Good morning, everybody. This is the Westgold Resources September quarter FY 24 conference call. The speakers for today are Wayne Bramwell, Managing Director, Tommy Heng, CFO, Philip Wilding, COO, and Matthew Pilbeam, GM, EH&S. I'll now hand over to Wayne to start the presentation.
Good morning, everyone, and welcome to today's webcast. Let's go straight to slide three. Q1 FY 2024 overview. The trend of cash build continues. We had a fantastic quarter at Westgold in Q1 . Most importantly, we maintained our cost management and added AUD 25 million to our cash, bullion, and liquids balance, which now takes our treasury to AUD 217 million in cash. We've strung 3 cash flow generative quarters in a row together and managed to build AUD 58 million over the period. Considering where the business was at the start of FY 2023, we're really pleased by what we've been able to achieve. In regards to safety, it was another solid quarter. We've managed to maintain the improvement that we've started earlier in the year, and this will continue.
This quarter, we produced 63,000 ounces of gold at an all-in sustaining cost of $1,935 an ounce. Cash flow from our operations was strong, with Bluebird and Big Bell continuing to perform above our expectation, and this gives us a solid start into FY 2024, keeping us on track to deliver full year guidance. We continue to drill aggressively. 10 rigs currently working to add mine life across our operations. Importantly, we completed our hedge book at the end of July, which means that August and September sales have been fully leveraged to the spot price, which is fantastic for our revenue. With our last gold sale done at AUD 3,113 an ounce. Most importantly, we remain debt-free, and this quarter we've significantly enhanced our balance sheet. Slide four.
This is the scorecard that we run every quarter, and again, it shows that we are on track. Even though one quarter in, we still remain on track to deliver FY 2024 guidance. Our objective for this year is really to deliver the top end of production and the bottom end of the all-in sustaining costs, and with a Q1 result of $1,935 an ounce, across the full year, we expect to deliver the bottom end. Growth capital of AUD 23 million, we'll talk to later on, and AUD 8 million in exploration. It was a slow start this quarter, but we will be building momentum in quarter two. I'll hand over to Matt Pilbeam, General Manager, EH&S.
Thank you, Wayne, and good morning to everyone on today's conference call. Today, I will take you through an overview of some of our key environmental, health, and safety performance numbers for Q1 FY 2024. Starting from slide five. Consolidation is the key focus for us in FY 2024, following significant improvement through FY 2023 for our key EHS metrics. Now, while we recorded an increased number of events in Q1 comparatively to Q4 FY 2023, our 12-month rolling charts are showing a leveling out of these performance rates as we expected through this period. Total recordable, lost time, and high potential frequency rates all had marginal increases for the quarter as we worked through this period of consolidation. TRIFR increased to 8.82, lost time increased to 0.98, and our high potential events increased to 7.86.
The management team remained focused on continual improvement across the full 12-month reporting period. Moving on to slide six. A really exciting part of our business is the commissioning and operation of our Clean Energy Transition Project, encompassing the installation of four hybrid power stations at our key operating hubs. A quick status update for each area is as follows: Tuckabianna was commissioned and fully operational from August this year. Fortnum was commissioned and fully operational from earlier this month in October. Big Bell Gas Power was commissioned as recently as last week. Solar and battery installs remain on track for completion in Q3 FY 2024 as planned. In Bluebird, commissioning is expected to be completed in Q2 FY 2024.
Summarizing this detail, Westgold is expected to have four fully operational hybrid power stations in place well before the end of this financial year, resulting in significant energy savings, including a 38 million-litre reduction in diesel fuel usage, an overall 56% reduction in emissions, and an approximate $60 per ounce all-in sustaining cost saving across the business. It certainly is exciting times ahead, looking at those numbers. Moving on to slide seven, where I want to remind you all of our dynamic and resilient business. We are a fully Western Australian company with upwards of 1,400-strong workforce, increasing our diversity as we grow. We have extensive tenements within Western Australia, of which we are aggressively drilling for organic opportunities and mine life growth.
We have a total of four underground operating mines. That number increasing with Fender and Great Fingall, of which we will talk to later in the slide pack. Three processing plants with approximately 4 million tonnes of milling capacity. And last but not least, we are an owner-operator miner with our own workforce and our own equipment. With all that detail covered off, I'm happy to take questions at the end of this session, but for now, I'll hand you over to Tommy, who is keen to talk finance.
Slide eight. Thank you, Matt, and good morning to all. From a quarter-on-quarter perspective, we are 8% down on production. Having said that, our key assets in Big Bell and Bluebird performed to target, as did Paddy's Flat, which we are right-sizing. We flagged last quarter that the Big Bell grade will be lower as the mine plan progressed more towards the lower grade south side of the cave. Starlight has gone through a difficult period transitioning through the legacy development, but we have seen positive signs of improvement in September and currently October, which we expect to continue going forward. Our all-in sustaining cost was maintained quarter- on- quarter, which is a good sign that our cost controls are working, as we have seen early indications of cost inflations in consumables and labor.
Now that we are free of the fixed forward sales contract , we have been selling gold from August at the spot price, which has allowed us to continue to build our margins quarter-over-quarter and generate another great quarter of free cash flow. Slide nine. Diving a bit deeper into our costs. We maintain our total All-in Sustaining Cost at AUD 122 million, the same as the prior quarter. The key drivers were: lower mining costs and sustaining capital costs at Starlight, as it maintained through legacy workings. Displaced diesel costs through the operation of a hybrid power stations, reducing our power costs. We continue to find ways in which we can reduce our costs more broadly within our operations, and these cost benefits were offset mainly by increased stockpile consumption, which expenses costs from our balance sheet, noting, of course, that this is a non-cash movement.
On a per ounce basis, these costs are spread over the lower production, which drives the all-in sustaining cost per ounce up slightly this quarter. I'd like to add that we are starting to see signs of cost inflation in some of our key consumables and portions of the labour market. One of those key consumables is diesel, which we are working on reducing our exposure through the adoption of hybrid technologies, such as the hybrid power stations that Matt has already spoken about, and hybrid loaders that are already operating within our mines. We spent AUD 23 million in capital, predominantly towards growth of our underground mines at Big Bell and Bluebird, the transition at Starlight, commencement of Fender, a tailings lift at Fortnum, and the CET project.
As was previously mentioned, we are continuing to invest in exploration and drilling, spending AUD 8 million this quarter to grow our resource base and invest our organic opportunities. This expenditure is on a run rate that, if maintained, will see us meet guidance. Slide 10. Westgold's view on profitability remains the same: Simplicity plus efficiency equals profitability. We continue to focus on operating discipline and cost management. We are determined to expand our mainstream mines in Big Bell and Bluebird. Phil will talk to what we are doing at these two assets. Paddy's Flat is starting to deliver a better economic outcome at a lower rate and higher grades, and Starlight is showing signs of improvement from September.
The graph here really shows the turnaround story, which we have materially reduced our total all-in sustaining costs from AUD 139 million at Q1 FY 2023, or roughly AUD 45 million per month, to now AUD 122 million this quarter or AUD 40 million per month. I will now hand over to Phil to talk more in detail about the operations, projects, and exploration.
Thanks, Tommy. On to slide 11, Murchison operational summary. Our Murchison operations have performed to plan. Big Bell has produced 286,000 tonnes of ore at 2.3 grams for 21,000 ounces. The grade, as we previously highlighted, was down to focusing on the southern area of the cave, required to maintain the shape of the cave front. Bluebird, another great quarter, 126,000 tonnes, an impressive grade of 4.4 grams per tonne, to 18,000 ounces delivered this quarter. Thanks to the extensive drilling we've recently done, we have better ore body definition, allowing us to increase efficiency and accuracy in our planning, leading to higher grade at fewer tonnes. Ultimately, same ounces, less cost. Paddy's Flat is also delivering on its objective of moving to a sustainable production through right-sizing the mine.
It produced almost 50,000 tonnes of ore at 4.7 grams per tonne, for 7,500 ounces of gold. The bulk ore source known as Prohibition, finishing up. Paddy's Flat has delivered fewer tonnes, but has correspondingly increased its mine grade through mining its other high-grade ore sources, improving the economic outcome. By continuing to drill extensively at Bluebird, we have a focus on increasing the mine life, but also our understanding of South Junction. South Junction has the potential to become another mining front at Bluebird, which could provide a step change in production rate of this mine, and it's a great organic growth opportunity for us at MGO. The team is looking to expand Big Bell. From recent drilling, the size of the prize has grown, delaying the study.
So in Q2, we expect to complete the Big Bell Deeps expansion study and allow the board to deliberate on the final investment decision. Big Bell Deeps is a project which proposes a long-hole stoping operation below the pegmatite, which will act as a crown pillar under the existing Big Bell cave. This mine will essentially operate as a standalone mine, has potential to increase the total grade of Big Bell. On to slide 12, Great Fingall. In August, we announced the board approval of the Great Fingall project, and on Monday, we announced that the Great Fingall had commenced development, the first cut of the existing decline having been fired. We have new equipment, high-speed development crew mobilized to site, all within two months of gaining approvals, which is a great achievement for us.
Development will take up to 18 months to get down to the virgin ore at the Great Fingall below the old workings. As we develop down, we do expect to drill through structures which we believe are mineralized and could deliver additional ounces as early as this financial year, noting this would be an additional upside for our yearly production and the economics of the project, which we've not banked on. Great Fingall, when at a steady state, will add at least 45,000 ounces to our group production and will take Westgold beyond 300,000 ounces per annum. Slide 13, Fender. First ore has come out of the mine early this month, with development starting in September. We originally paused this mine in August 2022 while consolidating and taking stock of the business.
Now that we're stabilized and more profitable, we're bringing this operation back on with favorable economic environment. Ore will be transported up to the Meekatharra Processing Hub and deliver approximately 330,000 tonnes per annum at about 2.7 grams a tonne. Slide 14, Murchison with a drilling summary. As we've done for the last year, we're working really hard to grow our mine lives of our existing assets, and we're making great progress here through the drill bit, at all our sites within the Murchison. We're keen to convert our existing resource into reserve, and we look to provide progressive updates on our progress this year. Slide 15, Bryah, Starlight produced 154,000 tonnes of ore at 2.1 grams for 10,300 ounces mined.
The mine had a difficult start to the quarter as it continues to transition through a legacy development, which made efficient stoping very challenging. Having said that, we saw encouraging signs of improvement in September, and now in early October, as the site works through these areas, it's still going well. We've commissioned a new long hole drill at Starlight, which appears to be making a real difference in stoping efficiency for better hole accuracy and drilling smaller holes. From a drilling and growth perspective, we continued to see encouraging drilling results from the Nightfall ore body, which runs parallel to Starlight and has potential to increase the high-grade feed to the Fortnum mill. We also had great intercepts in Twilight, which is being considered fully mined out, portion of the upper part of the existing underground.
We've challenged that and hit some interesting intercepts that hint at further mining potential, and importantly, this could become another mining front in the mine that's well developed and require little capital to exploit it. Slide 16, extending our mine lives. We have 10 rigs in operation across our assets. This slide highlights our underground mines, their shallow nature, and the potential of them. Again, with 10 rigs spinning, focused predominantly on these assets, aiming to extend the mine life of this portfolio. Slide 17, the quarter One Exploration and Growth Update. This year, we are going towards spending AUD 25 million in exploration, and this slide identifies the major targets we have identified that are of interest to the team. We completed the Great Fingall drilling program in the quarter, having accelerated the program with the introduction of a second drill rig.
This program did return some outstanding drill results that you can see on the screen, and these further confirm our decision to commence the project. More importantly, broadly, we are working towards advancing the next round of targets we've identified, including Cuddy North, Nichols, Reedy West, Mainlands, Norrie, and Duffin. During the quarter, the team completed several heritage surveys and are well progressed on those that remain outstanding. Peak Hill is another target we're excited about, regionally proximate to Fortnum and a historically significant region of gold production. The team is working through updating geological and geophysical models to define the targets in the coming quarters. I want to hand back to Tommy to talk on our cash position.
Thanks, Phil. Slide 18. The graph shows our cash flow for the quarter and depicts our closing cash, bullion, and liquids, which grew by AUD 25 million quarter-over-quarter. Our revenues benefited from increased spot exposure, having closed our fixed forwards hedge book in July. Overall, our operating cash cost for the quarter was AUD 129 million versus AUD 127 million last quarter. Operating cost is basically our operating cash costs and sustaining capital depicted in the graph. Capital expenditure this quarter is on the build-up of the development works as we are undertaking to grow the underground mines at Big Bell and Bluebird, transition Starlight, which is improving our investment in the Clean Energy Project and the tails lift program at Fortnum. Our investment in exploration continued over the quarter, aimed at extending mine lives in our existing operations.
This spend keeps us on track for spending the allotted AUD 25 million guided for the full year. With all that, we finished the quarter in a very strong position with AUD 217 million of closing cash, bullion, and liquid assets. The last point I'd like to make on this slide is that we remain debt-free. Slide 19. Just a quick note on the hedges. At the start of FY 2023, we had 148,000 ounces of fixed forward contracts, which we delivered into over that financial year at a significant opportunity cost to the business. I'm happy to say that we delivered into the last 10,000 ounces of the fixed forward contracts in July, allowing us to sell gold at full gold exposure in August and September.
This quarter, our average sale price for gold was $2,888 per ounce, which is a great result. Just this week, we sold gold at $3,113 per ounce. We have 22,500 of our zero-cost collars out of the 30,000 we commenced at the start of FY 2024, about 11% of our annual production. These zero-cost collars allow us to sell at the spot price, so long as the put and call options are not struck at the lower protection trigger of 2,700 or the high cap of 3,340. Wayne, back to you.
Slide 20. Thanks, Tommy. Most shareholders will love this slide. In August, we announced an update to our dividend policy, which speaks to the company's commitment to delivering sustainable and consistent returns to our shareholders.
The new policy pays a minimum dividend of AUD 0.01 per share each financial year, up to a maximum of 30% free cash flow generated for that year. The payment will be contingent upon Westgold retaining a minimum net cash balance of AUD 100 million after the payment of the dividend. What does this say about the business? It shows that we have got increasing confidence in the ability for this business to pay dividends and be sustainable over the long term. Slide 21. In summary, Q1 was a strong quarter for Westgold and positions us well to deliver our targets for FY 2024. The strategy for the remainder of FY 2024 is simple: to continue to build cash. Our key operations are starting to perform to target. The second priority is to continue to drive our costs down.
The job is not done, and we are constantly improving in this area. All our hybrid power stations will be, will be online this year and will further improve our power costs and reduce our diesel consumption. We will continue to maintain the rage with drilling. The Murchison is clearly underexplored, and we have a host of high-priority targets that just require drilling. We'll continue to invest in technology that reduces our operating cost. Besides the hybrid power stations, we have also committed to more diesel electric loaders, with the aim to progressively replace our existing diesel underground fleet. Another key point for this year is to continue to invest in our people. We are rolling out a series of improvements to employee benefits during Q2. This is all focused on reducing turnover in the business. In closing, slide 22.
We welcome questions from all our shareholders, and we'll now open the chat room for those online.
Thanks for that, Wayne. We'll now just pause for a few moments to allow everybody to enter any questions into the webinar software. Thank you. Once again, everyone, if you'd like to ask a question, please enter it into the question function in the webinar software. Oh, sorry, we've got one question from Dev. "What is going to be the main focus in this financial year?
Thanks, Dev. The focus is really gonna remain the same. Focus on cash generation, increasing productivity in the operations, and really try and work on our people. I mean, one of the key enablers to success here is retaining our talent and attracting more. And so FY 2023, it's all about Westgold's people.
Thanks, Dev. Wayne, I've got a question from Nate. "Westgold has hinted at 300,000 ounces per annum being a future growth target. Could this be achievable in FY 25?
More likely FY 2026. Again, we are really conservative in how we forecast here, and we can see that Great Fingall will commence in FY 2025, but it won't reach its full run rate until FY 2026.
A question from David: "How are you looking to reduce costs over the remainder of the year to get to the lower end of your full year cost guidance?
Great, great question, David. Again, by the end of this half, all of our hybrid power stations will be online. But what really drives our costs down is, will be more ounces.
Good question from Chris: "You touched on recent labour hire and seeing tightness in the WA labor market. What is Westgold's further staff requirements in near future?
It's a good point, Chris. In some sense, diminishing. We're actually having an inflow of quality people now, and that's been driven by things like Great Fingall. Projects like that, people want to get behind, and with that, plus greater success at Big Bell and Bluebird, we've got an inflow of quality staff.
Question from Devin, I think this might have actually been answered in the thing, but, what is your position on hedging going forward?
At this stage, hedging is a month-to-month proposition, and it's discussed thoroughly at the board. At this stage, where the prices, we're happily capitalizing on the spot gold price.
Next question from Nate: "You are expanding your current underground operations plus looking at opening more. Could you rank which other underground operations might be next, and how many underground operations might be the best fit for Westgold?
At this stage, we're building up to our six mines. There's potential we could look at South Emu/Triton coming back online. We're looking at Triton ore system, the Gibraltar ore system as well. Our next biggest though will be South Junction, likely coming on as part of the Bluebird mine. I believe somewhere between six and seven mines is our ultimate target.
Next question from Travis: "Is M&A part of the strategy, or is the sole focus on organic growth?" And I'd note that this is a similar question received from another holder.
Thanks, Travis. I think we've shown that we are focused on growth. I mean, we certainly had a go at Musgrave earlier in the year, and we showed that we would be disciplined, i.e., we won't overpay. So really, the strategy going forward, and we've been really clear on that, is first focus our internal growth targets. Things like Great Fingall are now away, but we always keep an eye on what's happening outside our patch.
Next question, from Cameron: "Can you give sensitivity to diesel price, please?" This might be a little bit too specific, but-
This one, it's diminishing. So a year ago, this business was 8 million litres of diesel a month. We're now down to below 4 million litres of diesel, and that's dropping every month with these gas power stations coming on. We're expecting to be at 2-3 million litres a month going forward, so at the end of the day, it's pretty small. Next month's diesel price is actually dropping. We've just got notification, so I believe it is limited.
So, let's take a little pause again there. All right, we've got another question. Question from Nate: "Bluebird Plant needs oxide. What plans do you have to rectify this?
Thanks, Nate. Simon Rigby's not here today. He's actually in the field, but the exploration team is very much looking at targets that can be trucked to Bluebird. Look, the bottom line is oxide a must? No, it's a want. And again, there are opportunities proximate to Bluebird now. We just have to drill them.
Just take a little pause there to allow anybody else to enter any further questions. Two more minutes, and... Well, I'll hand the mic back to you now, Wayne. We've got no further questions at this time.
Thanks to everyone for taking the time to patch in today. Again, solid quarter. It's just head down. We charge into Q2. We're so excited that we've managed to start Great Fingall in October, as we said, and people can expect more news flow going forward about what we're doing. But always, if there's questions, please, this company is quite transparent, hit us up through our email addresses or reception at Westgold. Always happy to chat. Thanks, Shane.
Thanks, everybody, and that ends today's call.