Northern Star Resources Limited

Thank you for standing by and welcome to the Northern Star June 2023 quarterly results. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr Stuart Tonkin, Managing Director and CEO. Please go ahead.

Thank you and good morning and thanks for joining us today. With me is Chief Operating Officer Simon Jessop and our Chief Financial Officer Ryan Gurner. I'm pleased to present our exceptional June quarter results today that contributed to our delivery of group production and cost guidance for FY23. During the June quarter, we delivered a production result of 426,000 ounces sold at an oil and sustaining cost of $1,700 an ounce. I would like to extend an enormous thank you to our teams and contract partners that contributed to this outstanding result, which for the full year delivered 1.563 million ounces at an all in sustaining cost of Australian dollars 17.59 an ounce. We've now completed the second year of our five year profitable growth plan to 2 million ounces per annum. And we have made significant progress across each asset, which underpins the platform to deliver continued superior returns for our shareholders. During the quarter, we announced the decision to expand the KCGM processing plant to 27 million tonnes per annum, which will lift production there to 900,000 ounces per annum and reduce costs to $14.25 an ounce. At modest gold price assumption, this returns an IRR of 19%. It is funded from cash flows and it is paid back in under five years. This investment at KCGM will lower costs, extend mine life and be an enabler for future opportunities to drive superior returns for shareholders, placing it as a top five global gold mine. Today, we've provided our FY24 outlook for production and costs with guidance for costs for gold sales of 1.6 to 1.75 million ounces at an always sustaining cost of between $17.30 and $17.90 Australian dollars an ounce. We will invest growth capital of between $1.15 and $1.25 billion, including the KCGM plan expansion. And on exploration activity, we have allocated $150 million. I'd like to remind listeners that we are able to maintain these growth investments, given our strong operational cash flows and balance sheet, whilst also servicing our dividends that are based on 20 to 30% of cash earnings. Now Simon will speak to the Australian operations shortly, but first to operations in Alaska at a Pogo mine. Pogo delivered an exceptional June quarter with gold sales of 80,000 ounces, representing an annualised production rate in excess of 300,000 ounces per annum. Pleasingly, the uplift was through consistent monthly performance across mining and milling metrics. Development averaged above 1,700 metres per month. Stoke production was two-thirds of the ore mined, and the milling throughput approached an annualised rate of 1.4 million tonnes per annum. And impressively, mine operating cash flow for the quarter was US$61 million. It is very pleasing to celebrate these milestones with the Pogo team, and I thank them for the efforts to date to demonstrate the exceptional quality of this long-life asset, and I believe we will start to see the market assign greater value to Pogo given its performance and significant resource and exploration upside. Now over to Simon for the Australian operations.

Thank you, Stuart. For the Kalgoorlie Production Centre, including Casey Gem, Karasu Dam, Kanata Bell and South Kalgoorlie, we sold 224,000 ounces of gold, up 18%, at an Australian all-in sustaining cost of $1,666 an ounce. This production delivered a mine operating cash flow of $280 million, while we spent $112 million on significant growth capital projects. Primarily, $57 million was spent on KCGM open pit mine development and new tailings storage facilities. At KCGM, open pit material movement was 21.8 million tonnes for the quarter, along with a new quarterly record of 66,000 trucking hours as we continue to optimise the load and haul fleet. This quarterly movement combined with the previous three quarters resulted in 83 million tonnes moved for the year as a new record and is in line with our total annual material movement. Grade of mined ore and volumes both increased for the highest quarterly volumes of FY23. Underground mining volumes for the Kalgoorlie region were again steady at 1.56 million tonnes. while grade increased 5% compared to the March quarter, driven from Kalgoorlie Ops and Karasu Dam to deliver 130,000 ounces. KCGM's underground Mount Charlotte operation stabilised production with 1.04 million tonnes mined in the second half, which is above our annualised 2 million tonne per annum target run rate. We will continue to grow this operation to 3.5 million tonnes by FY26. The Karasu Dam Porphyry underground mine continued development as the next major underground ore source, averaging 390 metres a month for one jumbo. Kalgoorlie operations, Kanowna Bell and South Kalgoorlie underground ore volumes and grade volumes were stable quarter on quarter, showing strong cash flow margins from these assets. Processing volumes in the Kalgoorlie Production Centre returned to planned volumes with increased grade, resulting in the 18% uplift in gold sold by 224,000 ounces. Karasu Dam's processing plant milled 1 million tonnes for the quarter, a new site record, and finished with over 70,000 ounces sold as an outstanding result for the team. At our Yandall production centre, including Jundee, Thunderbox and Bronzewing, we sold 122,000 ounces of gold at an Australian all-in sustaining cost of $1,647 an ounce. This production delivered a mine operating cash flow of $124 million, while we spent $61 million on growth capital projects. Primarily, $26 million was spent on the Aurelia open pit, and new tail storage facilities. Our Jundi operation achieved a new underground mine record of 829,000 tonnes of ore, up 21% on the March quarter. Development continued to be consistent at 7.8 kilometres for an annual total of 31.5 kilometres developed. As a result, mined ounces was an impressive 101,000 ounces for the quarter. Processing throughput was also a new quarterly benchmark at 789,000 tonnes, while for FY23, Jundee milled over 3 million tonnes, which is 11% over the previous record. These exceptional mining and milling physicals delivered 320,000 ounces of gold sold and over 300 million of free cash flow generation. The recently announced renewable project for Jundee is exciting as we've commenced works on the 24 megawatts of wind and 16 megawatts of solar generation, which will also include a 12 megawatt battery storage. This is part of our carbon reduction target of 35% reduction by 2030, with Jundi an important first major step forward. Thunderbox underground operation continued to be the high-grade ore source for the mill, with 525,000 tonnes mined in the quarter and the highest physicals to date. For the full financial year, the underground and open pit operations successfully mined 6.5 million tonnes of ore tonnes, which is above the nameplate of the newly expanded process plant. We will continue to bring on life of mine ore sources in order to provide high-grade feeds to the newly built 6 million tonne per annum process plant. The new Thunderbox process plant achieved 1.03 million tonnes for the quarter due to the first major reline and shutdown activities which were successfully achieved. Thunderbox also had two separate downtime events totaling one week each to rectify a variable speed drive electrical repair. No further downtime has been experienced since the final repair in June. The throughput tonne per average for the quarter lifted to be in line with the design nameplate, which was very pleasing. Recovery also did improve 3% from the last quarter as the gravity circuit issues were resolved late in the quarter. Thunderbox over FY23 successfully built, commissioned and milled 4 million tonnes and is a new step forward as we look forward to a full 12 months of runtime in FY24. I would now like to pass over to Ryan, our Chief Financial Officer, to discuss the financials.

Yeah, thanks, Simon, and good morning to you all. As demonstrated in today's quarterly results, Northern Star remains in a very... robust financial position as we enter FY24, which is poised to be another exciting year for the company. Our balance sheet remains strong, as set out in Table 4, page 10, with cash and bullion of $1.25 billion at 30 June. And on the back of a great performance this quarter, we have built upon our net cash position, which now stands at $362 million. The company has generated record full-year cash earnings, of 1.22 to 1.24 billion. And pleasingly, we saw a material uplift in the second half as we continue to focus on cost optimisation and lowering sustaining capex across the business. A reminder that the company's policy is to pay 20 to 30% of cash earnings in dividends. After a very strong final quarter, we achieved our full year group sales and group cost guidance. Consistent with our profitable organic growth strategy, we continue to invest capital across the business where we see positive returns. During the quarter, work programs advanced ahead of expectations in three key areas. Early works and procurement of long lead time items for a recently approved KCGEN expansion project. Additional resource drilling at Jundi and commercial production being declared later than planned at the auto bore open pit operation at Thunderbox. Figure 9 on page 10 sets out the company's cash flow in and investment movements for the quarter, with key highlights being the company recording 557 million of operating cash flow, which is up 50% on the prior quarter. After deducting capex of 223 million relating to plant and equipment and mine development and 34 million in exploration, quarterly free cash flow generation was a company record, $300 million. Proceeds from the successful 144A bond issuance during the quarter was used to pay down corporate bank debt, resulting in a net cash inflow. Including cash and bullion and undrawn facilities, the company has $2.2 billion in available liquidity at 30 June. All three production centres generated free cash flow with capital expenditure fully funded Kavaguli contributed more than half of the group's free cash flow performance. And pleasingly, Pogo's strong quarterly performance contributed over 70 million in net mine cash flow, the highest contribution since acquisition, reflecting the delivery of the Pogo team's optimisation plans at the asset. Group net mine cash flow for the quarter was 302 million. On other financial matters, Depreciation and amortisation are in line with company guidance provided of $600 to $700 per ounce. Full-year depreciation and amortisation is at the mid to upper end of the guidance range at approximately $670 per ounce. And for the quarter, non-cash inventory charges for the group were $12 million. As mentioned previously, most of these non-cash inventory charges relate to the milling of acquired stockpiles at Casey Gem and are a component of EBITDA. Full reconciliation of all unsustaining costs to EBITDA is included in the back of our half-year financial results presentation. And in respect of the company's on-market share buyback, no additional shares were purchased on market following the company's Q3 release. The buyback program remains open until September this year with a blackout period applied until our FY23 results released in August. Following the strong Q4 performance achieved, the company is well-placed to deliver production and cost guidance for FY24. Overall, total capital expenditures for FY24, including sustaining growth and exploration investment, are forecast to be broadly consistent with FY23 levels, excluding the Casey-Jent Mill expansion capital. In relation to growth capital expenditure, we are guiding FY24 to one $0.15 to $1.25 billion, which includes the $525 million relating to the KC Gem Mill expansion. Figure 5 on page 4 outlines the key areas of growth capital activity across the production centres to deliver a profitable project pipeline. Expiration is guided to $150 million in FY24, with investment focus on KC Gem and Jundi in-mine exploration, including drill drive development. At Pogo, additional drilling at the Star Discovery is planned. Importantly, with the company's strong liquidity position, our capital projects and exploration investments are fully funded. Finally, in respect of hedging, Table 5 on page 10 sets out the company's committed hedge position at 30 June. The overall hedge book stands at 1.457 million ounces at an average price of $2,811 per ounce. I'll now hand back to Melanie for the Q&A session. Thank you.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Alex Barkley with RBC. Please go ahead.

Thanks. Morning, Stu and team. Just a quick overall question on KCGM through FY23. It doesn't look like it's come in light versus your guidance commentary without really having a major issue throughout the year. Is it fair to say it's underperformed and how would you think it shifts going into FY24?

Yeah, thanks, Alex. Simon here. I suppose if I look at Q4, we return to normal conditions. Q3 was a difficult quarter for us, but really pleasing that we saw Q4 come back and execution of the mine plan at the end of the year. So really processing was the challenge for us over the course of FY23, but we exited FY23 back at nameplate and things stabilised as usual.

Okay, so no sort of impact going into next year. Just a quick one on Thunderbox. Thanks for those comments around Q4. When should we expect that sustainable 6 million tonne per annum plus into next year, so maybe second quarter onwards, or how should we think about that?

Yeah, with the Thunderbox, so quarter four was the first quarter we did the full major shutdown and also completed some redesign of a few areas and, you know, beefed up wear packages in certain parts of the plant as we build our experience of running that. So, pleasingly, we got through the shutdown really well, see some optimisation in that going forward and we're really just had the variable speed electrical issue during the quarter. But post that fix, we've seen tonnes per hour at nameplate and we're very confident going forward at Thunderbox because we still see that sprint capacity over and above nameplate. It's now just stabilising the planter.

Yeah, OK, thank you. I'll just leave the questions there and end it on. Thanks very much, guys.

Thank you. Your next question comes from Daniel Morgan with Baron Joey. Please go ahead.

Simon, maybe just a quick follow-up to that last question on the Thunderbox throughput. So a lot of the issues you just answered have been resolved, but I just wasn't clear on whether, you know, you'd be running at 6 million tonnes for the whole of this year or is there still... you'll be short of that for this fiscal year. Thank you.

Yeah, Dan, so we're running at those rates now. It's whether we will maintain that throughout the FY24, but I think, importantly, what you and Daniel are probably trying to back out as the answers is we've guided 520 to 570 for the Yandel contribution for FY24, and that's with some buffer at TBO to ramp up, ramp down and sequence grade So the guidance over the full year is second half weighted, and that's with some planned shutdowns in the mills in quarter one, as we typically do. But that's also some range testing and ramping up of that plant. But we were able to run TBO today at those plus six million tonne per annum run rates. We just have had some, obviously, commissioning setbacks in the last year.

Okay, thank you. And you've earmarked a number of shuts for the September quarter. Could you just drill down onto which shuts those are and is Thunderbox included in that for any rectification work? Or is it, when you look at Yandall, is it the Jundi mill that has a shut? Thanks.

Yeah, so most of them are hinged around the main mill relines and we typically do two major shuts per annum. in just the wear rates. And you can appreciate it's wear driven, not time driven. So we monitor them closely. And, you know, sometimes they, you know, do it in five months instead of six, which means you've actually got more throughput through in that period. So you get a benefit for it. So unfortunately or fortunately, by design, every mill is getting a shut this quarter. We've incorporated that into our guidance. And that's when we've said, you Consider that around the entry rate and the exit rate throughout the year and the second half weighting of production with that planned maintenance.

Thank you. A relatively simple question, I think, but total CapEx guidance. Have I got the math right that it's about 1.7, Bill, if I put everything together? Is that about right?

Are you counting sustaining? So growth 1.15 to 1.25, including 525 of the KCGM mill expansion in year one.

Yeah, so the 1.7, including growth, sustaining, expiration, is that accurate?

1.7 is... What number, Dan? Did you say 1.7? No, it'd be lighter than that, Dan. It'd be a couple hundred million lighter, I'd say. I mean, you've got... Well, the midpoint we're guiding is 1.2. Expiration, if you want to throw that in there, depending on whether you are or not, 1.50. And then if you look at... I sort of mentioned in my... I guess, talk that our capex, including sustaining, would be similar to this year. So our sustaining capex is about $200 an ounce. So, you know, we've got a little bit more ounces this year. So if you use that 200, 220 an ounce sustaining capex and you look at our ounce profile, if you take the midpoint, that should be able to do the maths to get you there.

Yeah, so growth plus sustaining at $200 an ounce plus capex exploration, which I think you've included, will get you close to that 17.

Yeah, okay. Thank you. Thank you for all your answers. Thanks, Dan.

Thank you. Your next question comes from Levi Spry with UBS. Please go ahead.

G'day, team. Thanks for your call and your time. A few of us probably are focused a little bit on FY24 guidance and particularly for Yandel, which is a little bit different to mine. So I think you addressed the production, but can you just talk through ASIC and where the growth capital is going into that hub over the next year or two?

Yeah, Levi, Ryan here. Yeah, so obviously the guys have spoken about production. I think... From a weighting perspective of ounces, Thunderbox is a slightly higher cost mine than Jundi. And so that obviously, that weighting impacts the overall asset of that group. Look, there's no doubt just broadly across the business, there's still challenges in costs throughout our business, the sector. and the wider industry. So that's allowing for some cost increases across some items in our business. But broadly, I think it's the fact that Thunderbox is a higher cost operation than Jundi, and that's obviously contributing more production. From a CapEx perspective, most of the investment is around that pre-production of a really open pit. an establishment of the wonder underground there, which are high-grade feed sources to the Thunderbox mill.

So page four of the quarter gives a bit of a percentage breakdown of those CAPEX spreads. And the ASCAP, the annual, obviously, Jundi's impressive and you've got the higher cost of TBO as we haven't got the throughput. That's what's averaging it out at that sort of 1655 to 1700. So as we get the throughput up and the ounce profile up, At TBO, it balances back that whole yandle belt, gets above 600,000 ounces per annum and brings ASIC down. But that's beyond 24.

Yep, yep. Okay, thank you. And just pushing that a little bit further, so what growth capital comes in the coming years then if we're getting to 600 next year? No, we haven't got guidance yet. It's 25, mate. Okay, thank you.

Thank you. Your next question comes from Al Harvey with JP Morgan. Please go ahead.

Good morning, team. Just want a bit more clarification on the growth capex. So, yeah, Figure 5 does indicate 20% of group capex is going to sustaining waste movement. I was just trying to get some clarification on on that categorisation there. Obviously, it's in the growth bucket, but... Yeah, so sustaining.

Sustaining is the word for continuing, not sustaining CapEx. It's continuing. Yeah. Maybe poor use of the word sustaining in that, but it just means continuing waste movement at those levels to get that southern cutback opening up those reserves to the south of the soup pit. and so it's continuing, but it is growth expenditure.

Sure. So can't really pull anything. It probably can't pull anything out of our sustaining CapEx number as a bit of an offset there, sounds like.

No. No.

No worries. Thanks for that. And just briefly, the hedge position, it's come down 125,000 ounces in the quarter. Just Want to get a sense of how you're thinking about risk management for the KCGM expansion at the moment?

Yeah, so not really changing that policy, but maintaining it. So as we consume hedges in a quarter, we typically add them. Obviously, spots kicked up again and you're getting 3300 plus ounces at the back of the plan when KCGM gets turned on. So We only did the IRR was at $2,600 an ounce. It got 90% and you can hedge at that point at about $3,300 an ounce. So we're not changing that policy, but we're certainly keeping it maintained around that sort of sub 20% in production over those four years.

No worries. Thanks, gents.

Thank you. Your next question comes from Matthew Friedman with MST Financial. Please go ahead.

Sure, thanks. Morning, Stu and team. I just had a couple of questions to further unpack the FY24 outlook. And the first one's around the Kalgoorlie hub in particular. So if we look at the implied year-on-year production growth, that's really the one hub where you're saying there's not going to be that much growth on a year-on-year basis. But you have also called out that obviously KCGM is going to be working into the Golden Pike North area in the second half of FY24. So, you know, I would have thought that KCGM should be providing a pretty material list there year on year in terms of production for that hub. So how do I interpret that? Does that mean you're implying that maybe Cal Ops is going to be a bit of a drag on a year on year basis or perhaps Carissa Dam? What's the breakdown of that hub in terms of the production growth?

No, both CDO and the Cal Ops, which is obviously contributed from South Cal and Kanata, relatively flat throughout the year and, you know, Definitely, KCGM, it's a better year than this year because we don't have to put a three in there. But there's still a lot of work to be done at KCGM before it lifts back up to that 650 plus thousand ounces in FY26, so 25 onwards. So this is still a flat year in production-wise. So, yeah, the whole Kalgoorlie region got at 820 to 900 per probably isn't that different to what we've said or planned. The growth at K is all about KCGM, and it comes late in the five-year plan.

Yeah. Okay, thanks, Stu. That's pretty clear. So even though you're accessing Golden Pike North in the second half of FY24, that doesn't necessarily have a big step up in ounces until, you know, perhaps longer dated.

No, and, you know, the caramel fruit, it's really a grey driver that changes the ounce profile, right, so that 13 million tonnes per annum. And then obviously the year after we kind of hit that 650, 700,000 ounces, we get the contribution of the expanded plant to lift it another 250,000 ounces. So we're capped out on grade sequencing on the ounce profile for KCGM. And you'll find that ASIC obviously links very closely to relationship with ASIC is heavily driven by the denominator of gold salt. So as we get that, we get that improvement in the back of the five-year plant.

Yeah, thanks, Stu. Yeah, that's pretty clear. It also leads into my next question, and Ryan did make some comments there, which I guess were probably more specific to the Yandel Hub, but, you know, clearly you are growing production at the group level in TFI24, but you're guiding to flat oil and sustaining costs, at least at the midpoint. So, obviously, a pretty good outcome to have flat costs, but it does imply that there is some creeping costs that isn't being offset by the denominator or the higher production. So, Just wondering if there's anything in particular to call out, you know, at the group level or is that being driven by, you know, increasing stripping at any particular assets perhaps or is that more just, you know, general industry cost inflation and, you know, labour costs, consumable costs, et cetera, as Ryan seemed to imply?

Yeah, so costs going sideways is what we've planned. We actually do expect that on some levels it's capped out and we may get some relief. We just haven't. factored that into guidance. But we, like you, see them at an elevated level and probably don't like it, like you, but there aren't tangible actions in there to say, here's a qualified reduction in certain costs. But we control a lot of the labour costs, so we understand what they're doing. Obviously, consumables, energy costs are up very high at the moment, so we don't think that they will last at those levels. But we were careful to not guide improvements in costs without tangible actions that sit behind that. Even when you're always looking at ASIC here, but some of the all-in costs are very impressive. The gap between ASIC and AIC is shallow and the cash margins generated from these assets is significant. And back to the point of the strength of balance sheet, net cash position, all of our growth is fully funded. When you look at the all-in costs, Mines like Kanauna and South Kalgoorlie are sub-$2,000 all in costs, so $2,900 Aussie gold price. They are generating significant cash, which is contributing and funding the growth plan. So I think ASIC is one metric, obviously standardised, but it's also to understand the genuine cash flow that the assets are doing.

Yeah, that's very fair, Stu, and good to hear that your view is that hopefully there's at least some conservatism built into that outlook on costs. Maybe just finally, if I could ask you quickly on the Strickland transaction, obviously you probably haven't had a chance to talk about that much to the market. I guess the comment that I would make that the price tag, $67 million, that's nearly half of your FY24 exploration budget. And you've purchased a 340-ish thousand ounce resource. That's nearly 200 bucks an ounce to pay for that resource. So I would have thought that you're Discovery costs from that exploration budget, you would hope for a better discovery cost than that in your exploration spend. So just wondering if you can maybe expand on the rationale behind that acquisition and I guess where it fits into Jundi and why that was an attractive purchase.

Yes, I won't talk on that transaction because it's not complete, but I just will say a resource or a reserve that you know versus one that you spend exploration to find are very different prospects. In hindsight, you can say what the value of discovery is, but something that is in resource or reserve versus something where you're putting $150 million into an area with, you know, good planning and good geos trying to identify it is a different prospect in that regard.

Yeah, okay. Thanks, Stu.

Thank you. Your next question comes from Hugo Nikolakai with Goldman Sachs. Please go ahead.

Morning, Stuart and team, and thanks for the update this morning. Maybe a follow-up on costs and maybe getting into some of the assets, just maybe looking at Kalgoorlie Ops and the cost performance there in the quarter and marginally lower sort of mind volumes at production and mill tons kind of proportionally up. Just wondering what maybe the cost pressures were there in the quarter and to what extent you see those cost pressures potentially kind of continuing into FY24, both at the asset and then kind of across the group? Thanks.

Yeah, hi, Hugo. Thanks for the question. Look, in relation to Cowgooly in particular, probably the one I'd call out is power. Costs were higher this quarter than what we expected. That's probably the main call out that I would say at that asset. Yeah, Stu spoke more globally about costs. Look, we're not, as Stu sort of said, we're not building into our guidance cost relief. Broadly, costs we see have stabilised. I mentioned before that we are experiencing and will experience some higher costs in some parts of our business. So So no doubt, whether it's labour or contractors, we're forecasting probably some uplift in those. But broadly across the board in the basket of our costs, we are anticipating them to be sort of flat. But the power costs at the asset, at Kalgoorlie in the quarter, was the main driver of those higher costs this quarter.

Yeah, great. Thanks for that clarification. So just on that power piece, is that more kind of your electricity contracts and maybe reflecting sort of domestic gas prices in WA or is that linked to anything else in particular on power?

Probably, yes, in essence. I guess it is all interlinked because it's a balancing price that we essentially pay for. So it would be linked back to the infrastructure at the state level and then obviously gas prices have rose, yes. I mean, our gas... At other sites like Jundi, Thunderbox, where we contract gas, they are contracted over a medium term. So they're not assets that we see large fluctuations in pricing. But Kalgoorlie, when we're on grid across South Cow, KB and Casey Gem, we do see variable pricing.

Great, that's helpful. And then maybe just a second one, if I could, just around the growth capital. I appreciate you've touched on kind of across the assets, but you called out that 82% of the growth capital is going to the major growth projects. I was just wondering if you might be able to give a bit more colour around where that other 18% or roughly $200 million is going in FY24. Thanks.

Oh, look, broadly, it'll be largely drill drives, mine development. You'll see across the business. And that's really spread, Hugo, across the assets. So, you know, where we're opening up areas, declines across the business underground, that'll be where basically the spend is. So what we've tried to do here is just outline the larger components, particularly at Casey Germ, obviously the waste stripping, which is a multi-year project. Project Unlock, the high-grade Golden Pike North and Fim South. Obviously, Yandleby are really a pit, and Wanda, I spoke about feeding the Thunderbox Mill. And then you've also got Palfrey and Walbrook open pit feed for Karasu Dam. So broadly, they're there. I would just say across the business, there's just, you know, my development, as I said, accessing new areas would be the thing that I would call out. Great, thanks for that. I'll pass it on.

Thank you. Once again, if you wish to ask a question, please press star one. Your next question comes from Kate McCutcheon with Citi. Please go ahead.

Hi, good morning, Stu and Ryan. Since Matt asked on M&A, you've got a lot of liquidity but also have a lot coming up with KCGM, et cetera. How are you thinking about the portfolio here? You said three to five assets is the strategic goal. Are you actively looking at anything else, or for now you're focused on the organic growth for the near term, I guess?

Yeah, thanks, Kate. Look, we see some of the most compelling returns on our organic opportunities, and obviously it gives us confidence to commit to things like the Finmester Mill expansion. We do have strong liquidity and strong balance sheet strength. We always assess opportunities, but we're fussy and we obviously don't need to do anything. We still expect to see sort of a lower end of the small cap space, lots of jostling and, you know, collaboration or, you know, consolidation at that end. But that's not typically the space that materially changes our world. So we just will keep that for you on our long-term strategy around having that sort of three to five assets and maintaining the lowest cost portfolio we can attain. So we'll always, always evaluate opportunities as they come up

Okay, got it. And then POGO Q4 numbers were great to see. What's been the key driver of that pickup or the step change that's enabled the Q and Q lift? Stoping tons look flat, but you picked up those development meters again. And then the second part of that question is forward looking. So what's the next operational target to hit at POGO? Is it still pulling costs out or is there more to go on head grade upside to reserve?

Yeah, thanks, Kate. I was hoping for a question around pago after 20 quarters. I know. 80,000 ounces for everyone. That is absolutely outstanding result and impressively not just delivered from grade. We're not even producing at the reserve grade because it's still third of the ore feed is development ore and obviously the stoping grade is higher. So I think it's really testament to the consistency of the Development metres, we said above 1,500 per month, and we obviously averaged 1,700 per month in the quarter, building out those new mining fronts, giving more flexibility in the mine plan so that you're not hand-to-mouth, that you've got capacity. We've got the underground oil bins and getting that consistent feed to the plant. Obviously, in quarter three, we had the mill motor failure that got rectified, but that allowed us also to sort of look at the main... flow sheet and critical elements within that aged plant to put some investment back into. So for us, it's around stabilising, maintaining and stabilising at these levels. Obviously, we've guided 260,000 to 280,000 ounces of POGO this year with a focus on optimising costs and inputs. So resourcing levels around equipment, people, reagents, consumables. Really importantly, last quarter did $1,250 US all in sustaining costs. really working hard to get the unit cost down and then take the growth on the back. But you're sitting there with, you know, seven plus million ounce resource, huge exploration success with things like Star to drill out. I really think people will look at the quality of this asset and, you know, over 60 million US operating cash flow in the quarter. This will start to become more important for people to look at in the valuation.

Okay.

Thanks for the call.

Thanks, Gareth.

Thank you. Your next question comes from David Radcliffe with Global Mining Research. Please go ahead.

Hi, good morning, Stu and team. I've just got a quick question on KCGM and recoveries. During the quarter, obviously, milled tons was up and so was grade, but the trend of overall lower recoveries over the last year is continuing despite higher grades. Just trying to understand really what's going on there, you know, what the expectation is going forward. Is this a new level until the new sort of mill is in place?

Yeah, thanks, David, Simon. Certainly not, don't drag right on quarter four in terms of recovery. If you look at the year, early in the year we were, you know, 86%, 85 is 86, and then in quarter four we had some, Float circuit issues and gravity circuit downtime, which really they're the two things that hurt us on recovery at KCGM. They've since been rectified and fixed and we're back to normal recovery. So over the full year, we averaged around that 84% and that's consistent for KCGM. So certainly quarter four was the low quarter average. for us over FY23 and historically. But no, back to normal levels of recovery at Casey Gym.

Great. Thanks for that. Cheers.

Thank you. There are no further questions at this time. I'll now hand back to Mr Tonkin for closing remarks.

Okay, thanks for joining us on the call this morning. It's very pleasing to close out FY23 on a high and be in a position of strength as we embark on FY24. I look forward to updating you as we continue to advance a profitable organic growth strategy. Have a good day.

That does conclude the conference today. Thank you for participating.