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Good morning, and welcome to Red River Resources Conference Call to discuss the company's June 2022 quarterly report. [Operator Instructions] I will now hand over to Red River's Managing Director, Mel Palancian.
Thank you, Simon. Good morning, everyone, and welcome to the June '22 quarterly call. Before I start getting into the nuts and bolts of it, as you all know that I'm leaving the business after sort of 7 or 8 years. And look, I guess, for me, it's a good time and a good opportunity to refresh the business and the leadership team in the business. We've got a new GM at Thalanga, being Ben Broad. Ben's got over 25 years of operations experience and Ben's fitted in really well into the Thalanga team, and he's done a fantastic job. And same with Matt Varvari at Hillgrove. Matt's got over 20 years of operations experience, and he's fitted in beautifully there at Hillgrove. And then we've still got Carl overseeing both operations.
So look, the business and the team are in a really strong shape and probably better than it's ever been. And for me, sort of personally, I've put my heart and soul into this business every year, year in, year out, and I need a break. I don't want to hang around too long and really sort of feel the tiredness kicking in, but I know that the time is right, the business is in great shape. And I'm sure that we'll find an excellent candidate to take over my role.
In the meantime, as we said in the announcement, I'm not going anywhere soon. So I will be around with my foot to the floor, pushing as hard as we can to progress the business and keep developing all our projects and keep producing from their operations. So I've got too much vested into the business just to see it go backwards. So for me, I'll be pushing as hard as I can until my time is up.
And I suppose the other thing I wanted to talk about is the markets where we're in a bit of a crazy, crazy time. We're -- inflation's up. Costs are up, and I think commodity prices have been going backwards. And to me, there's a bit of a disconnect. It's very -- it's pretty rare, so I've been in mining for 30 years now, and it's a rare occurrence to see what's happening at the moment.
I'll talk about the supply side and the fundamentals because to me, that's where my rational thinking kicks in. There hasn't been any material changes from the mine supply side kicking in. So we're not seeing copious excess amounts of copper, lead and zinc and gold coming to the market. So the supply side is being restrained. And usually, it's the demand dropping off or supply -- or oversupply, which tends to push commodity prices down, and that's not the case in this current period.
So we're still seeing huge demand for our products. So all the concentrates that we make, we have no trouble selling and there are lots of people out there chasing more concentrates. So the demand is there, the supply has -- there's no oversupply. So really, there's a bit of a disconnect between fundamentals and sentiment. The sentiment has been commodity prices have been falling, and most of that is on the back of the inflation rates going up, costs going up and I guess people sort of expecting growth to slow down. And we're not seeing less demand for our products. Metal premiums are still very high. So getting your hands on metal as an end consumer is still troublesome.
So I think in the last sort of 10 days, we've seen some sort of stability in the commodity prices. So for me, I think it's still a wait and see how this story unfolds. But given the sort of lack of material discoveries and given that no material new suppliers come to market and the cost increases is going to make that even more difficult. Building mines in a very, very simple way, is not that different to building a house. And at the moment, if you're building a house or you're renovating, you just don't know what the final cost is going to be. So you better have your wallet full before you start that journey. And I think on the mining side, obviously, the numbers are much, much bigger. But the lack of people, the lack of raw materials and supplies and time blowing out, and everything that takes longer costs more. We're not going to see the copious amount of new mines coming online anytime soon.
So we're in an interesting phase of the journey of the cycle. I'm sure it will play out. And -- but I guess I'm a little bit hopeful that things will stabilize. And the current price deck, the current prices that we're seeing in Aussie dollars are still pretty good. And the business itself is in a good shape. So -- and there's plenty of demand for the metals that we're producing. So I'm pretty confident that sentiment will bounce, and we'll meet the fundamentals that we're seeing in the market. We just need to wait for it to play out. And I have no doubt that all these interest rate increases will temper the inflation story. But in a lot of ways, the inflation rate is just making up for lost ground over the last 10 years.
So I think when we look back at it over a 10- or 15-year horizon, the average inflation rate is going to be what the average inflation rate has been for the last 25 years. So yes, I'm sort of short term, lots of volatility, and we've seen markets being hugely volatile. And -- but when we peel it all back and you look at the fundamentals, the fundamentals behind the scenes are super, super strong.
Okay. I'll leave it at that and move on to the quarterly itself. Look, we had a good quarter at Thalanga. We mined and processed 90,000 tonnes, which is back up to our usual rates, which is very pleasing to see. We've had better manning at Thalanga in the June quarter. And I suppose the other thing that sort of helped us as we've got on top of all that catch-up ground support that we were doing in the previous 2 quarters. So really good to see that Thalanga bounced back to our usual sort of 90,000 to 100,000 tonnes rate, which is where we want to be.
And in line with that, our concentrate production has gone back up to our usual rates as well. So really, the plan is now just to keep delivering at Thalanga at Far West and really sort of keep progressing the development of Liontown. Other than that, nothing really unusual happening at Thalanga. Everything is sort of ticking along nicely. Yes, there's nothing sort of unusual to report. It sounds a little bit boring, but sometimes boring is good.
You can see on Page 6 that we've developed to the bottom of the Far West. So the decline got there at the end of the previous -- the March quarter. But now we've been doing the ore development. So our ore development or the operating development is up significantly since the previous quarter because the decline has unlocked more levels. You can see in that figure 3, the stopes that we've got left to go for the rest of the mine life. So again, Far West, the capital is [indiscernible] there. You can see at the very top of the mine, we've got a couple of inclines to do there to access the ore at the top and probably some ventilation and the egress work associated with that. And that will be Far West fully developed and really turning into a stoping mine pretty much every day.
Line town. So we're still waiting on the permitting process. We've had another native title meeting, which went really, really well late in the quarter. So that's progressing as it should. And we expect that will be done and dusted very, very shortly. And same the mining lease approvals we're working on road agreements with the council and the state government. And again, they're just progressing as per normal, and we submitted the water pipeline infrastructure mining lease as well. So although it's all happening very slowly and much slower than what I want and what everyone wants, it is progressing. We have put out some tenders as well, and we've also purchased some minor infrastructure equipment ready to be installed once we get them on.
The other thing we've been doing is drilling the Liontown deposit, again, just to reiterate. So out of the 4-odd million tonnes at Liontown, about 3 million tonnes is inferred. So we're currently drilling the early years of production, converting that inferred to indicated so we can get a reserve out in that space. Look, the drilling is going really well. So no material surprises at this stage. We're still getting fantastic results in the gap load in Liontown main, which is the current focus areas. And that Gap load in particular, is looking really, really good. Just so everyone is aware, that figure 4 where you see that outline of the Gap Trend, there's -- at the moment, the gap's got about 400,000 tonnes in resource. Once we get out of this sort of infill drilling phase and start the extensional drilling Liontown, I'm quietly confident that, that larger envelope that we've portrayed there is going to fill out the gap and we're going to add a lot more tonnes. And certainly, Liontown Main and the Western footwall. They've only been drilled down to about 250 meters. So there's a big opportunity there for them to extend a depth as well as to the West.
So again, what's happening in that space, great results at Liontown. The team out at Thalanga have also been doing some more prep work at Coronation, getting that ready to drill as well as max Copper Gold as well as Agincourt. So coming probably either Agincourt -- haven't forgotten Agincourt, but Agincourt is a prospect that's about 150, 200 meters along strike from Waterloo. There are some historic holes there that were drilled, I think, around about 30 years ago. They're all very prospective. So the team on site have been working up a plan to drill that. Again, we feel that Waterloo is going to be another mine for us, hot on the heels of Liontown to and Agincourt being so close to Waterloo, we'll note that just anything we find there will only just enhance that Waterloo story. So we've been preparing for that.
Okay, Hillgrove. Look, I think the last quarter, I spoke about doing some test work on some leach material in the dam. And that test work was very positive, and we've started sort of scaled production in June at Hillgrove. So we're leaching that material and we've produced in June about 216 ounces of gold, and we sold about 136 ounces of that. So that's going really, really well. So we'll keep doing that in -- for the next few months and keep producing gold and carbon and sending that off to get -- turn into doré. We're also -- again, last quarter, I had mentioned that we've had the highest rainfall in 15 years at Hillgrove. There's a lot of water on the TSF and the RO plant is working its butt off to clear that water. Okay. A lot of exploration has been happening at Hillgrove. We've been drilling Sunlight, Eleanora/Garibaldi freehold as well but also Bakers Creek. Before I get on to that, the results at Sunlight have been okay. The results at Eleanora/Garibaldi have been fabulous. At Bakers Creek, Bakers Creek is really, really exciting. So anyone that sort of has worked or been at Hillgrove would know that the Bakers Creek ore body was the best ore body at Hillgrove. They finished mining there around about [ 1921 ]. By then, Bakers Creek had produced 309,000 ounces of gold. We know that the ore body continues at depth, but it's a little bit too deep for our bank balance to drill it. So we've been sort of patiently trying to unlock this thing really ever since we got it.
A lot of people have looked at it, a lot of people have tried to find extensions to this thing. And really, for us, it's just been learning about Hillgrove, how these ore bodies behave, how they look, how they are formed as well as where to target them. And Blake Latin, our geologist at Hillgrove, basically came up with a design for hole #8. So previously, there were 3 holes put into Bakers Creek by straight. Now most -- those 3 holes were really targeted at close extensions to the historic workings. So the way we thought about those holes, I mean, they all had some gold in them, but nothing to really get excited about. But the important thing about those holes was the geology was still alive and kicking. I hate to use this term, but they were technical successes.
The court practices were still there, the structure was still alive and kicking. It just didn't have the same level of mineralization that the old timers were mining. And really, when you put 2 and 2 together, if those holes contained a lot of gold in them, the old timers would have mined out to them. So really, for us, we bought our big boys pants on, and we did a pretty big step out with hole #8, which is actually the fourth time, and we've got 4.5 meters at 29 grams, including nearly 0.5 meter at 257 grams per ton. And most of it is free gold, as you saw in the announcement, absolute cracking intercept. That's stuff you dream about.
And if you see on Figure 7, we've stepped 150 meters away from the historic workings horizontally to the northwest, and we're 90 meters below the workings above us. So it's a pretty big step out and pretty busy move. But I guess, in a lot of ways, we did that because of what we've seen at Eleanora/Garibaldi and Sunlight. So these ore bodies tend to have -- they tend to have shoots. You can easily mine to the end of a shoot and get into the lower grade, and that's where the old timers stopped. But really, this ore body just hasn't had the drilling just to delineate the next lot of shoots. Eleanora/Garibaldi and Sunlight has had enough drilling to identify the next shoot. And the only way to do that is to drill and to step out.
That's exactly what Blake has done here, and we've got a fantastic result. So to me, we know this already continues at depth. But now we've got something that's sort of higher up, and we just need to keep drilling this thing because this could be a big change at Hillgrove. It's free gold. It's super high grade, and it's been mined before we know the history of this in, and there's no reason why it can't be mined again once we get a decent resource around it. So super excited about Bakers Creek. It's been sitting there for 100 years, waiting for someone to come along and pick it, and that journey has just started.
And again, we've seen great results at Sunlight, Eleanora/Garibaldi. We've had the sort of -- the hit rate at Hillgrove has just been fantastic. So I'm confident as long as we keep drilling there, we will keep adding ounces and too many tonnes for the store. So excellent results.
Look, I want to go back because I missed the section on safety, and I do apologize for that because I did all that safety upfront. I really want to commend the team at Thalanga. Two quarters ago, the TRIFR rate was at 16. Last quarter, it was at 8. To have that TRIFR rate to below industry averages is a fantastic effort. I know the team have been working really, really hard in the safety space with the PYBAR contractors to get that number down. And really, the results speak for themselves. So really great efforts from that Thalanga team to get that TRIFR rate down and Hillgrove, again, great outcome. They've maintained their 7.3 TRIFR rate in the last quarter as well. So I really like to thank the site teams for such a great safety result for the business.
Look, I'd like to hand over to Rod Lovelady, our CFO, to run through the corporate and the financials.
Thank you, Mel, and good morning, ladies and gentlemen. As reported in the quarterly, we closed the quarter with $12 million cash of bank, which was an increase of $1.9 million on last quarter's balance. In addition to our usual operating activities, we repaid USD 2 million on the working capital facility when it was due at the end of the quarter and invested $3.6 million in mine development, project capital and exploration.
Thalanga's unaudited EBITDA of $7.5 million was very similar to last quarter's with the increased revenue that we earned on the additional concentrates produced and sold, being largely offset by the higher treatment charges that we saw on the zinc and lead concentrates and the additional cost of sales associated with those increased production volumes.
Our C1, C2, C3 costs were lower than the March quarter costs, and this was due to the impact of the higher production on the unit cost and also of the higher lead and copper concentrate production on the byproduct credits applied to the C1 costs.
At the end of the June quarter, our working capital facility had a balance owing of USD 4 million. So we're halfway through repaying the original drawdown, and we remain on track to repay the remaining USD 4 million out of cash reserves by the end of this calendar year. At the end of the June quarter, as I mentioned, we had financial reserves of AUD 12 million cash, and we also had USD 11 million available now on the working capital facility. So thank you, ladies and gentlemen, and back to you, Mel.
Thank you, Rod. So really, that's a wrap for this quarter, a solid quarter of production out of Thalanga. Good -- we don't have any sort of huge clearing issues underground. The mine is mostly developed now and moving into the stoping phase. So really, we just need to keep pushing that space.
We are seeing a lot of volatility in the industry. It's getting people is not easy. It's probably the hardest it's ever been in my 30 years in mining. But by hook or by crook, we did manage to find them and keep kicking gold. So to me, Thalanga is in a good, solid position. Liontown is taking longer and really, I see there's a question there about when are we going to get to the higher production rates. That will really come when Liontown comes online and we can feed Far West and Liontown into that mill together. That will be the enabler for the next step-up and then really soon on the heels of Liontown that sits -- bring on Waterloo. So to me, we've got a great future at Thalanga.
And then I'm sure once we're there, we then get to turn our attention to Thalanga East and the Orient. So we've got resources there that are on mining leases that I'm sure will eventually find their way into that mill 1 day. So yes, lots of opportunity in Thalanga. Liontown is taking longer, and I do apologize for that, but some of that is out of our control. But we will get that. It will be in line, and it will happen.
And really, the other thing that sort of is really exciting is the exploration upside. We've got so many things to drill there. And I spoke about Agincourt. It's -- I'm confident that Agincourt will come in. I'm confident that Liontown will find more and more extensions there to add to that story. But also, we've still got 106 targets that we have to drill out there. And it's -- it wouldn't be a surprise if we got another 5 or 10 ore bodies out of those targets. So really great future at Thalanga. And the demand for copper, lead and zinc isn't going away anytime soon. And with all the electrification that's happening, and it is happening, right? So this stuff is real. Copper, lead and zinc is right in the middle of it and the thick of it.
I don't have to talk about battery minerals and lithium and graphite and whatnot. But none of that happens without copper, lead and zinc. None of it. So to me, we've got the right base metals. And we'll just need to keep delivering and growing that story and keep the drill rigs going because we've been very successful there and the same with Hillgrove. Again, Hillgrove's a fantastic opportunity for us, and it will pop, having such a material antimony resource. And there's a lot of rhetoric around antimony and supply constraints around that. It's -- but it's also really, really important that we can only mine it and sell it once. So we've got to get it right.
We've got the resources and the drill bit pretty much every hole is hitting more gold and more antimony. So the story there is only getting richer. And I will use the Fosterville analogy at Hillgrove. If you look at the Swan Zone at Fosterville, which was the honeypot there, that's roughly a kilometer below surface. Most of the mines at Hillgrove have been mined down to about 300 meters. I truly believe the best is yet to come at Hillgrove, but we just got to get that strategy right.
The Bakers Creek rediscovery is just a fantastic outcome for Hillgrove and Red River. I know the market didn't really reward us for it, but you got to -- this is the best ore body that was ever mined at Hillgrove and by [ 1921 ] have produced over 300,000 ounces of gold. I'm confident if we keep drilling them and we keep finding more of this material, that's only going to add to that rich story. And eventually, once we get deep enough in these ore zones, 1 or 2 or 3 of these ore bodies will have swan zones in. We just got to keep drilling and keep following them down.
So look, again, it's -- I'm not sure whether this will be my last quarterly or not. But if it is, I do like to thank all our shareholders and all our associates for their support and also working with a great bunch of people in the Red River family. There isn't a day that I haven't locked up the word full of beans and really excited about the business. Even when things are going south, even when things are tough, the potential of the business is so good, and I look forward to seeing the business grow. And in the meantime, I'll do my best to pedal to the metal and keep delivering. Thank you.
All right. Great. Thanks, Mel. We do have a few questions here, so we'll get through those. The first one here is, when do you plan to increase the volume of ore extraction to 600 kilotons per annum to 650, and thereby increase the results in concentrate by 1.5x? What is the amount of EBITDA and net profit you plan to receive in this case?
Sure. Look, thanks for the question. I can't really tell you the EBITDA and the profit mainly because we've got to get this infill drilling done at Liontown to get a reserve out and then put the financials out around it. But really to get to that throughput, it's all about Liontown. So getting Liontown permitted is the key now. And we're doing everything we can to do it as quickly as we can, but it is taking time. So it's all about Liontown.
Thanks, Mel. The next one is, can you give us a feel for how much of the 90 kiloton was development ore or stoping ore?
Yes. Look, I don't have the number at hand, but my gut feel would be about 20,000 tons of development ore.
Great. Thank you. What's the remaining mine life at Far West? And will Liontown commence before Far West finishes?
Yes. So we're currently updating the reserves at Far West, and that should come out with the annual report in August. But I suspect that we've got about 12 to 18 months of mine life left at Far West. So that's plenty of time for Liontown to kick in. So to me, as long as things keep going the way they are and we get permitted this quarter, we will see a material overlap between the 2 mines.
I think we've got one more here now. When do you expect Phase 2 of the underground portion of Hillgrove to commence?
So look, I think that's probably what the strategic review is going to answer. I guess the world has changed and the world is very volatile at the moment. And I think it's important that we get our DUCs in line there. So initially, it was the quicker, the better. But I feel like the way the exploration results are going there, we have got something material at Hillgrove. I think the story is a lot bigger and a lot richer than what anyone understands right now. So for me, the review has got to take all that into consideration and come up with a strategy that's worked for Hillgrove.
So look, just to put it into perspective, Hillgrove has produced over 730,000 ounces of gold. We have done more drilling in the last 2 years than what anyone has ever done collectively at Hillgrove. It's so under drilled and so undersampled. The lack of sampling and drilling is just unbelievable for a place that's produced so much metal.
So to me, it's not something that we want to just dive in head first. And I suppose the other thing is we've now taken the time and worked up metallurgical flow sheets for pretty much any type of ore that can come out of the ground there. We can deal with free gold and we can pour gold bars, and we've done all that. We can produce concentrates. And now we're leaching and reducing gold and carbon.
So I think taking the time to understand all the variances is part of that jigsaw puzzle. And the Bakers Creek intercept was just another fantastic outcome along that journey. So I think right here, right now, it's important the business takes the time to really understand and review before we come out and say when we're going to start underground.
Great. Thanks, Mel. There are no further questions at this time. I will now hand back to Mel for closing remarks.
Thank you, Simon. Thank you, everyone. As I said, it's been a great quarter at Thalanga and a really solid quarter at Hillgrove with the exploration results there. The business is in a good space. It's nice to see paying down that debt again. And we just got to keep pushing in that space. The exploration potential, the production upside in the business is just fantastic, and we're in the right basket of metals. The copper, lead, zinc is the bread and butter stuff. The gold and the silver is the icing on the cake. And one day -- and by the way, the antimony price is really, really strong still at the moment. I think it's sitting at around about [ USD 13,500 ]. So it hasn't seen the deterioration that the other commodities have. But nevertheless, I still think it's important that we get our strategy right because Hillgrove's got to work at oil prices, not just at sky high prices. But we've got the ninth largest antimony deposit on the planet there, and it will have it staying the same and all pop. We just got to get it right. So to me, thanks for your support, and we'll keep pushing as hard as we can to deliver great results for shareholders. Thank you.