Good morning everybody, and welcome to the Westgold Resources March quarterly FY 23 update call. Your presenters for today are Wayne Bramwell, Managing Director, Tommy Heng, CFO, Matthew Pilbeam, General Manager, EH&S, Simon Rigby, GM Exploration and Growth. I'll now hand you over to Wayne Bramwell.
Thank you, Shane. Welcome everyone and thank you for joining today's March quarterly update. I'm Wayne Bramwell, and Shane has outlined who's with me here today. Our COO, Mr Phillip Wilding, is an apology today as he is away on leave. Anyway, let's dive straight into the quarterly results. Slide 3. This is a scoreboard we run every quarter to update the investors as to where we are. Three quarters into FY 2023, we remain on track to deliver the full year guidance. Looking at the Q3 results of 60,000 ounces, we're a little disappointed there. Weather events in the Murchison had an impact of 1,500-2,000 ounces for the quarter. With that weather event, we would have been closer to the 62,000 ounces for the quarter. Those ounces aren't lost.
They're effectively deferred, but again, not being able to deliver those ounces that quarter also saw the all-in sustaining costs jump. Moving on to slide 4. As you can see, it was a busy quarter for Westgold. The things for me which were most pleasing other than the financial results is our improvement in our safety performance. Matt will talk to that in the upcoming slides. Key takeaway from this, and I will talk to all of these points during the presentation, is that this turnaround we're in the early stages of, but we're starting to see the financial results and the safety results in this company change. Over to Matt.
Thank you, Wayne. Good morning to all those who have phoned in today. Today I'll provide a brief overview of our Q3, environment, health, and safety performance. I'll be more than happy to take any questions related at the conclusion to today's session. From the top, slide 5, we were able to continue our total recordable injury frequency rate improvement for Q3, resulting in a 37.15 decrease in our TRIFR result. Really important to note, in this particular indicator, it's the first time that Westgold has been able to return a TRIFR below that sort of mark of 10.0, which is obviously very pleasing for our business.
In addition, we had a lost time injury-free Q3 as well, which continues our LTI performance for the year of 0 cases over that time, resulting in an overall frequency rate of 0.00, down from 0.6 in Q2. High potential frequency rate increased slightly over the quarter, up 2.13%. This is largely due to the worked hours differential between 12 months ago to the last quarter. Over the same period, we had 0 significant environmental incidents and 0 significant psychosocial harm events in that time as well. Summarizing at a high level, really pleasing results overall. Overall improvement, quarter-on-quarter, which outlines, I guess, the fact that we are well on our way to sustainable EH&S high performance within our business.
With that detail in mind, I'll now hand you over to Tommy.
Thank you, Matt. Slide 7. This gives a snapshot, as Wayne just mentioned, how we're tracking in terms of our guidance. Pleasingly, from a all-in sustaining cost perspective, from a dollar perspective, we have maintained from the previous quarter. I'll give a little bit more color in the following slides. Slide 8. I won't go through each and every detail here, but I'd just like to call out, from a dollar perspective, Westgold has maintained its all-in sustaining cost circa the mid 120s. At 127, this is particularly impacted by the weather events and us having to draw down on the surface stockpiles that were built over 2022. The monetization of these stockpiles has brought the all-in sustaining costs higher. Just for comparative purposes, in Q2, the amount was circa AUD 1 million. In Q3, it's AUD 5 million. Slide 9.
Again, just a different way of giving more details from how we've progressed on a monthly basis for the year to date. As you can see, pleasingly, our all-in sustaining cost from a dollar perspective is sitting around about the AUD low forties. That will continue on into Q4 as we sit here speaking. I'll hand it now back to Wayne.
I'll jump in and run through the operational section, which the COO would normally do. Slide number 10, the Murchison. Great set of numbers from the Murchison for Q3, and most pleasing was the continuation of the lifting grade at Big Bell and Bluebird. Tonnage is down, grade is up. That for us generates a far better and far more robust financial result. The expansion of Bluebird underground continues. We are drilling like demons in Bluebird and South Junction and importantly, the Big Bell Deeps expansion study will be delivered to the board for review during this quarter. Jumping forward to slide number 11. The investment in drilling is paying dividends. We haven't really found the edges within Bluebird and South Junction, and that's a really large mineralized system.
That plus some of the drill hits we're finding at depth at Big Bell are really lifting our view as to what scale these mines can operate at. Jumping forward to the Bluebird. The Bluebird has been a consistent performer for Westgold for many quarters. It underperformed in Q2. It underperformed in Q3. This is reflected in the lift in the all-in sustaining cost. This is a great little mine, and it's a great team. There's a new mine plan in place. It'll take a little while to execute that plan. The plan is really about reducing the tonnage and lifting the grade. We were very disappointed with Q3, though the grade did lift. We were a little bit more reliant on low-grade stocks in this area than we would have liked to be for that period. This mine will get better.
As the grade comes up, the costs will come down. Jumping forward to slide number 13. Again, I run this slide every quarter just to show people where we're drilling and the deployment of rigs, and it's great to see that we've now got 9 rigs running. 1 in Big Bell, 2 in Bluebird, 3 in Starlight, 1 in Paddy's Flat, and Simon will speak to the 2 that he's operating in the exploration division. Again, we create our own luck here, and we extend our mine lives by investing dollars in exploration, and I don't see that investment slowing down anytime soon. Throwing back to Tommy for slide 14.
Thank you, Wayne. Slide 14. Pleasingly, our Q3 cash bullion and liquids were up AUD 9 million. This is a fantastic result, and it's testament to the turnaround for Westgold since quarter one. Just key points I'd like to highlight here. As I spoke to, the all-in sustaining cost, AISC, is a non-cash operating cost. It has had a positive impact on our working capital movement, on our inventory stockpiles. A very key one for us in terms of our capital expenditure is our Clean Energy Transition Project. AUD 6 million of this has been financed directly through our operating cash flows. Initially, this was to be financed separately through a facility. The decision was internally, we can fund this from our cash flows, and it's just again, a fantastic result for Q3. I will talk to slide 15.
Slide 15, our hedge book. Our hedge book has now reduced to 40,000 ounces at the end of Q3. The last spot sale we did as early as 12th of April was at AUD 3,030 an ounce. That is a fantastic place to be in. What we've also done during the March quarter was put in place some zero-cost collars, 30,000 ounces. These are at a put of AUD 2,700 and call of AUD 3,340. These were considered during the time when the gold price was pushing through the Aussie dollar, Sorry, 2,900 mark. By putting in these zero-cost collars, which cost us nothing, protects us on the lower end at AUD 2,700 if the gold price is triggered below AUD 2,700. Obviously, conversely, on the upside, it's kept at AUD 3,340.
It's 2,500 per ounce per month... Sorry, 2,500 ounces per month from July 2023 to June 2024. I'll hand it to Simon for slide 16.
16. Thank you, Tommy. As Wayne has said, obviously we're drilling very hard within our existing deposits, but we haven't forgotten about looking for new opportunities, new mines for Westgold within our region. Part of that is a two-phase approach. One is brownfields exploration around opportunities like Great Fingall, but also looking for totally new discoveries. During the quarter at Great Fingall, we undertook a bit over 3,000 meters of deep diamond drilling, looking for the extensions of the Fingall system, an historic mine which produced over 1.2 million ounces. Those programs are progressing well. The best intersection for the quarter was within hole 7, wedge 2, 3.5 meters at 45 grams. You can see that on that figure.
The big upside from this particular program is we've totally changed the Great Fingall Reef model in that historically, the Great Fingall Reef was thought to be flattening with depth. What we have now discovered is, in fact, the Great Fingall Reef has bifurcated, split into two, which totally changes the geological model and allows us to convert a lot of what were historically interpreted as footwall reefs actually into the lower Great Fingall Reef. We have two reefs now instead of one. We need to update the geological model and update the resource model around that. That work has commenced. In addition to the ongoing Great Fingall Reef program, we've started our winter program of testing new priority targets throughout our large 1,300 sq km ground holding. This includes RC programs in the Cuddingwarra region at some priority targets.
Further drilling both north and south of Great Fingall in a series of targets that were generated from aeromagnetic surveys and also some conceptual targets that we've generated or the team has generated to test. We're undertaking that work at the moment. We've also got ongoing programs to the north of Meekatharra. A very active period coming up over the winter period as we execute those programs. At that point, I'll hand it back to Wayne. Thank you, Simon. Hugely excited about what we're doing on the exploration front because it's been the missing piece of the Westgold puzzle for a long time. Jumping back to the last slide, I really wanna encapsulate where we are. We're early in the turnaround of this company.
Q4 going forward, the strategy remains the same: safe and profitable ounces. It's really heartening to see the turnaround in financial performance, but most importantly, the way our safety numbers are starting to track speaks to a change in the safety culture. We've still more to come in terms of operational efficiencies. The expansion of Bluebird and Big Bell is underway, and right-sizing Paddy's Flat and Starlight will deliver better economic outcomes there. Less tonnage at a higher grade is a better financial outcome for this business. We continually review the assets that we've paused, and that's South Emu, Triton, Comet, and Fender, as to under what circumstances we can bring them back on.
People should remember, there are those three other assets there which are sitting there ready to go when the circumstances are right. Really excited about what we're doing on the drilling front, both within our existing ore bodies and the next suite of assets which Simon's working on. Again, watch this space for Bluebird and South Junction. This system, we just haven't even touched the sides of it yet. One of the other things we're really excited about during this quarter or Q4 will be the commissioning of our first hybrid power station at Tuckabianna. That has a significant positive impact on our cost base and reduction in emissions. In closing, really happy to say that we're on track.
We said this year that we would basically set the business up for growth in FY 2024 and adding cash to the balance sheet during this quarter or Q3 has been a fantastic result. Shane, I'll close and open up the floor for questions.
All right. Just going to hold a second. All right. Wayne, your first question is, can you comment on the stockpiles at Fortnum? How large are they and, what grade?
Thanks, Shane. We've got in excess of 1,000,000 tons of surface stockpiles at Fortnum at 1.5 grams.
Thanks, Wayne. The next question is, how much ore is presently being sourced from deposits outside Starlight?
Currently none. People should understand Starlight is a single mine, but there's multiple lodes within Starlight. When you read drill hits and things like Nightfall and Truce, that's still within the mine, it's just individual lodes within that system.
Thanks, Wayne. 1 shareholder has noted that Regent and Labouchere are now being, commented on. What are the plans for Regent and Labouchere?
Both of which are being. Certainly Labouchere we drilled as a potential underground target earlier this year. We're going back to look at that again as a potential open pit. Same with Regent Messiah. More likely a pit cut back, but not certain that there isn't a underground opportunity there. Those things are continually being optimized to see how we can bring a second ore source into the Bryah operations.
Thanks, Wayne. The next question is on the hedge collars that you've struck, asking for more detail on the cost basis of those hedge collars.
I think that's just prudent financial planning there. Again, the gold price is volatile. We've protected the AUD 2,700 downside. If those, if that option, where it is an option, it's not a firm commitment, got knocked off at AUD 3,340, I think we'd be quite happy. Anyway, let's hope the gold price gets to AUD 3,340. This is a commitment which protects the downside, does cap the upside, but I think overall, the risk profile around these type of things, it's just good financial management.
Thanks, Wayne. The question on Fingall Reef with the potential bifurcation there, would you like to comment on what implication that has for mining? Does that complicate it?
No. Actually, what that does is actually improves the mining scenario. Previously we were modeling this as a single reef with a series of footwall, or sorry, a single steep reef with a series of footwall flat reefs, which were very short strike length. That was based on historic 1980s data, which we didn't have structural information for. We've now, based on this drilling program we're undertaking, worked out that in fact we have a bifurcating reef. A lot of what had been previously been interpreted as footwalls to the single reef are in fact the lower Fingall Reef on a steep. It actually presents us with a better, potentially a better opportunity to extract a larger amount of this reef system, once the studies are completed.
Thank you. Just a reminder, ladies and gentlemen, if you'd like to enter your questions into the chat box, then we can take them.
Shane, I've got one question that's just come through here about what's happening at depth at Big Bell. We're still drilling at depth underneath Big Bell. Again, people should understand when we look at show that image about the pegmatite there. The pegmatite, it actually been a positive for us. It separates the ground stress from the cave to what we're proposing as a long hole open stoping operation below the pegs, and we continue to drill that area now. I mean, the last lot of drilling, 50 meters, which is really true width of 15 over 5 grams per ton, was not grades we expected to see. There's a level of excitement about Big Bell at depth now, which is being catalyzed by the additional drilling.
Thanks, Wayne. Just a reminder everybody, if you'd like to put your questions in, you can do so in the Q&A box.
Yeah.
There's no further questions at this time, Wayne, so I'll hand back to you. Yeah.
Just to close out, Q3 was tough. Our operating teams in the field to keep our mills going, certainly towards the end of the quarter when we had the rainfall events through the Murchison was, I think a herculean event. Effort was fantastic. Again, full credit to the people in the field, in our minds, who keep these things going, keep delivering the results. We're on a good path here. Sorry, there's one last question that's come through.
I'll read it out for you, Wayne. Regarding Fortnum, are there any continuing flooding impacts into April?
Thanks, Tyson, for that question. Even as of last weekend, we're still basically pumping some of the lower levels in these mines. Yeah, that rainfall event really sort of had a 2-3 week impact on the operations. Again, might held some production back, but it hasn't stopped it. I suspect by the end of this month, basically all of these mines will be back to full noise.
Thanks, Wayne. The, the question queue is empty at this time.
I've just had another question. Are we off?
One more left, yeah.
Sorry. Another question that has come through is about what our grade expectations are for Fortnum, Starlight for Q4. Our expectations in Q4 is that the grade will lift again. This mine makes money at 2.4-2.5 grams per ton, that is our target. Less tons at a higher grade. If the tonnage backs off, maybe the grade goes up. Where we get to this quarter, not quite sure, but the target will certainly be 2.5.
Thank you, ladies and gentlemen. That concludes today's call. If you have any further questions, please feel free to get in touch with Westgold at the details on the screen. Thank you.