot Gold Mine, where management have been presenting our results to the operations teams both here and also at King of the Hills. On the call today, we have Mark Williams, Red 5's Managing Director, along with the Corporate Development Officer, Patrick Duffy, and Chief Operating Officer, Richard Hayter. We're also joined by our new Chief Financial Officer, David Coyne, so Patrick will speak to the results from the last quarter for the financials. We'll present Red's first quarter results for FY 2024, referencing the slide deck that was released to market this morning alongside the quarterly report. As explained by the operator, there will be time for Q&A at the end of the presentation.
I'll now hand over to Red 5's Managing Director, Mark Williams, for opening remarks and our Q1 results. Over to you, Mark.
Thank you, Matt, and good morning, everyone. Firstly, I'd like to... We're very pleased with the company's overall performance during the September quarter. This has been the second solid quarter we've delivered since we've hit the high ore body in the King of the Hills open pit in February of this year, which was the key inflection point for the project. As a consequence, the Red 5 share price has continued to strengthen as we continue on our focus for the year, to be able to deliver safe, cost-effective, and efficient ounces quarter on quarter. The company's market cap and enterprise value have currently held firm at over AUD 1,000,000,000 , which is a, which is a watershed for the company and our employees as we continue to generate cash and accelerate debt payments. I would also like to welcome Silver Lake as a new significant shareholder to Red 5.
We see this as great validation of what we've created at the King of the Hills hub. Moving on to the next slide. The September quarter has been a busy period for us, with Russell Clark and Peter Johnston joining the Red 5 board as Chair of the board and Non-Executive Director respectively. While long-serving Non-Executive Directors, Colin Loosemore and Steve Tombs, have confirmed their intention to retire from the board at the company's upcoming AGM in November. I would like to acknowledge the significant contribution that both Colin and Steve have made to the company over many years of service, as well as the exceptional service of our former Company Secretary, Frank Campagna, who retired during the quarter. This will leave the board with five directors, which we believe represents a good fit for the company, given our size and status, and concludes the board renewal process.
I welcome David Coyne as CFO and Joint Company Secretary, and Lisa Wynne as Joint Company Secretary, who joined Red 5 during the quarter. I'd also like to give my heartfelt thanks to Patrick for his contribution while in the CFO role. Moving to the next slide. A key feature of the quarter has been that in parallel to our improved operational and financial performance, has been our continued improvement in safety performance. This is seeing the TRIFR rate continue to reduce quarter-on-quarter, which is great to see and is, of course, an ongoing focus forever. We've produced over 55,000 ounces for the quarter, and an all-in sustaining cost of $1,696 per ounce at an all-in cost of just over $2,000 per ounce.
This continued strong gold production has enabled us to make good progress on our core strategy for the year, which is to accelerate our debt payment and strengthen our balance sheet. We paid AUD 15,000,000 of bank debt during the quarter and improved our net debt position by AUD 13,700,000 . Moving on to the next slide. I will now hand over to Richard, who will take us through the operational performance in more details.
Thanks, Mark. The September quarter saw all three mines produce consistently to supply the King of the Hills mill with the best quality ore available, which in turn allowed the mill to achieve another very solid quarter of production of 55,009 ounces. That led to operational cash flows of AUD 4,800,000 . The King of the Hills open pit mined 792,000 tons of high-grade ore above a 0.5 gram per ton cutoff for a grade of 1 gram per ton. While the open pit was producing sufficient baseload ore to fill the mill for the quarter, the company took the opportunity to realign the work areas of the Stage One open pit to improve mining efficiencies in the future.
Mining of Stage Two A and B starter pits progressed well during the quarter, providing some very valuable high-grade oxide ore, which is blended at 5%-10% to assist with viscosity and throughput in the mill. The King of the Hills underground continued its very strong performance, mining 258,000 tons at 1.98 grams per ton. Excellent grades from development ore, in addition to solid stoping tonnages, contributed to the highest quarter of grade mined since the restart of the underground. Development continues to focus on opening up new areas, including the East and Regal declines. Moving on to the Darlot mine. The Darlot mine has continued its turnaround success with very, very consistent production at much lower costs.
Mining produced 190,000 tons at 2.65 grams per ton in the quarter, including the commencement of a new low-cost bulk stoping area located in the Pederson area of the shallow Darlot workings. The lower cost turnaround of Darlot has allowed the company to plan for additional development meters and resource definition drilling in the second half of the financial year, aimed at extending the current mine life, which is now looking very positive for Darlot. The King of the Hills mill operated for long periods at a run rate of 5,500,000 tons per annum, significantly higher than the design of 4,400,000 tons per annum, with tons per operating hour through these periods ranging between 680-720 tons per operating hour.
Overall, milled tons for the quarter was 1,230,000 tons at a very good 93.3% overall recovery. Reduced tonnage was as a result of crusher performance, which was primarily impacted by crusher feed operations. During the quarter, management has focused on improving this aspect with the ROM pad and skyway reconfigured to improve efficiencies, as well as a third standby loader to maximize time with two loaders feeding the crusher. The first 10 days of October have seen a marked improvement as a result of this focus, and will remain so moving forward. Moving to the next slide. The growth potential of the King of the Hills is starting to look very exciting in both the open pit and underground, with multiple targets presenting.
Recent grade control drilling in the stage two A pit included a hole that resulted in an intersection of 26 meters at a whopping 168 grams per ton. Importantly, this zone was previously unidentified by the wider spaced original resource definition drilling. Other resource definition drilling intercepts were very encouraging during the quarter, including one extension hole intersecting 16.5 meters at 16.5 grams per ton, targeting the Regal Imperial down plunge area. These results demonstrate that there is a strong potential to extend the underground mine life along the Regal and eastern flanks of the ore body. In the zone beneath the southern open pit design, in blue on the slide, located on the left of the long section, there is very strong potential to deepen the pit below the current design.
If successful, it should have a very positive impact on the 2- to 3-year medium-term open pit mine schedule, as well as extending mine life. Targeted deeper drilling from surface will commence in the December quarter to identify zones that can be brought into the open pit mine plan. In addition, as you can see on that long section, there are a number of underground targets below the South Pit that will be tested in the future. Finally, of note, approximately 85% of the FY 2024 mine plan is underpinned by grade control drilling. This has increased the confidence level of achieving our production forecast in the current financial year and beyond. Now over to Patrick.
Yeah, thanks, Richard. Well done. Just onto the cash flow slide, slide eight. So in the past six months, we've paid off AUD 22,000,000 in the June quarter and another AUD 15,000,000 in the September quarter. And in an excellent position where we've been generating positive cash flow since March, and the company in King of the Hills hits its straps. Importantly, since April, when we were able to normalize our creditor payments, and since that point in time, we are able to pay our creditors within the normal credit terms, and it's a simple story of generating positive cash and repaying debt. Pleasingly, we're now at a point in time where, at end of September, the net debt was down to AUD 68,200,000 .
Importantly, going forward, we will look to prioritize all excess cash flow to accelerate the repayment of debt over the next 6-12 months, with the objective of refinancing our project finance facility into a corporate facility in calendar year 2024. On to the next slide, slide 9. As Richard highlighted on slide 7, we have seen a huge turnaround in the King of the Hills underground, and now it's generating very good cash flow. After a difficult first 12 months of ramping up, we've put in a strong management team led by Graham Burns, and we are now 100% confident in the future of the King of the Hills Underground mine. Similarly, at Darlot, it's had two outstanding quarters and generating excellent cash for the business.
We've able to strip 30%-40% of the cost base out of Darlot, to reposition it as a lean underground satellite mine, feeding the King of the Hills process plant. Without that process plant at King of the Hills, it's difficult to see how Darlot would have continued as a standalone operating asset. Later in this quarter, we anticipate putting out more drilling results and a broader story about Darlot. Currently, it has a 2- to 3-year reserve life, but we anticipate that it's got a much longer mine life as a result of the rebased cost base, plus the processing costs at King of the Hills, and also at today's gold price, results in it being a very profitable mine.
I would note that a number of analysts only put minimal value on Darlot, however, we see it as a very strategic, profitable mine into the future and highlights the capacity of the King of the Hills processing plant to turn marginal gold mines into a very profitable, having very profitable future, future lives. I think it's a nice segue into this graph. So we've just done 55,000 ounces at AISC sub-$1,700 costs for the quarter, and we are very confident on the guidance that we've set for this year. Feel it's cautious and conservative, and confident we can come in at the top, top end of guidance, if not above that. Relative to our peers, on an EV to Ore Reserve basis, we've now valued it at over, just over $400 per ounce.
But given the 14-year mine life, the fact that it's a brand-new gold mine, large open pit with two additional profitable underground gold mines, we don't see any reason why Red 5 would not be valued in line with some of our peers, in particular, Gold Road and Capricorn. We're also confident, given the recent momentum in our share price, that we are approaching sort of ASX 200 inclusion over the next couple of months, and there's excellent potential for further uplift in the gold price, if and when we are put into the ASX 200. On that note, I'll hand it back to Matthew for questions.
Thank you, Patrick. That's the final slide for today. Before I hand over to the operator for our Q&A section of the call, I just want to remind everyone that you can subscribe to our mailing list via our website, or follow us on LinkedIn or Twitter to get regular insights as to what is happening within the company. I would now like to hand back to the operator for the Q&A section of the call. 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 Kaner with Ord Minnett . Please go ahead.
Hi, gents. Yeah, thanks. Thanks for taking my question. Good quarter. It looks like you're on track to deliver at the top end of guidance for FY 2024. Could you maybe just provide a bit more color on how you expect processed grades to change through the year? I mean, will this, will this come down with lower grades out of the open pit?
Yeah, thanks, Paul. Richard, here. The grades will be slightly down on where we have been in the past, as the mill tons go up to hit our 5,500,000 tons per annum run rate targets. However, we will be maximizing grade wherever possible from Darlot, from the King of the Hills underground, and in the open pit as well. We don't see the grades declining in any great manner, but it'll be in line with the mill tons.
Yeah. No, understood.
Yeah.
That's it for me. Thank you.
Thanks.
Thank you. If you wish to ask a question, press star one. We'll now pause a moment to allow for any final phone questions to register.
While we wait on the phone questions, we have one question from the webcast line. It's another one for Richard Hayter from Brett at Petra. Can you outline the issues experienced with the crusher and what the likely maximum capacity is for the crushing circuit?
Yeah. Thanks, Brett. The challenges we've had in the last quarter have mainly been around the loader feed mechanics at the front end of the crusher. We regularly see instantaneous rates of up to 1,200 tons per hour through that crusher. So we know that the crusher designed at 6,000,000 tons per annum, we know that we can exceed that significantly. What we're doing is working at the front end of the crusher to make sure that we can feed it consistently and efficiently, and that's been the main focus in the last quarter. Hence the third standby loader, to ensure that we always have two loaders to feed.
Also, we're working on the abilities of the loader operators to ensure that the material is the right size and reduce the number of blockages that we have incurred.
A follow-up question from the line: Is there any more detail on the plant maintenance through the quarter and what our plant maintenance is for the second quarter of the year?
So we have a mill reline shutdown next week. It's the full shell. Approximately 4.5 days for that one on the mill. And then the next one, the big next shutdown is in February next year. And we anticipate that that February shutdown should extend us through to the very end of the financial year and aiming to try and get it into the next financial year.
Operator, unless there's any more on the Q&A line?
There are no questions on the teleconference currently. I'll now hand back to Matt to address the webcast questions.
Thank you. I think we've addressed the 2 webcast questions that we've received during the call as well now. So we'll finish the Q&A section. On that note, on behalf of management team, I'd like to thank everyone who's dialed in for today's results and for the questions asked, and we look forward to updating the market on our full year results or our half year results and quarter two results in due course. Thank you, and operator, that ends today's call.
Thanks, everyone.
Thank you.
That does conclude-
Thank you.
Our conference for today. Thank you for participating. You may now disconnect.