Northern Star Resources Limited

Welcome to the Northern Star Resources December 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.

With me today is Chief Operating Officer Simon Jessop and our Chief Financial Officer Ryan Gurner. I am pleased to present a strong December quarter performance, positioning Northern Star for growth in production and cash flows in the second half of FY24 as planned. Each of our production centres contributed excellent progress towards our profitable growth strategy during the quarter, with a number of highlights that Simon and Ryan will cover shortly. We sold 412,000 ounces of gold at an all-in sustaining cost of Australian dollars 18.24 an ounce, generating underlying free cash flow of over 100 million Australian dollars. We maintain our full-year production guidance for costs as well, 1.6 to 1.75 million ounces at an all-in sustaining cost of 17.30 to 17.90 an ounce. with a strong H2 outlook delivering gold sales into a very healthy gold price, currently above $3,000 an ounce. We remain financially resilient in a net cash position of $238 million, with strong liquidity of $2.5 billion and strong cash flows which funds all of our growth investments, exploration activities and dividends. For the KCGM mill expansion, we advanced enabling works and commenced early stages of construction ahead of schedule. It is exciting to see this activity underway at Phimiston, leading the three-year build to double the plant throughput to 27 million tonnes per annum and production lifting to 900,000 ounces per annum by FY29, establishing KCGM as a top five global goldmine. The Kagwooli team has endured some plus 40 degree days last week, complicated by state grid power outages to the city's homes and businesses. And Northern Star are fortunate to own and operate the Parkston Power Station with TransAlta, which has been integral to minimising operational disruption and facilitating the power needs across the city whilst the repairs are conducted. In contrast, the POGO team are enduring negative 40 degree days in Alaska, but have maintained strong momentum in operational improvements with quarterly gold sales of 66,000 ounces and an oil and sustaining cost US dollars of $13.67 an ounce. At Pogo, stoping dilution is still affecting mine grade slightly, which has been partially offset by higher mill throughput, which milled at an annualised rate of 1.4 million tonnes per annum for the quarter. Mine operating cash flow from Pogo continues to strengthen with US $40 million generated in the quarter, which is very pleasing to see. Simon will now speak to the Australian operations. Thank you, Stuart.

For the Kalgoorlie Production Centre, including Casey Gem, Karasu Dam, Kananabal and South Kalgoorlie, we sold 220,000 ounces of gold, up 20%, at an Australian all-in sustaining cost of $1,683 an ounce, down 9%. This production delivered a mine operating cash flow of $288 million, up 65% quarter-on-quarter. The region also spent $200 million on significant growth capital projects, including $72 million on the KCGM mill expansion and $65 million on KCGM open pit mine development and new tail storage facilities. At KCGM, open pit material movement was in line with plan at 18.3 million tonnes in the quarter, with a total movement of 40 million tonnes for H1 in line with our stated total material movement goals. The open pit successfully continued mining the east wall remediation area to regain partial access to Golden Pike North with 25,000 ounces mined in quarter two and slightly ahead of time. This partial access to Golden Pike North is a real highlight as we continue to accelerate towards unlocking the 1.2 million ounces. Underground mining volumes for the Kalgoorlie region were steady at 1.54 million tonnes, while grade increased 13% to deliver 128,000 ounces. The higher grade was driven from Mount Charlotte and Karasu Dam, as we regained access to higher grade areas of the mine. KCGM's underground Mount Charlotte operation stabilised development at 3.3 kilometres for the quarter, after a 52% lift in quarter one. This is a key lead indicator for opening up new mining fronts as production increases will flow from further stope areas online. The Karasu Dam underground mines all performed well, enabling the underground ore mine to supply over 60% of the mill feed for the hearth. Open pit movements increased to 1 million BCMs as we started the new Walbrook open pit. The Kalgoorlie operations mined lower volumes at Kanowna Bell with a major production blast completed late in December. While South Kalgoorlie ore mined was stable, but average grade increased 5.4 grams over a total of 24,000 ounces. Processing volumes in the Kalgoorlie Production Centre improved 11% post the quarter one major shutdowns to 4.85 million tonnes. KCGM recovered gold increased 36% quarter-on-quarter to 124,000 ounces on processing volumes, grade and the initial access to high-grade ore from Golden Pike North. Karasu Dam achieved 1 million tonnes milled for the quarter, along with increased head grade and gold solves. The KCGM mill expansion spent 72 million during the quarter and successfully continued with the on-ground enabling works. Significant earthworks have commenced in the course or stockpile area and clearing of the new mill footprint. We also achieved significant works on the 33 KB power line into the northern switch up. The engineering design works are progressing well with 20% complete and are on track. The focus remains on the enabling works in preparation for the main construction team to commence late in the March quarter. At our Yandall production centre, including Jundee, Thunderbox and Bronzewing, we sold 125,000 ounces of gold at an Australian all-in-sustaining cost of $1,923 an ounce. This production delivered a mine operating cash flow of $125 million, while we spent $61 million on growth capital projects. Primarily $22 million was spent on the Aurelia open pit. At our Jundi operation, development advance was consistent at 7.5 kilometres with 760,000 tonnes of ore mined and 80,000 ounces for the quarter. Processing had an unplanned SAG mill trunnion bearing failure, which resulted in 10 days of lost mill availability. We exited December with this rectified and an annualised 3.2 million tonne per annum mill throughput as issues were resolved midway through the quarter. The Jundi renewable project progressed with all of the panels laid out for the 16 megawatt solar farm and the wiring up of the project has commenced. The 24 megawatt wind farm foundation works have commenced with steel complete in two of the four foundations and remains on track for FY25. At Thunderbox, our underground operation achieved 498,000 tonne of ore mined at a slightly higher head grade of 1.7 grams per tonne. We also commenced our latest underground mine during the quarter at Wanda, with the portals established and significant infrastructure already in place. Northern Star Mining Services established the portals with 74 metres of development achieved before Christmas, and we look forward to the future higher grade ore from this mine. For the quarter, the underground and open pit operation successfully mined 1.35 million tonnes of ore, matching the Thunderbox process plant milled tonnes. The Thunderbox process plant achieved 1.29 million tonnes for the quarter and 51,000 ounces of gold salt. The throughput tonne per hour remained above nameplate, averaging 759 tonne per hour. Availability was 77% for the quarter, with major impacts being the main feed belt conveyor that was damaged and low crushing circuit availability ultimately affecting feed rate on the mills. The focus is on availability while fixing wear points and engineering improvements for operability. The continued opportunity is improving availability greater than 90% and milling in excess of 6 million tonnes per annum. I would now like to pass over to Brian, our Chief Financial Officer, to discuss the financials.

Thanks, Simon. Good morning, all. As demonstrated in today's quarterly results, Northern Star remains in a fantastic financial position. Our balance sheet remains strong, as set out in Table 4 on page 9, with cash and bullion of $1.1 billion, and we remain in a net cash position of $238 million at 31 December. The company has recorded strong cash earnings for the first half of FY24 2021. which is estimated to be in the range of $685 to $715 million, and a reminder that our dividend policy is based on 20% to 30% of cash earnings. Pleasingly, all three production centres generated positive free cash flow with capital expenditure fully funded. Figure 9 on page 10 sets out the company's cash and bullion investments movement for the quarter. with key elements being the company recording $486 million of operating cash flow, a 22% lift on the prior quarter, and this includes a $28 Australian million coupon payment on the notes and $25 million of our annual insurance premiums. Then after deducting capex of $315 million relating to plant and equipment and mine development, $28 million of exploration and $41 million of lease payments, quarterly free cash flow generation was a healthy $102 million. Quarterly investment in sustaining capital, growth capital and exploration at Cracking to Plan. Growth capital includes waste removal at Casey Gemmett, FIM South and the East Wall, development at FIM Underground, Casey Gem Plant Expansion, Development at Palfrey Underground and Walbrook Open Pit at CDO, Development at Aurelia Open Pit and Wonder Underground at Thunderbox. And during the quarter, the company paid its final FY23 dividend of $0.155 per share, totalling $165 million. In respect of the company's on-market share buyback, this remains open and is 56% complete. A blackout period applies up to and including our first half FY24 results release on 22 February. On other financial matters, depreciation and amortisation are in line with company guidance provided of 650 to 750 an ounce. First half FY24 depreciation is at the midpoint of the guidance range at approximately $691 per ounce sold. And for the quarter, non-cash inventory charges for the group $33 million. The majority of these charges, non-cash, relate to the milling of acquired stockpiles at Casey Gem and are a component of Iberdar. During the quarter, the company refinanced its revolving credit facilities, extending maturity dates to December 27 and December 28, across two equal tranches, totalling $1.5 billion Australian. With the facilities remaining undrawn and available at the end of the quarter, the company retains $2.6 billion in liquidity. In respect of hedging, Table 5 on page 10 sets out the company's committed hedge position at 31 December. During the quarter, the company delivered 100,000 ounces into contracts and placed 285,000 ounces at an average price of $3,450 an ounce Australian. The overall hedge book being 1.8 million ounces at an average price of AU$3,028 per ounce. I'll hand back now to Lexi for the Q&A session. Thanks.

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 speakerphone, please pick up the handset to ask your question. Your first question comes from Hugo Nicolaisi from Goldman Sachs. Please go ahead.

Morning, Kim. Thanks for the update this morning. Maybe just one more on the medium and longer-term outlook. Just going back to the comments at the exploration update in November, I think broadly the KCGM outlook is pretty well understood, but maybe... The perception around the medium-term outlook at some of the other assets is probably still lacking a little bit. So I'm just wondering if you could please talk us through in a bit more detail what you currently see the capital commitments being for things like ongoing Pogo development, satellite pits at Jundi and Thunderbox and the broader medium to long-term sustaining CapEx profile. Thanks.

Thanks, Hugo. So, yeah, outlook you're talking about as far as compliance to capital guidance number or more production surety or expression?

Is it around the CapEx confidence?

Yeah, more on CapEx, but then anything you can give around physicals for kind of the medium term, just beyond just reserve grade and that sort of thing would be great as well.

Yeah, sure.

So, look, the key changing things... Go through them. The POGO fundamentally is around the grade and improving the stoping grade by minimising mining dilution. The percentage of stoping to development was a bit down on the quarter, but ultimately it's around getting high-quality tonnes. through that plant to get to 300,000 ounces. So, yeah, lifting that average grade up is where we're going to get that uplift in the revenue. You can see costs are improving, but there's still a lot of fixed costs at Pogo. So the improvement primarily there is a combination of improved grade from mining dilution improvements plus some increased throughput. We milled at 1.4 million tonnes. There's a few other plant small capital items that will be there to stabilise maintain an increased milling throughput. So that's POGO settled. The other growth fundamentally comes from the stabilising availability of the Thunderbox plant. So we've been able to meet that milling rate fairly consistent, but not for the full quarter. So it's around getting that available time up. keeping that average grade through there and basically keeping that 6 million tonne per annum rate consistently throughout the quarter. We think we'll be at the exit rate in quarter four at that 6 million tonnes. It is a bit later than we wanted to see this year, but it's around just getting that mechanical uptime. So there's a few of those small capital items being improved across that part. The rest really is driven by volumes and grade coming out of KCGM. As you pointed out, we're in the Golden Pike North in the pit floor. We've still got about six months of movement of waste material on the east wall, but we're in the grade in the north in the pit floor, which has been three years in the making, and it's a fantastic outcome ahead of where we expected we would be. So they're the three key drivers of Inflex. We'll put out a resource reserves. We conclude them at the end of March. So there'll be a lot of content detail that underpins what life assets and the guidance is in grade. But everything else is pretty static other than those three key moving parts for the remainder of this year and into next year.

Great. Thanks for that, Kyle. And I guess maybe moving beyond kind of the second half 24, I mean, how much are you planning on having to spend, say, in FY25 and 26 on new satellite pits at Thunderbox and Jundee and And what's the ongoing, I guess, development capex per year that you're kind of anticipating a program? And is it in the order of $50 million a year over and above sustaining capex supplant and the like? Or how do you just, I guess, see that medium-term capex profile shaping up?

Yeah, so we haven't given multi-year growth capex in that regard, and we'll assess doing that in the middle of the year. So really what it is, is, you know, delivery of this year's capital and most of that's going into KCGM, obviously in the waste stripping movement, but also in the mill expansion. So lion's share of the capital is going there. There is a, you know, start a new mine a year across the yandle so whether that's an underground or an open pit we're managing it with our own fleets so ultimately you're spending the same amount per annum because you're reallocating your people and your fleet to those those jobs so it's not a case of stacking them on top of each other it's just they sequence through those underground mines so and open pit mines. So there's fairly consistent spend around opening up those growth ideas, and you'll see that pipeline of targets or pipeline of ore sources coming through in the resource reserve statement in a few months.

Great, thanks, Adam. So just last one, sorry to belabor the CapEx point, but from a sustaining CapEx perspective, And do you think about that longer term in terms of dollars per ounce and what sort of number, I guess, do you see sustaining CapEx at once you kind of settle out through growth projects? I mean, is it north of $200 an ounce in sustaining CapEx?

Yeah, Hugo, Ryan here. Yeah, I think if you look over history, I think the trend for the business has been around $200 to $250 per ounce. And I think we've trended that way for many years. And even this year, if you have a look at the results for the half year, I think we're just over $200. We're about $210. So, yeah, that's what I would guide to.

Thanks for that, Tim.

I'll pass it on. Thank you. Your next question comes from Daniel Morgan from Baron Joey. Please go ahead.

Hi, Stuart and Tim. First question is at the Super Pit and just asking about what drove the early access to Golden Pike and does it mean that potentially you're slightly ahead of plan and we could see better grade in the second half of this year or is it just that you got in a few days at the end of the quarter and so it came this quarter, not next? Thank you.

Yeah, thanks, Daniel, Simon. I suppose after three and a half years of work, it's really good execution by the team to stay on track and on the path and fundamentally with some good mining and thinking and technical work, we've regained partial access to part of the southern side of Golden Pike North. and also regained a little bit of access in the northern end. So I think really most of it's just good mining, good focus, and the team's really, really delivered there. So we accessed that slightly early. The grade in the second half, absolutely, KCGM will climb. And you can sort of see that timing difference between the gold recovered and the gold sold of 112,000 ounces. We had a big build-up in gold in circuit there, and that was really getting access to some of that Golden Pike North late in the quarter. And Tassie Gemma takes, you know, really sort of three weeks to get the gold through the full circuit. So a bit of a timing piece there. So a big build-up in GIC at the end of the quarter, but we'll continue to... get access into Golden Pike North going forward. So some really great work from the team.

Yeah, huge milestone. Just clarifying, you've got partial access that's been restored and obviously I think you've guided for full access is restored at sort of midway through this year, end of June. Can I just clarify that you'll have full access at the bottom of the pit and for all intents and purposes you won't be or is there still work to be done that will occur on FY25?

No, you're exactly right. By the end of FY24, so June this year, we should have finished all of the east wall works and therefore we've got unlimited access to Golden Pike North for FY25 and FY26. Obviously, that's critical for our services to 650,000 ounces.

Thank you. More of an industry question. It's unfortunate, but your nickel peers are suffering right now through low prices. There's been a few shuts and perhaps more in WA. Yeah. Just wondering, what, if anything, does that mean for your business in terms of getting access to people and contractors and equipment? Has there been any signs yet? Might we see some, I guess, relief on the cost inflation we've been feeling on your business? Thank you.

Yeah, thanks, Dan. So one of the first things we've done is reached out across those businesses. We understood we're going on to care and maintenance or reducing staffing. We have vacancies across our group we can fill, so we've put that in. um that offer out there to get them in i don't see it fundamentally as a cost saving it's around keeping those those jobs in the regions and and keeping them employed and filling gaps and as we're growing um it'll certainly aid you know delivery of our business and again quality of skilled people re-employed okay thank you very much thank you your next question comes from hayden berstow from

Argonaut, please go ahead.

Good morning, guys. Just a couple from me. Just comments on the reserve resource update. It's interesting to understand, is there going to be any sort of shift in how you're thinking about, particularly around Kalgoorlie, given the announcement committed and the mill expansion sort of underway, as opposed to Karasu Dam as a distinct operating centre and the same with KV? bringing more of those resources more directed towards the mill longer term? Is it something that you're thinking about or is it sort of a couple of years away?

Yeah, so we've obviously recessed all the things regarding our cost-based cut-off grades and obviously the revenues, gold price assumptions. We may modify the gold price slightly, given it's a lot of headway from sub-$2,000 being used and the spot's north of $3,000. But it's more probably drilled density at a place like KCGM around the confidence level of measured, indicated, inferred, et cetera, from resource and then conversion across to reserve. So it's not that sensitive to the cut-off grades or goal price assumptions. It's really around getting the definition density right. So at the moment, we just see huge opportunities there. to come in later. We know that there is material in the pit shelf that exists that will be economic and very profitable through that expanded mill and the lower milling cost. That won't be factored into this resource reserve statement. We've obviously still got two and a half years of building that plant before that would be brought into the statement.

And then just on the hedge profile, the decision to add 185,000 ounces to the book, I mean, is that Something that we should be thinking about might be getting bigger over time, opportunistic, just to understand what that was about?

No, it's pretty reflective of that policy, keeping that sort of average around that 20-odd percent, and you'd appreciate we're growing our ounce profile, so it's about that four-year outlook and maintaining it at that level. Opportunistic when the price is up, so they were added over $3,400 an ounce. and it basically keeps that percentage flat throughout that period. So just as we deliver into those hedges, you know, opportunistically adding to that book, using that contango to get the price up, you know, average book price is above $3,000 an ounce. You know, if you took a spot out of the money, it's under $100 million, which is what we generated in cash flow on the quarter. It's pretty cheap insurance.

Yeah, okay, great. Good result. Thanks, guys. Thanks, Ian.

Thank you. Your next question comes from Ben Lyons from Jardin Securities Limited. Please go ahead.

Good morning, everyone. Congratulations, Stu. It was a great quarter, clearly. Maybe in the context of what was a very strong result, sorry to hone in on one of the weaker numbers, but I just wanted to talk a little bit about the physicals at Jundi. So the grade reported there was the lowest in over five years and Obviously, understanding that there's always going to be a natural tension between chasing the tonnage and maintaining the grade profile. Just wondering if you can make any sort of comments around your expectations about that grade profile as we move forward. Thanks, Matt.

Yeah, thanks, Ben.

I will chuck to Simon and congratulate Simon on a great quarter too because he did all the work. But it's around the sequencing of open pit and underground contribution and with sort of some mill outages on just utilising some low-grade stockpiles. So, yeah, Jundi is particularly lumpy when it comes to sources and feeds, so it's around maintaining and getting back to those reserve grades. Just let Simon give you the colour of forward look.

Yeah, Ben... Thanks. The grade was lower for Jundi, but when you look at it, it's partly due to a combination of Ramone, lower grade as a percentage into the total blend at Jundi, and we had some better grade come through late in the quarter. So, just really timing of line sequence at Jundee. So it does fluctuate quite a bit in terms of the grade, but as an average, we have a higher contribution of Ramon, a slightly lower grade, but it's not far off reserve grade 3.6 grams per tonne for Jundee.

Yeah, cool. Thanks for that, Simon. And then just the second one, moving across to Thunderbox, good to hear that you're opening up the Wonder Underground. Just wondering if you could possibly remind me what sort of rough throughput and grades you're looking to achieve out of that new underground operation. Thank you.

Yeah, certainly really, really excited to cut the portals and establish it just late in the quarter there. And really from this quarter on, we'll just ramp up the wonder underground. But the initial reserve for wonder was about 455,000 ounces at around about 3.2 grams per tonne. So When you compare that to Thunderbox Underground, which is sitting around 1.7, 1.8 grams per tonne, it's a really high-grade source for us that we also see a lot of opportunity to drill and continue to grow. Pretty excited to get that project underway. Obviously, there's a bit of a lead time in terms of development for, you know, like a normal underground that starts ramping up. But they're the initial numbers on last year's R&R.

Yeah, cool. Cool. Thanks, Simon. Just intuitively, do you think about it as a million tonne per annum dedicated underground or more sort of like, you know, sort of 500,000 or 600,000 tonnes per annum?

I suppose a little bit depends on timing of when we open up those different areas. But, you know, definitely up towards that sort of million tonnes per annum I think is pretty reasonable for that operation. So certainly well north of 500, that's for sure.

Yeah, the combination of development ore and production ore, staking ore would be towards that million. It's just the blend of that. Okay.

That's it for me. Well done, guys. Thank you. Thanks, Ben.

Thank you. Your next question comes from Alex Barkley from RBC. Please go ahead.

Thanks. Morning, Stu and team. Just a bit more specifically on POGO and those grades. It did seem a bit low this quarter, and in the second half you said you're only expecting marginally better. I don't know if there's any more detail you could give about that rising percentage of stope ore. And you mentioned dilution might be an issue. So when should we see this mine getting up towards reserve grade, and is that really achievable? Thanks.

Yeah, so if you sort of look at the physicals in the quarterly, you know, we maintain sort of over 1,600 metres a month in development. And that, when it's knocking out ore, basically that's going into the plant preferential to stoping. So that will in turn relate to higher stoke tonnes in the future. But it's the balance of just total amount of people, total amount of fleet moving material. So when we do overachieve on development, It does chew a bit into stoping, but it gets us more working fronts and ability to pick it up in the future. So that's why we have the visibility and the confidence. When we were sort of hitting the 1,200, 1,300 metres a month, not only were we consuming stocks, we weren't getting ahead. So it's pleasing to see those lead indicators there. And the grade is also reflective of that high percentage of development or going into the feed. The mining dilution, it's different for different zones and areas and ground conditions within the mine. So it's around us understanding not just having one pattern for each of those areas and the tech teams honing those things in. So, yeah, we've seen improvements throughout the year, but then there'll be a certain area that'll give us some grief and it's just about isolating that and modifying that and continuing on. So we're working on all those things now. Reserve grade, you know, eight and a half grams, you know, we'll again assess with all the drilling and the confidence of what we're finding in all of those areas, as well as what those mining factors are. We'll reassess in March what the reserves kicks out if it stays at eight and a half grams or whether it comes back with mining factors. We're still doing that work presently.

Okay. All right. That's very clear. Thanks. And just a quick one. Recent power issues in Kalgoorlie, has that been a problem for you guys?

Oh, look, it's been a horrendous period for the City of Calgary Boulder for the last couple of weeks. So we believe it's imminently going to be fixed permanently sort of this next few days. But, yeah, there was a lot of drama up there with obviously power out for 30,000 residents, businesses. We're fortunate we have that Parkston power station that can service the city and obviously service our mines. So we've managed through those things in the last couple of weeks with sort of the state enterprises in regards to that. So, yeah, there's been certainly disruptions across the goldfields. It hasn't materially affected us, but we've also worked hard to support the community, providing even backup gensets and power and redistribution of our power. So we work under instruction of those energy companies on using Parkston to feed and supplement the power into the city. Okay, sounds good. Thanks very much, guys. Thanks, Alex.

Thank you. Your next question comes from Alex Papuanu from Citi. Please go ahead.

Hi, Stuart and Simon. Just one for me. At KCGM, when can we expect recoveries to move back towards 84%? Thanks, Alex.

Yeah, thanks, Alex. Simon here. Yes, we had a number of issues really in the flotation area, which has been impacting slightly down on our normal sort of recovery. So what we've We've just had a shut recently and done a lot of work on the rougher columns, and really it's the distribution of the material going into there versus bypassing some of that and going into the CCDs. really the core impact there. We understand it. We're working hard on the float circuit to just try and lift the optimisation there. And really, that's the main challenges for us here on recovery at Casey Gem.

To get to those sort of numbers, our attitude is around the fully expanded mill case, which obviously is a different circuit, really targeting on that sort of much bigger ounce profile And the residence time, it's around getting all the ultrafine grinding on the same site, not going out to Gidgee. Lots of residence time in multiple tanks added to that larger throughput circuit, stabilising all those float banks that go to that. So I think, as Simon said, we're focusing on the next couple of years of the things that we have, but it's really the big game changers on the new circuit and making sure that that is the best recovery we can get through.

Yeah, the leach residence time is sort of going from our typical 8 to 10 hours out to normally 16 hours on the new circuit. So that's a fairly big difference in the new design of the expanded process plan. So we get the volume increase. We also double the residence time. Okay, cool.

That's it for me. Thanks. Thanks, Alex.

Sorry, thank you. Your next question comes from Matthew Friedman from MST Financials. Please go ahead.

Sure. Thanks. Morning, Stu and team. Apologies if I missed this at the start of the Q&A, but just wanted to, I guess, get you to expand, please, a little bit on the issues that you're facing at Thunderbox. Obviously, some ongoing, I guess, pinch points and problems that you guys are sort of working through and resolving with the mill there. How do you, I guess, what's the pathway to rectify that the second half will that get you back to that six million ton pranam nameplate in your view or do you sort of have to start rethinking that uh and then also maybe just following on from from some of the comments on the last question you know any learnings you can apply uh from that expansion and the implementation of that expansion to what you're doing at kcgm thanks yeah thanks matt solomon um

I suppose just on the last piece of your question there around learnings for KCGM, they are vastly different. mythology and all the elements in terms of the Casey Gem plant. So we've really worked extremely hard with Steve and the team around the operability of the new Casey Gem plant and done a lot on the design reviews to make sure that's going to come out of the build very, very strong. So, yes, we've absolutely looked at internally some learnings from the Thunderbox process plant, but they're really chalk and cheese between the two. In terms of Thunderbox itself, really had a major conveyer. failure in terms of the belt, which was a fairly big job to fix during the quarter. But it's lots of small things here and there in terms of wear points in sag feed chute design and things like that, which take a few iterations to get worked up and in place. And therefore, we sort of got to wear this lower availability while we work through those. So working through the short term, here and now, issues fixed as well as medium-term improvements and then long-term as we understand wear rates around the process plan. We're sort of at that 5.3 million tonne annualised when you take half one results, and that's running at 77% to 80% availability. All of our other process plants run well north of 90%. We don't see any issue at all getting to that. It is purely around just lifting that availability by 10% to 13%, and we're above 6 million, so... We're not far off. It is a little frustrating. It's taken a little bit longer than we expected, but we've got the right people all over it now.

Yeah, that makes sense. Thanks, Simon. And, yeah, appreciate that. Obviously, the KCGM and Thunderbox plants are going to be very different. Just, I guess, with that confidence in the ability to get back above 6 million tonnes per annum, clearly that's also factoring in, I guess, the increasing mix of fresh ore that's... that's coming into that mill obviously you talked about the development of uh you know the wonder underground and and others that are sort of increasing that fresh feed so six million with a bigger proportion of fresh still highly achievable yes or even just great streaming so any material that falls short of that sort of currently is the lowest grade so we preferentially put in the better grade now

in FY25 and beyond. And there is capacity for that to go, you know, back over 90% of our ability to go beyond 6 million tonnes per annum. So, you know, not counting those chickens yet, but we're certainly working towards what we've done at every other plant. As soon as we've got a nameplate, it's around optimising it from there.

Yep, got it. Thanks, Stu. Thanks, Simon.

Thank you. Our next question comes from Levi Spry from UBS. Go ahead.

G'day, guys. Thanks for all the extra information. Maybe just sticking to the key value driver of the KCGM, super pit plant expansion, maybe that figure five, I guess. Could you talk to the movie there over the next 18 months? What are the next activities? And I guess is this the CapEx profile? Remind us of the CapEx profile in the second half and through into next year. Thank you.

Yeah, so out of the $1.5 billion, thanks, Levi, you know, there was pretty much third to third to third, but sort of $5.25. a bit over 500 in the balance in the fourth year, really on that figure five showing that the large part to date has been all of the pre-works and getting the site cleared and ready for construction crews. And we've modestly commenced some of that construction work late in the quarter. So, yeah, we're pleased with that. The timing of how we're tracking against it will keep this graphic and the talking through the milestones of what's occurring there. And we've obviously segregated production from this expansion activity so that the mine is unimpeded from milling and mining and activity continues throughout the build period. And obviously the funding of this is all done from operational cash flows. And then this is under separate leadership and separate supervision with contractor building and all of this activity in and around the existing plant that's operating. So, yeah, pretty strictly run, a lot of activity to occur. Obviously, all the accommodation and the crews starting to arrive more so in this March quarter. And then, really, you've got, you know, 500, 600 people there for a couple of years doing pretty significant construction works. So we'll just keep that updated there in that CapEx update. Pretty consistent over those years. Checks written versus commitments made might be a bit lumpy, but it's pretty consistent. It's going to get built.

Yeah, great. Well done. Thank you. Thanks. Thanks, Levi.

Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. Your next question comes from Jared Brian Lucas from ABC News. Please go ahead.

Yeah, good morning. Thanks for the full name there going in. You mentioned, Stuart, at the top of the tape just about the Parkston Power Station and the role it's playing keeping the lights on in Kalgoorlie at the moment. I was just curious if Western Power's indicated to you guys how much longer that will be relied on for just feeding into the grid more than you normally do. Yeah, thanks, Jarrod.

Oh, look, we've got guidance that, you know, it's days away and that's the permanent solution. So, you know, we're expecting that that work obviously has continued since the first outage and those poles were damaged through that storm. So, like yourself, you know, you hear a lot of different versions of actions at the start of this period. I think they've solved for a lot of those and understand they've got multiple things underway. So, The bulk of that disruption that was experienced will be solved very shortly.

Okay. They've obviously, the state government utilities, had to lean on you guys, and they're lucky they've had you guys there. I guess you'd like to see a bit more strategic investment, potentially, from the state into the power infrastructure so they don't have to rely on you guys?

Either or. It's pretty known that that Parkston plant has underpinned the power in Kalgoorlie for a long time. So that's clear. I think it's more around the speed to act and having multiple contingencies. No one can predict what part of that system could fail. Yes, you could spend a lot of money in contingencies and all those sorts of things, but I think it's a case of, you know, A storm or otherwise, you know, these things that occur, it's about the rate of speed and the willingness to act quickly so that people aren't disrupted. And we understand the impact that's occurred across the community there. You know, it's pretty hot weeks there.

Last one on the power, the renewable plan with the solar arrays, the wind turbines that's been mooted for a while. Is there any update on where that planning's at?

Look, it's still multi-year with an outlook that it gets brought in when we have the mill expanded. If that was in place today, you know, it could have well solved the issues of the last fortnight. But it's just another, it'll be another asset that's, you know, one underpins continuity and power security in the region. So, yeah. There's a lot of benefits with having that islanded, either behind the meter or connected to the grid, renewable, reducing our carbon footprint there, but giving absolute power security for a lot of businesses' homes and obviously the business we have in Kalgoorlie.

Thanks, guys. Just to clarify before I let it go, so that's after the three-year mill project, so still in feasibility level?

Yeah, there's still a number of options being evaluated in regard to wind and solar battery in regard to that. Thanks, guys. Cheers. Thanks, Gerard.

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

Great, and thanks, everyone, for joining us on the call today.

We're really pleased with the mid-year quarterly results and we look forward to updating you as we continue to advance on our profitable organic growth strategy. So have a great day. Thanks very much.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.