Thanks, Michael, and good morning, everyone. It's a real privilege to be standing here in Kalgoorlie and talking about West Australian gold. Ultimately, this is the industry that has fostered and created many of the careers, the communities, and the companies that feature as part of this week. Diggers 2026 comes at a really interesting, exciting, and important time for Genesis. Before I move to the proposed merger with Vault Minerals, I'd just like to spend a couple of minutes on Genesis as a standalone business.
Ultimately, it's the delivery of, obviously, I'm biased, but a pretty awesome group of people, and the progress over the last few years that puts us in a position to look at the proposed merger with Vault and the value that that transaction can bring. Standalone FY 2026 performance for Genesis, we produced just over 285,000 oz at an all-in sustaining cost of AUD 2,670 per ounce. Importantly, delivering guidance for our third consecutive year since commencing our operational profile in 2023.
Again, this was against inflationary macro backdrops, really proud of the entire Genesis team in that delivery. We generated AUD 899 million of underlying cash flow and a June 30 position that gave us AUD 520 million cash in equivalents, setting up the business for a really strong FY 2027. Strongest position our business has been in. On the growth train piece, no pun intended, Tower Hill, our Leonora 2 g per ton + 1 million ounce open pit, came along in leaps and bounds and we were able to really fast track throughout the year.
We ordered the Genesis Mining Services open pit fleet ahead of schedule in preparation for first ore FY 2028. The pit's dewatered. We've commenced surface mining activities, it's all full steam ahead at Tower Hill. From an exploration point of view, Drill Bit did exactly as we had hoped. In the June quarter alone, we were able to articulate 21 individual results of 100 g meters plus, just underpinning the compelling nature of our asset base and that future growth pipeline. When I consider Vault Minerals putting the finishing touches on also an excellent FY 2026, we were set up to be able to look at the compelling, logical merger, which will create a new Australian gold major.
A couple of pages of our notices and disclaimers, recommend reading through. There is clear strategic logic to this combination. Genesis and Vault Minerals are not two isolated gold companies being put together for scale alone. This is a logical consolidation of complementary assets in the same Tier One district and very similar operating cultures, ultimately paving the way to unlock AUD 2 billion of genuine synergy potential.
The merged group will have three production centers across Western Australia, with a dominant position in the Leonora-Laverton district. Pro forma, we're talking about 600,000 oz-700,000 oz per annum of production entirely in W.A. We'd have just shy of 34 million ounces in resource and 9.4 million ounces of ore reserves, with over 75% of that inventory basically located in one dot on the map. We'd also have a very strong balance sheet with approximately AUD 611 million in pro forma net cash, giving us about AUD 1.4 billion of pro forma liquidity, that really matters.
This is not simply about combining ounces. It's about having the balance sheet to develop the right ounces through the right mills and at the right time, and ultimately facilitating rewarding shareholder returns. The market relevance also changes materially. With a pro forma market cap of approximately AUD 12.6 billion, the combined group would become a top three Australian gold producer and a top 20 global gold miner by market capitalization. Global investors, they want gold exposure. They also want investable companies with strong balance sheets, long life assets, clear growth pathways, and credible management teams.
This merged group would offer all of that with one additional advantage, district consolidation. This combination gives us production scale today, but more importantly, it gives us operational flexibility for the next 10 years and beyond. The transaction itself is straightforward, with the merger to be implemented by a Vault scheme of arrangement. Upon completion, Genesis shareholders would own 59.8% of the merged group and Vault shareholders 40.2%. We see this as a rare opportunity where the strategic, operational, and financial logic all point in the same direction. We're targeting completion in November this year.
There's four core reasons for this transaction. First, it creates that new Australian gold major focused on one of the best gold districts in the country, if not the globe. The merged group would immediately have that 600,000 oz- 700,000 ounces of production and the dominant position in what is an 85 million ounce district in Leonora-Laverton. Secondly, that synergy potential is significant and importantly unique. We estimated those potential synergies of approximately AUD 2 billion, but importantly, AUD 1.5 billion of those synergies are unique to the Vault-Genesis combination.
They're not generic corporate synergies. They exist because King of the Hills is close to Tower Hill, because Bardoc can access the Mount Monger processing facility, and because our Laverton milling capacity can be better prioritized. This combination creates operational flexibility that neither company has on its own. Tower Hill ore can displace lower grade King of the Hills open pit mining feed. Our Laverton capacity can be liberated, and our Bardoc free milling ore also be able to go through the Mount Monger facility. Even our exploration priorities can be reset across some prolific combined tenure and a phenomenal growth pipeline.
Finally, the greatest scale, liquidity, and quality of cash flow that it brings really matters. Global investors do seek that scale and liquidity, plus the balance sheet strength and mine life. This combination provides all four. A transaction will only be successful if the people and the governance are right. The proposed merged group Board importantly reflects both businesses with a four to three representation between Genesis and Vault. Russell Clark will be Chair, Tony Keenan, Deputy Chair, and Raleigh Finlayson will be Managing Director.
Ultimately, the company will be led by a Board and management team with strong alignment and ownership culture. Ultimately, that senior management structure is designed to ensure delivery momentum is maintained from day one. Importantly, Genesis will seek to retain key Vault personnel. Both companies have built cultures based on safe operations, productivities, and cost discipline. We're taking ultimately the best of both businesses and creating something even stronger. Culture will be central to this merger. Genesis ASPIRE values, Accountable, Sustainable, People First, Integrity, Results, and Empower, underpin everything that Genesis completes.
Underpins our culture. For the merged group, we will not simply laminate the Genesis values and expect everyone to adopt them. We will take the same successful approach that we did in 2023 and rebuild them from the frontline workforce of both businesses. That point really matters. Ultimately, it is our frontline workforce that understands what drives value in their business and also what can erode or break that value.
Our commitment is that there will be no overnight disruption just for the sake of disruption. We will focus on safe production and that continuity, respect, and clear communication. The opportunity for people is genuinely significant. That larger group creates more career pathways, more development opportunities, and a broader platform for employees to think and act like owners. This illustrates a real step change in scale.
On the impressive pro forma metrics you can see here, the integrated group moves into a genuinely different peer set. We move from being a growing mid-tier producer to a true Australian gold major. But scale only matters if it is of quality, and it needs to enable us to become more relevant, more resilient, and more capable of delivering that per share value. We are going to be able to optimize all sources, prioritize mills, allocate capital across a deeper project pipeline. We will be able to use our balance sheet to accelerate the best projects and ultimately defer the lower margin ones.
Importantly, the ambition and commitment is to retain the agility, cost discipline, and people first culture that made Genesis successful and is visible throughout the Vault business. This map illustrates the dominant position we would hold in the Leonora-Laverton district, where the combined group would have just over 8 million ounces of reserves and 12.4 million tons of milling capacity, which ultimately is over 17 years on reserves alone and does not talk to any of the conversion opportunity for +20 million ounces of resource.
The proximity is what creates this opportunity. KOTH is just 35 km from Tower Hill, close enough to change the development thesis for Tower Hill and the feed strategy of King of the Hills. At Genesis, we have spoken for several years about ensuring the right ore goes through the right mills, and we are now in an even more powerful position with this principle. It allows ore to move west. It liberates milling capacity in the east, which ultimately supports acceleration of some Tier One assets like Lady Julie, Beasley Creek, and another pipeline of Laverton opportunities.
That stronger balance sheet provided, we will be able to fund the development of these assets when the economics warrant. If gold price moves up, we can bring these growth projects forward and ultimately everyone benefits. If gold price continues its recent 2026 trend, our improved flexibility, optionality, and balance sheet with less capital commitments ultimately makes us a very resilient business. At 465,000 oz of FY 2026 production across the combined Leonora-Laverton assets, this operation would immediately sit amongst Australia's largest gold operations. King of the Hills, KOTH, is central to this.
It is a large, low-cost processing facility expanding towards around 8 million tons per annum. When you combine that plant with Tower Hill and other regional feed sources, the flexibility becomes material. This is how we start to think about Leonora-Laverton, not just a combination of assets, but a genuine system. The value that can be derived from optimizing that system is immense. Now the portfolio will have four West Australian operating centers, Leonora, Laverton, Kalgoorlie, and Deflector, creating a highly coherent operating base. We have the underpinning Leonora-Laverton operations I've discussed.
At Kalgoorlie, we have the consistent Mount Monger operations and with the mill unlocking the free milling Bardoc ore. At Deflector, there is an impressive team led by Vault General Manager Greg Winder, focused on extending mine life, opening new areas with continued exploration. This is a portfolio with production today and optionality tomorrow. This slide goes to the heart of the transaction. Of the AUD 2 billion of synergy potential, again, with that AUD 1.5 billion unique to the combination, the largest advantage is clear capital savings.
By processing Tower Hill ore through KOTH, the merged group can avoid the construction of a standalone Tower Hill mill and avoid the expansion of milling capacity out at Laverton that would otherwise be required. This immediately provides us AUD 715 million of capital savings. There are also operating benefits. Lower processing costs through that large KOTH mill. Regional G&A efficiencies will get cost benefits out of utilization of Genesis Mining Services, our open pit mining in-house division, and again, unlocking that Bardoc free milling ore through the Mount Monger facility. This is why the transaction is unique. The value is not theoretical. It comes from physical proximity, existing infrastructure, and the genuine optimization choices.
Now, whilst this quantified number is significant, it's not the end of the opportunity. There are additional operational flexibilities that we have not yet quantified. These are things like utilizing or expanding the existing Gwalia Mill, or deferring higher grade, higher strip ratio, open pit projects like Westralia out at Laverton. This is where the combined group has real strategic advantage. If the gold price remains strong, again, we can bring forward the best assets, the best opportunities. If costs move against us, we can prioritize the higher grade ore sources. If drilling results continue to support growth, we can reallocate capital very quickly.
In a gold business, this optionality has real value. It protects the downside and ultimately increases the upside. Now, here we explain the grade streaming logic that is critical to this transaction and to unlocking the value of the merged business. Now, the King of the Hill open pit contains both higher grade and lower grade material, which Vault General Manager Paul Mitchell and his team have done a great job over the past six months in successfully segregating and delineating the higher and lower grade split through diligent mining and geological practices.
The opportunity is to preferentially treat the higher grade open pit ore, which averages around 0.9 g per ton, and defer the lower grade split, which averages around 0.3 g per ton, and displace it with the higher grade Tower Hill that I touched on earlier, reminding that that is 2 g per ton. This is a major change in feed quality. Standalone King of the Hills would have to process a large amount of low-grade material through that larger mill, substituting the lower grade feed with Tower Hill ultimately enables the same amount of ore tons through the mill to produce more gold.
The lower grade material also does not disappear. It can be stockpiled, preserving future optionality in a strong gold price environment, even more importantly, provides a future-proofing mechanism for the asset. The point is ultimately pretty simple. Genesis has the grade, Vault has the large-scale processing infrastructure, together, the combined group can unlock and realize more value than either entity in a standalone case.
To put some numbers to that, the opportunity is for Tower Hill to displace approximately 2 million tons per annum of that lower grade KOTH open pit ore, which will add around 100,000 oz per annum of production for the same amount of volume processed. With the KOTH mill expanded to 8 million tons per annum, this actually paves the way for that asset to produce 300,000 oz per annum, standalone by FY 2029. When I include Gwalia Mill production, total Leonora production could equal 500,000 oz per annum over that same time frame. The Kalgoorlie logic is also compelling. With a combined resource of 85 million tons at 2.5 g per ton for 6.7 million ounces.
The Mount Monger operations have been consistent and efficient stalwart for the Vault business. A credit to the execution of General Manager James [Raine] and his team over many years. The mill gives Bardoc that processing pathway for the free milling ore. Zoroastria n is particularly important. It has underground development previously commenced, approvals in place, ultimately possesses almost 100,000 oz at a 3.8 g per ton reserve grade that could see the Mount Monger Mill.
It's another example of value that has not featured meaningfully in Genesis standalone plan, becomes more relevant in the merge scenario. With the AUD 611 million in pro forma net cash, the merge business will have the financial capacity to fund growth opportunities while still maintaining that balance sheet strength. There's approximately 25 million ounces of resources, not yet in reserves in the combined group, that includes three of the top six undeveloped open pit assets in W.A., with more than 1 million ounces at 1 g per ton or higher.
These will able to potentially see a mill even faster. This is where sequencing becomes really powerful. We can choose where capital goes first, we can accelerate the highest return projects, we can use existing mills before building new ones. For shareholders, it creates a much better platform for disciplined growth. With the merger giving us the lever of ore able to move west and freeing up that milling capacity to the east for higher quality ounces, we can ramp up our development of the exciting Laverton assets along the Chatterbox trend that you can see on your screen.
Specifically, the + 1 million ounce, 1.7 g per ton, Lady Julie open pit, that was the focus of our Magnetic acquisition earlier this year. The Lady Julie open pit optimization has been unshackled effectively by the removal of tenement boundaries under Genesis ownership. We have rapidly commenced drilling overnight or immediately along strike in the gap you can see in the Chatterbox trend. This is exactly the sort of portfolio flexibility that creates value. Gwalia remains one of the great names in Australian gold.
The recent drilling in the uppers, which is between 300 m and 1,000 m below surface, reminds us exactly why when you consider some of the remarkable results you can see listed. Intercepts like 27.6 m at 17.6 g per ton and over eight meters at 43 g per ton are some remarkable outcomes, and we've only just started scratching the surface, so to speak. Historically, more than four million ounces have been mined from the uppers, and drilling is ongoing throughout FY 2027, with three rigs turning flat out. The strategic point, again, is straightforward.
In the combined group, every ton of higher grade ore that can displace the lower grade material improves that system. Gwalia gives us a long life quality, King of the Hills gives us the scale, and Tower Hill gives us that transformational open pit feed. Together, Leonora becomes a much stronger production center. In closing, I want to leave you with a very simple message. This transaction is not about becoming bigger. It is about becoming better. The combination of these two businesses creates a company with a scale, complementary asset quality, and strategic position that is genuinely unique in the Australian gold sector.
We're creating a top three Aussie gold producer with that 600,000 oz- 700,000 oz per annum of production and an enviable mineral resource and reserve base. With that portfolio concentrated in one of the most prolific gold districts in our country. Importantly, we believe there is considerable upside, additional, that has not yet been quantified, that we look forward to unlocking.
The success of this combination will be driven by the quality of our workforce, the capability of our leadership team, and ultimately, the experience of a management group that has repeatedly demonstrated its ability to integrate assets, unlock value, improve performance, and importantly, deliver on commitments. We really look forward to delivering on that opportunity that lies ahead and creating significant returns for shareholders from what we believe is one of the most compelling combinations seen in the Australian gold sector for many years. Thank you very much for your time.