Good morning and good afternoon, ladies and gentlemen, and welcome to the OceanaGold 2018 third quarter results webcast and conference call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on October 25th at 5:00 P.M. Eastern Time. I would now like to turn the conference over to Mr. Mick Wilkes. Please go ahead.
Thank you. Good morning and good evening, everybody, and welcome to the OceanaGold third quarter 2018 results webcast and conference call. It's a pleasure to be here with you again to discuss OceanaGold's continued strong operational and financial performance and exciting near-term opportunities. I'm joined today by members of the executive team who will provide specific details on our results. With me is Michael Holmes, our Chief Operating Officer, who will discuss our operational results and what we're expecting in the final quarter of the year. He'll also briefly update you on the expansion project at Haile and the underground at Didipio, both of which are progressing well. Scott McQueen, our Chief Financial Officer, is also with us, and he will discuss our financial results. As you know, we've been very active with exploration, and we continue to have solid results.
With me today to discuss those is Craig Feebrey, our Executive Vice President and head of exploration, who will discuss those exploration results in New Zealand. Before I proceed, just the usual cautionary statement noting all references to this presentation adhere to IFRS standards, and all financial figures are denominated in U.S. dollars unless otherwise stated. Please note that the presentation contains forward-looking statements, which by their very nature are subject to some degree of uncertainty, and there can be no assurances that forward-looking statements will prove to be accurate, as future results and events could differ materially. Please refer to the disclaimer on the forward-looking statements in your presentation. Moving on to slide three. I'm more than pleased with our performance in the first nine months of this year. Our operations are performing well, delivering on production targets and generating strong cash flows.
I'm excited finishing the final quarter of the year on a continued positive note. It's been a year of new achievements operationally, socially, and financially. In the first nine months of the year, we've delivered robust financial results and accumulated the highest revenue and EBITDA the company's ever achieved over the first nine months of the year. We've continued our strong track record of profitability with solid net profits again this quarter, despite 9% lower gold price received. The strong cash flow generation from our business has allowed us to make discretionary repayment of $50 million towards our revolving credit facility in the third quarter, while we paid dividends of $12 million. We've maintained a strong balance sheet with total liquidity sitting at $140 million, which excludes $76 million in marketable securities.
We continue to deliver strong margins and returns to shareholders, and that is and has been a primary objective of our business. As mentioned, we continue to have significant exploration success while also reinvesting in our business to expand our operations to deliver both value and growth. Exploration has been an important area of focus for the company that's yielded significant results across our business. More recently, we have discussed some of these results in New Zealand at Waihi and WKP. Earlier this week, we announced some encouraging results at Macraes, where we're targeting another extension to the mine life. Macraes is a very important operation. It generates very strong cash flows for our business and yet is overlooked by many in the investment community.
It shouldn't, as we will continue to generate good cash flows from the asset, and given its vast resource base, there is a real optionality to further extend the mine life beyond 2021 while maintaining good cash flows. Finally, on the back of our strong operational performance this year, we have increased our guidance for the second time this year. We are now expecting to produce between 515,000 and 545,000 ounces of gold while maintaining our All-In Sustaining Cost range between $725 and $775. The main driver for the guidance increase is related to the continued strong performance at Didipio. Moving on to slide four. On a consolidated basis, our operations produced 406,000 ounces of gold and 12,000 tonnes of copper after three quarters. As you can see, we're well-positioned to come within our revised guidance range.
We expect the fourth quarter production to look similar to the third quarter, but with a varied production mix. Overall, the third quarter production was down slightly, which we expected, and had previously forecast to the market. The main driver was lower production at Haile on lower grades and mill feed. The mill feed was related to a planned shutdown in July for maintenance and tie-in of the pebble crusher and upgraded tailings thickener. Our New Zealand operations delivered strong quarters, while Didipio was consistently strong. For the fourth quarter, we achieved an earnings per share of $0.03 on an adjusted basis, with the timing of sales and average price of gold being the main drivers for the quarter-on-quarter decrease, while cash flow per share for the quarter was a solid $0.12, which is in line with analyst expectations.
Overall, we continue to demonstrate revenue and profit growth now, with all four operations contributing strong operational and financial performance. For the nine months of this year, we have posted revenue growth of 23% and net profit of 33% over the same period last year. On a per-share basis, we've delivered a 13% increase in cash flows over the same period. Moving on to slide five. For the 34th consecutive quarter, we have delivered a positive return on invested capital, which again reflects how we run our business and how we allocate capital. We are one of the only two gold companies that has delivered a positive return on capital every quarter dating back to 2010. Meanwhile, our year-to-date EBITDA margin sits at a solid 49%, which maintains our standing as having one of the highest EBITDA margins in the gold sector.
We expect this trend to continue next quarter and beyond, given the low cost structure of our business. We're also expecting lower All-In Sustaining Cost next quarter. I'm very pleased with our results. However, we still have room for improvement, especially at Haile, where we continue to focus on productivity improvements to make that operation run as efficiently as Macraes, which we see as our benchmark for operating efficiency. We expect each of our operations to operate to the same high standard, and we do expect Haile will get there with patience and with strong leadership. Our business is in a very good place right now. Operations generate strong cash flows and are expandable. I'll now hand over to Michael to discuss the operating performance.
Thank you, Mick, and hello, everyone. I'll spend the next few minutes going through our operational performance. Health and safety, moving to slide seven. Health and safety performance remains an important focus for our business, with our year-to-date TRIFR remaining static for the quarter at 4.7, however, improving on our last year's quarter three performance. Through the quarter, we experienced some extreme weather events at our Haile and Didipio operations, and with excellent site preparedness and weather event management, we ensured that there were no safety or environmental incidents. We continue also to focus on our principal hazard management plans with reviews and regular audits, including emergency scenarios and drills. We're always working with our contractors on-site to ensure their safety management processes align with ours, particularly when there is a change of contract services. For example, the exploration drilling services in New Zealand.
On a quarterly basis, Didipio continued its strong safety performance while we saw a slight improvement at Macraes. We recognize that we need to continue emphasizing safety performance at Haile, and we're certainly committed to improving the safety culture there with the rollout and implementation of the behavioral-based safety program during the last quarter and continuing into this quarter. This is the same program that we have rolled out at our other sites. Several other safety initiatives have been introduced during the quarter as we track the more common types of incidents, particularly focusing on programs for hand injury prevention and the prevention of slips, trips, and falls. Body mechanic and movement programs were also implemented to reduce the number of sprains and strains in our workplace. Moving on to slide eight and the operational performance at Haile.
As mentioned, production in the third quarter was lower than in the second quarter, which was expected with a lower head grade. In July, we had a major shutdown of the process plant for seven days to tie in the pebble crusher and upgrade the feed well in the flotation tail thickener, as well as carrying out other planned maintenance activities, such as installing the new CIL feed box, the SAG discharge screens and feed chute, and ball mill feed chute, and the surge tank reline. This work went well, and in fact, since installing this equipment, we have achieved daily throughput rates, which annualized are performing at a run rate of 3.2 million tons. We are encouraged with what we've seen so far at the plant as we look to increase the annual throughput rates to between 3.5 and 4 million tons per year.
Recovery was similar to the previous quarter, despite the lower head grade, as we drive for operational performance improvements with our current programs. Mining activity continued to be a focus for us as we're not achieving the productivities that we expect and are used to having, particularly at our sites. Mining activities were impacted by maintenance issues through the quarter for the dig and haulage fleet, which also negatively impacted the unit cost. Towards the end of the quarter, the mine was also impacted by the weather events, where we planned the shutdown of the operations for three days to ensure the safety of our people, plant, and equipment. The management of water was also critical to ensure that there were no offsite discharges, which meant the pits were used to collect water.
Subsequent rain events have meant that we were still managing the water on-site, and we are still pumping water from the Mill Zone pit. This has had an impact on our mining rate and has thus negatively impacted our mining unit costs for the quarter. Upskilling the workforce continues to be an important objective, and we're actively running recruiting roadshows and recruiting operators from states such as Colorado, Nevada, and Arizona. Moving on to slide nine. We are making very good progress on the plant expansion, having installed both the pebble crusher and the upgraded tailings thickener in the third quarter. We've also poured the concrete foundations for the tower mill and are in the process of installing the equipment. We've commenced the foundation work on the IsaMill and expect the tower and IsaMills to be in operation in the first half of 2019.
As we go through the permitting process on the mining front, we have assumed that the Horseshoe Underground will be in operation in 2021 while we proceed with the optimized open pit. With the underground and the larger pits, we expect annual production to be over 200,000 ounces a year, and in 2021, we're forecasting production of around 180,000 ounces. Some ramp up of the operation will be required to get us to the 200,000 ounces a year. Getting the underground built will also be a very important catalyst for us on the exploration front, as we expect to conduct extensive underground drilling programs to target the high-grade zones that we have hit through the surface drilling.
Moving on to slide 10, you can see some recent photographs of the construction of the tower mill and the installation of the equipment on the left-hand side and the foundation work of the IsaMill on the right-hand side. Moving to slide 11 and the Didipio operations in the Philippines. We had another strong quarter of health and safety performance and production from the operation. The Didipio operation continues to be a leader in ESG and continues to win awards for environmental excellence. Just recently, Didipio has won the Philippine Chamber of Commerce and Industry most coveted award, the 2018 Excellence in Ecology and Economy Award in the large enterprise category. This is the first time a mining firm has won this award. Production at Didipio was similar to the second quarter and will increase with increased mill feed that was partially offset by lower grades.
The mining of the Breccia zone from the surface was completed and fully backfilled with cement in the third quarter. High-grade ore from the Breccia pit and the underground ore supplemented the mill feed, which was predominantly sourced from the low-grade ore stockpiles as we ramp up the underground mine. We will continue to blend the ore from the Breccia zone material for the future processing. Panel one of the underground operation continues to ramp up to design as we completed several stopes, including a double width stope in the monzonite zone and the first double height stope. In the fourth quarter, stoping will continue in the monzonite zone with a second double height stope and two single height stopes, which are 30 meters in height. We will commence a redesigned smaller profile stope in the Breccia zone, which will take out the side of filled stope.
The water storage stope is nearing completion. This will further assist the water management in the mine as we expand the stoping fronts deeper into the mine. The primary pumping system is operating at design rates and to expectations. The first real test we had was when we were touched by the recent typhoon. The infrastructure performed as expected. Costs are also generally in line with expectations thus far, and as our underground operations ramp up, we'll see the unit cost drift towards the $36 per tonne, as we expect. Hopefully, through further efficiencies, such as the optimized mine plan and the stope sizes like we have done already, with this we can achieve the lower costs. Production at Haile is expected to be lower in the fourth quarter. However, we have increased our guidance again for the Didipio. Sorry.
Production at Didipio is expected below in the fourth quarter. However, we have increased our guidance again for the Didipio to 110,000-115,000 ounces. Moving on to slide 12. Here is an overview of what I've just described, that we're in the mining operations. Within the slide, we do have the 20 million tons of ore stockpile on the surface for processing from the open pit. The slide shows the decline position of where we currently are in the gray and the stopes which we've mined in October. The stopes in the pink are the stopes that we will mine in 2019, and the remaining light blue is the areas that we'll be mining over the life of mine. You can see the location of the capital pump station and how we're advancing the decline into the construction of panel 2.
You can also see the area where we believe there's additional potential for resources at depth, which will be opened up as we progress further down the mining front. We see that has enormous potential for us. Moving on to slide 13 and Waihi in New Zealand. The Waihi operation had a strong third quarter on better head grades and slightly better recoveries. Mine productivity continued to improve following the lower equipment availability that we experienced in the first quarter. As indicated by our exploration and news releases, we continue to achieve compelling drilling results at the Martha project. Craig will discuss the exploration there in more detail. However, we have increased the resource at the Martha significantly and continue to drill from the two underground drill drives. In parallel, we have the permitting process underway for a 10-year mine life extension.
We've hosted several town hall meetings and received overwhelming positive support from our stakeholders at Waihi and in the region. In mid-August, the public comment period officially commenced and ran for four weeks, which is the standard length for the permitting process. During this time, 284 submissions were received, again, with overwhelming support. The Waikato Regional Council and the Hauraki District Council are the regulatory authorities tasked for the approval of our permit application. In November, they will host a consent hearing and render a decision in the first quarter of 2019. Once a decision is rendered, there is an appeal process that takes place. The permitting process in New Zealand is straightforward. We've been through this process several times over the past 28 years, and the Waihi operation itself has had several cutbacks and underground mines approved over the past 30 years.
This consent is more of the same. It does, however, take time and requires strong engagement with the regulatory agencies and other stakeholders. As the permitting process continues, we will continue to prove up the resource and work on the project study. We do expect production in the fourth quarter to decrease on lower grades at Waihi. Turning to slide 14 and Macraes in New Zealand. Macraes had another strong quarter with its health and safety performance continuing to trend in the right direction. In the third quarter, grades and mill feeds were similar to the previous quarter, while recoveries remain robust at 86%. Despite the solid third quarter, mining operations, both surface and underground, were impacted by lower equipment availability. This led to a high quarter-on-quarter mining cost. So far in the fourth quarter, we're seeing considerable improvements and expect to reduce our unit cost.
We do expect production to be slightly better in the fourth quarter as we open up more of the Coronation North pit. As mentioned in our recent press release earlier this week, we are working on a new mine plan that we believe will further extend the mine life at Macraes beyond 2021. It's still a work in progress. However, we are targeting ore currently outside of our reserves, but currently located within previously mined pits. Project teams is also investigating a potential underground mine at the Golden Point on the back of the exploration successes we've had over there in the past year. Craig will discuss the exploration opportunities we see at Macraes, and together, we believe that Macraes will continue to deliver strong production and cash flow for many years to come.
I should also point out that Macraes has a large resource with lots of leverage to the gold price. When the price does return to $1,500 an ounce levels, we have about 3.5 million ounces in resource that become economic. In addition to this, we have the Round Hill optionality. I would now like to introduce Scott McQueen, our CFO, who will discuss our financial performance. Thank you.
Thank you, Michael, and hello, everyone. As illustrated by both Mick and Michael's comments, the company had another quarter of solid operational performance, and that is reflected in our financial results, despite some headwinds from weaker Q3 gold prices. Turning to slide 16, here we see a snapshot of our financial results. Top-line revenue for the third quarter was $187 million, a slight decrease on the previous quarter, due mainly to the lower average gold price received and slightly lower sales volumes. Lower sales volumes have a timing element to them. As you all know, production was nearly 4,000 ounces above sales for the quarter. For context, the $90-plus fall in the quarter-on-quarter average gold price translated to more than $12 million in quarter-on-quarter revenue and EBITDA impact. In addition to prices, EBITDA was also impacted slightly by higher cost of goods sold.
This reflected the expected reduction in mill grades at both Haile and Didipio, lower plant utilization at Haile, principally related to the pebble crusher installation, but also some weather impacts, along with the general second half trend whereby a higher proportion of our sales mix came from our New Zealand operations. I'd also like to reiterate the point Mick made earlier, that despite the lower gold and copper prices, our 2018 year-to-date revenue and EBITDA are both records to this point in the year. The expectation of continued strong returns and margins in Q4, overall, we're very pleased with our financial position and performance. Moving to slide 17, which provides an overview of cash flow. Cash flow generation for the quarter was a solid $64 million, despite the drop in the average gold price and the impact of the sales timing.
Another material timing impact was a negative quarterly working capital movement of around $13 million, primarily increased receivables combined with some inventory build, as already noted. You can also see here our investing cash flow was steady quarter-on-quarter. As expected, we saw an increase in our investment in growth projects, which was largely offset by a reduction in pre-strip costs, which are more first half weighted. I'll provide a bit more detail on the split of CapEx by nature and location on the next slide. Unsurprisingly, our financing cash flow was higher this quarter given the $50 million discretionary debt repayment we made. Whilst that liquidity remains available, we had sufficient cash to allow the repayment, which will materially reduce our ongoing interest costs. Fourth, during the quarter, we also paid $12.4 million in dividends.
For year-to-date, that takes us to a total of $18.6 million in dividends, again, reflecting the strong cash flow generation business. Moving to slide 18, includes a bit of additional information on the CapEx profile. In total terms, capital invested in the third quarter was similar to the previous quarter. As I just mentioned, in general terms, relative to last quarter, we could see an increase in the growth CapEx, largely offset by a reduction in pre-strip. General operating CapEx and exploration spend were pretty flat. The bulk of the growth capital has been spent at Haile and Didipio. At Haile, the focus remains on the expansion activities. While Didipio, the development of the Panel 2 underground continued.
Also of particular note was the growth capital spend at Waihi, where we continue to advance the Martha Underground development. In terms of pre-strip, albeit reduced quarter-on-quarter, the main spend was at Haile and Macraes, as you would expect. We continue to invest in exploration, with much of that spend at and around Haile and Waihi. Craig will discuss a bit more detail on the positive results that program continues to yield. Looking to the fourth quarter, we do expect our sustaining capital to be lower, although we expect to fall and remain within our guidance on the full year. Moving to slide 19, which covers key features of our liquidity and debt position. Our balance sheet is robust, strong liquidity and low debt. Over the past year, and even in the last quarter, you can see our liquidity is trending higher while debt is being reduced.
This is in line with our practice of levering up when we're developing and de-levering when the assets are generating cash flow. As at the end of September, we had $70 million in cash and $140 million in total liquidity, an 18% increase year-on-year. A year during which, I might add, we reduced debt by over $60 million and paid nearly $25 million in dividends. In total, we had $150 million of drawn debt and $30 million equipment leases, leaving us with a low net debt of $110 million. I'll now hand over to Craig to discuss some of our exciting exploration results.
Thanks, Scott. Hello, everyone. Over the next few slides, I'll focus on our continued exploration success in New Zealand, where we have delivered a resource increase at Martha
Continued to intersect high-grade gold mineralization at our newest discovery, WKP, and target a mine life extension at Macraes. In discussing these slides, I'd like to bring your attention to the footnotes around both resources and exploration targets mentioned. Moving to slide 21 in Waihi, with an oblique section of the Martha Pit and Martha Underground project on the left. We continued to drill with nine rigs at Waihi, five in the underground from the two drill drives, and four from surface. The focus for us here has been to test a large exploration target and establish a resource within the Martha Underground. We're pleased to highlight that to date, drill fans along multiple drill points on the two drill drives have delivered the results we were expecting, intersecting both the main fissure veins of Martha, Empire, and Royal, and additional mineralization in linking structures between these dominant structures.
In July, we announced additional resources at the Martha Underground of 140,000 ounces of gold in indicated category and 339,000 ounces of gold in inferred. You can see from the graph on the right that we're now validating the concept and quickly establishing significant resources. With over half of the planned current program of drilling still in front of us, we're continuing to look forward to updating the market on progress. As part of the same news release announcing the growing resource, it's important to note that we also stated a significant increase in the size of our originally outlined exploration target, increasing to between 5 million and 6 million tons at an anticipated grade of between 4 and 6 grams per ton gold. The reason for the revision is an improved understanding of the nature of mineralization, both through drilling to date and an extensive compilation of historic data.
Just finally on this slide, the development of the 920 drill drive is complete and the 800 drill drive approximately 62% complete, providing additional drill platforms going forward. Moving to slide 22 on WKP. The figures on the left highlights the distribution of our pipeline of exploration projects covering around 30,000 hectares in the Coromandel Peninsula. These projects are at various stages of exploration with the discovery at WKP, shown in blue, the most advanced and located just 10 km north of our Waihi operation. We're obviously very excited about the exceptional drill results we're reporting from WKP, as highlighted here and in our press releases the last several months.
Based on those drill results reported to date, we've started to define a major high-grade gold-silver vein called the East Graben vein that strikes over 1 km, is open along strike, and is approximately 5 m in average width with an average grade of 14.7 grams per ton gold and a vertical extent of approximately 200 m with room to grow. I'll talk to this a little more in the next slide. Moving to slide 23. The schematic on the left is a plan view. The reason I'm showing this is that the East Graben vein located on the right or east of this figure is just one of three significant fissure veins shown in red with associated hanging wall and footwall structures, similar to what I was just describing at Waihi and the Martha Underground project. The two other veins are the Western and T-Stream veins.
Both are poorly explored with significant upside, as demonstrated by drill intersections to date. The schematic on the right side of the slide is a geology cross-section through the East Graben vein, showing the pierce points of drill holes to date, color-coded by gram meters. That's gold in grams per ton, multiplied by the true width of the vein. As you can see, all but one hole in the preferred rhyolite host is above our nominal cutoff of 10 gram meters. Drilling continues off two platforms, testing further the 1 km of strike in order to establish a resource and advance the project further. Although we're very excited about the opportunity at WKP, it's early days and we have a lot of drilling ahead of us, both on the East Graben vein and its two neighboring structures.
With that said, this is an opportunity to continue monitoring as we release additional updates and continue to explore this target to its full potential. Moving to slide 24 on exploration at Macraes. Our press release on Macraes a few days ago highlighted the exploration success that continues with drill results confirming expectations at targets such as Golden Point. You can see from this slide that we've intersected mineralization in a number of holes extending from the historic Golden Point open pit rim to the east and down dip along the shear that is both good width and grade. These results encourage us to chase resources here that may lend itself to an underground mining operation, as highlighted within the blue rectangle. Going forward, we expect to be conducting further drilling here to test this concept further. Moving to slide 25 on exploration at Coronation North.
Recent drilling has involved targeting infill programs in support of an updated life-of-mine plan. Drilling is highlighted here in this aerial view. It's predominantly within the current pit design. Drill results highlighted in the captions and bulleted on the right were in line with expectations and resulted in the conversion of approximately 14,000 ounces in the measured and indicated resource categories. That's a brief review of the results of exploration to date at New Zealand. I'd like to hand it back to Mick Wilkes.
Well, thanks, Craig, and thank you, Scott and Michael as well for those detailed updates. Before we start a Q&A session, I'd like to outline our priorities for the remainder of the year and just leave you with this thought. Our operations are performing well, delivering on production targets and generating really strong, solid cash flows. We expect a strong fourth quarter and are positioned well to achieve our upgraded guidance. Our organic growth opportunities are all advancing well. Exploration continues to demonstrate that we are operating in prolific gold belts. We will continue to drive further efficiencies at all of our operations, whether it be through productivity improvements or the implementation of technology. It's been a strong year for the company, and we expect we will finish up the year on a positive note. That concludes the formal presentation segment of the webcast.
I'll now take some questions over the phone, and I'll turn back the webcast over to the moderator to facilitate. Thank you.
Thank you. Ladies and gentlemen, should you have a question, please press star followed by one on your touch-tone phone. If you're using a speakerphone, please lift your handset before pressing any keys. One moment, please, for your first question. Your first question is from Michael Schrodbach, from Macquarie. Mick, please go ahead.
Good morning, Mick and team. Three questions from me. First, you noted that the mining of the larger monzonite stopes reduced the operating mining costs at Didipio during the quarter. What were the key drivers behind the lower processing and G&A costs, and do you see those being sustainable going forward as well?
I suppose the main drivers for that was the throughput that we achieved. We're still sort of, I suppose, managing that within the current guidance. We're expecting sort of similar, or probably slightly higher in the fourth quarter, depending on the amount of throughput that we can put through the plant. It's really that production base going forward. From the monzonite areas, yes, the more competent material we've successfully able to look at the increase to the stopes to take out some double stopes. We'll continue to sort of work with that. The plan has always been to have a look at the single stope sort of mining methodology, where the opportunity presents itself is we'll take that opportunity.
Okay, excellent. Thanks for that. What percentage of the resource is hosted in that monzonite zone itself?
Craig, can you answer that question now?
Not specifically, Mick. It would be well over three quarters. I don't have an exact number.
Okay, no problems. Just a quick question on Haile. Were the lower grades part of the mine scheduling, or was that a reconciliation issue? Are we to expect similar grades for the remainder of the year?
No, the quarter that we had, basically, we're transitioning. We're coming to the sort of the finalization of phase 1 in Mill Zone and as we sort of mine through into the Snake Pit. It was the mine scheduling. Grades will be improving this quarter.
The reconciliation is very good to date. Okay, thank you. My final question on Haile. It seems like operator training is one of the key challenges out there at the moment, given the new equipment and some of the issues with availability. Is that right? What are some of the strategies you're implementing to kind of optimize that going forward?
Yeah, thanks for that, Mick. It has been, I suppose, a little bit slower than what we'd hoped to. As I mentioned, the operators, we've targeted some job fairs at the experienced areas, and we're getting some good take-up of that. Those job fairs have been in the likes of Nevada and Arizona. We'll continue with that. We have picked up some more experience as we've gone through, and that's both experienced operators and experienced maintainers. We've got some experts in to do the maintenance review, and we've just come out with a list of actions there that we're following through. As mentioned as well from an optimization. We'll continue with the training, but also just with the improvement processes.
We have a couple of programs that we're going at site for performance improvement, and we're adding some bench strength to that with a performance improvement company called Lodestone. A lot of activities are happening at the moment. Yes, one is employing experience, and two is training the people that we have up.
Okay, that's good to hear. That's all for me, thanks.
Thank you. Your next question is from Chris Thompson from PI Financial. Chris, please go ahead.
Hi, guys. Congratulations on a great quarter and a year so far. Two quick questions. We'll start off with Haile. Just looking, I guess, forward at the installation of these new mills first half of next year, can you provide a little bit of color as to potential for downtime there? What should we be modeling?
Well, the overall utilization for the plant is edging up towards 90% at the moment. We do have quite a bit of maintenance on the fine grinding circuit that's in there at the moment. That is also costing us more than it should. Once the new fine grinding circuit's been installed, the existing circuit will be turned off, not necessarily decommissioned. We do expect that the number of times for downtime for that circuit will be much less. We'll also allow the process plant to run much more steadily, we're expecting utilizations around 95% to be the target over the next 12 months.
Great. Thanks for that, Mick. Final question, just moving on to Waihi, the East Graben. Could you just sketch out, obviously great exploration results. The permitting process, what would be required just roughly, I guess, to develop that as an ore source for Waihi? What sort of timeframe? What are the hoops that need to be negotiated to deliver on that?
Well, first of all, it is shaping up. It's a very good deposit, and I'm confident that it will be a mine one day. The development concept is for a fully underground mine, which would have virtually zero impact on surface. The feed would be trucked or conveyed back to the Waihi process plant at distances of 10 to 15 kilometers approximately. We're obviously in the early stages, and we are preparing our conceptual development plans with a view to starting the permitting process sometime in the near future. That's about where we're at at the moment. It is very encouraging. It's a very exciting prospect. It could add even more mine life to the Waihi operation as we currently envisage it.
Great. Thanks for that, Mick, and congratulations, guys.
Thank you. Ladies and gentlemen, as a reminder, should you have a question, please press star followed by one. There are no further questions at this time. Please proceed.
Okay. Thank you, everyone, and thanks for joining us again this quarter. There will be a replay available of our webcast later today on our website. On behalf of the team, Michael, Scott, Craig, Sam, Jess, and everyone else that puts this together, on behalf of the team, thank you for joining us. If you have any follow-up questions, please do not hesitate to contact the team in investor relations. Thanks. Bye for now.
Ladies and gentlemen, this concludes your conference call today. We thank you for participating and ask that you please disconnect your lines.