Evolution Mining Limited (EVN) Earnings Call Transcript & Summary

Good morning, and welcome to the Evolution Mining's 2023 Investor Day. This is the fourth event since 2016. The Investor Day series kicked off as a biannual event, unfortunate adjustment during the COVID period. So really happy to be back in front of a live audience today. So, thank you for being here. My name is Peter O'Connor. I'm the General Manager of Investor Relations at Evolution Mining. I started this role in January this year. So I'm the newbie on the team today. But I've been fortunate over the last period since 2016 to have been in the audience where you are today and enjoyed and learned from the messages of the first 3 Investor Days that Evolution had. Now turning to some key announcements for today. Firstly, most importantly WiFi. We all need WiFi to get on. The releases are now on the exchange, if you want to download them, they're available. The WiFi connection is the Hilton Honors and the WiFi password is H event. Secondly, the agenda for today, just to keep you well-fed and nourished. We'll be running the morning session, which will run through to 10:30. There'll be a morning tea break. There will be morning tea served outside, and there will be coffee as well. Second session will kick off at 11 a.m., run through to about 1, and we'll conclude with the buffet lunch outside as well. Two safety issues, some guidelines for this room. We are in the Hilton on Level 4. In the event of an evacuation today if an alarm sounds, if you could please make your way forward in an orderly manner towards lectern, go past me -- on my left-hand side, going to be a door to your left. Ahead out that way, follow the exit signs to the stairwell to the Street and then head north to Market Street and then pass the QVB building to York Street assembly area. Now turning to some explanatory slides next. The materials today include -- presentations do include forward-looking statements. So I refer you to Slide 4 for a reference in this regard. All amounts in the presentation today are expressed in Australian dollars, unless otherwise stated, and all references to U.S. dollars when noted are an exchange rate of $0.65. The presentations today also include production targets relating to the Mungari operation and I refer to Slide 5 for those details. Now to the most important point and the reason we are here today, first session to kick off, which will cover areas of strategy, business outlook, financial position and outlook and sustainability. These messages will be delivered by our executive team, including our Executive Chair, Jake Klein, our Managing Director and Chief Executive Officer, Lawrie Conway, our Chief Financial Officer, Barrie van der Merwe and our Vice President, Sustainability, Fiona Murfitt. And lastly, can I remind you that this event is a webcast event. So as we move through this process and when we're in Q&A, we will require microphones to ensure that everybody on this call or in the event can hear and respond accordingly. And now it's with pleasure that I hand over to my colleague, [indiscernible], who is the acting Group Manager for social performance for an acknowledgment of country.

Thank you, Rocky, and good morning, everyone, and welcome. So it's my privilege today to be able to deliver this acknowledgment. So I would like to acknowledge that today, we do meet on the traditional lands of the Gadigal people of the Eora Nation. And on behalf of everyone here, I would actually like to pay my respects to the elders past, present and emerging. So we are here in Sydney, not far from the harbor. And this is a place of significance for this country and not just because of the iconic symbols that we all know, being the Opera House and the Harbour Bridge. But because of the place it holds in history. So I actually ask you to reflect on that. This is actually one of the first points of contact for British colonization, and one of the very first British colonization's establish. So beyond the story, that is the Harbour Bridge lies an untold history that is very little explored even though this is one of the most visited cities in Australia. So off the back of National Reconciliation week last week and in the spirit of truth telling, I do invite you to whether you're visiting here or whether you live here to take the opportunity to learn more about where you are and to really use that to be a voice for the generations that have come before and also for the generations that are coming. So I would like to thank you. I deliver this acknowledgment on behalf of all elders, including my Wulli Wulli elders from the Dawson River in Central Queensland. And I wish you all a great day. And I hope that you have a full day of learning as well -- is continuing the learning from this acknowledgment. So thank you very much, and I'm going to hand over to Executive Chair, Jake.

Thanks, [indiscernible], and thank you for the acknowledgment of country. I also acknowledge and pay my respects to all our First Nations partners, both here in Australia and in Canada. Good morning, everyone. It's great to see so many of you here today and those joining on the webcast. Thanks so much for your time and attention and your ongoing interest in Evolution. We're really excited to have the opportunity to showcase our company to you today and then to host visits to our Cowal and Ernest Henry operations over the next couple of days. I'm absolutely confident that you will be impressed by what you see and you hear over the next 3 days. As you'd expect, getting here and getting ready for today has been a massive effort and a large number of our people have worked tirelessly and literally 24/7 on the presentations, preparations for the upcoming site visits and the ASX releases we made today. In particular, I'd like to specifically acknowledge our Investor Relations team of Peter "Rocky" O'Connor, Liesl Kemp, [ Donna Lesk ] and Emily Anderson, also assisted by Michael Vaughan. Thank you all. This morning, we've released lots of new news, which the team will take you through in detail. Firstly, we have announced the next step in Mungari's transition to cornerstone long-life asset in our portfolio with a $250 million plant expansion that will deliver an 18% reduction in all-in sustaining costs, a higher production rate and a mine life that is now out to 15 years. Secondly, we have also announced that our newest and most cash-generative asset Ernest Henry has extended its mine life out to 2040. Today, we have also announced at that asset, we have doubled the ore reserves. And as you'll hear later this morning from our VP Discovery, Glen Masterman, we are very excited about the future exploration potential at this asset. To allow the new drill results to be included in the feasibility study, we plan to update the mineral resource estimate in the September quarter again for Ernest Henry so that we can best optimize the future of this outstanding asset. The Evolution today -- Board today has committed $15 million to complete a feasibility study on this mine life extension at Ernest Henry and also an additional $7.5 million on drilling to explore this outstanding potential at this asset. Importantly, we are entering a period of lower capital intensity where our capital projects and commitments are better timed to maximize returns. Therefore, in parallel to this and reflecting the longer mine lives in our portfolio. Today, we've also announced that we've restructured our balance sheet to ensure that we can continue to prosper through the cycle. This restructuring has freed up $445 million of liquidity over the next 3 years does not increase our gross debt. And it is there to create what Warren Buffett aptly refers to building a moat of resilience around our business. Finally, and this is a personal guarantee from me to you, you will definitely be excited when you see Glen's Discovery presentation, where he'll use some really cool new technology to highlight the outstanding exploration success he and his team are having. So it's definitely going to be an action packed day. Last month, our General Manager at Mungari, Scott Barber, sent me the receipt for the sale of 537 ounces of gold. He doesn't normally send me the receipt of his gold sales. It's roughly 1 day's production for that operation. But in this case, he did, mainly because it totaled $1.6 million, it was the first time that Evolution had sold gold at over $3,000 an ounce. That's -- it was $3,023 an ounce at that time. To put it in context, I remember that when I started in this industry 30 years ago, the gold price was about $500 an ounce, which is about 1/6 of what it is today. And when we started Evolution only 12 years ago, gold price was around $1,400 an ounce. That's less than half of where it is today. And whilst the current price of $2,950 is impressive, and it is an indicator of gold's role as a store of value, I really do think there are compelling reasons to believe that the gold price will be much higher in the future. Finally, and only recently, investors have started to pay attention, increasing attention to gold, and I think there are good reasons for this. I've tried to capture this logic in what I've called the 5 Ds. The first 3 reflect the growing global financial risks and the last 2, global realignment, which I think we can all agree, is well underway. Firstly, debt defaults. The Federal Reserve recently implemented its tenth consecutive rate hike, which has taken U.S. interest rates at their highest level in 16 years. This, as you would expect, is clearly causing stress in the financial system. And in the last couple of months, Serious cracks have started to appear. 3 banks: Silicon Valley Bank, Credit Suisse and First Republic all needed to be rescued. What surprised me was that these 3 banks alone had more assets than all the banks that failed in the GFC of 2008. Secondly, the debt ceiling. Much talked about over the weekend. As you know, the debt ceiling is the amount that Congress has authorized the U.S. government to borrow to meet its basic obligations from providing medical insurance to paying military salaries. Interestingly, you may not know this, but on a wall in Manhattan, and we've tried to replicate it on the slide over here and not far from Times Square is a debt clock which shows the amount of debt that the U.S. government is in, and it ticks steadily higher from about $40 billion just after World War 2 to the more than $31 trillion that you see on the clock there now. What amazes me is the speed at which it increases. It's $100 million an hour. So by the time we finish this session, the U.S. government will be $0.5 billion more indebted than it is right now. And yes, as we discussed on Friday, U.S. politicians did manage to find a way through the impasse on the debt ceiling and defer this problem for another 2 years, which will allow America's budgetary gymnastics to again fade from view, but the reality is that this country's finances are increase -- on increasingly precarious ground. Moving to the third D, de-dollarization. I remember clearly on my many trips to China in the 1990s hearing Chinese government officials expressed their frustration that the U.S. dollar was the world's reserve currency. Today, we are witnessing the early stages of what has been a Chinese government ambition for the last 25 years, a formidable challenge to the U.S. dollar. Moscow is hatching deals with China to sidestep the U.S. dollar. Crisis ridden Argentina has negotiated the right to pay China in renminbi for its imports. The Saudis in China are talking about invoicing oil in something other than U.S. dollars. On a recent visit to China, Brazilian President, Lula da Silva said, and I'm quoting him, "Every night, I ask myself why all countries have to base their trade on the dollar." He then went further to argue that an alternative would help balance world geopolitics. The conclusion in my view, is clear. The U.S. dollar is under attack and that is not going away and it will reshape future financial markets of the future. And investors will increasingly look at different asset classes and gold will definitely be one of them. My final 2D, destabilization and decarbonization refer to the significant global realignment taking place. It's easy to forget that a terrible war has been waged by Russia on Ukraine for the last 15 months, and regrettably, there is still no end in sight. In the meantime, the CIA Director, Mr. William Burns, recently called China, America's foremost adversary, one is influence prepares nearly every aspect of his agency's intelligence gathering mission from military capability to digital influence to mineral resource acquisition. Previously demilitarized countries like Germany and Japan have committed to building military capacity. There is essentially an arms race on with the 2 sides clearly demarcated. At the same time, countries, companies and consumers across the world are at the start of a massive wave of spending to reduce the emerging and increasing impact climate change. The UN estimates that this will cost $125 trillion of new investments to reach net zero emissions by 2050 which will only add to the inflationary pressures we are already experiencing across the globe. Whilst regrettably, none of these things I've highlighted are necessarily good news for financial or political stability, they are definitely good for gold. I recently attended the Bank of America's Global Mining Conference in Barcelona. And if there's 1 consistent takeaway, it was the bullish outlook for copper, also primarily due to a number of the factors we've just discussed. Turning to Evolution. We remain convinced that our strategy is right. Since we formed Evolution in 2011, we've had a consistent strategy built around the pillars of assembling a great team, focusing exclusively on Tier 1 jurisdictions, operating a concentrated portfolio of high-quality assets and well endowed geologically prospective gold districts and relentlessly seeking opportunities to improve the quality of our portfolio. We have strategically positioned ourselves in Australia and Canada. Both of these countries are undoubtedly premier mining jurisdictions, rated near the very top by the Fraser Institute and the World Bank as places where the rule of law can be relied on. They are both vastly populated mineral-rich mining-friendly countries whose talented people have the skills so important and necessary in building successful mining companies. What has exceeded our expectations is the quality of the portfolio we have been able to assemble. In many ways, our playbook has really been pretty simple. Our best opportunities have come from the majors. They generally establish themselves in the world's best and most geologically well endowed mineral belts. But like all companies, they go through transitions either because of strategic repositioning, M&A or some balance sheet stress where assets have become noncore and available for sale. And these are the situations that have presented us with the best opportunities. When you think about it, it's really quite rational and logical. Capsule in these companies and any company is appropriately prioritized to one's most important assets. So in each of these acquisitions that we've made, we've been able to add enormous value through the discovery of more ounces because these assets have had their exploration programs curtailed for a number of years prior to their disposal, not because of their geology, but because of some other corporate priorities. And geology is the foundation of any successful acquisition. The reality in our business is that for each ounce we mine, our asset base is depleting and you need to either discover or buy ounces. This is our value in our sectors created. And our track record in this area speaks for itself. We've been able to consistently add ounces to our mineral inventory at a very low $45 an ounce cost. So going through the deals that we've done, the unique 1 that we negotiated with Glencore in 2016 secured us around half the economics of Ernest Henry when they were confronted with an existential debt crisis and needed to delever. This was a precursor of being able to secure 100% of the asset in 2021. Since then, an asset that didn't rank as a higher exploration priority in Glencore's portfolio has had more discovery dollars spent on it in the last 12 months than in the last decade and the results that we've released today are clear evidence of this. We have doubled the reserves, and we now have a mine life of at least 17 years in front of us with outstanding exploration upside potential still ahead of us. It's also been a powerhouse cash generator. Since acquiring the economic interest in 2016 and after the first 15 months of full ownership, the asset has generated a remarkable $1.8 billion. So we've almost paid back our entire investment of $1.9 billion, and we have that big mine life of 17 years, at least 17 years still in front of us. Turning to our asset in New South Wales, which some of you will visit tomorrow. Cowal, we bought that from Barrick in 2016 when it decided that Australia was no longer a strategic priority. On acquisition, the operation was scheduled to cease mining in 2020 and process low-grade stockpiles for the next 4 years and close in 2024. That's only 12 months from where we are today. Our exploration success has changed that profile completely. With the new $380 million underground mine that you will all see -- some of you will see tomorrow now being completed and being commissioned, and we are now on track to produce 320,000 low-cost ounces next year and the mine life is out to at least 2040. You'll also hear about the exciting potential at Cowal from Glen, with the last ounce at Cowal a long way from being discovered. Turning to Western Australia. The only thing that separated our highly efficient Mungari mill and the relatively small tenement position that we owned from Northern Star's large tenement position containing the Kundana and East Kundana operations was the tenement boundary on a page. It was not the geology. Since consolidating the property, we have integrated the operations and delivered consistent production. Today, you will hear about our plans to unlock the potential of the very significant 5 million-ounce resource base that we own on the property. Mungari now has a clear pathway to a longer mine life, higher production rates and importantly, lower costs. Red Lake in Canada followed the same playbook, an asset from a major this time, new mines, and in this case, definitely an unloved assets. We quickly unlocked value through the world-class geology and established a resource base of 12 million ounces. But the difference with this asset to the others is that it was very poorly operated. Whilst progress has been slower than we would have liked, as you will hear from Bob later today, we are on the pathway to changing that and remain confident that it will evolve to become a highly valued cornerstone asset of ours. Later this morning, you'll hear about the unique and potentially very valuable opportunity we have at Mt Rawdon converted into an infrastructure's asset. A very large 2-gigawatt pumped hydro battery capable of powering 2 million homes in Southeast Queensland for 10 hours. Not only will this be a unique way of closing a mine, but it is potentially very valuable and is currently a free option to our shareholders, but more about that later. We also believe that what is good for majors is good for us. Sometimes assets are better held by smaller companies. So we have sold 4 operations and in each case, maintain exposure to the upside of the asset either through a royalty or contingent payments. We are very confident about our future. Our portfolio is extremely high quality. Our assets have long mine lives and a low cost and our balance sheet is strong, and we are benefiting from the very high gold and copper prices, which are likely to go even higher. Our values and culture are unique. And as you will hear from my colleagues, we remain committed to being courageously different as we take advantage of both the external and organic opportunities that are in front of us. So thanks for your time, and I'll now hand over to Lawrie.

Thank you, Jake, and good morning, everyone. I truly appreciate you making the time available to attend the Investor Day today and any of the other associated activities, be that at the end of this evening or our site visits over the next couple of days. I trust you'll get a better understanding of Evolution and where we plan on taking the company over the next few years. Jake has just outlined our strategy, and it's very clear and has been consistent from day 1. As we move into the next phase for Evolution, I confirm that, that strategy is not changing. It is one which we believe has worked for us and is delivered for our shareholders. The realization of that value, however, is about how we go against executing that strategy. Before moving off this slide, I call out our values are shown on the bottom there around safety, excellence, accountability and respect. They must underpin everything we do as an organization and live out these values if we are going to maintain our license to operate and deliver high returns for our shareholders. Jake just talked about the exciting projects and exploration success that we're experiencing as an organization. The plan that we've put in place today is to execute in the coming years is very much about delivering returns for our shareholders and at the same time, deleveraging the balance sheet. We've repeatedly said that FY '23 was a peak year from a capital investment perspective. And from there, we would move to a period of deleveraging and continue with our disciplined approach to capital. Over the next 3 years, our plan is to deliver over $1 billion of additional cash as compared to the current financial year. This will be achieved through increasing operating cash flow by a higher production at sector-leading costs, lower capital intensity and a restructured balance sheet. At the spot prices, this benefit increases to over $1.8 billion of additional cash flow over the next 3 years as compared to FY '23. Our production next year is guided at 770,000 ounces, plus or minus 5%, and then we're targeting around 800,000 ounces for FY '25 and '26. At the end of FY '26, we expect to have our 4 long-life assets producing at the higher run rates. That is Cowal at around 320,000 ounces, Red Lake of at least 200,000 ounces, Mungari ramping up to 200,000 ounces and Ernest Henry at around 80,000 ounces. Bob will take you through the plans for each of these operations in the second session. The priority of margin over ounces will remain and our all-in sustaining costs for FY '24 is guided at $1,370 per ounce. We'll continue with our cost discipline and optimize margin and manage the impacts of ongoing inflation. Barrie will take you through the group guidance soon. Our commitment on capital discipline is evidenced by the lower capital investment over the next 3 years, resulting in an additional $450 million in free cash flow compared to the FY '23 levels. We've not introduced any new material major projects since our last plan. Yes, some of these are moving through the various gates, but that's only because they've justified the investment, they deliver appropriate returns and the timing with respect of their mine plan and from a portfolio perspective is right. With this pipeline of high-value projects, we have restructured the balance sheet to allow us to have flexibility on timing while continuing to deleverage and increase returns for our shareholders. In this high metal price environment, the usual thing for a mining company to do is to reinvest it all in the assets. Our approach has always been and will remain to balance that reinvestment and returns to our shareholders. We'll be staying with that approach and the benefits of higher metal prices will flow through to the bank. The restructure, as Jake said, does not increase our gross debt position but it does free up $445 million of cash over the next 3 years, and we have no debt amortization commitments in FY '24. The metal price is materially higher than what we have achieved this year using a price of $2,650, which is our planning assumption for FY '24, we would achieve an additional $225 million of revenue in the next 3 years, and at the spot price, this increases to around $925 million. Over the next few slides, I'll take you through the key focus points that receive our highest priority to enable us to deliver this plan and what we believe will be able to deliver the planned returns given the track record in our portfolio. In the first few months since taking on the role, I've spent a lot of time defining what we should be our most important areas to direct our attention. It's easy to say that everything is important. But in reality, we need to focus on a few things which deliver the greatest value and avoid the distraction on focusing on too many areas, which result in underperformance and causes inefficiencies. First and foremost is performing our jobs in a safe and environmentally responsible manner. We work in an industry which exposes us to high risk, and we have an obligation to provide a safe and healthy work environment for our people. We've seen our injury frequency rate reduce considerably this year. However, at the same time, our efforts on psychological safety and critical controls for our material risks have increased. We are committed to reducing our emissions by 30% by 2030, and Fiona will shortly take you through how we're progressing towards achieving this reduction as well as providing some more context on our sustainability initiatives. We often talk about making Evolution the career highlight for our people, I mean that our employees or contractors. Having a highly engaged and diverse workforce is fundamental to being able to deliver on our plans. When you consider that labor costs comprise around 46% of our cost base, that makes them our largest and most valuable assets. In terms of diversity, we acknowledge that we have some work to do both as a company and as an industry. Our short-term priority is to lift participation rate to at least the mining industry average and then over the longer term, go materially above the industry average. I do want to call out an example of the levels of engagement and commitment of our workforce. It relates to the recent efforts by our team in dealing with the weather impact at Ernest Henry. The efforts right across the organization to do whatever was required to mitigate the impacts of the weather event and then move into full recovery mode was exceptional. We remain on track to be back at normal full operations by the end of this month, and the discretionary effort from everyone was very satisfying to see and shows that if we provide the right operating environment for our workforce, we will realize those benefits. We have to have a reliable operational performance to provide confidence to our shareholders that when we make commitments, we actually will deliver against them. While most of our assets have operated very efficiently and reliably, in the last couple of years, we have seen this performance slip predominantly due to the underperformance and under delivery at Red Lake. And there is considerable effort being made across the business right now to improve our performance. To achieve this reliable performance, all operations need to consistently deliver not just 1 or 2, it requires good short-term and long-term planning with a disciplined focus on costs and margins. In recent years, we have successfully undertaken a number of valuable projects and the Cowal underground is the most latest one. Evolution is certainly starting to demonstrate a strong project execution capability. That said, we will move forward at these projects in a manner which controls the operational and financial risks of the business. The last key focus point is business development. Jake has outlined our strategy and approach to this. The only point I want to make here and reiterate is that it remains a key focus for us because if we're going to maintain relevance in the sector, we need to have greater scale than the 4 long-life assets we have in the portfolio today. However, this will be done in a disciplined way to ensure that each deal is accretive for our shareholders. Turning our attention now to the portfolio. Jake outlined where we came from and what we've been able to do with the acquisitions. This slide here is really to show what we've actually been able to achieve out of the change in the portfolio over this time and where we are really positioned well to take it into the future. Firstly, I'll explain what the chart is trying to show. It's looking at each of the assets in the portfolio and shows where they were placed in terms of key metrics from a value perspective. Mine life of each asset is shown across the horizontal axis and we want at least a 10-year mine life in each asset. Annual production is shown on the vertical axis. We're targeting a scale of production to generate strong margins and cash flow. The average rate of return is shown by the bubble sizes. When we acquire assets, we want to generate adequate rates of returns on those investments. And lastly, the percentage of asset payback that is acquisition and subsequent capital is shown in the bubble color. The bullet you see on the chart -- the bubbles you see on the chart now show where each asset was at the time of acquisition, and I'll walk you through now where we've been able to position them. Starting with the assets today, we are announcing the exciting organic opportunities of Mungari and Ernest Henry. Mungari is an asset, as Jake said, that will be nearing the end of the mine life based on where it was when we originally acquired it. Kundana was an enabler to the plant expansion we announced today and that has given Mungari a 15-year mine life, allowing improved production rate, payback and return on investment. The expansion will deliver a very good 19% return at a conservative $2,400 per ounce price assumption and also reduce all-in sustaining costs by 18%. Turning to Ernest Henry. The update to reserves and the outcomes of the pre-feasibility study announced today gives us a 17-year mine life on an asset which has repaid over 90% of all acquisition and subsequent investment. It's our highest returning asset at over 25% per annum to date. The pre-feasibility study shows that the extension will deliver an even better return at 28% at conservative copper and gold price assumptions of $12,000 and $2,400. At Cowal, as Jake said, this asset should be finishing operations next year based on the life it had when we acquired it. It now has 17 years remaining and is essentially fully repaid, including the $380 million underground capital. As the underground ramps up and with Stage H now fully into ore, the asset is moving back to net cash generation mode. The average return on investment has been 16% per annum, which is at an average gold price materially lower than the spot price today. This return will increase as we move into that extended period of net cash generation. Red Lake has had a slow start due to the state it was in when we acquired it and the investment that was required to transform it. Our immediate focus now is to get Red Lake consistently delivering to plan and generating material positive cash flows before embarking on the next step in higher production rates at this asset. Mt Rawdon is a really exciting renewable energy option play. It has repaid all its investment many years back and now has a unique opportunity to convert itself into a multigenerational renewable asset that could be very valuable for Evolution and [indiscernible] is extremely excited to be talking about later this morning. Looking at the combined portfolio, it's easy to see that it is an exciting suite of assets that we have. With long lives ahead being able to maintain or improve our rates of return and paybacks we have been able to deliver since acquiring each of them. Moving on to the expansion project at Mungari. The outcomes of the feasibility study shows a very compelling case. We have taken the decision to proceed with the execution of the expansion because of these compelling economics. We acquired Kundana and the East Kundana joint venture to consolidate the district, as Jake outlined, and the study has confirmed this to be true. Since the acquisition, we have integrated the operations and the asset is delivering consistent and reliable production and is starting to reduce its cost base. The expansion allows us to transform this asset into a cornerstone asset with a lot longer life and materially lower costs. We have been able to lock in on the $250 million capital investment for the process plant, which will increase processing rate to 4.2 million tonnes per annum from March 2026. We now have a mine life out to 2038 with further extension potential. With a 30-month build and only 3 ore sources for the initial production post expansion, it provides us with at least 5 years to increase conversion of resources to either sustain a higher production rate will further extend the mine life. You'll hear from Glen this morning about our confidence of being able to sustain a 200,000 ounce annual production rate for a large part of this 15-year mine life. The economics do justify the investment now. It will generate an incremental NPV of $260 million at an IRR of 19% at conservative metal prices and the current inflated cost position. This increases to around $600 million at spot prices and a rate of return increases to 28%. The project is expected to reduce our all-in sustaining costs by 18% to an average of $1,750 per ounce. As has always been our position with projects we have taken a prudent capital management approach and therefore, have put in place hedging of 120,000 ounces during the construction phase at an average price of $3,185 per ounce. The Ernest Henry pre-feasibility outcomes are exceptional in that we've been able to extend the mine life out to 2040 with an increase in gold and copper reserves by 124% and 103%, respectively. As you'll hear from Glen and Bob today, the PFS only looked at the area that Glencore Drilling had defined in the concept study, which is the Magenta part they have shown on the chart. And we've been able to take into account the -- we have not been able to take into account the very significant exploration successes we've had in the first 18 months of 100% of ownership. These results will be included in the feasibility study, which means a return from this asset will only get better. The capital required to extend the mine life is relatively modest at $450 million to $500 million with the majority of this capital not being spent until FY '27, '28, and over 60% of this capital provides infrastructure required to extend below the 750 level. Importantly, the economics of the PFS are a reflection of the high-quality asset. The incremental NPV will range between $690 million to over $1 billion at conservative metal price assumptions or at spot prices, respectively. It shows a short payback period of around 1 year post first ore at both price scenarios and delivers a rate of return of between 28% and 39%. The feasibility study is expected to further upgrade the mine life and the economics will materially improve the value of this asset. The study is due for completion in the March '25 quarter. And I do reiterate our excitement at Ernest Henry has shown on the bottom of this chart with 18 months of full ownership, we've now converted the asset mine life into 17 years of low-cost production with further upside potential. So when we look at it from a portfolio perspective, the key things about our projects and as shown on this slide is that we've appropriately timed these projects from an operational and financial risk perspective, there are no new material projects in the pipeline compared to our last plan. There is lower capital intensity in the coming years as compared to our peak in FY '23 and we have structured the balance sheet to adequately fund each of these projects. We have 2 recent projects at Cowal and Red Lake, the 2 new underground mines that are moving into commissioning and ramp-up phase. This provides us with additional improved cash generation from these operations over the next few years via higher production from higher-grade material. We'll be moving forward with the Mungari expansion and the Ernest Henry feasibility study. They are the only 2 major projects approved and we'll see our total capital intensity as I said reduced by $150 million per year over the next 3 years. When Ernest Henry Extension moves into execution phase, it's important to note that we'll commission the Mungari project. Therefore, we'll have 3 assets operating at expanded cash-generating position. And additionally, Ernest Henry is expected to be able to fund its execution phase capital from its own operating cash flow. To provide this funding flexibility, as I said, we have restructured the balance sheet and we have no near-term debt repayment commitments in FY '24 and the repayments over '25 to '26 are reduced materially. Bob, Glen and Barrie will go through in further detail on each of these projects in their sessions later. So in summary, we have a portfolio of assets where we will continue to prioritize margin over ounces and maintain our focus on safely and reliably delivering to plan. We've been successful to date, increasing the mine life of each asset and have further upside for each in terms of mine life extensions or margin improvement. This will enable us to deliver sustained sector-leading returns. We have flexibility to do these projects, and we'll continue with our capital discipline. Doing this will allow us to deliver material cash flows through the cycle leading to increased returns for our shareholders. Thank you for your time, this morning, and I'll now hand over to our CFO, Barrie van der Merwe. Thanks, Barrie.

Thank you, Lawrie, and good morning, everyone. After joining Evolution on 1 March this year, it's a privilege to be presenting to you at this Investor Day. I'd like to extend a special word of welcome to our banking partners who are here with us today. Having been in the mining industry for more than 20 years and spending a lot of this time in the platinum group metals industry, where we experienced significant metal price and currency volatility, Evolution's objective to prosper through the cycle is something that I regard is very important to our financial management. I'll provide updated guidance for 2024 today. The appendix includes details about the changes between our previous outlook for 2024 and today's guidance, but I'll talk you through these changes at the high level to just outline them. So total gold production is expected at 770,000 ounces, with all operations in line with the previous outlook, except Red Lake, as we announced at the last March quarterly. All-in sustaining cost per ounce midpoint is moving from $1,240 per ounce to $1,370 per ounce. This is due to lower production at Red Lake that I refer to earlier, higher-than-expected inflation and higher royalties driven by the elevated metal prices. The breakdown is in the appendix, but those are the key changes. Major capital expenditure, and this includes mine development for longer-term production, is expected at between $440 million to $490 million. This compares to $330 million to $380 million previously. This is driven predominantly by timing, so it's timing on spend of the Cowal underground, which was pushed back from this year, and then the Mungari expansion that is starting earlier in 2024. There's also an additional new $20 million for buttressing activity at the Ernest Henry tailings storage facility, which is necessary and that will be constructed over the course of the next 2 years. What I do want to stress is that when we manage major capital projects, it's all about the overall schedule and the budget of the hold project to deliver the business case. In the case of the Cowal underground, that is what we did, delivering the first stope ahead of schedule and with the remainder of the project on track and on schedule, all within the original budget. The annual cash flow expenditure on these projects can vary year-on-year as we execute the projects. Now turning to production guidance for 2024. As Lawrie mentioned earlier, gold production is expected to increase by 17% next year. Mungari is continuing its consistent delivery over the last couple of years, which makes it an operation that's deserving of the investment we're going to make there. Ernest Henry will be back to full production by the end of this month following the weather event that happened earlier this year. Cowal increases strongly as it continues mining the Stage H ore in the open pit and ramps up the new underground mine. Red Lake continues to ramp up as we are opening new mining areas in the Upper Campbell mine, which will drive a strong production increase in the back half of the 2024 financial year. Mt Rawdon is expected to have better access following weather impact, resulting in increased production. Copper production is expected to be 50,000 tonnes next year, which is slightly up on 2023 production, but in line with what was the previous outlook for 2024. This material increase in production will contribute towards our commitment to delever the balance sheet. Now talking a bit about cost drivers and cash flow sensitivities. Our top 6 expense categories account for approximately 77% of our total operating costs. This allows us to focus on the procurement activities on the categories that really matter. Labor represents almost half of our costs, and it's our biggest cost driver. The labor market remains tight, and this has cost implications for talent attraction and retention. That and recent higher cost of living requires us to adjust salaries, and we expect employee costs to increase by between 5% and 6% at the start of the 2024 financial year. The impact of inflation flowed through our costs in 2023, and given that inflation has remained higher than expected for longer, with Australian consumer price index in March 2023 still 7% higher than the same time last year. Therefore, most costs are staying at current levels and some will increase in 2024. However, the increase in the gold price of about 17% over the last year, especially since November, has more than offset that. We believe we've captured the impacts of inflation in our 2024 guidance. We have a high proportion of contracted spend, which includes electricity that are contracted for the next 2 to 8 years. In the case of Cowal, the rates are fixed until December 2030. In the current New South Wales power market, we believe we've avoided materially higher costs for power at Cowal. Generally, supply chain reliability has been improving steadily in the recent months and stock levels across the supply chain seem to be replenished quicker than the period just after the pandemic. This is improving timeliness and security of supply. Our cash flow and cost drivers are well understood and key sensitivities are set out at a high level, bottom right on the slide. Metal prices and grade changes is by far the biggest potential impact on cash flow. When using the sensitivity chart, remember that the price sensitivity includes the impact of the 5% revenue royalty. With the spot gold price prevails through the 2024 financial year, then compared to the 2023 year-to-date realized price, cash flow would increase by approximately $310 million. Based on our conservative planning assumptions, metal price upside is banked and will contribute to our commitment to delever in the near term. Now turning to the all-in sustaining cost per ounce guidance. Cowal's all-in sustaining cost per ounce continues to benefit from mining higher grade Stage H ore. It includes escalation on the primary underground mining contract and takes into account the ramp-up to full production that will continue into the 2025 financial year. In line with general accounting practice for mines in ramp-up, capitalization of cost for the underground will continue until the point of commercial production, which is expected to be by the second half of 2024. Red Lake benefits from increased production as it starts to access new mining areas in the Upper Campbell decline by the second half of the year. Mungari continues its steady performance and clearly demonstrates its consistent delivery in a very competitive Western Australian mining market. Mt Rawdon improves as a result of better pit access following a year of significant weather events. Ernest Henry is impacted by the 2023 year-to-date achieved copper price, that's higher than our planning price of $12,500 per tonne, and this at $230 per ounce to Ernest Henry unit cost, about $25 per ounce to the group's unit cost. Evolution continues to be a leading low-cost producer compared to peers with our focus being on margin, not just ounces. Now going to capital. Over the next 3 years, our capital expenditure and intensity are trending lower. We have no new material capital projects compared to the ones we identified last year. Based on currently approved projects, average capital expenditure over the next 3 years is expected to be $150 million per year less than in 2023, that is $450 million less capital expenditure over the next 3 years, and this again will contribute to our commitment to delever the balance sheet. The base requirement for sustaining capital and long-term mine development will continue to be around $200 million and $110 million per year, respectively. The sustaining capital level is appropriate for the current asset portfolio and mine lives, which we've successfully increased since acquisition. Long-term mine development involves costs required to establish long-dated production ore. Major capital is expected to be about $80 million lower in 2024 than in 2023, and details of capital expenditure by operation is included in the appendix. Now talking a bit about our debt maturity profile and the associated flexibility. Earlier today, we announced that we're restructuring our debt facilities. This is to align the debt maturity profile with longer mine lives and timing of cash flows from the operations. It provides an additional $445 million liquidity over the next 3 years without increasing the total debt and with no debt repayments until the 2025 financial year. This balances are reinvestment in assets, deleveraging and providing returns to shareholders through dividends. The new structure gives us more flexibility and does not increase the overall debt level. The transaction involved raising USD 200 million in the U.S. private placement market at a competitive rate of 7.4%. This will be used to settle our existing term loan obligations and replaces it with a new 4-year loan out to financial year 2028. We have no debt repayment obligations in financial year 2024. What we did here extends our average debt tenor from 5.5 years to 7.5 years at an average overall interest rate of 4.7%, and this includes the new long-dated maturities via the USPP at an average fixed rate of 4.5%. To protect the balance sheet against downside price risk while executing the Mungari expansion, we followed the prudent approach of entering into gold forward contracts. These are for delivery of 120,000 ounces over the next 3 years at an average price of $3,185 per ounce. This is the only hedging we have in place from 1 July for a very small portion of about 5% of our production over the next 3 years with more than 95% of our production remaining unhedged and fully exposed to the spot gold price. I would like to extend a word of thanks to our noteholders, our banks, for their continued support, and also our advisers that worked with us to make this change to our debt structure. Evolution has a strong balance sheet that supports our strategy to prosper through the cycle. At steady state, that's period without major capital projects or acquisition activity with target gearing of approximately 15%. While the current gearing is above that level, we always knew this would be the case as we were building 2 new underground mines. It's within the upper limit and as outlined by Lawrie just now, we have a very good plan that will allow us to delever in the next few years. We align debt tenor with mine life as showed today and aspire to at least retain our investment-grade credit rating. We target a minimum liquidity level of about $500 million through cash holdings and a $525 million revolving credit facility that's available until October 2025. Our target dividend policy of 50% of group cash flow is unchanged, and hedging is only entered into for purposes of financial risk management with more than 95% of our gold production unhedged and fully exposed to the spot gold price. So in conclusion then, going into 2024, we expect strong growth in production in an elevated gold price environment. Costs are well managed and includes expected inflation based on our current economic outlook. Capital expenditure and intensity is decreasing and our revised debt structure provides good near-term financial flexibility at a low cost. We are committed to ensuring that Evolution is well positioned for strong cash generation in the near term and to prosper through the cycle in the long term. I will now hand over to Fiona Murfitt, our Vice President for Sustainability. Thank you.

Thanks, Barrie. The air conditioning has just gone on. I'm not sure if the room is getting hot or not, but thank you, Barrie. And good morning, everyone. It's really great to actually be here in person. Since the beginning, our commitment to sustainability has been core to our business. It drives our thinking, about who we are and about how we'll be relevant in the decades to come. A vital connector in this is people in making working for us, the highlight of our career; in the strong relationships fostered with our First Nation partners and the communities in which we operate; in the people who work to protect the environment and improve biodiversity outcomes; and in all those whose efforts are about building positive legacies. It's worth noting that about 75% of the people who work for us are locals. We continue to be a significant supporter of being and buying local and promoting the economic future of our communities. From an external perspective, you'd be aware that the landscape for sustainability is changing. There's been a shift in the expectations, both externally and internally, particularly related to climate risk, and the drive free quality and inclusion. We've also seen the need to increase our disclosures. Our performance has continued to improve, particularly for our stated climate risks including emissions and water, which has been externally recognized. We have a AA rating from MSCI and are only 1 of 3 gold companies listed on the Dow Jones Sustainability Australian Index. The ESG demands are dynamic, and we remain resilient and agile to deliver against our commitments, creating value for all of our stakeholders in environmentally and socially responsible way. In focusing on our sustainability efforts, we have matured with a key differentiator being that sustainability is integrated into everything we do. Our efforts are aligned with UN SDGs, TCFD, GRI and UNGC's and reflects the positive impact we can have on the welfare of our people, our planet and the future, all aligned with our purpose. This model explains simply how we integrate sustainability and at its heart is people, where our leaders are visible and that people feel engaged and capable to be the best that they can be. Starting at the top right wedge, we have health, safety and well-being, and this is an area that we want to be great, where we unlock the potential of our people and operations through leadership and to develop those behaviors that protect us. There's been an increased focus on the whole person, including mental health and the provision of a psychologically safe workplace where people feel free to speak up with ideas, questions, concerns or even mistakes. More needs to be done in this space across the industry and building a more diverse workplace supports this progress. From a health and safety perspective, we're never comfortable with our performance. Over the last year, we've seen an improvement in both our lead and lag indicators such as quality field interactions and training and our [indiscernible], as Lawrie noted, is showing a 17% improvement on last year's data. Our reporting reflects a healthy and psychologically safe working environment. But importantly, we're not satisfied, and we'll continue to strive to do better. Operational discipline is our next wedge in the wheel. We know our risks, including climate-related risk, and we manage them in a consistent and reliable way. We have our climate risk position statement focused on the management of waste, emissions, reduction in the use of freshwater and the management of extreme weather and health events. I'm pleased to confirm that we continue to manage these well, including the significant year-on-year reductions in freshwater used against our FY '20 baseline. I'll also touch upon our progress on Net Zero commitments in a moment in more detail. That operational discipline and risk management extends to our environmental management and our ESG scores reflect that we're leaders in this space. Every site proactively manages this, including implementing comprehensive biodiversity programs. As the short-term custodians of the land in which we operate, we consider the protection of the environment and cultural heritage as both an honor and a responsibility. Now we can't achieve any of this without our license to operate. It must be continually earned. Listening is key. It enables us to focus on what's important to our First Nation and community partners. It's best summed up in the words of Ally Coe, and he's the CEO of the Wiradjuri Condobolin Corporation. At Cowal, we formed the WCC partnership that supported the development and launch of the Galari Agricultural Company. It's a farming and training enterprise. It's fully owned and fully operated by the WCC and it supports capability and capacity building. Ally said, "I think mining companies all around the country can learn from the process that we have in place with Evolution." It's always about creating opportunities, and we are developing what I consider to be a very unique and successful partnership. And we know that inclusion and diversity deliver better outcomes, and it is key to growth. We continue to grow our participation of indigenous and female workers and are really advocating for people to be educated and informed around indigenous cultural awareness and reconciliation. This is also supported by our recognition position statement. We're also supporting and celebrating being a voice for generations through our First Nation Summit in Australia this year, bringing together our First Nation partners. The next wedge in our integrated approach is around assurance and continual improvement. And with this changing landscape, this requirement to improve will be a constant. Our adherence to rigorous standards has resulted in no material sustainability events, and we continue to keep our people healthy and safe, support our ecosystems to thrive and reduce our environmental footprint. And finally, it's really our stories that show the positive impact we can make, supported by strong partnerships and transparent disclosure. I'll share some of these with you in a moment. In terms of our progress on our Net Zero commitment, our approach remains clear and consistent. We are well placed to deliver against the reduction in emissions by 30% by 2030 and are currently tracking ahead of this. Phase 1 is about our transition to renewables and levering partnerships to achieve this. Where we are grid connected, we continue to partner to deliver this transition. This was demonstrated in a first of its kind retail partnership with AGL and the Sunraysia Solar Farm this year. It supports the transition to renewable energy to the Cowal operations, who is 1 of our largest emitters. We've also conducted all baseline studies and understand our profiles to ensure that we can achieve our efficiencies, and we also remain below the safeguard mechanism. This second phase builds on the first and sees a greater shift in the fleet and equipment focus. Our partnerships with the Electric Mine Consortium support it. We've also embedded a review of future mining design and emissions management into projects and the DD process. In Phase 3, explores the improved management of biodiversity, an area in which we do really well. The partnerships held with the Burnett Mary Regional Group complements this, reviewing accounting for nature and other opportunities. Having just completed our TNFD assessment, we're reviewing the results for learning and improvement. So emissions management is now firmly embedded at every level of the mine life cycle. We have now applied our innovative thinking to add more value at the end of the mine life. We now have the possibility to contribute to the future of renewables in Australia. I'll touch upon these partnerships with ICA in a moment, and Jake will discuss the Mt Rawdon Pumped Hydro project in more detail. Every 2 years, we conduct an independent stakeholder survey. The output highlights our well-developed relationships and the many economic, social and environmental benefits that we deliver. The high approval level from our own communities is something that we're really proud of. Our FY '23 sustainability report will showcase these many stories and I'll highlight just a couple of them for you now. As I noted, our First Nation partnerships are really critical. And a shared value project with [indiscernible], one of our long-term partners, we [indiscernible] Enterprise demonstrates that success can be built together. [indiscernible] is an average owned and operated enterprise that provides authentic culturally appropriate artwork, and it's made by and support aboriginal families. We're also really excited by the results from our relationship with the University of Queensland's Australian Institute for Bioengineering and Nanotechnology research. They're conducting some really groundbreaking research using gold, using gold nano particles, which is showing really positive results that can lead to more effective, personalized cancer therapy and allows oncologists to rapidly determine how treatment is progressing. And our partnership with ICA at the Mt Rawdon Pumped Hydro project is focused on building solutions for a greener future. Jake will discuss how we've applied our innovative mind that can lead us to be a significant contributor to Queensland's renewable energy commitments. The project continues to receive great community support and also from the government as a coordinated project. I really do feel privileged to be part of a team that genuinely cares about people and our communities. Not only do we talk our values, we live them every day through the decisions we make and how we go about making things happen. The possibilities in front of us are really exciting. By harnessing our talent, experience and continuing to be uniquely us, we remain excited to deliver a positive legacy for our employees, our communities and the stakeholders that choose to join us on our journey. The future is bold, it's bright and it's golden, and that's an intended pun. Not even a smile on that. Thanks again for your time, and I'll pass it back to Jake. Jake, over to you.

Thanks. We have about 30 minutes allocated to Q&A. We are going to have to keep to the schedule. We don't have to use all the 30 minutes for Q&A. But because of the webcast, we will start Session 2 at 11:00. I would ask you to wait until the mic arrives so that the webcast participants can hear the question. And also, if you -- you'll have an opportunity later to ask questions of detail on the assets. So at this stage, I'd appreciate it if you could keep the questions to the material that has been presented to date. And maybe if you can just introduce yourself when you ask the question, that would be great.

Rahul Anand, Morgan Stanley. First 1 for Fiona. Fiona, you mentioned Evolution meeting the safeguard mechanism. Could I just inquire -- I mean, is that the normal 4.9% decline rate that you're assuming in that? Or because I know that as you get to 2030, the targets change as per the industry as opposed to the decline rate. So if you can highlight a bit as to what decline rates you've assumed and how comfortable you are within that range, please?

Yes. So is that Michael? Yes.

Maybe Fiona, you just stand up when you're answering the question.

Well, thank you for the question. We -- to be clear, we remain under the safeguard mechanism. So that safeguard mechanism is really on Scope 1 for those of you in the room. So all of the forecasting that we have, we remain under that. So at the moment, if you are above that safeguard mechanism, that's the government 4.9%, but all the calculations that we have done to date keep us underneath that. What we have done in our calculations is we looked at the portfolio and what we've been able to do is to make sure that year-on-year, there will be reductions. We're targeting at about minus 9% for this year, and we're targeting about a minus 35% by 2030. So all of that is looking at that portfolio. And as I noted, as we have grid connected, a lot of that will be through renewable energy and that is how that is tracking.

Okay. Perfect. Second one, perhaps for Lawrie or yourself. Mungari, the $250 million number, I just wanted to touch a bit upon that. What's the contingency in that number? How are you accounting for the mines that are opening up? If there's a bit more clarity on that CapEx number.

So we're very confident on that $250 million. That's why we delayed the announcement of this expansion. We've really tested that and very happy with the fact that we feel it's robust. There is adequate contingency in there, appropriate for the project and where we're at for the project. So very confident that we've allowed appropriate contingency there. In terms of the development costs of additional mines, those costs would have been incurred irrespective of whether there was an expansion or not. So they are included, not in the $250 million, but in our capital projections going forward.

Thanks. Matt Frydman from MST. I know you asked not for asset-specific questions. This is kind of, I guess, more about balance sheet and CapEx rather than the asset itself. But just wondering on the Ernest Henry Life Extension project, you talked about how the majority of that capital is not going to be spent until FY '27 or FY '28. Just wondering whether that's a project-driven decision or is that a balance sheet-driven decision. If you could execute on that project earlier, would you or -- what's the drivers there?

I'll have a go at answering it and then pass it over to Lawrie. But it is absolutely related to where we're at the project. There is no point in spending additional capital on the extension of mine life at Ernest Henry until FY '27, '28. We're going to need to do the development down to that new crusher level, and that's where the bulk of the expenditure comes. So put the conveying -- crushing conveying system is in place, so there has been no change in sequencing of the Ernest Henry project at all because of balance sheet constraints or the commitment to the Mungari project. Lawrie, do you want to add anything to that?

Only to say that...

Stand up.

Yes, boss. Yes, Matt, I think just when we go through the sessions with Bob and Glen and particularly with Glen, will explain why. Because I think if you look, we didn't sign off on it in February because of the drill results we had seen and where we've ended up with where the crusher location is going to be is different to where we were thinking at the end of last calendar year, and that's because we've got more and more information. And I think if we were to schedule that and bring it in earlier, we'd actually lose a lot of optionality and actually destroy value on the project, which is 1 reason when we took the concept study and took longer because it was a trucking -- low capital intensity, no drilling, we would have actually cut off a lot of the mine areas that we've now got in the plan. And I think what you'll see from Glen also why it is scheduled when it is. And I think also, as Jake said, all we've got to keep doing over the next couple of years is get ourselves to the areas where the crusher conveyor is, so the decline work will happen. And I think importantly, when you look at the incremental NPV, there was actually NPV added above the new mining area as well. So we're getting more, which we expect through the feas study that buys us further time to optimize it.

Trent Allen from CLSA. I think I asked this question on the March call, but I'll just reiterate it. So you're talking about reduced capital intensity, more cash, you redid the balance sheet to free up some liquidity. Some of that to support organic growth, obviously, like Mungari, but can you remind us what your M&A criteria are in terms of acquiring new assets?

Yes. I think it's -- as Lawrie said, we recognize that we need a couple more assets at least, but our criteria has always been very strong and clear. As I tried to articulate in my presentation, the best opportunities do come for us from majors. There's obviously a lot of activity in the market at the moment with respect to the majors. I think Newmont has made it clear that they are looking to dispose of some of their noncore assets if they proceed with the Newcrest merger. So that is obviously a place that we would be looking in the future, recognizing that it will take them probably to 2024 to make any decisions. The criteria is simple trends, accretive to shareholders and improving the quality of our portfolio.

And so there's no particular minimum size in terms of output you look at?

Not really. I mean I think improving the quality of the portfolio means it needs to reduce our all-in sustaining costs, and it needs to have a mine life out to kind of 10 years or a visible opportunity from a discovery perspective to get out to that 10-year plus mine life. Challenge with doing M&A at the moment is that we've created a high bar for ourselves to jump over. Ernest Henry was the last piece of M&A we did and certainly put a high bar there for Kirron and his team to get over.

That was a good deal.

Alex Barkley, RBC. A quick one. On that CapEx guidance you've given in FY '24 to '26, that says approved projects only. Does that mean nothing from the Ernest Henry extension other than studies, et cetera, and same for Cowal, no extra open pit cutback?

So I think it doesn't include any open pit cutback because we're going through a feasibility study, and I think it relates to the opportunity and flexibility we've got. I mean I think it depends on gold price scenario. As Lawrie's articulated if gold prices stay at these levels, there will be $2 billion of additional -- close to $2 billion of available additional cash flow, and we'll have delevered completely. I think RBC is a pretty conservative outlook on the gold price. It goes back to $2,400 in 2026. So if that was the scenario, then we've got the flexibility to gate these projects and defer -- certainly of Cowal, you'll hear later today that there is not an absolute necessity to proceed with that at that time. It's dependent on the gold price and the scenario at that time.

And [indiscernible] Ernest Henry until '27, 28, as you flagged?

Correct.

Yes, but it does outside of the study. Obviously, we've got to get work around the decline to get down there. So if you look at that $450 million, $500 million, by '26, there will be some, but it's not material and '24, '25, you're probably talking $20 million, $25 million a year that's captured in our estimates for ongoing decline work.

Anyone else other than from staff of Evolution? Go ahead, Dan. They're all shareholders, so you should have the opportunity.

Just a question on Red Lake. I mean, obviously, that hasn't panned out how anyone in this room would have wanted it to. What is the decision point for that to get capital again in terms of timing or what does that operation need to demonstrate to you in order to get more capital?

You'll hear a lot more about it later this morning. But it needs to earn the rights to be allocated additional capital for expansion. And that means it needs to start delivering consistently and reliably, needs to get over that 200,000 ounces a year and deliver that 1.1 million tonnes consistently and then demonstrate that it is worthy of capital allocation.

And so clearly, Mungari and Ernest Henry are well ahead on deserving capital.

Mungari has done exactly that. Since we acquired the Kundana and East Kundana properties, we've integrated them successfully. We're operating them well and consistently, and we can see the opportunity. As you know, at Red Lake, the challenge is getting -- going -- delivering 1.1 million tonnes of reliably and then being confident that we can go from a step change of 1.1 million tonnes to an increased mining capacity. That will happen over the next couple of years. And then it will determine -- we'll determine when it's due for capital allocation. Anyone else? Otherwise, it's going to be a long tea break. There you go, Matt.

Matt Frydman from MST again. Just wondering in the context of the emission reduction discussion 30% cut by 2030, how does Mungari fit into that? Is the 30% versus a pre-expansion baseline? Or how do we think about Mungari in the context of your emission reduction activities, particularly given, I guess, it's not a super high-grade project. You've got trucking, et cetera. I think [ grid power ] on that meal. So how do you approach that challenge?

Yes. Fiona, do you want to take that?

I need to stand. Is that right?

Yes.

Matt, thanks for that. We had looked at that in lots of different optionality, particularly as they will be trucking and also increase in mill. We've got some reductions also happening at one of the power plants, so -- at the Kundana power plant, which we will gradually turn off. So there are a number of opportunities open to us in the partnerships, but also just greater efficiencies in the way we're doing the trucking. So all of those are being examined as part of that project. And again, we don't really believe at this stage, it will hit the safeguard mechanism. The way we are building the portfolio is that we do understand all of the various different value streams in which they're coming through. And then we have different strategies and which levers to pull. So that's how that's being looked at, not just for that project, but actually any future mine design as well.

And I also just want to be very clear on our -- on the emissions reduction. Roughly 70% of our emissions are Scope 2 emissions. So that is largely from power from the grid. As you'll hear later from my Mt Rawdon pitch, the state and federal governments have very aggressive targets to get to a renewable grid by 2030 and 2035. Assuming they deliver on those targets, we will easily get into our 30% reduction target.

Maybe just quickly on Cowal. Correct me if I'm wrong, but I think previously that operation has been talked about in the context of production growth at 350,000 ounces. But in the outlook you've given today, it's more like 320,000. So wondering what's changed there. If anything has changed, is it out of conservatism? Or how do we think about that?

Nothing has changed with respect to that.

Was 350,000 the wrong number to be thinking about? Or is that ultimately the goal?

I mean it's ultimately our goal to maximize it. I think what you're going to see at Cowal is that you're going to -- we're obviously drilling some underground. We're drilling some additional material. It depends on the grade largely, but we're comfortable with 320,000 for next year. Glen has some results at the Cowal underground.

Jon Bishop here from Jarden Australia. I recognize that Mt Rawdon is near and dear to your heart. And I know it's fairly early days. But I'm interested to know in terms of the carbon offsets, whether you're able to do anything in terms of bringing that into the portfolio as you go through a sort of a, I guess, a divestment process in due course to offset some of your other operations? Is there anything clever you can do there?

No, is the short answer. Largely because the scale of capital required to develop Mt Rawdon is large, and Barrie and Lawrie have said it that I cannot have the $4 billion required to develop it. it doesn't fit in our capital profile. It doesn't fit in Evolution's portfolio either. So the key is to commercialize that at the end of 2024. Pumped hydro doesn't actually generate carbon credits because you're pumping up water from hopefully renewables, but it's carbon neutral. The key is that it can support, in this case, 6 gigawatts. It's a 2-gigawatt pumped hydro, it could support 6 gigawatts of renewable power off the back of that. So that would generate a lot of carbon credits. But at this stage, our focus on our reduction is not related to Mt Rawdon.

Kate McCutcheon at Citi. Traditionally, you give us a 3-year outlook. And today, you've given us production targets, CapEx targets, but we don't have an all-in sustaining cost target past 2024 today. What are the moving pieces or the work in progress that are preventing those disclosures today? Or do you have any targets you can talk to. You're looking at setting 70 for next year? What -- where do you want to be in that...

We've decided not to give 3-year targets because that didn't seem to help analysts get the numbers in accordance with those targets. What we've decided to do is give the 1-year outlook. We think we've given all the pieces to what you should expect over the next 3 years, and it's up to you to build your model as to what you think inflationary pressures and various other things will be over that 3-year period. But it depends as Laurie keeps -- and I keep discussing, if the gold price goes down, then you have to assume that costs are likely to go down. If the gold price goes up, it's probably an inflationary environment, and you've got a higher cost base. What we are absolutely committed to, as Barrie has articulated is a strong focus on cost control, the things that are in our capacity to control. Barrie, do you want to add anything there?

No.

And your copper price assumptions for guidance for next year?

So AUD 12,500, which is the same as what we used previously.

Sorry, I didn't introduce myself early. Daniel Morgan, Barrenjoey.

We know you.

Just a quick question about the decision to hedge at Mungari project. Can you just talk through how you thought about that and why other projects are -- you haven't done the same thing with other projects?

We have done that previously. I think what we thought was we don't want any -- it's a 3-year construction period or a 30-month construction period. In the event that gold prices went down materially, we wanted to protect that capital investments over that 3-year period, 120,000 ounces at $3,185 an ounce seemed like a prudent thing to do to protect that capital investment. But it was certainly -- there's a 19% return at $2,400 an ounce. It's not related to the robustness of the investment. It's really balance sheet prudence. It seems like we have run out of questions. Obviously, the leadership team and our colleagues are here to answer any questions. We'd encourage you to ask us anything you want. We want to engage. We want to make sure that you have all the facts and information to get your analysis right and your investment decisions. Session 2 will commence at 11:00. Thanks for your participation in Session 1 Thanks. [Break]

Good morning, and welcome back to Session 2 of the Evolution Mining Investor Day 2023. Just an observation to kick off. A Q&A session that's scheduled for 30 minutes that goes for 15 can only be 1 of 2 things. It's either I wasn't on the other side asking questions, and it would have gone longer, or we acknowledge there's a lot to digest. We put out 5 releases this morning, which totaled 200 pages. There's an enormous amount of detail and information in those to digest that process. Hopefully, you had a chance, during the last half hour, to engage with some of the Evolution executives to start discussing those details and working up to some Q&A going forward. So our next session, which I'll introduce when we do go to Q&A, please feel free to ask a question. You will be noticed and your questions and no doubt somebody else is thinking about the same thing. So please feel free to do that. And as Jake mentioned, we do have over 20 members of the Evolution Mining team here today, including the executive leadership team, but also people, including from Discovery, from T&E, from our operations, et cetera. So there's a wealth of experience to tap on over the next couple of hours. Please feel free to do so. So I'm saying that let me introduce session 2. Session 2 is -- focuses moving from our last session into the detail of the assets. So we'll be focusing on the 4 cornerstone assets of Evolution Mining, also on the discovery potential across the portfolio, and we'll be finishing off with the exciting Mt Rawdon pumped hydro opportunity. And we'll finish with a Q&A session at the end. And again, please feel free to participate in that. So the messages in this session will be delivered by our Chief Operating Officer, Bob Fulker; our General Manager of Cowal Operations, Bonnie Coxon; and our Vice President of Discovery, Glen Masterman; and followed by Executive Chair, Jake Klein at the end, and he'll take the Q&A session again as well. So with that, Bob, I hand over to you for running through on your page.

Thanks, Rocky, and good morning, everyone. I think the reason there weren't very many questions in the first session is because the session is going to be more interesting. Don't tell Barrie that because I told him something totally different yesterday. Look, it's great to see everybody in person and I am really looking forward to the next couple of days with you. It's going to give us the opportunity to actually showcase what we've been doing and who we're trying to be over the next couple of years. We have been hearing and reading a lot of speculation on our project timing and capital expenditure. We've had different views about what we're going to do, when we're going to do it, what it will cost from a capital expenditure. Today, I'll provide you with some clarity on many of these areas. I'll also provide you with insight into the organic growth projects we have within our portfolio to increase shareholder return. And how we plan to assess and potentially execute them in a disciplined way linked with our long-term plan. Lots have moved from a group perspective and for each operation. We have 4 cornerstone operations, all with brownfield growth options. Red Lake's enormous resource will see future production trending towards plus 200,000 ounces with significant potential to expand once capital is justified but only after we stabilize the mining and demonstrate a boring reliability and have earned the right to invest more capital. Today's Mungari mill expansion approval will deliver a 15-year mine life with production build into circa 200,000 ounces across the first 5 years post commissioning of the mill. With a lower AISC and an average production across the life of 155,000 ounces. The Earnest Henry cave extension gives a life to 2040 and potentially beyond. This is a fantastic asset with huge upside. The PFS has shown a compelling future expansion opportunity that we are moving into a feasibility study. And with the addition of the new mineralization, which Glen will talk about later, things are going to only get better. The Cowal underground is building towards plus 320,000 ounces of safe, reliable, low-cost production. With the key infrastructure nearing completion, this will enable it to revert to being a strong cash generator in our portfolio. Well, they are not a cornerstone, sorry, Jake. Mt Rawdon does present an innovative option as we head towards closure. Of these opportunities, only the Mungari mill expansion has been approved for execution. The rest are still in study mode and will be considered for progression to execution only when an appropriate feasibility study demonstrates accretive value for shareholders and fits within our project execution and financing plan. This is in line with our track record of delivering upside to Evolution shareholders, operating assets safely, productively and cost effectively whilst delivering on the growth. As I stated earlier, we continue to progress the studies and proactively manage the delivery risk across the portfolio with projects that are self-funding our aim. We need to manage them appropriately. So we are delivering them on time and budget as we have demonstrated at the Cowal underground. Firstly, on to Red Lake. Over the past 6 months, I've been spending almost all my time at Red Lake. We have been putting the building blocks back in place to enable the future. I know I've said this a lot of times in the past, but I cannot stress the significant steps we have made in the last half year. My biggest disappointment has been the time it is taking to get these foundations in place and accepted. The siloed historic culture has been a challenge to break and getting delivery-focused leadership in place is taking time. Restructuring the systems and the frameworks of how people work together has and still is a work in progress. Bringing the workforce along with us is a key underlying philosophy in how we have the restructing at Red Lake. Suffice to say, we have been getting resistance, but this is actually changing. The noise at the crew level when I went back in November was all around uncertainty about their pay, uncertainty about their rosters, uncertainty about the understanding of how they get paid. And the big one was stress about the operation not performing and what was going to lead to change. Consistency of message delivering on what we say when we're going to do it and having a difficult conversation have all been the focus over the last period of time. We have challenged the status quo and sought feedback on changes from the workforce and we are near implementing. We have harmonized the roster systems. This wasn't about appeasing people, but was about synthesizing the local majority with an important [indiscernible] portion of our people. We are currently in the process of moving all our employees to the site quarterly production -- quarterly performance bonus. Most of our people have already moved across to this system, which links the site delivery and being cash positive to their bonus. Additionally, we are now predominantly in the chemical mining, giving us an improved development right and allowing us now to concentrate on our next improvements. Simple things like poly [indiscernible] and hitting quality have all started. These are improving the development cycle and change is getting easier. We have negotiated a new production drill contract, which includes production metrics and we have commissioned 2 of the 3 near electric hydraulic production drills. We are now working to improve drilling accuracy, productivities and practices. In summary, all the foundations from a systems and structural perspective are in place. And as we identify issues, we will proactively address them with permanent solutions. We need to demonstrate the ability to reliably deliver from the underground and to return some consistent cash before we consider the next investment scenario at Red Lake. In short, we are delaying the expansion options until the risk of ore delivery is eliminated. Technically, it does make sense, but we need certainty on ore feed. That means to proactively identify and permanently eliminate all the impediments with the delivery of a stable, and I'll say it again, boring year in, year out, cash-generating mine, our key objective. I said before that I thought the foundations are set. We have 3 production centers. Mechanized mining is in place, 2 decline breakthroughs are eminent and a 3-year journey since purchase is coming together. We have reduced the major equipment and by the end of this calendar year, we'll be down to 32 pieces of equipment of major equipment underground. The future is exciting. The high-speed development will enable on-time access. The efficiency of material movement in underground environments will actually reduce our costs and increase efficiencies. Improved drilling is demonstrating improvements and the centralized surface mine control room and remote systems utilization with automation is improving delivery as well as enabling real-time feedback and continuous improvement through short interval controls. In summary, with all its mineral endowment of circa 12 million ounces, Red Lake is a cornerstone asset. We have put the foundations in place. We just need to deliver it now. Moving on to Mungari. Initially, I'd just like to put the announcement of the mill expansion. Mungari is a consistent deliverer and has continued to operate this way post the Kundana acquisition, which was driven by the opportunity for value generation through consolidation of the region. When combining the regional consolidation with the mill expansion, Mungari is a very well-placed operation from a cost perspective and asset quality when benchmarked across the eastern goldfields. The bubble chart that I've got up there is an attempt to try to bring together life annual production costs, et cetera. The blue spheres are operations of a similar size to what Mungari is at 4.2 million tonnes. As we did back at the time of the original Mungari acquisition, our focus is to continue on cost reductions. In line with our thinking during the Kundana acquisition, the feasibility study demonstrates sound economics, which, when combined with a stable operating performance, makes this the right time to commence execution, also allowing us to pivot the execution team from Cowal once the project is up and running. Today's approval of $250 million to double the capacity at Mungari's processing plant to circa 4.2 million tonnes per year is a critical milestone for the operation. The planned project is a simple flow sheet expansion. There are no new technologies or difficult metallurgical conditions. The actual white stuff that's coming up now is the additional plant infrastructure. As you can see, it's fitted within and around the existing plant. On the processing cost, this cost reduction base is really seen in an underground operation and is only possible when combined with an open pit material to act as the [indiscernible]. On-ground works are planned to commence during the December quarter this year, allowing time for engineering design and contract negotiations to occur. From a logistics perspective, the SAG is the critical path to ensure we bring expanded operations online in the June quarter '26. From an economic perspective, the project delivers an extended mine life, reduced AISC to a LOM average of $1,750 per ounce, and this is via a 30% reduction in processing costs. This will create an operation with a long life in a geological setting known for its upside and within an operation that has demonstrated reliable delivery. An early identified risk has been the regional growth currently underway. We have proactively engaged 3 contracting firms to be involved in an ECI process. They have all committed resources and people to the completion of the project. And we're in final conversations with respect to the tendering process. As we build scale in the processing plant, the mining department will focus on 3 key near-plant ore sources in preparation to fill the expanded capacity. Namely, these are the Castle Hill, the Kundana and Paradigm camps, which you can see in the picture within the 25-kilometer radius zone. We'll adopt a regional mining center approach typically in the eastern goldfields. We'll be using conventional mining practices with a mixture of owner-operator in the underground and contract mining in the open pit. This provides the opportunity to scale the mine to match the mine plan. Over the LOM, the average production is circa 155,000 ounces per year during the first 5 years post commissioning -- sorry, during the first 5 years post commissioning, it's 200,000 ounces. Over the next 8 years, our geology team's focus will be on near-mine resource conversion. Due to the reduced operating costs and the improved economies of scale delivered from expansion, our target is to maintain a production rate of 200,000 ounces across the LOM. Originally, my question was to myself, and it has been for a while, why is Mungari a cornerstone asset within Evolution. I think the answer for myself is pretty simple. It's a 15-year mine life, targeting 200,000 ounces per year with exploration upside, and it's got a conventional mining and a conventional processing path. It's been a long journey for the last 7 years since we first acquired Mungari, but we have the mineral resource to support this expansion and it's the right time to execute the construction and commissioning. We have a team coming off the successful Cowal project and that we redeployed directly to Mungari. Finally, I'll move on to Ernest Henry. This is a -- personally I believe -- I honestly believe this is a world-class orebody. And today's announcement of the opportunity of the long life, bringing continued long-term economic benefits to the region are huge. I'll just start on a little bit of the past. After the recent rain event on the 8th of March, which affected the entire gulf, we're actually back up and running. We've achieved a run rate of 20,000 tonnes per day. But over the next month, this will stabilize into next year. I wanted to call out this is off the back of a very dedicated and determined operation team on site to bring the mine back up safely into an operating state. Since our initial investment in Ernest Henry, we have reaped $1.8 billion in cash, and they are a stable 50,000 to 55,000 tonnes of copper and a constant 75,000 to 80,000 ounces of gold per year producer. Over the past month -- 18 months, we have conducted a PFS on the cave extension. Significantly, we believe the geological potential is such that a more efficient alternative to truck options below the 1,200RL should be investigated. The previous owners' truck concept study, which were considered during the due diligence, limited the depth extension possible and had a declining production profile as the truck constraints increased. The crushing and conveying option enables us to continue to utilize the 1,200 crusher whilst we develop the next crusher horizon on the 800RL, delivering a higher NPV, by setting the operation up for a long life at low operating costs with significantly lower emission footprint. Through the PFS and the updated mine design work, we are restating our ore reserves. I think most would agree, a 126% increase in tonnes and a 124% increase in contained gold is a great outcome. We are actively drilling on site and look forward to continuing to see growth in the underlying mineral resource, which we hope will translate into future ore reserve growth. As we move deeper in the resource, we are seeing similar copper grades. But slightly higher gold grades. The mine grade variation seen in the reserve statement is due to the modifying factors that have been applied and the change in commodity assumptions, and Glenn will talk about some of this in his section. The PFS has only considered the mineralization in the pink. So that, I think Lawrie called it magenta. That area there, whatever the color is, is the what the PFS is actually included. And it's based on the December '22 MROR. Not the potential additional resources, all the exploration upside which Glen will actually go into. These are all additive to the economics and will be considered during the PFS. As we have said, the capital costs are estimated at $450 million to $500 million in today's dollar. This is for both the mine development and infrastructure and again based on only that pink area. Today, we are actually committing $15 million over the next 18 months to complete the Ernest Henry extension feasibility study before seeking approval for execution. We are also committing $7.5 million for continued exploration into the feasibility study zone. We expect the feasibility study will be completed during the March quarter FY '25 with the majority of this project spend over the 2 years from FY '26. With our current knowledge, in today's reserve increase, I do expect the cave footprint will expand with potential longer life and higher total tonnages. In summary, Ernest Henry now has a pathway to an extended life with upside for further increases that are value accretive in nature to what I'm calling a magnificent orebody. With the feasibility study timing and the required development, lead time to reach the 800 crusher and you can see it in the bottom there in the orange square. It's logical that the expenditure for the extension to Ernest Henry cave is actually post Mungari mill upgrade. Just in summary, thank you for your time. I'm certain we'll get more questions asked at the Q&A, but I want to leave you with one thought. We have 4 excellent operations. They are set for the future. We believe completing the technical work to ensure our investment decisions are sound and timed right for delivery and capital spend is the appropriate path to deliver higher returns and stability. I've not covered Cowal. That's because Bonnie is going to step up in a minute. Bonnie has actually been at Cowal for the last couple of years in the integrated planning role, and we promoted her to the General Manager just earlier this year. So I'll hand over to Bonnie for Cowal.

I'm Bonnie Coxon, I'm the General Manager of Cowal Gold Mine. And as Bob said, I've been with the operation for over 2 years now. In that time, I've held leadership roles in technical planning and operational management. So while I've been with the operation, I've overseen the progression of the Stage H cutback of E42, the transition of the underground from feasibility through to production having been discovered under Evolution ownership in 2018. I've also overseen the life of mine studies being the continuance of open pit mining past FY '26. The combination of these key factors is what is building our asset towards 320,000 ounces per annum of safe, reliable, low-cost production. So a little bit now about Cowal as a cornerstone asset. Evolution acquired Cowal in 2015. And since then, there's been a step change in mineral resource and ore reserve. We're currently operating at a large 8.8 million ounce mineral resource and 4.3 million ounce ore reserve. Under Evolution ownership, there's also been a significant extension in mine life and we currently operate out to 2040. That's 17 more years of operations. There's a couple of key components to this. The first is E42 Stage H. The second is a recently added 1.2 million ounce higher-grade underground ore reserve. And this is in an orebody that remains open. We also have the open pit continuation project that's going to carry open pit mining forwards through an additional cutback from Stage I and satellite pits to the north and south of the mine lease. And this is going to provide us with a long-term production base. And we have a large, lower-grade stockpile sitting at circa 40 million tonnes as well. So the combination, the staging of these ore sources gives us the flexibility to grade stream and maximize value over our life of mine. And throughout FY '23, we've generated cash through a low-cost, high-margin approach. Throughout FY '23, we have seen our ounce production increase quarter-on-quarter. This is due to the safe, reliable and consistent production that we see coming out of our current open pit, Stage H E42. It's also from bringing forwards and delivering ahead of schedule our underground production, which has seen an increase in mill feed grade quarter-on-quarter and record recovery under Evolution ownership in both quarter 2 and quarter 3. These production results are leading to us to forecast to increase our production for FY '23 by 20% from FY '22 at 275,000 ounces. When we look forward to FY '24, we are looking to make another step change of 16% increase to 320,000 ounces and this is going to be primarily due to ramping up our underground and the high grade that will come with that. With this plan production moving through our major capital spend phase, we are set to become a significant cash generator for Evolution. Now to an overview of our operation and focusing on our open pit. Stage H E42 is progressing really well. It contributes the main base feed to our mill and is on track to deliver the plan for FY '23. This is despite a one in 100-year flood event and significant weather events in the first half of the year in Central Western New South Wales. And I'd like to take this opportunity to call out our fantastic workforce, whose resilience, hard work and can-do attitude demonstrates the Cowal culture and what underpins it. So throughout FY '23, we have seen a quarter-on-quarter increase in ore tonnes. In quarter 3, we delivered a record 4.2 million tonnes of ore from the mine, which is pretty exciting for us. As we go forward, we're forecasting to deliver over 13.5 million tonnes of ore in FY '23, which will be 30% higher than FY '22. This trend of increasing ore volumes in grade is set to continue for the remaining Stage H cutback. As we reach the more mature part of the cutback, we become ore bound and our stope ratio is falling below 1:1. This is a pretty exciting time to be in this orebody. This is going to be supplemented by our underground feed at that slightly higher grade there, and it will also help us to build on our stockpiles, which gives us flexibility in our mine plan to adapt to different circumstances going forward. So I'm really pleased to talk about our underground project today, which is on time and on budget. It's been in execution throughout FY '23. And there's 2 key parts to this. The construction of the surface infrastructure and the underground mine development. Most recently, as I mentioned, we brought production on ahead of schedule in quarter 3. We bought 43,000 tonnes at approximately 3.4 grams per tonne into the quarter 3 production. Over the year, year-to-date, between quarter 1 and quarter 3, we have completed over 8,000 meters of development. And we see that development -- productivity increasing quarter-on-quarter. We are forecasting to complete over 106 kilometers of drilling in FY '23. And this is just building our confidence in that grade continuity and really enhancing our understanding of the geometallurgical and the geotech characteristics of our orebody. In our near-mine drilling and resource drilling that we've done, we've had some exciting results, and Glen's going to have a chat to you about them after this. The mine is now in its first stages of production. We are commissioning key infrastructure over the next month and this will support the ramp-up phase for the mine, which will build us to an expected 110% increase in ore delivery between FY '22 and FY '23. That's over double from 480,000 tonnes up to circle 1 million tonnes in FY '23. As the production ramp-up progresses over FY '24 and FY '25, we're building to a 2.4 million tonne per annum rate in early FY '26. The average grade over the ramp-up period will be around 2.3 grams per tonne. In terms of costs, we have managed our project spend within contingency levels within inflationary environment. The operating cost increases we've seen have been balanced out with the increase in gold price, and that's reflected in our recent ore reserve that showed the cutoff grade remains steady. Now looking forward to our open pit continuation project. This project is currently in feasibility and the feasibility study outcomes are expected in the first half of FY '24. The project is going to enable open pit mining at Cowal for an additional 10 years, taking it from FY '26 to FY '36. The source of ore from this project, as you can see here, is from 5 pits. The first being E42 with an additional cutback Stage I. There are 2 satellite pits to the north, our E46 and Galway-Regal pits and to the South, we have E41 East and West. The EIS for this project has been ongoing over the last 18 months and is now ready, and will go on public exhibition this month. And that's in line with our approvals time line, and we're forecasting approvals in FY '25. These additional open pit ore sources, in combination with our underground and our stockpiles, gives us that flexibility around the allocation of capital past FY '26 once we have depleted Stage H. We'll look to optimize our mine plan based on NPV, cash flow, capital spend and timing as we go forward So the point we really want you to take away today from this is we have multiple, great options that we are progressing in parallel as we optimize our mine plan over the next couple of years, which is pretty exciting. Now I am really proud to release to you 4 great drill results that we have found ahead coming recently. As you can see, there are 4 significant results at different areas in the orebody here. Now these are important to note that they're outside our current geological model. They have potential for growth in near-mine, near-term areas. I'm going to hand over to Glen Masterman, who is our Vice President of Discovery, and he's going to talk a little bit more about that.

Thank you, Bonnie. This is where technology collides with geology. And hopefully, there's been [indiscernible] Let me get sorted out here. All right. Next slide. So my aim this morning is to take you through the growth opportunities. I believe we'll continue to secure the production future that Bob and Bonnie have just spoken about. At Cowal, I'm going to take you through a fly-through of our underground orebody, where I'll describe how we can continue to expand the underground reserve. We will also say over 1 of them are exciting long-term targets, which is the kind of thing my geos love to get out of bed for every day to explore. At Mungari, I'll illustrate how we plan to sustain production rates at plus 200,000 ounces through to 2038 and beyond. I'll also walk you through some of the exciting underground opportunities at Kundana that will maintain high-grade production fee beyond our existing reserves. Ernest Henry has been one of the more memorable geological journeys in my career. It's not often that a geologist gets the opportunity to be part of a growth story that shows no signs of slowing the rate, at which we're adding metal. Beyond doubling the reserve, we believe there are additional opportunities where I am confident we will deliver future options that can consume the additional capacity we are designing in the underground infrastructure. The first of these is at Ernie Junior, and I'm looking forward to spinning the model later in my presentation so you can be as convinced as I am in the growth upside. We will also look at how Bert can potentially supply incremental production without competing with the existing and future underground infrastructure. And lastly, we will look at some of the deep drilling intercepts that I highlight Ernest Henry is still open for future growth. Although I will not be covering exploration and growth opportunities at Red Lake in this presentation, it, in no way, represents a shift in my level of enthusiasm for new discoveries in the large land holding under our control. In fact, we are exploring several earlier-stage exploration targets that I really hope I will be back to talk to you about at our next Investor Day. Red Lake remains as 1 of our, if not, best regional exploration properties across the portfolio. Let's commence our first fly-through of day at Cowal. Here, we have reproduced the scene from Bonnie's last slide, showing the exciting results from the 4 drill holes we reported in this morning's ASX announcement. The aim of this slide through is to talk you through where we see the growth opportunities in the Cowal underground. And I'll finish with a description of a relatively new exploration target we've been developing 15 kilometers south of the mine [ known as ] South Cowal. In this scene, we switch on all of the drilling results above 3 grams per tonne, which are represented by the orange dots with the red dots showing assays at 5 grams per tonne and above. The real ellipses highlight areas of growth potential where we believe further drilling will continue to expand mineralization domains beyond the current resource boundaries as well as convert resources to reserves along the way. Zooming in, we will take a closer look up at the Cowal ore body and at the top of Dalwhinnie. I've filtered the assay results here to show only those 5 grams per tonne or above. The first thing we see is that there is a significant amount of very good grade that we're confirming in the upper levels of the underground. These drill hole results reflect the success of the closed-space drilling we've been doing to de-risk the short-term mining schedule. What we're seeing in the results is great upside accompanied by a slight volume reduction to deliver similar metal inventory. The other aspect of these results is that they are targeting the fast strike extent of both ore bodies and shows them to be open beyond the currently modeled resource shapes. The implication of these results is the potential to extract more metal from these levels than previously planned. The next scene illustrates what I believe is our best growth opportunity at Cowal. Dalwhinnie is one of the most continuous and highest grade of our underground ore bodies. It remains open along strike and down plunge. It's also an opportunity where we can convert resource to reserve with more infill drilling. Dalwhinnie South is a target we can readily switch on and deliver when the time comes. We will likely wait for development to arrive and provide the most favorable drilling positions for an efficient and cost-effective program to be executed. We're going to rotate away from Dalwhinnie and cross over to the Regal area to look more closely at the long 40-meter intercept that returned an average grade of 4 grams per tonne. This view is a planned view or will come into a planned view looking to the north, which will be at the top of the page. We're excited about this result as the hole was drilled well outside of existing resource shapes, as Bonnie mentioned, and this is going to extend the resource further to the East, which is on the right-hand side of this image. We believe the hole has potential to add metal in the tens of thousands of ounces, and we've got a fair bit of space to continue to drill and expand the zone to the right of the intercept. Future drilling will hopefully connect mineralization between these resource shapes, adding more metal per vertical meter in this area of the underground. We're now panning out to review the designs of the 5 satellite pits that are being examined in the open pit continuation feasibility study. This also includes the Plan of E42 or the expansion plan of E42, which will be known as Stage I. Panning out even further, we are flying south now to South Cowal to look at some of the geological elements of this new target we've been working on. We identified South Cowal by interrogating historical information contained in our regional drilling data sets. What we did was to grid and contour the maximum assay values of gold and copper from our wide-space drill coverage. This resulted in the identification of several coincident copper and gold anomalies which we believe represents separately developed mineral systems across our exploration tenements south of the mine. The first bit of image I showed was gold and the second one that we're now seeing on the screen is copper, with the warm to hot colors representing the anomalies that we are interested in. The [ other ] circle that's just disappeared, emphasized a large copper anomaly at South Cowal and that's almost 3 kilometers long, as we can see as we zoom into the target, where now we are showing the separate copper and gold anomalies in the yellow and orange colors. We have subsequently drilled 3 diamond holes, 2 of which have returned encouraging high-grade results on 2 sections spaced 400 meters apart. The third hole returned a wide interval of anomalous copper and gold mineralization. However, no significant or grade numbers were received in the assets. These impressive results suggest we may be testing around the edges of a significant mineral system. The veins, the grade in the first 2 holes have very similar geological characteristics to the mineralization at Cowal. We are impressed by the scale of the target where we plan to conduct more ground geophysics that will help us -- that will help guide us to a location where drilling will hopefully reveal the discovery of a new ore body in this district. Turning now to Mungari. I'm going to commence this section with a description of how we see reserve growth emerging in the regional production centers. Our aim is to continue expanding reserves and sustain a production rate of 200,000 ounces or better. Bob mentioned earlier that we are already drilling at a number of these resources with the intention of infilling between our reserve and resource shelves. The goal is to sustain production at our main operations for much longer periods than we have assumed in the plan. Our infill drilling programs aim to upgrade classification of mineralization extending beyond our resource optimization shelves to pull our pits longer, along strike and deeper down depth. In the example here from Castle Hill, we have long wide-spaced intersections beneath the $2,400 shell confirming mineralized extensions of the ore body that have potential to pull down this pit on new reserves when we establish high confidence in grade continuity around this deeper drilling. The same can be said along strike, where we have sufficient -- where we have wide-space sections that are mineralized, but without sufficient drilling support for these results to inform higher resource classification categories in our models. Further drilling along strike should drive the same result we expect to see when we drill more infill holes at depth which is an overall increase in ore across our main regional production centers. We now continue our fly-through experience at Mungari where we are showing our regional tenement holdings in white in closing the various open pit resources that will be mined across the bioproduction centers. We'll transition quickly to hover above the plant where we see the current layout and infrastructure. The main changes of the PFS plant design that Bob described earlier are dropping over the top of the existing outline. From here, we're going to pan out, fly north and float above the numerous underground mines at Kundana. We're now looking at the 3 main lines of load that make up the various high-grade ore bodies. The navy blue panels represent the regional default faults, which are important to understand as they juggle and displace the veins against each other. Here, I'm talking on the underground development and revealing the reserve shapes in red, which we inherited when we bought the asset from Northern Star. Coming up in gold are the reserve shapes we've been able to optimize and grow since taking ownership of the asset. I'm switching now to the mineral resource outlines, which are situated outside the reserves. I filtered these shapes to report block grades at 3 grams or better. We can see that there is a big opportunity to continue converting resources to reserves with our underground -- with our ongoing underground drilling programs. I'm going to finish at Mungari with where I believe there is additional high-grade upside we can potentially deliver to the mining schedule. I'll draw your attention to the yellow trace line signifying the position of a narrow hanging-wall vein that tracks from Raleigh in the Southeast, a long past Christmas and up to the hanging-wall position at Strezlecki. At Raleigh, this structure hosts a narrow vein known as Skinners's which has been historically mined. We recently started mining the same structure at Genesis in the hanging-wall of Christmas. And we now know the structure exists in the same position at Strezlecki. However, it has never been effectively tested at this location. The reason why this opportunity still exists at Strez is that most of the drilling has been predominantly called from the footwall side of the mine. Very few holes were pushed long enough to cross the structure, which is situated 30 to 50 meters away from the main mineralization. The holes that did, drilled in the direction of the blue arrow, believe it or not, intersected mineralized court stain at the location of the structure. This is an exciting opportunity that we've been recently developing in the, hanging-wall of the Christmas mine, which we call Genesis. We now understand it's the same structure at Strezlecki and gives us a new opportunity to drill and continue to build on our underground ore reserves. This has all come about because of some great forensic geological work that's been able to reverse engineer those late default faults and rejoin the ore bodies as they originally developed. This clever work is helping us understand where new opportunities for high grade may be discovered along this highly prospective corridor. So now we move on to Ernest Henry. And I think really is where we've been saving the best of our growth stories for last. We're looking at a planned view of the mining areas with the open pit situated in the middle center. Zooming in, we're looking at a closer view of the surface infrastructure with the pit there again is the reference. And for those not joining us on the site visit over the next couple of days, this is a pretty good reality representation as I spin the -- spin the model -- to zoom in on some of that infrastructure. So the admin buildings there, the mill, in the middle are shaft in the pit, and we can turn it around and flip it around and such. So next then moves us under the surface to look at how the drilling has defined the ore body. What we're showing here is all of the pre-2022 surface and underground drilling completed prior to 100% ownership of the mine. I'm showing only the gold results, but we would see a similar geometry of grade distribution if the copper was turned on as well. This next illustration or scene shows the addition of the Evolution drilling completed in the last 18 months, which has been a really busy period of time for us. In the next scene, we see the green shapes, which show the copper ore bodies or the copper contour at a grade of 0.7%. This is what the ore body looked like pre-2022. Now we're showing the grade shelves where they have been expanded in the last 18 months, reflecting resource growth achieved by aggressive drilling programs. The arrows are obviously indicating the directions in which the various ore bodies remain open to grow. The other piece of the story at Ernest Henry is that we've delineated a domain of higher gold grades inside of the copper shell, the gold domain is shown as the red shape, which has been modeled at 1 gram per tonne as a cutoff grade. The grades within the shell are commonly better than a [ gram ] but which drives some of the higher grade in the resource model through this section of the cave. The shelves I'm showing here are consistent with what we are seeing in the resource model, which hasn't changed since our 2022 December year-end update provided in February this year. Copper and gold grades reported from that most recent estimate are 1.3% for copper and 0.75 grams per tonne for gold, giving rise to 1.2 million tonnes and 2.3 million ounces of copper and gold, respectively, in the mineral resource informing the recent ore reserve. Excluded from this estimate are significant step-out drilling results from the [ lower lenses ] below the PFS extension footprint and extensional drilling into the Ernie Junior connector area, which I can show here with my pin, so this is the shaky hands. This is the Ernie Junior connection area that we've been drilling recently that we're really confident the geology is connecting through with additional drilling to follow that will deliver mineralization across this gap or connector area. So if we switch off the ore bodies and now focus our attention on the underground development designs. Development for the current life of mine schedule is down to the 1125-meter RL and that's shown in the gray shapes. The future development designs for the PFS are shown in purple. The PFS is predominantly focused between the 1125 and 775-meter RLs. However, one of the more positive developments from the December 2022 mineral resource upgrade was growth of the Southeast lens above the 1125-meter RL into this level. So there's a portion of it here and a portion of it here. A key infrastructure consideration that Bob described earlier is the design of a Crush and Convey system which we can view -- if I turn off the pin and rotate it around this way. So the Crush moves its way down here and down in here. Sorry, that's the Conveyor and the Crush is down in there. So really, just to reinforce Bob's message, the inclusion of this system really provides optionality to exploit future resource growth and extensions in the mine. Switching ore bodies back on provides clarity on how much of the resource falls outside of the PFS footprint and where we have opportunities to expand our underground production areas. However, before I go there, I want to touch on the rationale for the -- for drilling the surface holes that have delivered a lot of the results that are informing the recent estimates. We made the decision early last year to go with the surface drilling program. And that -- in order to complete the critical infield drilling to enable us to upgrade the resource in support of the PFS or reserve. We learned that we had really sort of started to exhaust the positions we had from underground to enable us to get a good angle of attack on the ore body. The surface drilling allows us to drill through the ore body at right angles and as a result, we've been able to model the edge of mineralization more accurately. This has actually driven a positive outcome in the mineral resource modeling where some of the deeper lenders are 20 to 30 meters wider than we'd previously assumed. The service drilling approach has been well worthwhile. And as you can see, we have done it with very few surface [indiscernible] positions which has been enabled by the technology advances in directional drilling. Here are some of the results highlights of that deeper drilling, where I'm pulling out some of the longer and higher grade gold and copper intercepts through the deeper areas of the PFS footprint and at depth in the lower lenses below the 775. You can see that these intercepts support the higher-grade gold domain that we've incorporated in the resource model. The next theme shows some of our underground drilling that has been done outside of the PFS footprint. These drill holes are high or drilling into the gap between Ernie Junior and the [ lower lenses ]. The results to return numerous robust copper and gold intercepts over good thicknesses which was again emphasized in the yellow color boxes. We are confident in the geological continuity as I mentioned earlier, and I'm really looking forward to the ability to get more of the -- more of the Ernie connector area drilled as we restart the program in the next couple of months. This next scene really illustrate or is illustrative of the long section we included in our last ASX announcement on the drilling results at Ernest Henry at the end of the March quarter this year. Yellow area, obviously, is the PFS footprint below the 1125, and the blue box is representing where we believe the resource will continue to grow outside of the PFS. And as I mentioned a moment ago, I expect that gap to close between Ernie Junior and the [ lower lenses ]. I think what we're going to see out of this as these resources grow, will be the [ deep ] definition of sufficient incremental metal inventory that will enable us to keep the plant operating at full capacity all the way out to 2040 and beyond. The next mine life extension opportunity shown is in the purple where we are confident that these lenses will continue down plunge, and future drilling will target these extensions at the appropriate point in time. Moving back to the main ore body, closer to surface brings us to the Bert domain. This was an area of mineralization that we assessed in our DD back in 2021, where we really like the geological opportunity. We gave the site team a green light to drill, what was several isolated pods of mineralization located adjacent to the north wall of the pit. What happened in the results is that the pods joined up to create a meaningful domain of gold and copper mineralization. What's even more interesting is that you can see how close Bert is to the north wall of the pit which will be really useful as we'll be able to access from the existing ramp system in the pit. We also believe that we can expand the mineralization down plunge, which has the potential to link to Ernie Junior assuming the geology cooperates. The other interesting element at Bert is that access from the pit sidewall will allow us to extract ore independently at the hoist, enabling delivery of incremental production to the plant in the future. In closing out on Ernest Henry, I wanted to show that we still have several new results that we expect to come and hopefully be able to announce in the September quarter. These are shown in the blue drill holes here. We'll also be able to incorporate these results in our next mineral resource update, which I expect will be ready to declare during the September quarter. However, what I'm really excited about is the plan to restart our underground drilling in July, which will continue targeting [ east ] connector area by those holes shown in purple as well as infill and extension drilling in the yellow holes at the Bert ore body. Last slide. So there are really 3 key takeaways I'd like to leave you with this morning. The first is that we have numerous opportunities at Cowal to continue to extend the mine life in the underground and build long-term optionality for production beyond 2040. We are confident in our plan at Mungari to deliver additional ore to sustain production rates of plus 200,000 ounces with the growth opportunities I've described across our regional pits and in combination with the ability to continue to supply high-grade resources to the production schedule. At Ernest Henry, we have the reserve expansion opportunities outside the PFS footprint which we believe can keep the mill running at the current operating rate. A mineral resource update is due in the September 2023 quarter, which will inform an ore reserve update that will be a deliverable of the feasibility study. I'd like to finish that -- finish the presentation here and hand it over to Jake, who's going to give us a really exciting detailed update on Mt Rawdon.

Thanks, Glen. That was impressive and exciting. It is a hard act to follow. And when we discuss the schedule for today, we thought what could we put after that. And there is only one thing. That's the opportunity at Mt Rawdon. I didn't realize that the financial review is going to hold an ESG summit next door. But I do think that someone should go and tell the delegates there that the most exciting thing happening in the ESG space is being presented today here at a gold company's Investor Day. It really is unique. It is about transforming a gold mine that's been going for 25 years and nearing the end of its mine life into a large multigenerational renewable infrastructure asset. I think it's a great opportunity to showcase mining in a completely different and very positive light, which our industry will benefit from but it also really has huge potential value to Evolution shareholders. As you'll read about in the financial review, no doubt tomorrow, not necessarily about Mt Rawdon but about the transition to renewables, our federal and state governments have set massively ambitious targets. Federally, the government is targeting 82% renewable energy by 2030. Assuming that total demand as of today remains constant. We're only currently generating 36% of our energy through renewables. So you need 57 gigawatts of power, new power to meet that target. That's a lot. I mean, when you think about a gigawatt, don't think about the solar panels on your roof, think about a coal-fired power station, which is -- we're going to talk about the [ Cowal ] coal-fired power station in Queensland, which is 800 megawatts, which is less than 1 gigawatts. In Queensland, where Mt Rawdon is located, the challenge is it really even bigger. States committed to a 70% renewable targets by 2032, so that it can host the first green Olympics and 80% by 2035. So Queensland currently has 17.5 gigawatts of installed generation capacity, of which only 23% is renewable. So it's obviously a huge -- a long way off its targets. In order to get there, Queensland will be required to install 25 gigawatts of large-scale wind and solar and couple that with 7 gigawatts of new long-duration energy storage which will nearly be built at a cost of around $62 billion, and that's a low estimate, I think. The scale and complexity of this transition and commitment by government is massive and to get there will require enormous political will and capacity. On the flip side, Queensland is fortunate. It has the natural ingredients to achieve it, lots of wind and sun which are ideal for renewable generation. So it is possible. But -- and I think this is a really big but in order for solar and wind generation to be reliable, the most strategic and critical components of renewable grid is the storage. That's for the times when the wind isn't blowing or the hours of darkness when the sun is not shining. And so that makes storage or firming capacity, both the most challenging and the most valuable part of renewable power system. Without it, the grid is simply not reliable, particularly as this coal generation is retired and users will be subject to blackouts. The only reliable way of delivering the scale of storage or firming capacity using existing technology at economic cost is through pumps hydro generators and Mt Rawdon presents -- and you heard it in and low-cost opportunities in this space. For those of you who don't know, pump turbine is really just a giant battery. It uses electricity from the grid or nearby renewables, solar and wind, pump water from a lower reservoir, which, in our case, will be the open pit mine into an upper reservoir where intermittent renewable energy is generating. So then when you need energy, say at night, water is released from the upper reservoir into the low reservoir generating cheap clean power as it passes through a turbine. The big benefit is that power can really be generated on demand and almost immediately at any time. So it can be fed into the grid, thereby ensuring secure reliable supply to users. You may be wondering how a pumped hydro project is being presented at a Gold Company's Investor Day. So the story how we got here is quite interesting and probably worth spending a couple of minutes talking about. About 4 years ago, we were approached by a group ICA partners who are a leading Australian renewable advisory firm. They've done a survey of all existing mine sites in Australia or most sites and identified Mt Rawdon is highly prospective to be converted to a pump hydro facility. The reality is that ICA partners deserve a lot of credit for this. They were front-runners in understanding the magnitude of change, investments and the opportunity that our countries transition to a renewable grid presented. They agreed to fund 50% of the $17 million required to complete a feasibility study on converting Mt Rawdon into pumped hydro facility. And we're talking about doing the feasibility study to generate 2 gigawatts for 10 hours. So that's essentially 2.5x or 2x bit times the [ Cowal ] power station that's scheduled closure. ICA has also provided their very valuable expertise in navigating the pathway to transforming this asset, in exchange for that, we agreed to a 50-50 partnership. I can absolutely, would certainly say that we would never have got to this point without ICA's knowledge and experience in this space. One of the great challenges of pumped hydro is not only finding a suitable site, but also getting environmental approvals for the facility. I think what you've got to think of it as is permitting essentially 2 very large open pits and normally a greenfield site. The 2 pits are the upper and lower reservoir and that's a process that, as you all know, can take many, many years. And in this regard, Mt Rawdon has an absolutely unbeatable advantage. It's located on an existing mine lease. It has very strong local community support, and we already own or have options over all the land, which this renewable infrastructure will be built. I cannot stress how important this is. Mt Rawdon also benefits from unique topography and location. Of course, another huge benefit is that the open pit has now owed over $1 billion spent on it, mining gold over the last 25 years, creating a suitable and easily adaptable pumped hydro reservoir. In this case, as I mentioned earlier, it's going to be the lower reservoir. The upper reservoir will be built some 550 meters higher on natural ground, so the topography really helps in this case. This 550-meter head height is really important and provides the capacity to generate the very significant amount of power that the system will generate. 2 gigawatts is capable of powering 2 million homes in Brisbane metropolitan area for 10 hours. So the amount of political traction this is getting is very significant. When you talk to politicians, they can see how important this is potentially for them, both in terms of profiling a mine site transition to a renewable asset, but also in achieving their commitments on renewable energy. The other great advantage that Mt Rawdon has is its location. For those of you visited it over the years, it's 75 kilometers southwest of Bundaberg, it's only 22 kilometers from the current 275 kV transmission line, and it's even closer to the proposed 500 kV transmission line Super Grid that the state government needs to build to meet their renewable targets. As you also know, the Queensland government has an aggressive plan to shut down aging coal-fired power generators. The [indiscernible], this is 800 megawatts is scheduled to close in 2029 and Mt Rawdon's advanced stage of readiness, makes it really the only viable replacement in this planned closure time line. So where are we at? The feasibility studies is advancing well with the project benefiting from being grinded coordinated project status by the Queensland government. We have to date not identified any fatal floors. And importantly, the terms of reference for this critical environmental approval have been largely defined. We expect to have demonstrated the technical veracity and robustness of the project in the next few months. We write down to the last few issues. We expect to have our environmental approvals in place by mid-2024. And that will allow the commercialization and crystallization of value by the end of 2024. The work to date suggests that it will be the lowest cost renewable firming or storage capacity in Australia. It's expected to cost around $2.5 million per megawatt of capacity by reference points, Snowy Hydro is its latest -- it may be not its final cost estimate is now at close to $3 million per megawatt of capacity the Kidston facility, which is owned by Genex, it is over $3 million per megawatt of capacity and our understanding that pumped hydros that are being planned today are well over $3 million per megawatt of capacity. You may also recall that Genex was recently subject to a $346 million bid by Stonepeak Partners that was withdrawn. But if you add the $610 million of long-term, low-cost debt from [ NAIF ] a which is the Northern Australia's infrastructure facility, which is funded by the federal government. The enterprise value of Genex at the time of the bid was close to $1 billion. And just again, in terms of context and comparison, Genex Kidston pumped hydro facility, which is still under contract in this plan to produce around 250 megawatts for 8 hours. So we are planning a facility that's roughly 8x larger than Genex facility. So with the feasibility study now well advanced, our attention is turning to commercializing this opportunity. To date, the conversations with potential partners or owners of the facility have been overwhelmingly positive. They understand both the strategic value of the opportunity and the very compelling economics of the project. We're really engaging and discussing with 3 broad categories of groups: Firstly, the Queensland government's owned energy group such as CleanCo, Stanwell and CS Energy; secondly, the Queensland retailers and large users that all have ambitious targets to convert their existing generation assets into renewable assets; and finally, infrastructure funds who have mandates to deploy large sums of capital. I'm a bit stunned by how large those sums of capital are to the energy transition and renewable power assets. Over the next few weeks, we will again be providing them with another update on the progress we've been making and start discussing commercial options. Clearly, this is not an asset that either ICA or Evolution will develop unless Barrie and Lawrie can give me that billion -- 50% of the $4 billion required but we are completely aligned ICA-Evolution and focused on maximizing the value for our respective shareholders. Like a mining project, this requires us to advance at a stage of having all the required government permits in place, a clear funding part and an investment decision to proceed, and we expect to have that by the end of 2024. So hope in this very short time, and I'm always happy to talk about it longer. I've now lead a justice to this unique opportunity. It is an area that I've personally grown increasingly interested and excited by. Our 50% interest is essentially today a free option to our shareholders. I don't think one analyst who covers Evolution has any value in their model for this project, but I'm hoping that, that will change as of this afternoon. That brings us to the end of the presentations. I appreciate you listening. We'll now open it up again for Q&A.

Again, if you can just please state your name before asking a question, it will help those on the web or not.

Dave Radclyffe, Global Mining Research. So the questions in relation to Cowal and the upside of Cowal and how you guys think about it and rank it. Seems to be a few options if you look ahead to the future, given those exploration results, maybe there's an option to expand the underground. Given the permitting you have for the plant and obviously, plenty of open pit ore and lots of stockpiles. Do you finally expand the mill? And then I guess the third one is that open pit continuation plan, but then is permitting and I imagine a fair bit of capital. How do you think about those and rank them?

I'll make an initial comment, and then I hand over to Lawrie. But one of the great things about our portfolio now is the optionality and our ability to adjust and maximize value, both from a group perspective and from an asset perspective. So I think what you've described at Cowal where you've got stockpiles, you've got open pit opportunity, you've got the underground. Plus, you got great exploration results coming through -- is to us kind of the Holy Grail in the space where you really have options which you can pull levers on to maximize value. Lawrie?

Do I have to stand up?

Yes.

Just checking. Yes, Dave, I think it's an enviable position for Cowal that it's got 40 million tonnes on a stockpile that will build over time. We're ramping up the underground and Glen and Bonnie are confident that we can get further upside in the near term there. That gives us that flexibility. We've got to go through the approvals process. As Bonnie said, that will go on public display for the open pit continuations. And what we then have to look at is when is the right time to bring on those satellite ore bodies. Knowing that over the next couple of years, we've got to work through the approvals and then the timing of bringing them on. But it does give us a lot of options at Cowal versus where we were 2 years ago with just 1 open pit. [indiscernible] I don't think so. When you consider that the -- what we're about to do with the open pit continuation does require us to move the [ bundle ]. So that approval process for that is going to take a period of time, which starts very shortly in terms of public display of that. So I don't think in terms of where it ranks against Mungari from a timing perspective was going to change. [ Kidston ] on pumped hydro. They all got their hands up.

There's going to be a lot of questions on it.

Daniel Morgan, Barrenjoey. I just want to get clear what is in the CapEx figures and what isn't? So you've got FY '24 CapEx guidance today. You've got $250 million at the Mungari mill and $450 million to $500 million at Ernest Henry. What is outside of these figures from now to first production that you would not call sustaining in nature. So working on Ernest Henry or bringing on satellite deposits at Mungari.

Yes. So if we look at the FY '24 to '26, it's the projects that are either in study or execution. So the $250 million at Mungari is in the plan. As we said, the drilling and feasibility study at Ernest Henry is in the plan. And there will be some of that $450 million to $500 million spend over the next couple of years, as I said in the first session, around continuing down to the decline. The majority of that $450 million to $500 million is spent in '27 and '28. So that's not in the '24 to '26. So there'd be -- I would gauge that out of the FY '24 to '26, you've probably got about $60 million to $70 million of Ernest Henry capital that would be spent in that period. When we look at Cowal, the open pit continuation is not in the capital through '24 to '26. What we have to do is work through the completion of the feasibility study, look at the permitting approvals and then make the decision on when to commit to that. And as we've said through the course of today, we've got that flexibility around stockpiles, working out what would be the impact of pushing that back 12 months if we needed to, but we need to get through that at the moment. So in the OPC, there's nothing other than some study capital that's in the '24 to '26 numbers. And then sorry, going on to Mungari. Mungari in terms of the open pits and the underground that sequenced to fill those plants, the development, you're probably looking at about $15 million to $25 million a year in terms of open pit mine development that's needed for when the plant expansion comes through. And so over the next 8 years, that's included in our capital profile for the open pits at Mungari.

I don't think you should sit down.

Sit down?

No, I said, I don't think you should sit down.

I thought you said sit down.

Andrew Bowler from Macquarie. Just sticking on Mungari first. I think key message trying to get across is over that 5-year period at 200,000 ounces per annum and growing inventory of the bigger, I guess, more reliable and bigger economies of scale or sources over that 5-year period. Are we expecting an update or should I say, an extension to those sort of reserve loss of those bulkier ore sources within the next couple of years? Or is that something you incrementally add over that 5-year initial period?

Are you saying this.

I can. I mean I think I just want to reference you back to that chart that bold that up. I mean this will be one of the longest life assets in the gold fields. Glen's summary of the exploration is the confidence that we can actually sustain that 200,000 ounces, albeit it's going to require discovery success. But that is how that Eastern Goldfields really operates. Our mine life at the moment at 15 years is amongst the longest. And then we're going to be doing a lot of drilling in and around the areas with the confidence that we'll be in those mining hub areas for longer. Glen?

Thanks, Jake. So the drilling programs are actually in the plan for the next couple of years. So we were talking about the 3 pits over the 5 years. So really aggressive drilling programs coming up in the FY '24 into '25, which will really focus and drive development or conversion of resources to reserves with the ultimate goal of just keeping us in those mining areas for much longer. So that's in the plan. The other piece to add to that is we just continue the ongoing underground drilling program so that we can convert those resources to reserves at Kundana and on the edge of Kundana JV. We've also got a lot of work to come on the Paradigm underground. So the arena load showing a lot of promise at depth with some fairly good grade and is definitely open. So the goal is to keep that high grade into the mix for a long period of time as well, which keeps that average grade of production up.

Last one for me, Glen. Probably person that touched on them, I think, talking about the potential for Bert to add incremental production at Ernest Henry. Can you just give us an indication of how far we are of seeing some more color around that. Is that sort of something that will come out in the next iteration of the expansion study? Or is that something a little bit more long dated? And I guess, being a bit cheeky, can you quantify what that could look like in terms of production uplift?

I'd love to be able to, but it's -- it's really early days on, but we don't even have that -- so that shell that we've expanded with the recent drillings not even in the mineral resource yet. So we need to get a fair bit more drilling done is really the next phase of work. You saw in the 3D presentation that there's surface drilling at comes. So we'll commence that in July and August and really get going with that aggressively in the next half year. So that's Phase 1. And that will then feed into a separate study on Bert and how it sort of works its way into a future production schedule depending on the outcome of the drilling results.

Matt Frydman, MST. Can I ask a couple of questions, firstly on Ernest Henry. If you believe or interpret Glen's visual representation of that ore body, it could very well continue to the center of the earth. So how do you consider your options both when you, I guess, recap the numbers for a feasibility study, but also beyond that. I suppose what are the ultimate constraints or risks in that -- both in the feasibility study that you're looking at or any potential future life extension. So I'm talking about things like, I guess, the dip of the ore body and how that might affect the mining method and the capability, I suppose, any geotechnical constraints at debts, any TSF constraints. How does that all play into your considerations for the feasibility study and beyond?

I mean again, Matt, it's a great problem to have when you got too many options at the asset because Glen keeps on finding more mineralization. But it is something that we have considered. That's how we went from the trucking to the crush conveyor. I think momentarily, a shaft was contemplated, but the crush conveyor system does allow us to access material to a significant depth even below the 800 level where the crush is being put in. But Glen, and Bob, you may want to comment on that.

Yes. Look, I'll comment on ore body geometry change in dep and plunge. I mean the reality is we don't know yet. And there are some curious shapes that we put up in the 3D presentation at the bottom of the ore body. And that's just going to require more drilling, Matt to understand what's going on. I don't know if we're seeing those lower lenses, basically plunged vertically down deep or whether we're going to see that flat sort of the plunge that the rest of the ore body higher up has. It's just at the moment, an unknown annual on the come with the drilling, and I'll let Bob talk about the other aspects of geotech.

Thanks,Glen. First one is I think the -- going to a crushing buyer option versus a truck gives the option to leapfrog in the future. So this will be one location that when Glen decides that he understands the geology, and we can actually put it into a mine plan. We can actually then go deeper again. So making sure that we put the crushing station outside the ore body is pretty important. That's a good problem to have, making sure that the geotech is the right location. So I don't actually intersect like some structures that create poor geotechnical stability. Because as we get deeper, we will get increased stress, and we will get increased issues with that stress coming on. To date, what we've seen in the drilling hasn't been significantly higher disking or anything like that. So we're not expecting it to seriously get bad quickly. But until we get the drilling, until we get the actual information to all sort of options are up there. I do think what it does give us is that option for the future. I like your describer as it goes to the center of the earth because that's what I'm saying it does. I remember years and years ago, MIM put a hole in the bottom of the Ernest and rear body and the geologists were celebrating then. So I can't imagine what goes to.

Maybe specifically, do you expect that in the feasibility study update that a crusher level might move lower given additional geological knowledge?

Personally,I don't think it's going to move lower. It may move around that level, as we get the location right. The aim is to actually put some holes [indiscernible] so that will actually shuffle around. But it really is getting that stage of how deep do we go? How much do we actually put up to the 1,200 crusher and making sure that sees the economic come out as the best option.

Jake, Mount Rawdon one with the analysts in the room, so we can build some value into our model. But -- you outlined a pretty clear pathway in how you're going to expect to commission in 2024. What in your view would be a good outcome in terms of how much of the value of that project that you and ICA retain? Or in other words, if you're selling a mining project, which is permitted and funded but not necessarily constructed, what's a fair proportion of the NPV that you as a vendor are happy to take on versus this project?

As much as possible?

Of course.

It's a difficult one because the one challenge, which you all have is there are not a lot of analogs out there to try and reference how valuable this is. I mean, I've always said that the best arbitrage in the world is a government policy that has no capacity to get to where the target is. And that's where Mount Rawdon fits in. As time progresses and as this commitment becomes more visible, there's an election in Queensland in 2024 that the potentially more valuable this solution becomes. So it's a case of kind of holding out for as long as possible, but not taking it too far. It is a big project. It has the potential to also host a wind project. So I don't know, I think my job and the team's job over the next 18 months is really to maximize that value and to discover that value. But there are a range of options, but as said lunch is only being served at 10 to 1, so another 20 minutes to talk. Whether it's in the offtake that we building an annuity, whether it's kind of -- it depends who the vendor actually, [indiscernible]. There's a whole range of that.

Thanks. I think this one is for Bob. It's a geotech question about Mungari. Specifically the Kundana part. So you bought [indiscernible] a couple of years ago. Now that area always had a reputation for being a bit noisy, seismically speaking, and the we've still accepted that, that's the way it was, but on gracious rate, much more focus on ounces rather than margin like you guys have. So I guess my question [indiscernible] seismicity with a mind to the expansion that you're putting in at the mill.

Thanks, Dan. I'm going to qualify this by I'm not a geotech engineer. So I'm a mine engineer, so I know a little bit about everything, not much about much. From a geotech perspective, the Kundana as opposed to East Kundana and Raleigh, they're different ratios. The Kundana itself has been a different mine method, which we are looking at what we can do in the future as we have deeper, maybe we can fill from a foot place and co place, et cetera, et cetera, which will make it better. Having the underground with Kundana or East Kundana Raleigh and then the open pits in this concept of operations gives us the ability to move, do it slower from the underground, which actually helps from a seismicity perspective, of course, we can let it settle. The Kalgoorlie region, and it's not just that Kundana belt, it is all active from a seismic perspective. It's nothing new. We are managing at the moment. We're back into Raleigh at the moment. We have seen some [indiscernible] bit coming, but we expected it, but it's designed for a speed and reentry that allows us to mine it at a rate, which is definitely. So I don't know if I go into the trend, but it's...

No, no, that's what I was asking. Thank you.

Kate McCutcheon. Two questions on Ernest Henry, if I may. When you did the acquisition in 2021, the medium-term outlook was for about 60,000 tonnes of copper. Today, you've given us about 50,000 tonnes of the outlook for that going forward. So I'm just wondering if that's tonnage or grade driven or perhaps the 60 was never the right number to use. And then just secondly, Jake told me I had other pieces of the puzzle to work out your cost guidance for '25 and '26, but you haven't given us anything for Ernest Henry, so perhaps -- Laurie, is that something you could say around where you expect unit cost to grow Ernest Henry $1 million cash costs, excluding copper credits going forward. That's my question.

The only thing I'd say regarding Ernest Henry and the production in June last year in the announcement, we did guide to 50,000 tonnes in FY '24. So this is a very consistent outlook.

Because that was really where we had guided last year that it was down to around 50,000 tonnes that the 60,000 back in '19 was sort of starting to trend down that tonnage. We still expect to keep the mill running at between 6.6 million, 6.8 million tonnes. In terms of the costs, we did put the AISC for [indiscernible] what we're looking at between now and FY '26 is we've seen inflation hold higher through the course of this year. We have looked at what that impact is over the next couple of years. But obviously, we've got to see is how well economies around the world are actually going at pulling that back in. What we sort of see [indiscernible] going back to $12,000 a tonne from a copper perspective, and therefore, we're sort of looking at where does that the 70 move. It's really -- right now, we've allowed for further movements. But really, as Jake said, that's really what each of you think that it's going to happen over the few years, but the FY '24 guidance [indiscernible] an ounce for Ernest Henry next year.

And so the feasibility -- sorry, the PFS that you've looked at for Ernest Henry, does that kind of envisage unit costs staying consistent over the medium term or do they?

It does take that into consideration. So yes, we've run that again. We've run that PFS at $2,400 an ounce and $12,000 a tonne, but we have factored in the higher operating costs that are being experienced right now into that.

Yes. Okay. And then can I ask a question on Mungari. So at the Feb '23 results, you said that you wanted to see a 15% IRR from that project at least, which you've more than given us today. And you also said you were looking for a $1,500 an ounce asset. So today, we've got a higher cost. So what's the lever that's being better at Mungari than you thought to get that IRR?

I think it's a combination. One, the team has been able to get that project in that $250 million capital, which is what we have planned at the start of the PFS -- at the FS. I think the other thing is that when we look at a life of mine average is 155,000 ounces the first 5 years, 27 to 32 at 200. So when we talk about a life of mine average of 1,750, you would assume that those first 5 years are lower and that's where Glen's up to the challenge of keeping it at 200,000 ounces, so that 1,750 trends down towards 1,500. That's really the way we've looked at it.

Alex Barkley, IBC. At Cowal, you've taken a longer-term rate down about 30,000 ounces. What's the driver there? And then you talked about a bit of flexibility, gold price dependent, what have you -- maybe it's more stockpile, maybe it's stage. Do you have any outlook on gold production given your choices a little bit further afield?

I mean I don't think we need to make that choice for the next 18 months. So again, it kind of comes down to the macro perspectives as we discussed earlier, if the gold price trends back towards I think your group's estimate of $2,400.

It's not high.

That's not ideal, but it's then you'd expect a reduction in costs and inflation pressures to abates and we'd have to look at where the balance sheet is at. But we have the options. If we're able to deliver the $2 billion of additional cash flow, then I think moving into the OPC and developing that and maximizing throughput and output that asset makes a lot of sense as well. So we don't have to make those decisions, and we'll also be benefiting from the drill results that Glen delivers on the underground. And we'll have a better feel for what the likely grade -- longer-term grade at the underground is. So a whole lot of factors. Laurie, do you want to add anything to that?

I think just when we look at it, Alex, is that, that 320 is sort of the base that we see coming out of the asset over the next 5, 6 years. And the potential that we can see in the near term of the grade at the underground gives us that movement above the 320. The issue -- or not so much the issue, but for the open pit continuations, as I said, we've got to get that permitting approval through. We've got 40 million tonnes on the stockpile today, as Bonnie outlined, we're out mining the mill over the next few years. So that will also build up for -- through '25, '26. That gives us the options of continuing to draw down on that or move to draw down those stockpiles if we don't see it's the right thing to go into the satellite ore bodies. We know what the impact is over '26 and '27 in terms of ounce profile if we displace the OPC with lower-grade material where you're talking in the order of 30,000 to 50,000 ounces a year, but you are getting a noncash benefit because you're drawing down on stockpiles that we've mined. We know the impact on the NPV of what happens if you do the bundle will move on a dry lake versus a wet lake. And so that is an option that we have. But I think when you look at it, what I outlined earlier today is that at 26.50, we generate more cash flow over the next 3 years than we have through FY '23. And if we take for Cowal at 320,000 ounces, if you are achieving $3,000 an ounce over the next 2 years, then that certainly gives a good justification for Cowal to be allocated that capital because of the extra cash it generates over the next 2 years. From our perspective, it has the greatest flexibility because when we look at that life of mine plan at Cowal as a stand-alone asset, it's cash positive at $26.50 over the next 5 to 10 years, even allowing for the OPC to come in. It's just got to work out when is the right time to move forward with it.

And that Mungari is similar to Kate's point, you looked at Castleville in the past, I think placing a few other options and then didn't go through with it. I don't know focus change to the new Kundana mines. Has anything changed there? Has it gotten bigger or something around the economics.

I think as we hand over to Bob, I mean I think what's changed is when we took over the Kundana and East Kundana, there really was an integration process that needed to be completed. And Northern Star operated the Kundana and East Kundana assets quite separately due to their relationship with their joint venture partner, which we've kind of stabilized and improved, and it's now a positive one. So -- but the integration of effectively what was 3 different sites has taken the last 18 months, and we're now confident that that's really delivered some real synergies, maintenance, workshops, allocation of equipment and various own people across those 3 sites. And now you look at the bigger processing clients at reduced costs, all of these resources start to become really valuable to that process.

Just to add on to what Jake said. The Castleville resource, we were considering heap leach, technically the top levels down to that transition on works, but it's actually quite a fair amount below those now. And the drilling that Glen has been doing is potentially pushing it even deeper with some of the lower cost and all that we're getting at the moment. So the proportions probably precludes a heap leach pillion, the percentage that is eligible and the percentage it's not -- do you want to add anything to the -- I'm becoming a geologist now.

Okay. So just last one on Red Lake. I know you haven't talked about too much. Obviously, [indiscernible] I think it was always turn Bateman mill on and upgrade the capacity. Is that still the most likely outcome whenever that might be. Yes.

I mean I think our base case is what Bob outlined. It has to earn its right to be allocated capital. And that is when -- and I don't think it's achieved it yet, it becomes boringly predictable. So that's the next catalyst. Once we do that, and it's delivering 1.1 reliably and predictably and it's not the headline of quarterly reports, that will be a good outcome and we can move forward with thinking about the future of that asset.

Al Harvey from JPMorgan. Just James, if you could touch on the copper strategy. I guess with Ernest Henry, you've got a solid platform there. South Cowal is looking interesting. And you've got Marston sitting on the books as well with $0.5 million [indiscernible]. Where do you ultimately see [indiscernible] for the business on basis or a revenue basis? And have you run the ruler over any of those opportunities, especially?

I guess I preface these comments are saying that you need to be flexible and open to the opportunity that presents. In our case, we are open to gold, copper gold and copper opportunities. With the provisor that it needs to be accretive to shareholders and it needs to improve the quality of our portfolio. So rather than kind of giving you a direction as to whether copper is now a higher priority than gold or gold copper. It's not. They're all equal priorities. We'd love to get them more assets subject to us being able to buy them wholesale and to be valid as retail assets.

The only thing I'd add there Al is when we look at as a proportion of our revenue going over the next 3 years, it will trend down to that 20% level, which certainly gives us a lot of headroom if we want to bring more copper in from a revenue perspective.

And just on, I guess, the exploration pipeline being really solid at the near production and maybe you can touch on how you're firming up the earlier stage pipeline. Now we've got Navarre, I think, still on the books, Musgrave, if you could touch on any of that things.

I'll pick that one out for you, Al. I think, look, good observation on some of the more advanced opportunities at that end of the pipeline. And pleasing to see come about. I think in terms of an overall strategy, the way we look at greenfield or early entry opportunities is for more -- really compelling types of targets. If it the trains in which we want to be exploring, but also operating. So that's the driver. And -- but by and large, it needs to be compelling. So in terms of where -- when we think we can really sort of advance it and create or unlock value by taking on a sort of joint venture or an option that is -- they're the really key drivers in the right geological jurisdictions. Those things are pretty hard to come about, particularly in mature environments. So we're fairly soft in terms of what we do. We also look at the more advanced end of the spectrum as well. And we're looking at types of things where there's a real sort of geologic arbitrage that we feel that we can kind of exploit and unlock in the future. And there number of opportunities out there at the moment that we sort of have the crosshairs on that we would like to think that we could sort of secure into the future. So I'd say at the moment, just watch this space, and there's certainly some developments to come.

Rahul Anand, Morgan Stanley. Just making sure I get you to 1,250 gig. So look, I just wanted to follow on from Alex's question on Red Lake. It hasn't been talked about much, you probably don't want to talk about it much just yet. But how can we think about potentially once you get to that 1.8 million tonne per annum, assuming that the asset does perform, and it is stable and we are -- it becomes a boring asset for the group. How many mining areas, what -- how does the grade profile look like? Is there anything that we can get a bit of an understanding on because I think that's something that everyone is trying to figure out in this room.

Well, unless you weren't immediate to go it does, but I don't think you do.

You can promise for me to do something else. 1.1 not 1.8 is our first target. The easiest way that I describe it is that the geology is actually when we do our reconciliations and when we actually put the drill holes in the right spot and blast the right dirt, it's actually coming out. When we control the dilution, it's actually starting to get really a lot better. The mining areas from my perspective, we've got Kostner, which is one isolated area. Campbell is that unlocker and Campbell will unlock all that upper Campbell area from a geological region perspective. And it's all capable of going straight up the shaft decline as opposed to the shaft. So that decouples it from the underground because all of Kostner come up the rig shaft. And then we've got Barma. And Barma actually got a good capacity with the new #3 shaft. And it can quite easily do that sort of 400,000 or 500,000 tonne if we want that from the having the 3 options, having those 3 areas working as an independent source of ore feed gives us the ability to get that stability and also be able to cover the interruptions that happened from a 75, 80-year old mine when you hit things that you're not expecting. And they're going to be there. And our job is to actually force and to put fixes in place before we get them. From a geological perspective, do you want to add anything or not? I caught him off guard. So from a geological perspective, I'm quite happy with where we're at and that the ore bodies are actually delivering. It's our job to actually get those 3 operations going. It's our job to get those declines through the next 12 months. And that will actually reduce our costs significantly. I mean at the moment, I'll give you an example. One of our production rigs we took down Kostner, we cut it into 28 pieces. Those 2 declines will stop us having to cut in any pieces, and that includes cutting the cap up. So I mean that's pretty drastic when you've got to cut the cap into 3 pieces to get it on the shaft. So I think that will actually reduce our cost side in the future as well. Yes, the grade -- I mean, the grade at Kostner has been pretty consistent. The grade uplift comes from Upper Campbell. So that's where the grade up with customer. It's consistent of where we have been over the next 12 months planning to be.

And reconciliations in the Upper Campbell were very similar to the other ore bodies better.

Yes. We've only just really started to get into the upper Campbell ore bodies. So it's pretty early days at the moment. But overall, when we back out the mining performance, issues that Bob has described. We're seeing those models sort of come in within -- all the reconciliations coming within 5% in those models. So far, we're pretty happy with the way they're performing. But like I said, early days, we want to get a fair bit more data as we sort of start to open up some of the stoping sequences in Upper Campbell.

And then final question from me, Mount Rawdon. So Jake that's for you. So look, I think it's been talked about a fair bit. You still have your environmental approvals to come through. I guess I wanted to understand a bit the critical path items there in terms of how does this thing work? I mean how do you save the water from seeping to the underground? Or does it not matter? Like what are some of the key things that you need to prove for that environmental license to come through.

Fiona may be best to answer that. I mean one of the key things is getting the first fill of water, which is planned for over 4 seasons. And the Queensland government is pretty confident that they can deliver that. But that is the one that I've kind of heard all the things associated with building an infrastructure asset on a mining lease is relatively straightforward and have clouded by the Queensland government.

There's a couple of key factors. The water -- first fill water is something we've been working with the government on quite closely. We don't see any fatal flaws on that. The other one is just making sure we look at species, flora and fauna. We've been progressing that and there's no fatal flaws in that as well. So all the things that you would expect to see as part of approvals, we've been going through that process. And we're not seeing any fatal flaws. And the other piece on it is around community and community sentiment. There's been a huge amount of support from that local community and also from various different government bodies, that is just showing that there's no fatal flaws in that itself. So in terms of the geology, in terms of the environmental and in terms of the community, including fascination, I mean we continue to work through that's really productive with no fatal flaws. So that's where we're at with that.

Thanks Anyone else?

Brenton Saunders from Pendal. Glen, just for you, and sorry to harp on this. But is there any exploration surface underground at Red Lake that's ongoing and delivering any sort of incremental flexibility of the mining operations or anything that is helpful.

I was hoping you'd ask that, Brenton. Look, one of the things that we had been doing is actually we've recommenced grade control drilling since we've taken possession of the asset almost 3 years ago. So that was something that just wasn't being done. And the way grade control was done historically, was that it was chip sampling across spaces, and that was being modeled to inform the short-term mining schedule. So we've put in play a program of grade control drilling to get it well ahead of the mining schedule. And we're seeing some really good results coming out of that. So an example would be MMTP, where we had really quite a material resource upgrade at the end of last year, and we sort of updated all the models at Red Lake in our annual cycle. So what we're seeing is wider intervals of higher grade when we infill. And you might ask why that's occurring. And the reason is that in the historical drilling that was completed and some of this -- some of the drilling that informs these resources is up to 40, 50, 60 years old. And what we -- one of the observations we made is that a lot of the drilling through these ore bodies is not sampled unless it's a really obvious quartz fine dripping with visible gold. And in the old days, if that wasn't the case, then it wasn't sampled or only that section of the drill hole a sample. And what we're seeing is mineralization in sort of sulfide replacement domains, that's actually quite high grade. That remains unsampled. So what we've gone and done is infilled around a lot of this old drilling. As I said, we're seeing wider zones at higher grades. So one of the -- so at MMTP, the outcome was in the original mineral resource that we did when we rebased back in 2020 to about 250,000 ounces and the infill drilling drove an increase up to 500,000 ounces with that additional width and higher grades we're seeing in the drilling. So we are seeing that as we start to get these grade control programs come in. So there's definitely some upside coming in around these mining areas that MMTP being really close to the rechart is one the reasons why we went there is because of the proximity and ability to get there quickly.

Jon Bishop again from Jarden. Just back on the hydro -- what sort of access do you have to low-cost finance? And is that part of the current economic study? Because from what I understand, if GenX project, one of the keys there was the financial engineering to get a very low-cost borrowing base?

It was the net funding that really got that -- I mean that's as I said, quite a different project about 1/8th the size of ours. We haven't got to that point, but it's clearly something that we'll be engaging government with. I think there are opportunities, and there is lots of money in the space from a government perspective. It's just a case of when do we ask and -- or how much do we ask.

Maybe take that a little bit further, what sort of internal rate of return are you shooting for under a bunch of scenarios? Because obviously, again, I know it's a different project, but at the time of financing, the cost of debt globally was considerably lower.

12% ungeared is roughly what it will -- that's the discount rate that we believe we need to sell for.

And just one final one on Cowal. Can you indicate -- and maybe this is going to be discussed tomorrow, but what are the bottlenecks, if any, in terms of displacing open pit ore out of the throughput consideration there, particularly given some of the near-mine exploration success you're having, is there an ability to increase the tonnages out of the underground?

The mic has been between Bonnie and Bob.

From my perspective, highest grade wood all the time. So the underground will actually displace the open pit material upfront, and we'll just marry that in for the speed of mining in the open pit. So the underground aim is to be 2.5 to sort of that is sort of grams. So that will always replace the sort of 1 to 1.2 from the open pit.

But do you have the capacity to actually increase the volume of material, if that's the growth.

This rather Jake can promise something that I shouldn't be promising to. At the moment, probably not -- 2.4 is the underground.

I think it's still to be tested. I mean yes. I mean, it's 2.4. And that's -- we -- we're only just starting to mine it. It will also be somewhat dependent on how quickly we can fill the stopes with paste. I think we're going to wrap it up there. Thank you very much for your participation. I really appreciate it. There is lunch outside. Our desire for you is for you to really understand this company and the plans we have for it. So if there are any questions, everyone in this company from myself right across the business is available and wants to help for you to understand the business better. If you are joining us this evening for dinner, it is at 6:00 p.m. at the glass brasserie in this hotel. A reminder for those of you who are joining us on tomorrow's trip to Cowal. You will be retalized at West Wilen. West Wilen is not a place where you want to spend the day not at the mine site. So please arrive and make sure you pass the breathalyzer. Thanks everyone. Cheers.