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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Thank you, Zach, and welcome, everyone, to our June quarterly analyst call. We've got to continue to see a strong Aussie dollar gold price, close to $2,950 an ounce for the quarter. As a result, Gold Road sold its ounces at record high sales price. As you will be aware, our production is completely unhedged. So that is a favorable knock-on effect to the cash flow generation for the quarter.
In the presentation today, we will be referring to the quarterly results slides that can be viewed on the live webcast, our website or the ASX release. Those on the webcast and on the phone are able to submit a question for us to address at the end of this call.
On the call today, we have Duncan Gibbs, Managing Director and CEO; John Mullumby, Chief Financial Officer; Andrew Tyrrell, GM of Discovery; and we have Keely Woodward, Joint Company Secretary.
Moving to Slide 3 now for a summary of the June quarterly results. Bryah continues to operate safely and reported no lost time injuries during the quarter. Bryah is now at over 810 days LTI free, a great result from the operation.
Sadly, the quarter saw 2 LTIs reported for the Gold Road exploration team, and our overall 12-month LTI frequency rate has subsequently increased from 0 to 2.13.
The June quarter saw gold production from Gruyere of 76,053 ounces produced at all-in sustaining cost of AUD 1,620 per ounce for the quarter with production impacted by the low availability of drill and blast stocks. Strong gold price helped us continue to increase our cash and equivalents position. We closed the quarter on $157 million net cash after free cash flow of just over $30 million generated during the quarter.
Lower-than-anticipated quarterly production resulted in a lowering of our 2023 production guidance. We retain the original all-in sustaining cost guidance, and Duncan will give more details on this later in the presentation.
Our strategic investments continued to hold good value and are valued at approximately $416 million on the ASX today.
We continued to explore across our recently expanded exploration portfolio in Australia with drilling ongoing at Mallina and Yamarna. The strategy remains unchanged here. We're looking for [mine 2] .
I'll now hand over to Duncan Gibbs to talk through the quarterly results in a little more detail.
Thanks, Duncan, and thanks to everybody who's joining us on the call today.
Looking at the quarter in a little more detail. Gold production fell short of Gold Road's expectations as announced on the 22nd of June. Gold production for the quarter reduced primarily to low drill rig availability, which ended both ore and waste mining. As a result, lower grade stockpiles were blended with the ore through the processing plant resulting in the processing plant grade being below the mine grade.
Average mine grade was strong at 1.2 grams for the quarter, and that's a record high and in line with our expectations of these increasing grades as we get deeper into the ore body.
Processing rates continued to be high. It was actually a record high monthly production rate achieved in May, and the strong production performance reflects improving plant utilization rates as well as some benefit from blending with oxide for around 10% to 15% of that softer material.
The operational focus is very much moved from the plant and out to the mine. Mobilization of replacement drilling equipment has commenced, and 2 new rigs were provided during the quarter by MACA. Another is due in the next week and the whole fleet is actually replaced. That program continues into the new year.
As a short-term measure, Gold Field have also sourced 2 rigs from our other operations, and that will help us get through the growing rig availability issues that we've seen. Additional blasting resources have been sourced and further increases are planned over the coming weeks.
As well as all of that, we're also putting another excavator on the site. So there's a new 600-tonne class machine that's actually already there along with 4 additional trucks. They will be mobilized. And once fully assembled, the excavator will commence operations late in this quarter. Accordingly, the rate of waste and ore movement will increase in the second half of the year.
The all-in sustaining cost for the quarter and was higher quarter-on-quarter at $1,620 per ounce, which largely reflected the lower gas production during the quarter.
Sustaining CapEx increased during the quarter with expenditure on the pebble crusher, and that will continue into the remainder of the year.
The corporate-only costs for people who look at that metrics were sitting at $1,949 per ounce.
As Duncan has indicated, the revenue from gold sales will get short of last quarter's record high despite the lower production, and the gold revenue benefited from record gold price received with all of our gold sales unhedged.
As announced on the June 22, annual production was revised to between 320,000 to 350,000 ounces for the year or 160,000 to 175,000 ounces attributable to Gold Road from our previous guidance of 340,000 to 370,000 ounces at a 100% level. The lower guidance reflects the lower-than-planned ore mining rates in June -- in the June quarer and will continue until the performance of the drill blast is addressed and both the ore and waste mining rates ramp up.
As I've indicated, we've made more positive steps with the drill fleet and additional blasting. I mean we've already mobilized the fleet. That's just the case of getting that up and going.
As a consequence of our ongoing blending with low-grade stockpiles, the plant head grade may continue to be lower than the mine grade, obviously dependent on how fast we ramp up the performance of mining.
While Gold Road is not revising the 2023 annual cost guidance, we are now expecting the cost to the upper range of between $1,540 and $1,660 per attributable ounce. This guided cost is largely reflecting the reduced gold production guidance along with the increasing rate of ore and waste mining in the second half of the year.
As previously guided, the sustaining capital expenditure will increase in the second half of the year and that very much reflects the capitalized waste stripping, the third pebble crusher and TSF lift that starts late in the year, really from about September.
The pebble crusher, an important piece of equipment for next year, but we expect that the commission late in the year and the benefits of that pebble crusher upgrade will flow in from next year.
Yes, I can talk to exploration. I should bring it up, sorry. Let me keep going. Gold Road continues to hold a diverse and prospective portfolio of exploration tenements around Australia, including Yamarna, Pilbara and in Northeast Queensland. Gold Road's strategy remains unchanged and centered around making a meaningful discovery consequences -- consequently prioritize the projects that we see with greatest potential in.
During the June quarter, the exploration team prioritized activities on the Golden Highway, which is located within the Gruyere joint venture. We completed quite a large program of resource definition drilling there with those resources being satellite pits to the Gruyere operation, and I'll cover them in a bit more detail on another slide.
At Yamarna, we completed almost 16,000 meters of drilling across mainly the Southern Project Area and a long strike to the south of the Gruyere mine at the Hopwood prospect, and further exploration work in this area will continue into the next quarter.
At Mallina, we continued with our first RC drill program over on the Western tenement package. And drilling over there is increased in success of some encouraging mineralization -- sorry, an encouraging alteration with assay results still coming in and drilling continuing into this quarter. Additional diamond drilling and surface samplings program there also as scheduled.
In Queensland, land access has been secured during the June quarter with field work also commencing. That station includes surface mapping, soils/rock chip object geochemistry, some remote sensing and geophysics is also scheduled. We're aiming to delineate a pipeline of targets there, and testing of that now looks like it's going to commence from early next year.
Moving to the next slide at the Golden Highway. As I mentioned, a lot of strong numbers you can see up on the slide pack here, I'll let you review those at detail. Really, most of that program really is infill drilling of the resource and reserve, really getting that to -- we've now completed the work to complete the resource definition drilling program and pretty much fully understand the strike extent of the resources over about 14 kilometers on the Golden Highway trend.
We're in the process of updating the resource model. And once that's finished in the next few weeks, we'll then start getting into feasibility level studies on the Golden Highway, which we aim to commence during the second half of the year. And ultimately, we're preparing for mining activities to start from 2026.
Okay. I'll now hand over to John Mullumby, who will take you through the financial results.
Thanks, Duncan. We'll start with the usual slide here, which provides a good synopsis of the cash flows for the quarter and our financial position as at the end of June. So that production from Gruyere as Duncan has just walked you through in detail provided a very healthy operating cash flows of $68.3 million for the quarter. It actually was pretty close to the record operating cash flows from Q1, which in turn Gold Road generated over $30.4 million of free cash flow for the quarter. And as at the end of June, we had on hand unsold doré and bullion of $5 million.
And as a result, our cash equivalents have grown from $128 million at the start of April to just shy of $160 million at the end of June. A very strong quarter financially for us and cash flow-wise, in part again attributable to this fact that we remained unhedged across the quarter and were able to fully exploit the strong oil price environment, which saw our revenues for the quarter of $113 million, again, just shy of the record set in Q1 earlier in the year.
On this slide, not too much I'll be able to talk to really. Quite a standard quarter for us. No real abnormalities or one-offs.
So I basically close off by saying that as at the end of June, we remained debt-free. Our listed investments valued at $416 million at the end of June, and our revolver facility of $150 million is sitting there untapped and ready for us to use at any point going forward.
Thanks. And now back to Duncan Hughes.
Thanks, John. That brings our results presentation to a close. We'd now be very happy to answer any questions you may have. So I'll hand the call back to Zach for any questions via the phone. And as a reminder, please feel free to lodge some questions through the webcast also.
[Operator Instructions] Your first questions comes from Hugo Nicolaci from Goldman Sachs.
Good to see on the cost guidance piece that the range has been maintained and we are just moving to the upper end. I was just curious, are there any moving parts in that cost guidance like a cost deferral or timing impacts maybe around the pebble crusher that might have helped to keep us in that original cost guidance range?
No. If anything, there's a bit of pressure on the total cost of the pebble crusher. But timing-wise, it's all happening this year.
Great. And then just the second one. Again, great to see continued cash generation in the business. How do you think about cash usage beyond the current CapEx and exploration profiles at this stage?
Look, I guess we're a company focused on growth, I guess, primarily. We will maintain a strong balance sheet. Obviously, we have substantial portfolio of investments and there may be calls on cash to maintain our strategic position primarily in the gray. And we'll just have to see where that one travels over time, probably being a key issue that we can see that's in front of us.
As you know, Hugo, as well, we've got a dividend policy. So 15% to 30% of that free cash goes back to our investors as well.
Your next question comes from Bradley Watson from Bell Potter.
I have sets of questions, please, around, firstly, in the quarterly, you mentioned that the new mining contract is starting to kick in to be more fleet and more total material movement. Can I just please check, I think you might have guided previously. What kind of total material movement are you sort of expecting going forward in the next period after that's all ramped up?
When it fully gets going and stabilizing, so this gets into next year, we'll be up at around [50 million] tonne total movement rate for the year.
Okay. And then on the -- just a couple of questions around the catch-up equipment that you've brought in, in this current period. I guess sort of a 3-parter. It sounds like there's quite a bit more gear going into the pit floor. I just wanted to get a sense for how much room there is for everything.
Is there plenty of space? Or does it start to get a bit congested? How long do you think you'll have that extra equipment for?
And then it's coming sort of late September, it might all be going. How much catch-up do you think you might get on the previous guidance with that equipment in perhaps 3 or 4 months?
Yes. So the additional fleet coming in, I guess, probably different parts to that. So it's basically a new drill rig fleet and that's part of the commitment of the new contracts, probably helped by the new ownership of MACA. So the site is properly capitalized. We've got quality gear.
The excavator and additional trucks were basically planned and will be required longer term. So they've been brought forward slightly, but it was always planned to ramp up the mining rate.
In terms of floor areas, look, we've got really a main ore mining area down in the bottom of Stage 3. There's really nothing that's chasing the mine plan there and we need to keep those benches turning over. The area that we need to push hard at is stripping in Stages 4 and 5. And I think all of that is doable with good management.
So really, we're on a -- there's kind of 2 oversecting pieces. We've fallen a bit behind movement that we needed to be in the first half of the year. We're now accelerating the ramp-up of that fleet to recover some of that movement and then get us to what takes to be the sustainable movement rate for the mine looking forward.
[Operator Instructions]
Okay. Thanks, Zach. While that's happening, we've had a few questions through the webcast. The first one is from Peter. It's a question, why are you unhedged as a gold company when most of your ASX peers have a hedge book?
And what is your strategy with regards to hedging?
Thanks, Duncan. It's John here. I'll just reiterate our position on hedging, which has remained unchanged. Gold Road has hedged in the past, and we're open to hedging in the future. It has to be done to manage a material risk or an investment of [indiscernible] materiality.
So typical examples that would basically warrant Gold Road having a hedge book again in the future would be having debt on our balance sheet that requires repayments; a high-cost cutback in the pit; or a large capital investment, which is not only in the short to medium term that would require -- or would warrant hedging also to protect our margins and cash flow. So that's the position currently in regards to hedging.
Thanks, John. Certainly, a good time to be unhedged with such high spot gold prices. Next question is from Sabrina. Sabrina is asking, do you have an idea when drilling results may be available from the recent Mallina drilling?
Thanks, Duncan. It's Andrew here. Yes, we're actually starting to receive the results from the Mallina drilling now. We expect that program to be completed by Wednesday this week and then full receipt of all our phases in the next 2 to 3 weeks is the time frame we're looking at.
Thank you. I have another question here online from Tom. Probably one you touched on earlier, Duncan. How is Gold Road planning to deploy the growing cash balance?
Yes, I think that was probably covered. So as mentioned, we have a dividend policy and anticipate that will play out continuing within the policy standard. And also, I guess, indicated there could be some demands on cash to maintain strategic position in investments.
Thanks. That's everything from the webcast that I have in front of me. Zach, are there any more questions from the phones?
Your next question comes from Meredith Schwarz from Bank of America.
Just a quick one for me. On exploration, I was just wondering if you could give a rough breakdown on exploration spend by project? And going forward, are you planning to maintain your $30 million exploration spend on an annual basis going forward?
So look, I guess exploration at a strategic level, we've been around about the $30 million mark. I guess that we see is probably about the right allocation if we want to maintain and grow the business through exploration. And obviously, exploration, you can have a bit of a dry spell and then suddenly a couple of drill holes change your life.
In terms of the allocation, this year, about $15 million into Yamarna, about $5 million into Mallina, probably a similar level into Northeast Queensland. And then there'll be some shuffling of money around late in the year according to where the best targets are bringing us up to the total.
I guess, broadly, you can see within our portfolio we're moving the weight of emphasis from Yamarna into some of our other properties and very much will be depending on results as to what the allocation of expenditures is next year and beyond.
Yes. Great. Could I also ask another one? On the June quarter production, you draw on stockpiles to maintain mill throughput. With the stockpiles running down, does that pose any risk for the future?
And if there is any production issues, that you won't have that stockpile material to feed into the mill?
Yes. I can't remember the exact stockpile balance, but it's something more than 5 million tonnes. So there's at least 6 months of inventory there. So I mean, that can help obviously us juggle if there's any shortfall out of the mine or if there was some kind of catastrophic force majeure type event, major rate event or geotechnical issues, those kind of things that occasionally can happen in mining.
Okay. Yes. So do you have a buffer there?
Yes.
There are no further questions at this time. I will now hand back the call to Mr. Hughes for his closing remarks.
Thanks, Zach. Nothing else online either. So that brings a close to our quarterly results call. Thank you all for your continued interest and support.
I'll just close out with a summary of the quarter. Obviously, revised our annual production guidance, but happily retaining the all-in sustaining cost guidance that we set for the year back in January. Gruyere, still robust projects. It's been delivering record mine grades. The processing plant is running to spec. We just need to get more tonnes from the mine into the mill.
Strategic investments stayed strong, and we're very focused on growing the business through exploration. Generating $30 million of free cash flow during the quarter was a good result despite the production misses that we had. And our balance sheet stayed strong.
Look forward to speaking to you in another three months' time. Thanks, everyone, for attending.