Aurelia Metals Limited (AMI) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Aurelia Metals Limited Federation Feasibility Study Outcomes and Company Update. [Operator Instructions] I would now like to hand the conference over to Mr. Dan Clifford, Managing Director and CEO. Please go ahead.

Thanks, Darcy. Good afternoon, everyone, and thanks for your time this afternoon. There's a lot of material that we've released today and we decided to push the conference call from our normal time back a little bit later to give people hopefully an opportunity to look through what we've got. I think today, or this morning, or this afternoon, I should say, is mostly about Federation because we've done a huge amount of work in getting the feasibility completed, but also making a fairly substantial pivot in how we want to develop this project. And therefore we have taken a bit of extra time to do that. End result is we are pursuing highest value. It now becomes -- because we are using existing infrastructure, it becomes more of a portfolio call on how we fit everything together. So at the same time this morning, we released the mineral resource and ore reserve report for the year and our FY '23 guidance now that we have a better fix on the Federation commitments this year. Importantly, with Federation, it's actually now how everything else fits or how Federation fits into the rest of our portfolio. And as we are chasing now or pursuing approximately at spot pricing AUD 480-odd million worth of near-term projects, NPV, existing sites with operating cash flow, the changes that we need to make to those sites to not only get a more resilient operating performance amongst the headwinds of economic conditions at the moment, but also making sure that we have the runway ready for these projects coming on. And also what we'll see here is a large organic pivot into a different commodity mix within the business, and that's really exciting for the group as we continue to extend lives, as well as pivoting into a large exposure of copper and zinc within the portfolio. To do that first, I'll just run through a summary, I was going to move over to Slide 9 first and upfront, talking through the highlights of the Federation Feasibility Outcomes. We indicated earlier in this year, we were seriously considering a different alternative to what the processing solutions were for the Federation Ore body and what has come very clear for us in finalizing feasibility studies that the best value, the most compelling investment we have is to leveraging the existing infrastructure across our other 2 assets in the Cobar Basin. And as Federation, with the values you can see, it's the highest value. It would be the ore body will get priority into the existing milling infrastructure. So just to step back and have an upfront look at Federation. It's an underground mine. Similar mining methods that we use at all our 3 operations. It's in our backyard. And even after only 2 years of resource drilling and a year of infill drilling to convert, we have a 4 million tonne production target, which, I must say, with the pace for approval, as well as the drilling and the timing of the feasibility, is a great turnout in terms of these metrics across only 4 million tonnes. A reserve of 2.2 million tonnes with approximately near 17% zinc equivalent. And this in some other commodity terms, that's roughly a 6% copper equivalent for a 9-gram a tonne gold equivalent. And with operating costs average across the LOM of AUD 190 a tonne, in steady state outside of ramp up and ramp down in and around AUD 190 a tonne. The NPVs ranging, pending price deck, between consensus, Bloomberg consensus and spot pricing between AUD 200 million and AUD 400 million NPV with IRRs just shy of 40% through to 70%. And I think those figures go to why we see this as such a compelling investment for the business. One of the real points with this is that we have opted to take a more resilient approach. I will use that word quite commonly today because we can see economic conditions out there. We've talked about cost increases, capital execution risks, input costs, and capital blowouts in other projects around. We've opted to do that, significantly reducing capital. It utilizes existing infrastructure that we clearly understand process flows on, and it helps us prioritize the highest grade ore body. And we see that as the lowest-risk most resilient setup for this operation. So with that being said, because it does need to fit into the rest of the business, it's not going to have its own mill. It's important just to pull back and have a look at what the context is through the direction and how we see this coming together. So let's move over to Slide 11. See our strategy, foundational base metals really is where we're going. And that's on an organic basis, with particularly Federation, as we talked about, but we can't forget about Great Cobar in this. It's our strategy pursuing the highest value, and that is through 3 to 5 projects, bringing on to these projects and making sure as a business we are run well. Optimizing of our assets, extending lives, reducing costs, maximizing use of existing infrastructure, and then adapting as a portfolio, particularly the commodity mix within the business as well as the life extensions through continuation of a really successful exploration program that becomes our strategy. It is fairly similar, but 2 key things to see is particularly a pivot in the commodity mix. So that's leading to what needs to happen with the business to be able to get our assets to fit around this opportunity. So move over to Slide 12. You can see we've laid out what we've needed to do and why in terms of today and then getting around what needs to happen for the future. So I'll just touch on a couple of the high points here. We as a management team, we recognize clearly the second half performance last year was challenging for us. There's a number of internal and external resources we've deployed into the assets to get this performance right and particularly focused on not having repeat incidents and making sure the engine room of our business, which is the 3 operating assets, run well and run resiliently. At Peak, the transition to own a mine that we flagged earlier in the year now is in its final stages and has pretty much been completed through the September quarter with only a tail end of work to be done. In focusing on Peak and maximization of cash flows, with the headwinds of operating costs, labor, equipment shortages and input costs on the rise, we've opted to actually scale Peak back to 550,000 tonnes to 600,000 tonnes on a yearly basis. This is about making sure that every tonne of ore we mine has margin and is profitable. And we've scaled not only the operation, but also the processing facility to suit that mine output. That's allowed us to pull roughly a 10% reduction in our cost per tonne processed. I'm going to cover that off a little bit more once we get into the guidance for individual assets in the group a little bit later on this afternoon. Hera has completed transition to a new mining contract and we have kicked the decline. I'm going to talk about that a little bit later on this morning, and we've returned back to 3 active stope areas op during Q3 and particularly Q4 last year, increased rehab requirements underground as well as some mobile equipment reliability issues. Dargues, as we're aware, during the year, we did impair the asset. We have now got it running operationally very reliably with grade being the key issue for us. So what we are planning to do, and we've actually submitted a modification to actually increase its throughput with very minimal capital requirement. And that capital requirement really is just the cost of the application for the modification because the plant we know can do approximately 415,000 tonnes per annum. We just need to lift the annual consent limit. Again, I'll cover that a little bit later on. And additionally, through the year, with the release of Emerald, you will see a 5% increase in our resource base over the prior year, giving us approximately 29 million tonnes across the business in resources. So we continue to keep growing that resource base. So that is what needs to fit around what the future looks like and what tomorrow looks like. And we talked about Great Cobar earlier. We released the PFS for Great Cobar in January this year. And we'll see, with the outcomes of the feasibility report today for Federation, combined values, again at spot pricing, of approximately AUD 480-odd million. That is what we're pursuing in terms of value. It's capital light in that we have opted to use the existing infrastructure, and that means the optimization of that existing infrastructure and the operating assets around this, and then continue to adapt that portfolio as there's a significant shift in commodities towards this foundational base metals. We remain gold in the portfolio and that provides an important and natural hedge to those base metals. In summary, it comes to really improving our asset quality. Moving over to Slide 10. Really, the key discussions around this morning are going to be around funding the preproduction capital. We have AUD 108 million in development load coming in preproduction for Federation. It has been derisked, as I mentioned, by opting not to build a new milling facility for it and go with the existing infrastructure. Of that capital load, over 50% of it is in development. That is all a decline and lateral development and the remainder particularly in on-site and off-site infrastructure. There's very little in terms of processing plant upgrades. In preproduction capital, we do plan because we are going to be utilizing both the Peak and Hera mill for this opportunity, a slight upgrade to the Peak mill for another regrind mill, and that's approximately AUD 7 million. Other infrastructure requirement is minimal compared to the overall spend. It's a key move leveraging existing infrastructure, reducing the capital and therefore, reducing the risk. I think there has been -- we saw a speculation last night on funding. We have been exploring what our funding options are for the business and the asset, in particular, to make sure we get the most flexible long-term funding arrangement into the business that match the business and these assets. It certainly has been done in challenging conditions for the business. And as a result of where we are with the preparation of this asset, the changes to the operating assets that we've made, and taking a little bit of extra time to chase the optimal funding package for this in the business ongoing, we have actually decided, for prudence sake, to put a pause on the decline until such time as we get that funding arranged and in place. That delivers or maintains a strong balance sheet as during the period of time we have continued to invest, particularly through Q4 and into Q1 this year, significant amounts of cash into growth projects within the year. So just in the September quarter, AUD 15 million in growth across Federation and TSF, and then continue to pay down loan repayments and cash backing of combined roughly AUD 9.5 million. That heavy capital load, in conjunction with an operating performance in transition from the Q4 performance through to now has resulted in relatively flat cash from operations, meaning our cash balance ended up at approximately AUD 46 million for the end of the September quarter. The balance sheet remains in good shape and we will be pursuing the best mix of funding, whether that be between the debt packages that we have or have been looking at in terms of moving forward, as well as any other ways that we can strengthen the balance sheet or get the balance sheet in shape to move forward. So just in summary, that's an overall summary of where we've been over the quarter. And it really comes down again just to pursuing these asset qualities, in particular, these 2 projects, matching them into the existing operations, reducing our risk, and then continuing with exploration and a real transition in the commodity mix within the business. So move into Section 2, so I'll move down to Slide 12. And I think I'm going to come back into the individual assets in a minute, but painting a picture of how this all fits together and the assets and the packages of land that we have. Looking at Slide 12, between the 2 operations between Peak and Hera, we have a terrific networks of roads, approvals, mines, camps, tailings facilities, processing facilities and exploration tenements. And that offers us with the approval strategy, with all our assets, ultimate flexibility between the components of the mines. So we now look at the business, particularly in Cobar, as instead of 2 separate operations and 2 separate projects, as multiple ore bodies in 2 processing facilities, all connected by roads, approvals and other infrastructure. Just move over to 17. That portfolio gives us the runway in which to integrate these 2 assets between Federation and Great Cobar into the business. And that's great. I think if we look at last year, AUD 440-odd million in revenue and AUD 167 million EBITDA in FY '22, between the 3 operations and our ability to fit in 2 really exciting projects into the business that are organic within the business with a much reduced capital profile and, therefore, risk that goes with it. So move over to 18, 2 projects of Federation and Great Cobar utilizing the existing mills. Again, just to reinforce, this is averaging up of our asset quality, whether it be value, loss, operating costs, and where they are with approvals is the key message behind what we're trying to achieve here. Just diving a little bit deeper, if we move over to 19 and cover off some of the nonfinancial metrics of the Federation project, single decline accessed from a box cut. The surface and MIA area is only to support the underground and surface crushing. We've got road haulage that will take material from the Federation MIA area to either the Hera plant or the Peak plant. There is some power modifications, tailings facility already exists, and we're in very late stage of approvals, which I will cover a little bit later on with some commentary around the implications of pausing the decline. So valuable asset for us. The only addition we'd really need to make to the Hera plant is the addition of a tailings filtration and storage site because we need that material for the paste fill at the Federation underground. Pending decline recommencement, first ore production expected within 12 months from recommencement of the decline. Moving over to 20. A snapshot of Great Cobar. As I mentioned, we released this PFS earlier this year, in January this year. So just to reinforce it, in that period of time, it's now been increased, the resource has been increased 45-odd percent to 7.7 million tonnes. It's just under 3% copper equivalent. The really important part of this project is that it's actually already fully approved and consented through the New South Wales government. The MIA areas exist either at the northern mine portals or back at the Peak infrastructure. The decline is off existing workings, and as mentioned, the increase to 7.7 million tonne resource. Importantly, wide open at depth. And the latest results that we printed during the year show the exciting tenor of that mineralization, particularly as it dips away from the existing PFS mining area. Moving over to 21. I've given a brief snapshot of the outcomes of the resource and reserve report, but a couple of the key highlights. 7.7 million tonnes at Great Cobar, 2.2 million tonne reserves at Federation, again, only after 2 to 3 years of drilling. That's averaging nearly 17% zinc equivalent. So at a group level, for Aurelia, a 5% increase in our resource base and a 30% increase in the ore reserve. So that comes off the back of a nearly 60% increase in our resource base in the prior year. So continuing to deploy the drill bit, and with the exploration packages that we own, that is converting into resource reserve and ultimately, life extension in front of the mills. Moving over to 22. I've talked about the commodity pivot within the business. I think you can see the FY '22 revenue mixes of over 50% to gold illustratively coming on with these 2 projects that we've got coming. We'll go to nearly 2/3 contribution to our revenue mix from copper and zinc. And I think it's difficult to not be able to see the actual global demand for those 2 commodities in particular. And for us, near term, we own them right on our doorstep. So across the 29 million tonne resource that's longer lives in the right commodity and much lower risk than going building brand-new sites elsewhere away from infrastructure. Moving on to 19. Underpinning all of this is our sustainability performance. And as a company, we have focused on this. It is a core part of our business. But the point I particularly want to call out today, if we move over to 20, is that in interactions and consultation with key stakeholders in the areas that we operate, the Board has made a decision that after some consultation that has already occurred and to be continued that we will be continuing to engage with our First Nations people to actually change the name of Federation. I think this is very much in line with our commitment to the deep connection to First Nations people in our area. So I think it's time probably to dig in more detail into Federation. I particularly want to talk about what we see is the optimized position, which I've already covered in terms of the utilization of existing mills, but also where we see how we are going to split the ore and how it's going to be fed into individual sites and also remaining upside within the business as we have only been drilling -- we only discovered it 3 years ago. Just moving over to Slide 23. As I mentioned earlier, it was clear that with the current production target of 4 million tonnes, that the highest value option for this asset was to utilize existing infrastructure. So that means road transport from Federation to either Hera or the Peak business. That does result in significant capital reduction and particularly protects us, as I mentioned earlier, about the challenging conditions for large-scale capital development within the businesses. It utilizes existing infrastructure, and in conjunction with not only that physical change, the consenting process for the asset is really well advanced and still on target for mid-calendar year '23. So June next year. The beauty of this is that it actually allows us -- because that consent where we are applying for 750,000 tonnes of capacity and a stand-alone processing plant or upgrade at Hera, we will retain that flexibility into the future. And it gives us the options as to where -- if exploration and increases to resource and reserves, justify the best place to put incremental or large-scale increases into our milling capacity, we retain that optionality between it being at Federation and/or Peak. So it's an opportunity and it's a great flexibility to retain within the business. So let's move on to 24. How does the 600,000 tonnes of ore get split and what's the decision-making process to do that? The processing facilities at either Peak or Hera are different. And the Peak plant is a 2-product location, but the Hera plant is a single product and produces the bulk con. So the optimal revenue model for where the ore goes is derived by the higher grade or the higher value ore, which in essence is the ore with the higher gold content, is transported by road to the Peak plant, so we can utilize the advantages there of the separated concentrate. The remaining ore -- I wouldn't call it low grade, but the remaining ore will go through the Hera plant. So the end result is that we end up with our existing infrastructure full and the phasing of our ore bodies between Peak, Great Cobar, Hera and Federation, in a competition with NSR to get access to that mill capacity. That's the optimal position for us in the most resilient position going forward to protect against capital blowout, but it does generate the highest value within the business. It's interesting how the separation of that happens underground. As I mentioned earlier, it's derived by the higher gold content. And the way Federation mineralization occurs, we see through the exploration program, visibility of 3 high-grade gold shoots through the mineralization, and it's those high-grade shoots that define the high grade that can go to Peak and the remaining grade goes through Hera. So it's actually a stope by stope separation, the high grade and the remaining grade as opposed to bucket by bucket. Just moving over to 25 to talk about upside. There is always -- again, from a feasibility through execution, there's always optimization. We've still have drill results that didn't make it into the feasibility that came through in the finalization of the program from March through to June this year. We printed those results. They didn't make the cut. We needed to draw the line in the sand to the material that we are assessing in the feasibility. So there's still that upside remaining within the business, let alone the fact that we've only drilled it really from a resource perspective for 2 years and the remaining year from infill. So the real upside for us becomes that the ore body still remains open along strike and at depth. And the leverage to every year of extension of this asset is huge in terms of what a steady state post ramp-up EBITDA looks like. That the number there of AUD 126 million is quoted at spot prices just to note. So those upsides are incredibly valuable considering the prospectivity of the ground that we hold in the Cobar Basin. So that's the asset quality. We've been through the pursue bit, we got through the asset quality, and that is really what we're stretching out to achieve here, subject to getting the optimal funding package for the continuation of the decline. So moving into the existing assets. I've talked about what we need to do to these assets to be able to fit Federation in and also talked to the guidance in the year now that we've done the work on the feasibility. So just move to Peak. The transition to owner mining at Peak is vastly complete now. That commenced in FY '23 and is, in the majority of cases, complete now. September, we see the final -- the majority of that transition completed during the September quarter. In addition to that, as I mentioned earlier, we have opted to scale Peak back to ensure complexity is reduced and we end up with the strongest cash flow position for the business going forward. That means the processing facility has been scaled back to approximately 550,000 tonnes to 600,000 tonnes, achieved approximately 10% reduction over the FY '22 cost per tonne, and we retain the flexibility there to ramp that back up in time or when required for Federation ore feed to come into the asset. You can see production through the year for FY '23 compared to FY '22 and that 10% reduction in the operating cost for the asset. Move over to 28, talk to Hera-Federation. Transition to a new contractor at Hera was completed in FY '22. As I mentioned earlier, we've returned the asset to the 3 active stoping areas, which is really important to ensure that we get the mill fed fully in this period until Federation comes on. Loader availability has been improved and we have moved into a situation now where there's much less rehabilitation required on the ground support. And similarly, here you can see at AUD 210 a tonne operating cost about 14% reduction. That's a very important move for the business. Dargues throughput remained steady in the year, just noting that the consented limit of 355 is forecast this year. In the prior year 365, with the nuance between the consenting limit being 355 for a calendar year, and we had some upside available in the final financial year to take it to 365. Gold at 37,000, slight reduction in head grade and cost control in around the AUD 195 a tonne mark. With the grade constraints on the asset, the optimization of that asset has actually increased its throughput. And that is requiring a modification of the consent and MOD5 has been submitted, which gives us a 17% increase in throughput through that milling capacity. It will, though, remain under careful watch in terms of us making sure there is a detailed operational review completed on the asset to ensure we get optimal value on that asset from its current position. Let's move to 30 to look at group guidance for the business, and we can see gold, a slight reduction on the prior year with gold primarily head grade reduction and volume reduction at Peak and a slight grade reduction at Dargues, so just under 90,000 ounces for the year. And zinc and lead materially the same to FY '22. All-in sustaining costs in this year, I'll note, we are guiding on Bloomberg consensus and FX. All-in sustaining costs, lifting to AUD 1,900 an ounce for the year on the basis of our views on the base metal prices. Growth capital, excluding Federation, of AUD 9 million is majority tailings facilities across particularly the Peak asset and the growth capital at Federation, again, subject to the review of financing and the recommencement of the decline at approximately AUD 44 million. Exploration valuation this year at AUD 15.5 million on the basis that the infill program at Federation has been completed. Based on the timing and being in the end of September quarter now, we have got to reconcile production numbers in. So you can see the run rate through the September quarter easily aligning to the full year guidance for the business. I will make a note here that we haven't been able to provide September quarter all-in sustaining costs as we haven't closed the month end accounts from September yet. We will release that number in the upcoming September quarterly report later this month. But what I will indicate is that the September quarter result in all-in sustaining costs will be higher than guidance as the changes to the assets or better of Hera and Peak from Q3 and Q4 last year flow through into Q1 and those corrections made within the business that I mentioned earlier. And then we are very confident that it will then transition down to an average of AUD 1,900 an ounce over the full year. Just moving through to Slide 32, and just to wrap up the final piece in the presentation this morning. The continuous growth of both our resources and reserves is being driven by not only the exploration country but a continued investment into exploration. And 8 years now of -- roughly 8 years or 6 years, I should say, of continuous growth in equivalent production comes from that investment, and that will continue through the course of the year. Moving over to 33, we can see just this year's strength of the exploration country that we control across the Cobar Basin and particularly some of the recent work with Falcon surveys and continued on-ground exploration activities within the business. So again, just to summarize, we have been pursuing the full value of the assets that we have in front of ourselves. We have matched the existing sites and infrastructure to the projects. And we continue with that exciting exploration, life extensions, and commodity pivot within the business. So there's a lot in that, everybody, and thank you for your time. I might just hand back to Darcy, and we might move to questions, please.

[Operator Instructions] Your first question comes from Dylan Kelly from Ord Minnet.

A couple of questions for me. I appreciate there's a lot of content to get through here. Dan, can you just take us back to slide, I think it's 24, where you talk about the movement of ore from Fed to the 2 plants. So can you just walk us through here? Am I right in thinking there's what a 60-40 split between Hera and Fed. So 600,000 tonnes of ore, you're going to truck roughly, what's that, say, 250,000 tonnes up the road to Peak? And the basic movements of those are, Peak can handle the grade, so you're shipping what a 17% lead zinc ore there, and the remainder, anything less than, say, like a 10% lead zinc goes to Hera, so for 350,000 tonnes. Is that the right way to be thinking about it?

I think, in time, it is, Dylan, that's right. There is a couple of early constraints within our approvals that we just need to be aware of. We are currently approved to truck 110,000 tonnes between Hera and Peak now. The consent that we are going for -- that we are expecting to have mid-calendar year next year, so in June next year, allows that trucking increase to go to 200,000 tonnes per annum. And then beyond that, we can reapply, or we can modify our consents to increase that trucking between the sites. I think that's the first key points with that. In terms of the ore split, you're right, it really is about making sure that both mills are full and that we get the best revenue mix. So the split is approximately right. Remembering the Hera plant was designed for a combined base metals in around 7%, and we'll be putting up to, call it, 15% or perhaps less through it, but it will be constrained on throughput at those base metal grades. So in around 330,000 tonnes a year is our estimate of the maximum we'll get through the Hera plant. So that leaves a balance of 250,000 tonnes, and that we just make sure that we've got the higher grade and remaining grade split right. But in essence, roughly those numbers, but 250,000 tonnes, 350 tonnes type split is really the high-level numbers that we're aiming for.

Okay. And the economics of trucking that sort of distance don't necessarily move the needle too much. What is it -- so for a 100,000 haul, what are we talking like AUD 20 a tonne on an NSR basis, somewhere north of what, 400. It's not going to move the needle too much for the economics, is it?

No. It's just -- it is a bit north of 20 -- call it, AUD 22, AUD 23 a tonne. I think, overall mining costs here, including the trucking is AUD 108 for this asset. So I think the key thing here to be focusing on is, there's logically a transition point for where increased recovery -- the capital costs and getting increased recoveries and upgraded plan will overtake the trucking costs, i.e., you get a better benefit by putting that capacity in there. Across the 4 million tonne production target, that crossover is not achieved. And we get a better economic outcome for the business by incurring the trucking costs, minimizing the capital and utilizing the Peak plant for the high grade. I think they're the simple equations for it. At some point, though, there's no doubt that if successful drilling continues on that resource and it can be increased over time, then at some point that option may become or should become available. But what we're setting out to achieve here, rather than locking in on a high capital and high-risk period, large capital investment right now, from a value perspective, waiting a year or 2 to drill out further doesn't pull back on value. And it gives us the opportunity to not only just assess whether it's a new plant, but we may opt to do incremental debottlenecking improvements at either Hera or Peak to get more capital effective increases. So that flexibility remains for us. And that's the work we're ongoing. I mean at the end of the day, feasibility, we're not at FID for this. FID is not due until we get consented. And the industry can change in that period of time. So really, we're retaining flexibility through the approvals and what we're planning to here with the opportunity to drill further and make those decisions with capital deployment later and, therefore, more effectively.

So just to that point then around the capital cost, forgive me if you said this sorts buried in the notes there. So how much was the stand-alone process option if you're going to build the whole new plant?

It's an additional approximately [ $140 million ].

So then close to [ AUD 300 million. ]

Yes, just around there.

Okay, cool. So AUD 108 million cost initially. The ability to self-fund that from this point forward? Can you just walk us through how that spend is going to look and how we should be thinking about the funding options from here?

Yes. No, it's not self-funded, Dylan. I think that's the key. I think we have been assessing what our funding options look like for it. So there's no doubting that we are not self-funding for the predevelopment capital acceleration. And that's an ongoing program now that we are deep into, where from a debt side, we have and we will be looking into other options as to whether it's strategic offtake, strategic partners of either asset or headcount level, equity and also the debt packages available within the business. So we are taking that time to step back and assess that correctly. And as I mentioned earlier, that's driving a decision for us. Just to pause the decline for a period of time until that funding package has been assessed and landed.

Okay. Understood. And just finally, and I realize I'm taking up -- asking way too many questions. When it comes to the cash balance for the last quarter, I'm not too sure of the end of the line. Can you just walk us through the difference between, what is it, if I believe, AUD 77 million at the June quarter end and this quarter is down to around AUD 46 million. What were the different elements apart from cash flow, I think it was cash flow neutral from the assets this quarter?

Thanks, Dylan. So basically, the operations and working capital for the period were fairly flat. We did incur about AUD 19 million of CapEx, of which AUD 4 million was sustained capital and AUD 15 million on growth, which is made up of cost on Federation of AUD 7 million and the Peak TSF of AUD 4 million, and some exploration across the sites, primarily at Dargues and Federation. And then we also paid down our term loan of AUD 4 million and cash backing of AUD 5.5 million, and then there were some other equipment loan leases paid out. So that was the bulk of the movement for the period.

Understood. And so what was the total term loan principal down figure?

It's down at [ AUD 16.6 million ].

[Operator Instructions] Your next question comes from Michael Evans from Acova Capital.

Just a quick one following up on one of Dylan's. Just on that trucking capacity you applied for 200,000 tonnes, is there any reason why you haven't tried for a bit more? I was just looking at Page 12 of the -- averaging about 260,000 tonnes, aren't you going from Federation to Peak over the life of the mine, and there's a profile on Page 12 of the announcement. So is there any reason why you haven't applied for more than 200,000 tonnes. If I'm missing something else. I'll start with that question, Dan, if that's okay.

No problem, Michael. I think the -- what I'm going to do is just take a bit of a step back in time here to put some context around why that's the case. The consenting process or the concerning plan for the Federation assets started 18 months ago. So that is a very well considered -- and you need to be in New South Wales or for that matter in Australia in terms of navigating consent for these sorts of projects. That started 18 months ago, if not more, not long after discovery really. And at that point in time, as we started to see grade coming on from the continual drill out, we formed pretty quickly the view there that there was going to be a meaningful asset here. So we kicked off the consenting program with, at that point, a scope in mind for us once we can see grades coming through of a significant upgrade to the plant at Hera or a rebuild of the plant at Hera. So that formed the scope of the scoping study that then went straight through to feasibility. And in that preparation, we didn't know at that point that we would be seriously considering not building a new mill at Federation, and we opted to apply for the flexibility to truck between sites at that point, and we landed on 200,000 there at that point, well before we thought about more capacity going up the road. So it was, I guess, a speculation at that point in time as to what would the best tonnage would have been. So I think that then -- once you go into a consenting process and you've set a scope like that, you have done all your environmental impact studies around that, around that 200,000 tonnes, if that gets changed late in the consenting process, you almost go back to ground zero with your timetable for a consent. So when we looked at it and said, okay, we think we need to have additional capacity, and really, the flexibility to put all Federation up the road would be a great outcome, but there is a consenting process that you have to step through. So our plan at this point is, and you'll see, it's quite common to modify existing consents. That whilst we have 100,000 already consented, that gets us started. We will get the consent next year at some point. It's now low risk, we believe, step up to 200,000, and it is not a timely or complex step to then modify the consent and we get a lot lower risk of consent time blow out to get the majority of the project away. So that's basically the background context.

Yes. No, that's fantastic. Just a couple more questions. On the Peak mines, there will be sort of -- the run rate going forward is 550,000 tonnes to 600,000 tonnes. So the feasibility study that was released on Great Cobar at the beginning of the year, do you assume there's no change to that as a result of today's announcement and today's sort of agreed plans or -- and if the Great Cobar declined, just remind me where that -- is that still being progressed? Is that still mining as of right now? And the second question on the... Would you answer that first?

Yes, I'll answer that one first, if I can, Michael. So the Great Cobar decline is approved. And additionally, the whole project is approved. So it can commence. The decline did start a few years ago and it's been pulled up since, and we haven't gone back into continuation of that decline. So the subsequent results of the prioritization of higher-grade ore, which is Federation, into the existing milling capacities means that Great Cobar will be pushed out for a period of time, and integrated once we start seeing the timing of Peak depletion. So if you see in the timetable, the decline commencement has pushed out approximately 12 months from now, about 15 months from now. That means then it's the time to develop the decline and bring it into production pending no further discovery at Kairos or Peak North. That allows then the baseload of, call it, 3% copper at 500,000 tonnes into the Peak mill with the balance of 800,000 tonnes coming from Federation. So it actually fits really nicely in terms of what we know as mine life of the Peak asset now and the timing of the Great Cobar decline sits around Federation utilization of that mill.