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Thank you for standing by, and welcome to the St Barbara briefing on FY '20 Q4 June quarterly report. [Operator Instructions]I would now like to hand the conference over to Mr. Craig Jetson, CEO. Please go ahead.
Thank you, Amanda, and good morning to everybody, and obviously, thank you very much for joining us this morning for St Barbara's 2020 quarter report briefing. On the call with me this morning, I have Garth Campbell-Cowan, Chief Financial Officer; Rowan Cole, Company Secretary; Val Madsen, General Manager of Human Resources and HSEC; and David Cotterell, Manager, Investor Relations.At a high level, I'll be going through the presentation pack, and I'll open up for discussions at the end but also discuss the quarter that we've had and the strong end of the financial year. And I'd have to say upfront that the quarter that we've had has been very strong in many ways, and I'll go into the detail behind that strong performance in the coming presentation. First and foremost, I'm very pleased with our safety performance and in particular, the COVID-19 management that we've endured during this quarter, no different than others in our industry and across the country and globe. However, the risks of COVID-19 remain and we'll maintain our discipline as we evolve our management plan accordingly. I will have to call out to Val Madsen and her team at this point in time and congratulate her and the team for all the operations led by our general manager of the organization, in particular, to be able to manage through these challenging and different times for us. And as you'll see in the coming slides and the conversation we'll have, not only has our safety performance certainly improved over this quarter and a very strong year, but we've been able to manage and navigate our way through the current COVID-19 issues that we have globally within our -- in the countries of where we operate.So moving on. Operationally, it was an excellent quarter. For example, Atlantic Gold had a record quarter. Gwalia produced 50,000 ounces for the first time in a year and Simberi had the best quarter for the year, finishing up very strongly. The cash balance increased in the company by $85 million. The company is in a very healthy position with $405 million in cash, and as a result, we are planning to repay the $200 million we drew down back in March to bolster the balance sheet at the end of that time.In terms of -- I'd like to go to Slide 4 and discuss some of the management plans, initiatives we've had around COVID-19. As I've talked about previously, our absolute priority during this pandemic is the health and well-being of our people, partners, suppliers and the communities of where we operate. Fortunately, we've had no COVID-19 positive cases in any of our sites. However, we are very conscious of the risk of maintaining our controls by adopting and evolving in the changing circumstances of the past and what we have in front of us going forward. In PNG, for example, we've seen flights resume and allowed us to rotate our expat management team. However, with cases on the rise in PNG, we are keeping a watchful eye on the situation.Our exploration program has recommenced under strict procedures and guidelines given the remoteness of where we operate. We've also been conducting a number of mental health webinars for our employees, which we are offering on an ongoing basis, and we will certainly continue to do that and monitor the health and well-being of our people and our partners and providing support in the communities of where we operate. Lastly, in this area, we've maintained a strong commitment to our communities with a number of COVID-19-related programs and donations during this quarter, supporting the areas and the people that live in the areas of where we work. With that, now I'd like to turn to Slide 5. And on Slide 5 are the highlights of the quarter, which some I've already mentioned. We've had our strongest production quarter for 2 years in line with guidance. The operations generated $126 million in operating cash flow. The cash position increased $85 million after growth CapEx of $11 million, income tax payments of $6 million and exploration of $5 million (sic) [ $4 million ] was spent.Over to Slide 6, and again, I'll just touch on our safety performance at a very high level. But safety is certainly going in the right direction, which I'm pleased about. However, there's still a lot of work to be done to achieve an injury-free workplace. Pleasingly, FY '20, there was a 44% decrease in recordable injuries. And I'll take the moment to congratulate all of our employees, partners in all our operations and beyond for this achievement and congratulations to them.Turning on to areas of focus for us and moving into Slide 7. During the quarter, as I've mentioned in the past, we've had a review with external technical assistance that was undertaken at each of our operations. A range of productivity improvements and cost reduction opportunities have been identified, and there are still more being identified as we speak. We're also looking at our operating model to enhance our technical expertise to see what we're going to set ourselves up for success and how we're going to set ourselves up for success in the future.At Atlantic Gold, we're progressing the various environmental impact statements for each of the developments, which I'll talk a bit more in detail on slides to come. The COVID restrictions are slowing some stakeholder engagement down, in particular, community engagement. Work continues to be optimal sequencing the Atlantic Gold projects, and we'll still continue to work that in the short period over the remaining part of this calendar year.At Gwalia, we're completing the final vent shaft as we speak. Currently, it's sitting at 93% complete at 480 meters with a further 37 meters to go before that project is finally completed. It certainly has been a challenging program and project over a long period of time, and it will be good to get this one behind us, so we can move along and fully optimize that operation. Once complete, we will seek to optimize development, maximize ore extraction and production, and ultimately reduce operating costs into the future for that operation. A dedicated project team has been established to drive business improvement opportunities already identified in the operational review that I mentioned just a moment ago. So Gwalia is becoming a very strong operation, again, coming back out of the Gwalia Extension Project, and certainly, we're getting ready to optimize that particular asset.At Simberi, we're progressing the Simberi sulfide project through the feasibility study. This involves future optimizing work already completed in the past prefeas study. And I look forward to seeing the improvements in the study come to fruition at the end of this year.The consolidated June fourth quarter results on Slide 8 shows the consolidated quarter production and all-in sustaining costs. This shows our best quarter since acquiring Atlantic Gold. And with that, I'd like to move into some of the operations in a little bit more detail, moving on to Slide 9 and starting off with Atlantic Gold. So again, as I previously mentioned, Atlantic Gold had a record quarter. The team completed -- in this quarter as well the team has completed a reline of the ball mill. And the reason I highlight this as a significant factor is, it's the first time the internal team -- due to COVID restrictions and having people move around the country and within country to come and do our linings as contractors and our relines as contractors. We perform that task ourselves. I'm pleased to announce that the team not only completed better than budget but certainly, in a shorter time than allocated in our plans. Congratulations to the Atlantic team.As announced earlier this week, we are seeking to acquire 100% shares in MRRI for CAD 60 million. As you would know, MRRI holds 40% interest in the Touquoy mine and 25% interest in certain exploration tenements around the Touquoy operation. Post this transaction, St Barbara will own 100% of the Touquoy mine and 100% of the surrounding exploration tenements. Completion for this transaction is expected to be done and signed by early September.FY '21 guidance for Atlantic production is between 100,000 and 115,000 ounces; all-in sustaining cost between $955 and $1,100 per ounce; sustaining CapEx ranges between $15 million and $20 million with growth CapEx about the same, which is $15 million to $20 million. On the Atlantic growth projects, the COVID-19 restrictions certainly have slowed down in terms of stakeholder engagement and particularly in the area of public consultations. I'm pleased to say that the federal agencies have now reopened and engagement with the First Nations groups has recommenced. And I myself have had many engagements with the federal and the state government over the last quarter.The Beaver Dam data collection is progressing well together with the feasibility studies on plant design and haul route. I'm pleased with the progress on that particular project. And we expect to submit a revised environmental impact statement in the December quarter of this year.At Fifteen Mile Stream, currently, we're revising the environmental impact statement with scientific studies, and the First Nations consultation on this project is progressing very well. We expect to submit a revised EIS in the current quarter.Cochrane Hill EIS is planned for later this calendar year. On the proposal to designate the Archibald Lake wilderness area, we've engaged with the Nova Scotia government, and the outcome has been delayed due to COVID-19 restrictions. We are in consultation, and we have had meetings with the key stakeholders around Cochrane Hill, and that's progressing very well at the same time.So moving on to Gwalia quarter 4 performance. Gwalia's quarterly result has been very solid, to say the least. Production priority this quarter has absolutely showed the ability of what the Gwalia team can deliver in lifting production levels in that operation, certainly looking forward to the extension project being finished. The completion of the Gwalia Extension Project allows full optimization of the mine. However, in support of continued sustainable operations in the medium term, FY '21 development will remain over production, and I'm sure we'll get some questions on that.FY '21 guidance: production between 175,000 ounces and 190,000 ounces; all-in sustaining cost guidance is $1,435 to $1,560 per ounce; sustaining CapEx is AUD 70 million to AUD 80 million; and growth CapEx at AUD 30 million to AUD 32 million. Sustaining CapEx includes a higher mine capital development to increase the number of mining fronts, and that will be the focus of this next coming production year. Forward planning for FY '22 and '23 indicates a production uplift to 190,000 to 200,000 ounces. And happy to take questions on this at some other stage.So moving on now to Slide 11. The final raise bore has advanced during the quarter. However, we did prioritize ore movement underground. We had significant issues with the raise bore with bad and fragmented ground and squeezing ground that caused a lot of delays. I think that is now coming to an end with the last 37 meters currently underway.On to Slide 12 in terms of Simberi. Simberi, at a high level, had another improved quarter. Congratulations to the team there. Both Botlu and Sorowar's Central pit had higher grades than anticipated, which certainly assisted in that production uptick. On the downside, mill performance was lower due to reduced availability, in particular, the SAG mill and the RopeCon. During this quarter, we replaced a 250-meter section of the RopeCon with the remainder of the original belt of 1,200 meters to be replaced in this current financial year.As announced in May, the Board approved the Simberi sulfide project to proceed to a feasibility study, and this has been well progressed as we speak. We expect the feasibility study and environmental and social impact assessment to be completed in December of this year. The final investment decision is being targeted for the March quarter 2021.FY '21 guidance for Simberi is the production between 95,000 and 105,000 ounces; all-in sustaining cost between $1,665 and $1,840 per ounce; sustaining CapEx between $12 million to $15 million; and growth CapEx between $4 million to $5 million that is directly related to the feasibility study.If I may now and just turning to Slide 13 and our balance sheet. Our balance sheet is shown clearly on Slide 13. Cash increased by $85 million during the quarter to $405 million, and this is after $11 million of growth, $6 million in tax payments and $5 million (sic) [ $4 million ] exploration expenditure in the quarter. The debt is $316 million, as I mentioned earlier, and we plan to repay the $200 million drawdown from the syndicated debt facility that we drew down earlier this year.So just quickly moving through the exploration update on Slide 14. So again, during the quarter, exploration resumed under strict new procedures, in particular to COVID-19 management and due to us working in extremely remote areas. Activity was focused on the Leonora region, Pinjin and Moose River Corridor. The surrounding area in Gwalia is a particular focus, and we've commenced drilling in the shallow portions of the Gwalia system during this quarter. Additionally, the broader Leonora region, we are testing targets located within a 30-kilometer trucking distance from the operation itself.Slide 15 shows at a high level some of our growth pipeline that we have in place. So we're focused on building the existing growth options as well as keeping an eye out for external growth opportunities. The future growth potential looks very exciting for us, and I look forward to be able to talk positively about that in the future.In conclusion, on Slide 16, we've had a very good quarter to the end of the year. It's our best production performance in 2 years. Our safety performance has improved and heading in the right direction, although we obviously still have some work to do to be injury-free. Cash at the end of the quarter has increased by $85 million, leaving the company a very strong cash position at $405 million. Debt is $316 million, and we intend to repay the $200 million at the end of the month, which we drew down in March to bolster the balance sheet in case COVID affected our operations in any way.The feasibility study on Simberi sulfide is continuing. The operational reviews, as I've mentioned before, that obviously helped us in the production journey in quarter 4 at Gwalia is underway and continue underway at Gwalia and now Atlantic and then on to Simberi, and that's progressing very well, I'm pleased to say. Lastly, we announced on Monday that we have reached an agreement to acquire MRRI, who hold the remaining 40% of Touquoy.I think in terms of the presentation pack, that's certainly a very quick overview and a high-level update to everybody. And with that, I'd now like to throw open for any questions that people in the audience may have.
[Operator Instructions] Your first question comes from Alex Barkley from Morgan Stanley.
A couple of questions from me. Firstly, on guidance, specifically at Gwalia. Previously, you had a preliminary guidance figure for FY '21, '22 sitting more at about 230,000 ounces, and now it looks like you're coming in a little bit lower in FY '21 and '22. Is that largely about playing catch-up with development tonnes? And then perhaps are you going through some lower mine grades over that period in light of some pretty good mine tonnages you've just had this quarter? I'm just interested in how that guidance figure seems to have moved a little bit lower from what was previously suggested.
Yes. Alex, thanks for that. That's a really good question, particularly for people that are focusing on Gwalia performance. Look, I'd have to say the operation, as I mentioned in the last quarter, has gone through almost 3 years of upgrades and project delivery and all sorts of different interruptions. And I'll have to suggest that our development rates, because of all that, has certainly impacted our production rates. Where that leaves us is, I guess coming out of the extension project, in particular, when we finish the ventilation early to mid next month, it will give us the opportunity to really get in and optimize that business.What we did and how we managed through the quarter, and particularly the uptick in production this time was test a lot of methodologies in our improvement program. As I've alluded to, we've had some technical people help us look at optimizing Gwalia and other assets, but we're talking about Gwalia. And clearly, if we do get some of the productivity right, the mine sequencing right, the development right, without having to worry about vent shafts and taking that material to the surface, optimizing our PAF plant, they are the sorts of numbers that we should settle on.We're certainly looking at the second part of Gwalia in terms of margins and margins going forward. And I think if we land at a production level, life of mine with the best margins it can produce is probably the better outcome life of mine for the operation. It's certainly gone through peaks and troughs over the years and in recent time as well. My focus will be to level that out, maximize our margins and certainly be more predictable during the life of mine.The last technical comment that I'll make is Gwalia grade is dropping off. It is getting deeper. It's a changing mine than what we've had for many, many years. So the focus now is on management operating systems, productivity and certainly, costs out of our business with better margins.
And just a question on Atlantic Gold. I appreciate studies are ongoing at this point. But I just wanted an idea of when you're thinking about extra processing CapEx for Fifteen Mile Stream and Cochrane down the line. Are you thinking about how far that can be delayed and perhaps would be seeing that FY '22 because it doesn't look like it's coming next year.
Yes. Look, again, it certainly won't be next year. The mechanical and electrical and the top, the civil engineering is going on as the project unfolds and as we work through the permitting process. But as mentioned before in the presentation deck, in particular, we are looking at complete whole of business optimization. And in that, where do the Atlantic group of projects sit, what is the right timing, what is the correct sequence? And that would then certainly give us a better window of understanding the capital. In the short term, for the next 18 months, it won't be a burden on the organization, no.
Your next question comes from Reg Spencer from Canaccord Genuity.
I was wondering if you could just give us a bit more of a breakdown of the growth CapEx across Gwalia and Simberi next year. Given that the vent upgrade is approaching completion at Gwalia, can you give us an indication of what falls into that growth CapEx at Gwalia and likewise, Simberi? Can we look at the growth CapEx there as being a little bit of a head start on the sulfides potentially? Just trying to -- hopefully, you can flesh it out for me, please.
Yes. Reg, I certainly can. Look, I think the capital -- we'll finish off the vent shaft in the next few weeks at Gwalia. I'm very confident we're finally getting that out of the way. The next round of major capital at Gwalia will be the second stage of the cooling and ventilation, which is a small percentage of what we've spent in the last 3 years, but there is a little bit of CapEx on that. So that's quite simple really and not a lot of money.I think the Simberi is even easier to describe. The $3 million to $4 million that we'll be spending in growth CapEx, in particular, is almost focusing on the feasibility study. I'm very excited about that project and trying to fast track as best we can, given the opportunity for investment and payback. It's certainly over 110-odd thousand ounce sort of project for quite a number of years at a modest investment. So I don't think, at this point in time, we have a growth project internally that could surpass that investment, so I'm fast tracking that.There is a small amount of capital at similar sorts of amounts at Simberi that is also setting us up for longer life of mine over the next 2 years. So the investment capital that goes into there now, whether it be sustaining, has got a longer window than 2 to 3 years life of mine. It's now out beyond 10. So any investment we do, we've certainly put a lens over a life of mine of greater than 2 years.
That's great. Nice little segue into Simberi sulfides. Clearly, you're looking to complete studies by the end of this year, FID the start of next year. I know you guys don't like to dwell on it too much, but there has been, from what I can see, some legislated changes to the PNG Mining Act. We understand that, that's really focusing around what's happening in Porgera. But how might those potential changes affect the way you think about the development plan for the sulfides if you proceed with that project?
Yes, Reg, obviously, the changes to the Mining Act are sitting with the PNG government and not progressing at all for a lot of reasons. And one is the sitting -- the whole parliamentary issues in PNG are problematic, particularly with COVID and other things, so that's still sitting there and going nowhere. I think as I mentioned in the last quarter, there is a lot of communication within the Chamber of Mines and the industry within PNG, keeping a very close eye on what's happening because it will impact the entire investment community and extraction industry in PNG and not favorably.What I'm confident about is our mining license, our ML is something like about 8 years away before we need to worry about going through relicensing what we already have, which is a bit of a different argument, a different position than Porgera, for example. The other thing for me is in terms of now we know that the project or the sulfides has certainly got a huge benefit to it, not only just the extension in life of mine, but certainly a lot of ounces at low cost. But going through the next phases will be the return on investment with the engineering that we do.So what I'm saying is, we are looking at ways of bringing the life of mine, for example, even shorter than where we're saying 13 years to get our return on investment sooner than later. So if there are any changes to the Mining Act, then we're somewhat protected by our license to operate. The current Prime Minister has certainly come out in the public and stated that current MLs will be grandfathered regardless of any Mining Act changes. So all of that's political arena that we're keeping a close eye on.
So with that, Craig, based on your comments around potential optimizing of the mine plan and then maybe shortening that payback period, can we speculate in thinking that might have something to do with how you'll approach grade? Is there the opportunity to grade stream or perhaps chase high grades earlier on in the mine plan to deliver that shorter payback?
Look, it would be nice to be able to have those levers. I would suggest that, that's certainly work in progress. And we need to understand a lot more about the orebody knowledge before we'd even look at what the mine plan could or couldn't deliver. One of the pleasing things I'd have to say is, our grade control, in particular, is certainly picking up some more opportunity for the oxide program to extend the current life of mine there, which will help us in a lot of ways.So I think the transition from one ore type to another is very easy, very smooth. We've got a lot of work to do in this feasibility study to understand what the mine plan or what the mine can actually deliver at maximum rates given the equipment and the area that we work versus what the plant will have to, I guess, accept. So we're looking at all aspects of optimizing that project.
Your next question comes from David Radclyffe from Global Mining Research.
So I just wanted to follow up on Gwalia and if I can push a little bit more on the grade and tonnage kind of profile over that guidance period of '21 to '23. And really, because I guess, if you look at the numbers, it looks like what it's implying is that targeted run rate of 1.1 million tonnes per annum could fall outside of that period. Is that the right way to think of it? And then given your comments on optimization, does that kind of rate still make sense going forward if you are going to be focusing more on the margins of the operation?
Yes. David, I think if you just wind the clock back into the quarter, I think you can see what, clearly, what the operation can produce if it's debottlenecked to a point where the extension projects are finished and we can optimize. And I think with the internal business plans that we are currently reviewing in terms of how we run Gwalia, how we optimize, how we certainly benchmark ourselves against our peers on a whole range of operating performance, that was a test run in the last quarter to get the best result we could. And of course, it came out quite well. So that's given us the confidence that when we develop, when we optimize, when we get the mine plan right, we will certainly be able to be more productive than what's in our FY '21 budget and guidance in future years. But we have to do the development, we have to do the optimization, and we have to get our projects right.At the same time, our internal review has seen quite a few opportunistic areas to take costs out of that business as well that we will pursue. So at the end of a period, and pick a number, we will certainly look to have very, very strong margins for a longer period of time and a stable operation instead of up and down and for poor choice of words, a boom and bust.So yes, optimizing the mine, I think we will develop very -- and focus heavily on development. Now keeping in mind, we're still producing more ounces than we did this year into next year. We will optimize for the years to come and certainly set the mine up for success in second and third year. I don't have enough information to give you any more guidance on year 2 than what we've guided on today.
Okay. And then just in terms of PAF, is it possible to get a bit of an update there of how that's performing? And are you reaching targeted levels of waste that you're managing to keep underground because I think there was a comment before that, that also would be optimized.
Yes, correct. And we've just finished the first program of that optimization, which was a reliability review, typical of major assets like that during commissioning phase, particularly that you've never operated before and certainly a unique design. And during the quarter, I was lucky enough to be allowed into Western Australia and spend almost 1.5 weeks, nearly 2 weeks at the operation, saw that asset myself. But the team has certainly been struggling to commission and have it reliable. But there's been a significant amount of work done during this quarter and before this quarter started.And typical of timing, we have had consultants there working on the reliability program and certainly, any engineering change we may or may not need to stabilize that plant and make it a reliable piece of equipment that we know it will be. In the white space between me leaving a month ago and now, the team on-site have been able to get it running and certainly commissioning it as we go. And the production rates in the last 2 weeks during the review have been higher than they ever have been. And commissioning is going very well and reliability seems to have picked up a lot. So I think we will certainly get the design criteria, design rates out of that piece of equipment in the very near future. But there is a bit of work to do with some minor design changes, but it certainly over the next 12 months will play a critical part in what the future would be.
Your next question comes from Nick Herbert from Crédit Suisse.
I might just continue with a couple of others actually in Gwalia if that's okay. And do you mind just drilling down into the FY '21 guidance a bit more in terms of what those assumptions are on throughput and grade sort of phasing there for the first half versus second half? And then completely understand, you're still with the optimization work. If we just look at that FY '21 guidance for your sustaining CapEx and your development rates ahead of that optimization, given that you do have to play a bit of development catch-up and want to increase that mining rate, is that, I guess, at this point, a fair rate that we could assume that continues over the next couple of years until we get greater detail there?
Look, in terms of guidance, Nick, I'll say yes but with a caveat. And you'll see it in the first 2 quarters of FY '21 in terms of production, how it would be below the expectations of a lot of people. And the reason for that is strategic. And as you'll see, the total quantum of guidance is more than what it is this year in terms of ounces produced. That means we're having a slow first half year. That is deliberate. It's in our mine plan specifically to be able to deliver optimization in the second half and of years coming after that.So at some stage, because of the extension project being finished at some stage, we'll optimize to where it should be. And I keep using that word. But I think the strategy, given that we've got to make sure that the mine design is right, the mining-induced seismicity is controlled, we understand the geotech issues that accelerated rates will deliver, our ground control is safe, so the business interruption, and we can run the operation safely at higher rates, has certainly been managed well and it has been and it is. Post the, I guess, the ventilation work that we will do over the next 6 or so months in particular, waiting for the ground to break through for the RCD to be completed, we will optimize ventilation. So the second half of the year will set ourselves up very, very well. And you can see that in some of our CapEx spend.The advanced development over the first 6 months of the ore has certainly slowed the first 6 months' production down. The second half would be indicative, I would imagine, of the next year. And then any optimization of future opportunities will be guided on an appropriate time, but I'm really excited about the future of Gwalia. Even though it's getting deeper, the grade is certainly not -- we're not seeing and won't see the grade of yesteryear, but it will be achieving its best margins for a long time in the coming years and certainly stable.
Okay. That's really helpful. And so just to go back on the sustaining CapEx this year, not after guidance but just sort of what you've talked to in terms of expectation for development rates, is it a fair assumption sort of for us to go with that for now subject to sort of what comes out of that optimization study?
Look, I would. And that's the reason we've put it out there as a real number until we go through the optimization. But it's like all, I guess, reviews that you do. You benchmark yourself against best in class or operations similar to ours, and we've got some work to do. The issue with those rates are not because we're not capable. We show that we were in the last quarter. What the issue will be is getting the sequencing absolutely spot on to make sure that our short-term interval control and other MOS opportunities that we roll into that mine increase the productivity safely.
Your next question comes from Matthew Frydman from Goldman Sachs.
A couple of questions from me. Firstly, I guess just following on there from Nick's question on the mine development CapEx. You made it quite clear what the goal is for FY '21 in terms of really focusing on development. But looking further ahead and obviously, pending the optimization work you're doing, but do you think that rate of sustaining CapEx of around $70 million to $80 million, is that the number that's required to achieve the productivity you're hoping to achieve going forward in terms of FY '22 and beyond?
Be way too early to guide other than if we're spending and focusing a lot of effort and a lot of that CapEx on development to get in front of the mine plan. And really, what we're achieving there is opening up more headings and stopes than we currently have that we can go to. If we run into issues with one, we're not bottlenecking ourselves. Some of that cost will disappear at the end of this program, but other opportunities will come out of the optimization, I'm sure.
Yes, sure. No, that's a pretty clear answer. I guess what you're getting at is that you view it as a bit of a catch-up or a bit of an overspend in FY '21 versus what's required on a sustaining basis.
Yes, correct.
Yes. Secondly, expanding on Reg's question on the growth CapEx there. You've highlighted that, that's really adding additional cooling and ventilation capacity. If I look back to some prior guidance, which may be a bit dated now, I think you pointed to additional cooling and ventilation capacity of around $70 million over the life of the mine. So is the $30 million that you're spending in FY '21, give or take, what's required to finish the vent raise? Can we assume that, that will come off, that $70 million requirement over the life of the mine?
Look, the cooling in particular is going to be life of mine issues and so will ventilation. I mean we certainly have the infrastructure at the surface now and other infrastructure underground, but as we go deeper, we're going to need more. This is certainly the Stage 2 of the major, I guess, component. And the ventilation work in itself is still undetermined and not defined, but I think what you'll see would be a little bit higher. We are preparing ourselves for maxing production and development over the coming periods of time. We are advanced purchasing some equipment this year that's going to help us to do that just in time and some of the long-lead items that we'll need 2 years out from now. So it's all about bringing the balance of capital flow in line with production and productivity, and that's where we'd land at this point, yes.
Sure. Then I guess, secondly, moving on to Atlantic, and thank you very much for the update there on your various submissions. Maybe just focusing in on Beaver Dam. Can you remind us what you're expecting in terms of the decline or the depletion at Touquoy? And I guess working backwards from that point for Beaver Dam, when would you need to start production from Beaver Dam? And therefore, when would you hope to get approvals in order to achieve that and whether you can give an indication on how that might compare to the time line that you're expecting once you've submitted the revised EIS later this year? So I guess to just think backwards from when Touquoy starts to deplete and what that means for when you need Beaver Dam up and running.
Yes. Look, Matthew, I think Beaver Dam is certainly -- let me talk about Touquoy first. So I think we have certainly got some opportunity to extend the life of the mine at Touquoy, and we're looking for that at the moment. We're certainly drilling and shoring up, I guess, our grade control, in particular, but also drilling out more of Touquoy.I think Beaver Dam itself is obviously, as I said, we'll submit a revised EIS in the December quarter this year. We're certainly engaged with the regional and federal government in terms of permitting and permitting time lines. We really would like to see that permitted sooner than later so we can get on with development. But I think about 2 years from now is when we would like to have Beaver Dam online, but we're still doing some development work in Touquoy to extend life of mine there as well.
Yes, sure. Maybe to think of it in a slightly different way. The previous plan kind of had this overlap between Touquoy and Beaver Dam in terms of feeding the Touquoy mill. Is it possible that we'll see a scenario where there is no overlap or there is a minimal overlap or in other words, Beaver Dam is ramped up at the tail end of Touquoy or is that just conceptually not likely to happen?
Well I'd have to say that I'm certainly looking for the longest overlap or the biggest overlap that I can get so I can maximize the facility at Touquoy, first and foremost. Worst case scenario is that we go to low grade and we're waiting for whatever the right reason would be, whether it's permitting. Now having said that, the local government, in particular, and the First Nations are very engaging and supporting what we're doing. And I certainly hope to have the permitting approvals sooner than later so the overlap is longer, not shorter. The exact targets on those, I wouldn't like to commit to in these sorts of conversations, but we certainly have an internal target to optimize and get going in that facility as soon as we can.
Your next question comes from Levi Spry from JPMorgan.
A couple of easy ones, so just continuing that on. So the $60 million at Touquoy, just remind me, any CPs or outstanding approvals? So when does the cash go out the door?
I'll refer to Garth regarding the cash flow, but we hope to have signatures on paper and finalized early next month.
Yes. So Levi, the cash flows should be end of August, subject to the shareholder meeting and also court approval. But that's what we're targeting, end of August.
Okay. And just continuing Matt's questions there. So I mean we're all still waiting to a 43-101, which was like a long time ago. So just to put it out there, when do you update the life of mine plan for the whole asset?
Look, for the entire asset, I think it'll be before the end of calendar year. I think there's a lot of work to do to understand, a, the orebody; and b, keeping in mind, we've got some very exciting ground that we're doing exploration in, and not only near Touquoy but in that Moose River Corridor. That could change a whole range of things. But as we know it now, I'd certainly like to be able to talk about the life of province as we know it now later this year.
Okay. Great. And then just back to Gwalia, it feels like you got off there a little bit easy with the '22, '23 guidance. So 190,000 to 200,000 ounces is a fairly tight range. So what tonnage and grade is that based on? Is it based on 1.1 million tonnes at 6 grams?
It's based on the 6, 6.5 grams, Levi, yes. And the tonnage is about 1 million, but we have to get there first.
Yes. Okay. So what's the delta between the 230,000 that was out there previously? Is it grade or is it throughput?
No. It's certainly throughput, and that's driven by the development work as I've been talking about, but also the productivity and the reliability of the PAF plant. So if we can join all those pieces together and optimize, we'll certainly break through that 1 million tonne mark and beyond. But it's way too early to give you a number on that.
Okay. And so I'm just trying to work out what's in and what's out of it. So this optimization process that's ongoing, can you give us some timing around that?
Yes. I think you could -- the optimization itself is, I guess, mainly focusing on management operating systems, productivity, things like automation. And we don't talk about automation, big data and how we use that information very well at St Barbara, and we've certainly got some opportunities at Gwalia on that. And it's just debottlenecking that operation. And the mining team there, in particular for 3 years, have taken every component for the PAF plant and mining materials down when they climb, including some of the waste material, not only from development but from the vent shafts, and there's been 3 major levels of work around those vent shafts. They've all had to come to the surface pretty much. That all has to disappear and is disappearing for us to be able to get in a mine like we did in quarter 4. The enablers for that will be good systems, processes, good optimization, short-term interval control and certainly, management operating systems, and that's where we will head for productivity.What I'm also trying to paint a picture here is, longer term, the margins at Gwalia will be very strong and very stable. Our costs are too high. We certainly understand that. And we've got some opportunity identified through the review to have a look at some of those costs. And when it comes together, the productivity will be in the order of what we're guiding on, but the cost out and the margins will be much better.
Thank you. That does conclude our conference for today. Thank you for participating, you may now disconnect.