Northern Star Resources Ltd

ASX:NST

Earnings Call Transcript 2023-Q1

[Operator]

Thank you for standing by, and welcome to the Northern Star Resources September 2020 Quarterly Results. [Operator Instructions]

I would now like to hand the conference over to Mr. Stuart Tonkin, Managing Director. Please go ahead.

[Stuart Tonkin, executive]

Good morning, and thanks for joining us today. With me is Chief Operating Officer, Simon Jessop; and Chief Financial Officer, Ryan Gurner. I'd first like to acknowledge the 2 recent fatalities in the Western Australian gold industry and express my sincere condolences to family, friends and colleagues of these workers. The gold industry works collaboratively to improve the safety and well-being of our sector employees. We are committed to continue to share best practices to eliminate harm in our industry. I also acknowledge the sudden passing of Peter Bradford, IGO Chief.

Peter was a tremendous leader of innovation, cultural change and promoting diversity in the resources sector throughout his career. His purpose was to make a difference and his positive legacy will be remembered for decades to come. Now to our quarter one results; our September quarterly production of 369,000 ounces at an all-in sustaining cost of AUD 17.88 per ounce was slightly below plan, with some delayed production expected to be recovered in future quarters. We made significant progress with our growth projects advanced during the quarter, and we maintained our full year guidance with weighting in the second half.

Our safety performance is sector-leading with LTIFR of 0.7, but we are seeing numerous incidents that have led to an increased focus on training, competency and safety leadership. This is a challenge for the industry on the recovery of a state skill shortage and high turnover of staff levels. Simon will speak to the Australian operations shortly. But at Pogo, we are meeting the mill throughput rate of 1.3 million tonnes per annum with a major shut completed in quarter one and development ore grades contributing to the lower produced ounces there.

We finished the quarter with 13,000 ounces of gold in circuit and we'll reduce that over the coming quarter. Last month, we conducted an investor and analyst visit to Pogo on the back of the Gold Forum Americas Conference, and it was pleasing to highlight the significant improvements made at Pogo, which are the foundations for the growth ahead. We're also very excited about the exploration upside within the mine and regionally, which continues to be explored and extended.

Ryan will speak to the financials. However, one highlight during the quarter was the announced AUD 300 million share buyback, of which we have completed 15% during the quarter. So with our first quarter completed, I'm extremely pleased with the progress of our growth projects that we've advanced, the simplification of our operations and the outlook of the opportunities ahead.

Now over to Simon. Thanks.

[Simon Jessop, executive]

Thank you, Stu. For the Kalgoorlie Production Center, including KCGM, Carosue Dam, Kanowna Belle and South Kalgoorlie, we sold 215,000 ounces of gold at an Australian all-in sustaining cost of AUD 1,762 an ounce, slightly up on gold sales from the June quarter and 2% lower on costs. This production produced a mine operating cash flow of AUD 170 million, while we also spent AUD 91 million on significant growth capital projects. Of this major growth capital totaled AUD 60 million alone was spent on KCGM open pit mine development. At KCGM, open pit material movement increased 29% higher than the June quarter at 20.4 million tonnes with trucking hours also increasing 21% as our training and recruitment plans continue to be successful. Grade of the mined ore was lower due to planned grade control drilling and limited access into Golden Pike South.

The pleasing open pit physicals have shown we are on track to deliver and, in fact, are now delivering into our strategic goal of 80 million to 100 million tonnes of annualized movement. Progress in the [ Oroya ] continued as planned when we commenced mining through the historic 2019 failed zone during quarter 2. This key growth area remains on track for reestablishing FY '24 access back into Golden Pike North low-cost ounces. Underground mining for the Kalgoorlie region was steady compared to the June quarter at 1.52 million tonnes but at a higher grade for 119,000 ounces.

KCGM's Mount Charlotte operation physicals was steady, while Carosue Dam increased underground ore tonnes and grade as stoping volumes improved. Kalgoorlie operations Kanowna Belle and South Kalgoorlie produced lower volumes at higher grade as great quality was targeted at our South Kalgoorlie operation over volume. Processing volumes in the Kalgoorlie region was 4.7 million tonnes or 3% lower than the June quarter due to a planned major shutdown case in June and placing the South Kalgoorlie into care and maintenance.

The KCGM shutdown maintenance works was successfully completed early in the quarter. Going forward, all mined ore from South Kalgoorlie will now be processed at Kanowna Belle on a [ campaign ] basis. The personnel from the South Kalgoorlie Mill and some of the mine personnel have been redeployed back into KCGM and Kanowna Belle. These have been completed within the quarter with the new operating model successfully embedded. At our Yandal Production Center, including Jundee, Thunderbox, and Bronzewing, we sold 102,000 ounces of gold at an Australian all-in sustaining cost of AUD 1,584 an ounce, down 18% on gold from the June quarter and up 12% on costs.

This production produced a mine operating cash flow of AUD 81 million, while we spent AUD 67 million on growth capital projects, which is down AUD 27 million quarter-on-quarter as we close in on finishing the Thunderbox mill expansion. The mill expansion itself spent AUD 11.4 million of major growth capital during the quarter. Our Jundee operation continued with a strong development performance of 6.2 kilometers and an average mined ore grade of 4.3 grams per tonne. Ramone underground mine currently operated by Northern Star's Mining Services division achieved a new quarterly development record for the operation of 1,609 meters with one jumbo and commenced ore stoping at quarter's end.

Total jumbo development was also a new Jundee record of 8.1 kilometers for the quarter and will continue to be a key enabler, both on drill platforms and increased stoping areas. Processing throughput increased 28%, back up to 747,000 tonnes in nameplate as less open pit Julius supply material was fed into the blend. Thunderbox underground operation continues to increase the stoping mining fronts with 450,000 tonnes of ore mined up 2% on June quarter. Ore tonnes mined from both underground and the open pits was 1.32 million tonnes, which was 100% above the actual quarter mill tonnes of 670,000 tonnes.

Mined ounces was also 54,000 and steady quarter-on-quarter versus a recovered goal of 27,000 ounces. The increased ore tonnes on stockpile and ounces is in preparation to the expanded mill project. The Thunderbox mill expansion completed the major tie-in and commenced milling on the new SAG and existing ball mill at quarter's end. The project remains in line with expectations despite many obstacles over the last 18 months and will systematically ramp up over the course of quarter 2. We are pleased to see some initial results from the early commissioning data showing nameplate metrics in all areas. We expect to be achieving the 9.6 million tonnes per annum run rate during the half 2 of FY '23. This project remains a key focus until we deliver consistent throughput with the increased gold volumes to the Yandal region and lowers the overall processing costs.

I would now like to pass on to Ryan, our Chief Financial Officer, to discuss the financials.

[Ryan Gurner, executive]

Thanks, Simon, and Good morning all. As demonstrated in today's quarterly results, Northern Star remains in a robust financial position. Our balance sheet remains strong as set out in Table 3 on Page 7, with cash and bullion of AUD 473 million at 30 September, and we remain in a net cash position of AUD 173 million, following the payment of AUD 155 million in stamp duty and AUD 132 million in dividends, with AUD 300 million in bank debt drawn from our corporate facilities. Pleasingly, our assets generated positive free cash with capital expenditure fully funded.

Figure 6 on Page 8 sets out the company's cash movements for the quarter, with key elements being the company recording AUD 301 million of operational cash flow. Looking ahead to the remaining quarters, this is forecast to rise with the completion of TBO Mill commissioning Q2 and stronger margin contribution from Pogo across the remainder of the year. Quarterly investment in sustaining capital, growth capital and exploration are tracking to plan in respect of the planned expansion at Thunderbox at 30 September, approximately AUD 30 million remains to be paid on the project, which will be disbursed over the coming months.

In respect to stamp-duty on the merger, as previously indicated, AUD 155 million was paid during the quarter. As announced with the FY '22 financials, the company has initiated an on-market share buyback. During the quarter, 6.1 million units totaling AUD 45 million over the 11 available trading days were bought back. We intend to restart the share buyback program following the end of the company's blackout period at the close of market today. And during the quarter, the company paid its final FY '22 dividend of AUD 0.115 per share, totaling AUD 132 million net of our Dividend Reinvestment Program.

For other financial matters, depreciation and amortization are in line with expectations at the upper end of the guidance range at approximately AUD 700 per ounce sold. And for the quarter, non-cash inventory charges for the group are AUD 56 million. As mentioned previously, the majority of these non-cash inventory charges relate to the milling of acquired stockpiles at KCGM. And in respect of costs, we can continue to apply a sharp focus and drive cost saving initiatives by leveraging our supply chain and relationships with suppliers to source lowest cost items and receive best terms, and the company is not experiencing shortages or material disruptions to its supply chain.

Lastly, in respect of hedging, Table 4, Page 8 sets out the company's committed hedge position at 30 September with the overall book being 1.3 million ounces at an average price of AUD 2,600 per ounce. During the quarter, the company extended its hedging policy to include an additional year, meaning commitments can be placed out to 4 years, previously 5 years. Per the policy, the fourth year minimum hedge commitment is nil and maximum is 20% of annual production. And in respect of that, during the quarter, the company placed 200,000 ounces in FY '26 at an average price of AUD 2,815 per ounce.

I'll now hand back to Ashley for the Q&A session. Thank you.

[Operator]

[Operator Instructions] Your first question comes from Al Harvey with JPMorgan.

[Alistair Harvey, analyst]

Just a follow-up on the hedging. I just kind of want to get a sense of what the key driver of that extension out to 4 years is for? Is that -- is there a particular project that's concerning you? And do you think once we get beyond that growth phase, you will be likely to pull that back to a 3-year time frame?

[Stuart Tonkin, executive]

Yes. Look, it's quite light in the fourth year also zero to 20% of production. And what we saw was some ability to put in some AUD 2,950, AUD 2,900 hedges. We obviously added AUD 2,800. So with a view of what we see CapEx coming off in the next couple of years, but we've also got to make a decision around instant mill expansion next year. And so consideration of that gives to that sort of time horizon that we're looking at. So yes, some of the highest-cost mines, obviously, Kanowna Belle, South Kalgoorlie, we're conscious of. We can't hedge necessarily the costs, but we're just sensibly giving ourselves a bit of a taper there and hedge profile so that there's not large shocks across the business, we can continue and complete our current growth plans.

[Alistair Harvey, analyst]

And just on the super pit expansion, can you just remind us of the study timing and if you've got any incremental updates on how we should be thinking about that?

[Stuart Tonkin, executive]

Yes. Internally, the next quarter, we're still getting some finalization and really just looking at the scope and the risk side of it. So getting separate up values on that feasibility level for that expanded to 24 million tonne case, the sort of 70% renovation, I guess. That's the case we're really circling up on. We'll update the second half at findings on that, but we haven't committed to any investment decision date at this point. We want to see Thunderbox mill absolutely cranking. We want to see Pogo production delivered at that rate just simplified portfolio before we committed to that.

[Alistair Harvey, analyst]

Just slip one last one in. Just on the Carosue Dam underground. Are you able to give us a sense of the split of open pit and underground ore and the impacts we could expect on the grade profile, I guess, over the next year or 2?

[Simon Jessop, executive]

Yes. I think, Al, the profile is fairly consistent going forward. So as one mine starts to slow down, we start to commence another underground operation. So during quarter 2, the current quarter, we're expecting to start all 3 underground operations. So you'll see consistent volumes from Carosue underground operations going forward.

[Operator]

Your next question comes from Daniel Morgan with Barrenjoey.

[Daniel Morgan, analyst]

Sorry, I'm just taking myself on mute. Firstly, I mean, maybe a conceptual question across the group. What areas of your business running ahead of your plan or expectations? And what areas might be a bit behind?

[Stuart Tonkin, executive]

Thanks, Dan. I wouldn't say anything's terribly ahead. We're on track. We knew we'd have a second half weighted year, and the growth plans are, I guess, well advanced during the quarter. So as Simon highlighted, the volumes, 20 million tonnes moved at KCGM, it's that major 80 million per annum run rate so very pleased with the volumes there. Very pleased with the progress and actions on the East Wall Remediation due to [ light cast ] and rectified that first step down on the top of that scale. So that was really, I wouldn't say, it's ahead of plan, but it's on plan. And then Thunderbox Mill expansion, it's up and running.

It's really getting that bedded down consistency and sort of range testing it to make sure we just bedded in and keep that consistent production for the second half of the year. So we're pleased that that has completed. It's really now back getting that volume maintained at that 6-plus million tonnes per annum, which we've demonstrated we're doing. It's just the feet on that. Pogo, we're maintaining the 1,500 meters a month, which is great. We pulled that extra jumbo out. I still want to reduce total cost to that site. So that's the focus. We're just a bit cautious about pulling that too early and retreating backwards.

So you'll see grades driven by development, more weighting on development ahead of in the plan. It kind of grades 4.3 grams. A lot of that material that's been fed to get a 6 gram quarter is the development ore going in. So we still probably would say we're a bit behind on where we want to be with Pogo, but we're confident the quality of the system, the ore body, the reconciliations, the stoping grades we've seen that the second half weighting comes in and the exit rate to move into 300,000 ounce plans there. So yes, generally, ups and downs. I would not say we're ahead of the plan on anything, but we're pleased with the progress of simplifying and fewer things moving at the moment.

[Operator]

Your next question comes from Levi Spry with UBS.

[Levi Spry, analyst]

Lots of focus on cash margins, I guess. So I think, Ryan, you kind of addressed it, but maybe you could just talk us through the waterfall one more time and what we can expect through the rest of FY '23 in terms of expanding operating cash flow margins, maybe the CapEx rolling off a little bit? And what else could take place of the stamp-duty payment that you had in that quarter, we need to be aware of for the next 3 quarters? One question, but.

[Ryan Gurner, executive]

Yes. Thanks, Levi. Yes. So if you just -- I guess, looking ahead, I guess, this quarter KCGM, for instance, we'll get back into more material from Golden Pike so low-cost ounces, low strip ratio, higher grade. So that's helpful. There'll be this next quarter obviously we had the start of KCGM and Pogo. So we've also had, as Stu mentioned, there's been a bit of holdup in Gold at the Pogo circuit. So that will come through -- TBO's ramping up and remind there at Jundee, as Simon sort of alluded to as well, will start. So there's a few things there that when you talk about margin and I guess, contributions, that's what we expect to see over the coming sort of quarters. In terms of sort of bigger hits yes, around stamp duty, so stamp duty is all paid. So that's done.

Now that's an interim assessment. So yes, we're still on our balance sheet and another sort of AUD 70 million potentially that could be paid but we aren't sure about when that will be because the offices of state revenues got to assess us on that could be in years' time. So we're sort of holding that. Other than that, tax, which is asked a lot about, we don't expect there to be a large balancing payment in the second half of this financial year. We will likely go back to some tax installments. They're not going to be large, but that's sort of -- that will probably be sort of more in April to June for this financial year. And other than that, there's no big hit, I guess, you could say, to the cash flow.

[Simon Jessop, executive]

The other thing I'd add, Levi, just on the realized gold price is just under AUD 2,500 for that quarter as we were taking some of those lower hedges in. So you'll see the hedge profile, Page 8. That starts to average up. We make sure we consume those lower hedges and that averages up. So some of the cash flow there is not realizing exact spot in this quarter while consuming our lower hedges probably impacts that AUD 20 million, AUD 25 million quarter.

[Operator]

Your next question comes from Kate McCutcheon with Citi.

[Kate McCutcheon, analyst]

Can you talk me through Jundee a little bit? So you finished Julius pit. Is that correct? What does the feed look like into guidance this year in terms of underground open pit mining areas?

[Simon Jessop, executive]

Yes. Thanks, Kate. It's Simon here. Yes, we finished the Julius open pit last quarter, but we still got stockpiles of that material over the next couple of years going forward. And at the same time, during the half 2 of FY '22, we started the Ramone underground. So stoping's just commenced for Ramone, which is previously an open pit mined a few years ago, is now well-developed and we're into starting the stoping phase of that. So going forward, the main Jundee mine's consistent and then we've got Julius stockpiles for the next couple of years. And then it's really just Ramone stoping going forward.

[Stuart Tonkin, executive]

And there's about 180,000 ounces in stockpiles at Yandal there that shows that feeds can be blended through.

[Kate McCutcheon, analyst]

Okay. So Jundee is underground and stockpiles going forward?

[Stuart Tonkin, executive]

Correct.

[Simon Jessop, executive]

Yes. The main Jundee complex, Ramone and then just top up of stockpiles over the next few years so fairly consistent production profile.

[Stuart Tonkin, executive]

It's always [indiscernible] underground fleet, 2 million tonnes and an extra 1 million coming out of stockpiles over the pit regional satellite pits.

[Operator]

Your next question comes from Matt Greene with Credit Suisse.

[Matthew Greene, analyst]

I've got a couple on KCGM. Just to comment on the accelerated waste movement. It sounds like there's a bit of a catch-up there. So how should we be thinking about that total material movement that 80 million to 100 million tonnes? Where do you expect the operation to be placed for the remainder of the year?

[Simon Jessop, executive]

Yes. Thanks, Matt. It is actually spot on plan. So this year, we're targeting 80 million to 85 million tonnes of movement from KCGM. Last year, we did 66 million tonnes. So we've been building. We did the fleet replacement in the last 12 months. We already really completed that in quarter 4. So quarter one is the first real quarter that we've seen the full new fleet as one integrated large fleet really starting to move a lot of materials. So really, really pleased with the large tick up of 29% more material movement for KCGM and its spot on in line with our plan. So that's what we're targeting this year, 80 million tonne to 85 million tonne. If we annualize quarter one, it's an 82 million tonne run rate, and we'll continue to see more optimization and more benefits of the new fleet going forward. So very, very pleased with KCGM open-pit material movements.

[Matthew Greene, analyst]

Just on those new trucks, have you seen -- I mean you flagged in the past, the productivity gains you expect. I mean how is that sort of flowing through here? I mean obviously, you've seen some of it already, but are we seeing the full productivity over a number of quarters here? When do you expect that to fully flow through?

[Ryan Gurner, executive]

Yes. Look, we have seen a 5% reduction in diesel and sort of close to 15% improvement, speed on ramp heading up. So really, when we're back into Golden Pike South at the bottom of the pit, that's the longest haul, that's where we really start to see the advantages of the new fleet compared to trucks that are 20 years overheating and higher maintenance costs. So yes, we're pretty excited to see the optimization of that new fleet going forward.

[Matthew Greene, analyst]

That's great. And just on Golden Pike South, Ryan, you mentioned getting back in there this quarter. Do you expect to be mining from that for the balance of the year? And then just on diesel prices, what are you observing there and you flagged, I think it was AUD 70 an ounce previously. Are you still sort of seeing costs around that level?

[Ryan Gurner, executive]

In terms of Golden Pike South, so it comes and goes. So last quarter, we had -- we mined a small amount of ore from Golden Pike South, then we had a big grade control program in the base of the pit and really at quarter's end got back into mining into Golden Pike South. So it comes and goes depending on the cycle down in Golden Pike South. It's not continuous mining down there. And the other piece around the diesel and the cost is -- we took the cost from quarter 4 into our budget. So we're probably seeing fairly consistent diesel price compared to what we put in our cost assumptions for the FY '23 budget.

[Operator]

Your next question comes from Peter O'Connor with Shaw and Partners.

[Peter O'Connor, analyst]

Firstly, on hedging, just the shape of the forward curve relative to spot and your comments about adding a fourth year of hedging into your book, what level or what type of discussions have been had by the Board in terms of changing lifting the hedging profile more robustly given that backdrop and opportunity?

[Stuart Tonkin, executive]

It was really just the addition of that fourth year, and it can be nothing. It was a minimum 0%, and the maximum is 20% of the forward production outlook. So with a 10-year reserve backed mine life, plus with the resource conversion we're thinking long term and around the mill expansion. It takes a couple of years to build. You want to make sure that your payback coming in on the back of that once we started to build a cash offering. So that's just a view of what that fourth year is about.

[Peter O'Connor, analyst]

So no change in the shape of the curve in the early years, given that gap up in that forward curve.

[Stuart Tonkin, executive]

No. So as we consume on a quarterly basis, you're pulling out probably 160,000 ounces in the quarter, replacing that, but you're replacing it out 3 or 4 years out, right? So you're keeping the same profile consistent. We've got a band obviously, we move within, but it's really also on pricing. And we've seen that contango pick up about AUD 100 a year on that forward curve. So it's not about just trying to stuff the stack in the first 12 months, picking up AUD 2,800, AUD 2,900 positive hedges in the third year. We're now always standing cost projections go down. That's a pretty good margin expansion in view of some of the payback on the -- what we're doing with the evaluations of these investment decisions. That's actually really helping us give confidence to make those calls.

[Peter O'Connor, analyst]

It's due to the buyback and the cadence of the buyback it would appear to casual observer that your buyback is slow. Could you just map out what's the strategy for buying? What percentage per day or what measures do you use when you're buying back stock? And what do we expect going forward? Is the last quarter a reflection of that process?

[Stuart Tonkin, executive]

Yes. So we hand that over to obviously third party to be managing within that realm. But I think what people didn't understand is from the announcement we needed to give 14 clear days to the market advising of that. So once we came out the full year results, we've essentially black out for 14 days, so we couldn't be buying. So we only really achieved 11 days of buying in the quarter and in that, we achieved AUD 45 million of buyback, so in 11 days. And we sat anywhere between sort of 8% and 12% of the daily volume. So we can't move what there's rough rules, there's percentage of daily rules and we've given instructions to third parties who is buying. So it's got to be open transparent for shareholders to understand that. And that's 11 days to buying AUD 45 million, and we'll turn that back on tomorrow 24 hours clear of this announcement today.

[Peter O'Connor, analyst]

The 8% to 12% would be a good guide for the buying pattern going forward.

[Stuart Tonkin, executive]

On an average day, 10% pretty sensible, but we've got ability to pick that up or down, but it's really driven by the B block, not changing -- materially changing or working without that B block.

[Peter O'Connor, analyst]

So if you're looking at the B block guidelines, you'll buy every day.

[Ryan Gurner, executive]

No. So Pete, it's Ryan. So there's a limit to what we can buy based on -- we can't buy where the 5-day prior is above 5%. So yes, we're limited. There's a regulation as Steve said. So we've been in the market between the 10% or 8%, I guess to be exact, 8% to 12%. So it's just mechanical. So we intend to start tomorrow and get back to it.

[Peter O'Connor, analyst]

I understand. I know the rule after all, but just wanted to understand will you buy every day where you'd be buying a pattern of days just to be rounded.

[Stuart Tonkin, executive]

No, because we have to sit inside those rules. And when we can buy it, we will be buying, but we're really restricted. And I mean these are the premises behind all these buybacks as the company should be able to influence maturity importance share price. This is about us buying back our own shares with our own cash, shareholders' money to get that return because we see ourselves at a discount to our corporate model. So it's not about trying to compete with everybody else out there buying and selling. It's about sensible way to return shareholders capital by buying accountants shares at a discount.

[Peter O'Connor, analyst]

And lastly, the skills issue in WA, Stu, the company have brought up over the last one or so weeks. How does this play out? You can clearly get bumps on seats now for more dollars, but skills aren't necessarily there. Is this a multi-period process to get skills up? And does that mean the industry is going to drag in terms of productivity for extended period?

[Stuart Tonkin, executive]

I mean absolutely it takes years. And so you can get people to a competency, but to get them operating at full -- efficiently full speed. So a lot of our key frontline is its decades to get them really to that frontline grade. So the strength we have is the internal mining services division, and we've kept a very stable team there and are performing very high and high quality, high safety. But those challenges are for the sector where there was still shortage. There has been a dilution across the sector in that regard for everybody. So we have to increase effort, energy, focus, training, supervision and sometimes things just stop because you're not prepared to go forward in that regard.

So that's when you are even through COVID impacts, which are minimal now you basically triaging what your activity you're doing on a day. You're not just asking people to do more with less [indiscernible] so I think there are things that people need to be patient with. It will take a number of years to raise the overall competency. I think Dan's question from the start saying, are we ahead on the plan. No, we're on plan, and there's something that are behind, but we've consciously said don't do it and redirect traffic. So if we're behind on something, it's been almost a deliberate reallocation of resources to make sure we're doing fewer things well in recognizing that, that still go.

[Peter O'Connor, analyst]

So does that mean the normalization journey to lower costs or more normal cost is slower because of that?

[Stuart Tonkin, executive]

Absolutely checks, you'll see that. You'll see that some on an exploration spend. We can't get rigs or we can't get ourselves through. So you'll actually see reduced overall spend. But that's not necessarily a good thing because you're not getting activity done. So you will see that. But you're back in kind of 15,000 ounces into this quarter for us, our costs come back into the mid-quarter guidance. A lot of that go in circle that comes back into the plant in future quarters. The stores have it back in check. So it's not materially out of the rails.

And we've got ability to flex, and it's quarter one. So you've seen this before, adaptive change and modify things along the way. But at the moment, we're still sticking to what we've set out to achieve. I think the great highlight things like the volumes at KCGM -- it's only one quarter ago where [indiscernible] had the new trucks commissioned, we were still losing 20, 40 truck drivers to the iron ore players in the quarter, still had tempted vacancy across our workforce. Within a quick 3 months, we've actually met the volumes, manned up the trucks and hitting those metrics. So yes, things can move back relatively quick with attention.

[Operator]

Your next question comes from Al Harvey with JPMorgan.

[Alistair Harvey, analyst]

Yes, follow-up guys. Just at Kal ops. I guess it looks like we're seeing a bit of efficiency improvements quarter-on-quarter roll through. Is that a product of literally just switching off the Jubilee Mill or is it those efficiency gains from shifting personnel around? And I guess is today's numbers about 40,000 ounces at AUD 2,100 an ounce. Is that kind of the go-forward rate or do you think you can improve that further, especially on the cost side?

[Simon Jessop, executive]

Yes. Thanks, Al, Simon. Yes. Look, it is pleasing to see some cost reduction in the Kal ops. We probably see that looking a bit better going forward. We have made the changes turned off a very high-cost mill at SKO. And even with trucking costs, we're in front by treating that ore over at Kanowna Belle, plus it's using rather being short at 2 process plants on people and personnel. We've now filled up a lot of vacancies across the board. And the reason we decided to do that was a 30,000 ounce reduction to the Kalgoorlie ops region. But at the end of the year, we'll be AUD 20 million better off cash flow. So that's the processing side. Obviously, in quarter one, we were still running for sort of half the quarter, the South Kalgoorlie process plant.

And then we turned it off and there's some care and maintenance costs at the back of the quarter. So we're pretty well executed that now. So going forward, it will all be just through to Kanowna Belle. The other sort of the corn is on the mining side. So really focused on quality and grade at South Kalgoorlie and pulled a jumbo and associated equipment and manning out of that operation and redeployed at Mount Charlotte where we see huge underground growth going forward as well as some pretty interesting areas around Kanowna Belle, higher up in the mine. So I think going forward, it's representative in terms of ounce production of what we've done last quarter, but we should see lower costs going forward from the Kalgoorlie ops. But a good step forward on the decision that we made in July around the mill and the mine.

[Alistair Harvey, analyst]

And just one more for me. The AUD 37 million of exploration spend in the quarter, obviously annualizing higher than the AUD 125 million guidance. Is that just a product of access at Pogo or is there something else? And anything particularly exciting from the exploration front you guys want to talk about?

[Simon Jessop, executive]

Yes. Thanks, Al. [indiscernible] get a bit excited straight at the gates in July. So a lot of it is seasonal profile on the spend. So you'll see through obviously, the winter months in Pogo, the surface stuff. And then you'll see, again, wet season Tanami, a few of those are the things where we just take it out on ground. So it is a bit front-loaded, but we still guide to AUD 125 million for the full year.

[Operator]

Your next question comes from [ Neil Wilkinson with Calgary Miner ].

[Unknown Analyst]

I'm interested specifically in the East Wall remediation situation at Super Pit. Can you tell me how far through that process you are? When do you expect it to be completed and once complete, what effect that will have on production at the Super Pit?

[Simon Jessop, executive]

Yes. Thanks, Neil. Simon here. So in terms of the East Wall remediation, we're about 60% through in terms of material movement through the wall. So really pleased with how that's been progressing over the last period. Going forward, we still got probably 12-month-ish to finish that. But as we get lower through East Wall, we'll get -- we'll gain further access back into Golden Pike North. So our plan all the way along is FY '24, reestablished access back into Golden Pike North, which is the northern end of the bottom of the pit. So yes, on track for really 1.2 million ounces in Golden Pike North a very low strip ratio and high grade. So that's been a key focus for us over the last few years, but about 60% completed and on track for FY '24, reestablishing access again.

[Stuart Tonkin, executive]

That last Neil was an excellent sort of start to show that remain [indiscernible] remain access drilled last and that obviously can be seen to look out huge progress on that first main shop coming back down through that scale. So it's a fantastic achievement, taking a lot of work to get to that point.

[Unknown Analyst]

That was just last the one that said that just gone, was it?

[Stuart Tonkin, executive]

Correct.

[Unknown Analyst]

Any sort of unexpected challenges that you found during this whole process so far or dealing with the wall remediation?

[Stuart Tonkin, executive]

Not other than -- sorry, not other than just it's not something that's written in the textbook. So the team has typically needed to risk assess, redesign, relook at all the information and take it step by step. So again, they've taken that approach, it's working. But this is not something that is just standard work. So there's not a lot of rains on fixing this. So we're very pleased with the progress that's been made.

[Operator]

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

[Stuart Tonkin, executive]

Great. Thanks for joining us on the call today. And as you've heard this morning, it's clear, we're advancing our growth projects to deliver a strong half 2 with efforts to reduce costs underway as we delivered growth across Pogo and Yandal in the near term and KCGM over the subsequent years. We maintain our profitable growth strategy to 2 million ounces by FY '26, whilst measuring success by maximizing shareholder returns through disciplined and responsible investments. Have a good day. Thanks.

[Operator]

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