St Barbara Limited (GMD.AX) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to St Barbara, Creating a leading Australian Gold House Conference Call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Mr. Daniel Lougher, Managing Director of St Barbara. Please go ahead.

Good morning, and thanks for dialing into today's teleconference. As always, I'd like to recognize the traditional owners and First Nations people of the lands on which St Barbara operates in Australia, Canada and Papua New Guinea and pay my respects to the elders, past, present and emerging. Joining me on site at Gwalia mine in Leonora today are Raleigh Finlayson, Managing Director of Genesis; and Andrew Strelein, Chief Development Officer of St Barbara. Today, we are pleased to announce the merger of St Barbara and Genesis to form Hoover House, a new leading Australian gold company, 100% focus on the prolific Leonora District in Western Australia. Consolidation of this world-class gold district makes tremendous sense. And in today's presentation, we will highlight the unique industrial logic in pairing St Barbara's Gwalia mine and Genesis' Ulysses mine, just 30 kilometers down the highway from where we are calling today. St Barbara will also undertake a demerger of Atlantic, Simberi and other non-Leonora assets to safe-harbor shareholders to form Phoenician metals. Phoenician represents an attractive premium for St Barbara shareholders on merger and Hoover House will retain a 20% shareholding as a supportive cornerstone investment in this new company. Genesis to raise AUD 275 million to derisk and grow Hoover House with a raise in conditional on the merger and demerger becoming effective. Ultimately, Hoover House and Phoenician will be dedicated vehicles with dedicated management and most importantly, simplified business models. During today's call, we will be referencing the presentation placed on the ASX platform earlier. I'll now hand the call over to Raleigh, who will be the Managing Director of Hoover House. Raleigh?

Thank you, Dan, and thanks, everyone, for joining this morning. So I'll just draw your attention to the presentation. Hopefully, you can see the slides here. So initially, on the investment highlights, so the proposed merger of St Barbara and Genesis to form Hoover House. And I'll talk about the origins of that name in a second, but Hoover House will be exclusively focus on the prolific Leonora District. We'll have circa 15 million ounces in mineral resources and over 3 million ounces in ore reserves. It's important to note that Genesis will be initiating our normal reserves in the June quarter as well. When we fully funded capital light for a production target of circa 300,000 ounces per annum, this will be coupled with the demerger of St Barbara's non-Leonora assets to St Barbara's shareholders to perform Phoenician Metals, and Andrew will talk to this oranges of this name again in the second. Phoenician Metals will be focused on realizing long-term value of its portfolio, including the Atlantic and Simberi operations, a portfolio of St Barbara royalties and AUD 34 million worth of listed investments and AUD 85 million of cash. So in total, that's AUD 119 million of cash and investments and no debt. Courtesy of the GMD Genesis equity raising of AUD 275 million, that will be AUD 65 million in the cash reserves and repaid a CAD 60 million worth of debt. We'll be articulating a simplified business model with a dedicated vehicle and dedicated Board and management teams for both. Just looking at the transaction overview, the merger will be via a scheme of arrangement under which St Barbara will acquire 100% of the shares in Genesis with the exchange ratio representing a nil premium to respective 30-day VWAPs. Genesis is to raise AUD 275 million in new equity at Genesis' last closing price, via replacement of AUD 164 million contributed from Aussie Super (sic) [ AustralianSuper ] with the scale-back of up to AUD 32 million (sic) [ AUD 39 million ] and AUD 75 million committed from RCF. It's important to note that this commitment is conditional on completion of the merger and both RCF and Aussie Super (sic) [ AustralianSuper ] are taking on 5 months of time risk under this proposal. St Barbara to demerge Simberi, Atlantic and other assets into our new vehicle Phoenician Metals, which will be intended to list on the ASX. I'll cover off the Board and management in a second, but it's important to note the scheme has been enormously recommended by the Genesis Board and the issue of St Barbara shares under the scheme and the demerger will be unanimously recommended by the St Barbara Board. The scheme and capital raising is subject to approval by Genesis shareholders and the demerger is subject to approval by St Barbara's shareholders. The transaction is expected to complete by May 2023. Just by way of post merger and demerger transaction structure, this shows the ownership in operation and assets in each of the companies. It's important to note, on the right-hand side, I've mentioned Phoenician Metals ownership of Atlantic and Simberi. The other Australian assets will include shares in Catalyst, the Kin mining shares, Peel shares, and the Royalty portfolio. On the left-hand side, it's important to note that Genesis intends on extending our offer to Dacian shareholders for a further 1 month to the 16th of January enabling Dacian holders the opportunity to become Hoover House shareholders. Just by the way of overview and looking specifically at this picture on this slide, this is a bird's eye view of Gwalia. As Dan said, we're being to you live from the Gwalia admin building, which is on the top of that screen on the left-hand side, the green roof building. So we'll be here and then moving, come directly to our most important stakeholders of people and running them through the proposed merger. Adjacent to the admin building is a historic Gwalia museum. For those who know the history of this asset, we'll see the Sons of Gwalia headframe, which many of you remember was a logo for Sons of Gwalia, operated by Peter and Chris Lalor, who are my uncles and gave me my first job on this mine in 1996, working on the plant. Directly adjacent to the headframe is the historic Hoover House, which was designed and commissioned by Herbert Hoover, the Sons of Gwalia Mine Manager in 1898, who later became the 31st President of the United States of America. Just looking at the map on the right-hand side here. So I personally grew up on a sheet station just at the very bottom of this map just north of Menzies. North of that, again, you have the Genesis assets, which is 2 million ounces of gold, which has had the benefit of not having milling depletion over the last 10 years. Out to the East, you have the dosing assets, specifically the Mt Morgans 10-year, which has got a 3 million tonne processing plant which is perfectly suited to the head, to the St Barbaras Tower Hill deposit, I'll step through in a minute, plus an extra 2.2 million ounces of resource. To the northeast of Leonora, you had the Dacian Redcliffe assets, which are approximately 45 kilometers north of Leonora and will be available for processing through the Gwalia mill at 45 kilometers versus 150 kilometers that would be trucked across to Mt Morgans. And of course, central to all this right in the heart of the Leonora District is a Gwalia 10-year, which I'll talk you through. This transaction is very much on strategy. For Genesis, it accelerates our 5-year vision to become a 300,000 ounce producer that we articulated to the market in April this year. For St Barbara, it's a realization of the Leonora province plan and credits clear way to Craig Jetson and very much his vision seem to come to fruition. This is a very clearly articulated and delivered strategy. With regards to Genesis vision, which we articulated in April we quite we wanted to become the premium Australian gold producer sustainable high-quality 300,000 ounce per annum and this transaction enables that to occur. Wanted to do that by 2 operations, which we've done here 7 years of life and prioritizing Western Australia. From an M&A perspective, we have always talked about being disciplined first. This has taken 9 months' worth of data on both sides, but we've arrived at a sensible transaction for both sets of shareholders. The thesis around was around Leonora District's long milling short haul and having a home ground advantage. Consolidation here does make sense. And we have been open to the business, and we've done 2 deals towards the first 9 months under the new ownership management of Genesis. We'll be very clear in a jurisdiction that we will prioritize Western Australia and hence the demerger. We're also leveraging our bulk mining, open pit mining experience and the skill set we bring to the Tower Hill deposit. And it's clear to say that this GMD strategy stems back to pre Genesis when Saracen 4.9% of the 10-year Genesis. Credit is also due to Andrew Strelein, who I'll throw to in a minute, the strategy and the structure of this deal is very much his vision, and it's becoming a reality. So we're credit [indiscernible] Just as far as alignment on core values, we have common values in the themes of safety, integrity and respect. And in particular, St Barbara's Safety first resonated extremely strongly when Andrew Francis and myself spent 2 weeks on site here, and we can see that absolutely be on the shop floor. From a people and culture perspective, we bring a dedicated and proven management team. There will be unique remuneration opportunities that will absolutely align with shareholders and we'll encourage Hoover House people to think and act like owners, and we want to target 100% equity ownership for our employees, who want those who run the mine, to own the mine. We have a small company DNA everyone is important. Everyone's impact values. We'll be thinking big. We'll be building the capacity for future growth. We'll be focusing on career development opportunities. We'll be committed to developing talent, will be hiring for attitude and training for talent. We'll have a particular emphasis on the local community and growth opportunities, employment opportunities for people that reside in Leonora. We want to become one with the community Locke Member back in 1996, and Hoover House will be open for business, we will be hiring in 2023. From a personal perspective, I'll be contributing extra AUD 6 million into this transaction via the conversion of options that will bring my total cash investments into Genesis and Hoover House to AUD 14 million. I'll be putting a voluntary escrow on a AUD 2 million option, the performance rights that best under a change of control under the transaction despite there being tax liability upfront on that change of control. Now we will be also putting to shareholders 4- and 5-year retention rights for the management team of Hoover House to show our long-term commitment to the growth of this business. Hoover House will also benefit from St Barbara's industry-leading sustainability initiatives. St Barbara has a best-in-class on a greenhouse gas intensity, CO2 emissions per ounce produced. And this is pre a bunch of renewable projects that are currently under the investigation at Gwalia. A way of key news flow coming forward, post the deal, hopefully, going through by sets of shareholders will be intending to run a Capital Markets Day in the September quarter 2023. Between April and that date, we'll be developing a bottom-up strategy which will clearly articulate Hoover House's vision, core values, and this will be driven from internal stakeholders as well as external stakeholders. On that day, we'll also be articulating our 5-year outlook for the business and how we intend to grow from here up to 300,000 ounces. And one of the key motto that will be driven by the anything that will shift on in the new business, one of our core drivers will be safe delivery matters most. So I'll now run you through the merger rationale, the why, if you like, and I provide 6 compelling reasons as to why this transaction works so well for both sets of shareholders. There's only one slide to print it out and stick on your wall. This would be that slide. This will be the reminder as the voter vote in favor of this transaction. Having said all that, I'll now skip past it and actually go into detail on each 1 of these 6 points as to the why this transaction is so compelling. Firstly, on to the Hoover House Board and management team. We'll have initial Board of 7 people with greater than 40% female representation. Tony Kiernan will be the Chair of the merged entity, and I will be the Managing Director and CEO. St Barbara Non-Executive Chairman, Tim Netscher will join the Board, but wishes not to seek re-election at next AGM. I'd like to thank team for his persistence in the last 9 months as we worked tirelessly to bring this transaction to a point where we've got to today. St. Barbara, Non-Executive Director, David Moroney, will transition over to be the Chair of Phoenician Metals. And I'd also like to take this opportunity to thank particularly Mick Wilkes, Michael Bowen and Gerry Kaczmarek for their contribution to the Genesis Board. Mick joined us recently from us being the Chair of Dacian, has brought a wealth of corporate and operational knowledge to the growth. Gerry Kaczmarek has had -- I've had a long personal history with Gerry having been previously the CFO of Saracen, and has been absolutely diligent and a sensational contributor to our business. And Michael Bowen has been my rock through all this day. So initially getting us into the right-capital Genesis, an integral player in the Dacian transaction and even more integral player through this transaction as well. Dan Lougher has agreed to join and stay on the board, which is fantastic. Dan will also step across and join the Phoenician Board. He brings a valuable experience around underground mining, and we're delighted to have Dan stay on board with us. Kerry Gleeson and Stef Loader will continue on and join into the Hoover House Board as well. Lastly, but certainly not least Jacqueline Murray will join the Board as a new appointment. Jacque's got a geotechnical background, and it's been an absolute pleasure working with Jacque and her team over the last 9 months during due diligence on this project. From a Board -- from a senior management executive, Morgan Ball will be our CFO; Troy Irvin will be the Corporate Development Officer; Sarah Standish will be General Counsel and Co Sec; and [ Anne Lindsey ], the newly appointed Gwalia GM will report directly to the MD and CEO. This is a genuine win, win, win for St Barbara, Genesis and Dacian shareholders. So the benefit to all 3 sets of shareholders operational flexibility and reduce risk, the matching of the right ores to the right mills having the ability to target quality over quantity mining strategy at the high-grade Gwalia asset. Complete reset of corporate costs and associated cost savings benefits on tax depreciation and upside from further consolidation in the Leonora District. Benefits to St Barbara's shareholders will be a focus on 100% of the simplified business in Leonora, access to capital pointing case being the AUD 275 million placement at market with time risk, AUD 400 million of CapEx deferral, which I'll step through, access to the Mt Morgans plant and ex-Saracen owner-operator model, which can be applied to Tower Hill. Benefits to Genesis shareholders and potentially Dacian shareholders who wish to become Hoover House shareholders get access to ongoing production and cash flows at Gwalia. Addition of St Barbara's high-grade 10 million-ounce resource and 3 million-ounce reserve portfolio, potential to enhance our metallurgy recoveries by the treatment of Ulysses at Leonora and access to St Barbara's industry-leading sustainability initiatives. Point 3 is a AUD 400 million CapEx win. We'll have reduced near-term execution risk and funding requirements through the merger. Specifically, the Zoroastrian mine can be deferred with Ulysses being accessed only 30 kilometers down the road deferring AUD 30 million. The Leonora mill expansion to 2.1 million tonnes per annum will be deferred and reviewed with the ability to access the Mt Morgan facility. The Aphrodite and Leonora mill held in expansion can both be deferred with circa 10 years of free milling ore available upfront. And the Tower Hill mill will not be required. There's an estimated AUD 180 million of cost. This was under consideration within St Barbara internally, but has not been publicized due to the CapEx burden, but now it won't be required with access to the Mt Morgans mill when approvals sought and development starts at Tower Hill and circa 2 to 3 years' time. Personally, I'll be spending my time based on sites from the completion of the merger through to the announcement of our strategic plan in the September quarter. Point 4 is increased scale and relevance. So 15 million ounces of resources and 3.2 million ounces of reserves. And as I mentioned at the outset, it's important to not the Genesis will be publishing our inaugural reserves in the June quarter. We'll have significant coverage universe with 10 brokers covering the combined companies. Point #5 is matching the right ores to the right mills. So the color coding here, you can see the milling facilities on the left, color-coded by yellow is St Barbara assets and the blue is being the Genesis and Dacian assets. Firstly, at Leonora, currently running at about 1.1 million tonnes per annum. There is minimal capital to be able expanded up to 1.4 million tonnes per annum which enables with the onset of Ulysses enables Gwalia to target quality over quantity, targeting margin over ounces. We can actually run at a reduced mining rates of 0.7 million to 0.8 million tonnes per annum, targeting high-grade ore. With the addition of Ulysses targeting a run rate of 0.6 million to 0.7 million tonnes per annum, the combination of Gwalia and Ulysses is targeted to fill the 1.4 million tonnes mill by FY '26. In the interim, we can access open pit sweeteners, particularly the hub deposits which is a fantastic risk management leader and is also closer to the Gwalia mill. Across at Mt Morgans we had the benefit of time currently milling stockpiles. We have the ability to update our resource at Jupiter, having just completed all the drilling, and we'll be updating our reserves in the June quarter as we look at the addition of the Genesis mining services to reduce cost. At Tower Hill, this is perfectly paired with the Mt Morgans plant. So 20 million ounces of resource and 10 million ounces in reserve, which would take anywhere between 10 to 20 years to treat, it will only available to treat through Leonora mill. So there were capital savings, elimination of time to construction in new plants, and we'll also get to reevaluate the reserves with a larger mill and lower mining costs. Just by way of outlook for 300,000 ounces, this will be a doubling of our production profile and will be fully funded. We'll have growth of 300,000 ounces per annum with 3.2 million ounces in ore reserves. I'll just stepping through the plan for the Leonora and Mt Morgans mills, but it's important to note that production profile excludes the upside from the Genesis open pits which will provide either additional life or increased production rates, but also a longer-term strategy is the ability to access refractory ores, namely those from Harbour Lights and Aphrodite. Before I hand over to Andrew, I'll just run you through some asset-specific information relevant to Leonora. Firstly, at Gwalia. This is a world-class deposit and has the enviable track record and the trifecta of grades, width and continuity. The asset runs at a phenomenal 5,600 ounces per vertical meter. And if you notice the image on the right-hand side, all those drilling steps on that long section remained unmined. So it shows you the growth potential ahead of us, but also numerous intercepts further up the mine that we can access from existing infrastructure. The addition of Ulysses enables us to target quality over quantity, margin over ounces strategy. We'll be future-proofing this asset and derisking initiatives. The more conservative production profiles, we'll be targeting reduced costs at both fixed and variable will be prioritizing development and waste haulage from undergrounds and we'll be targeting smaller, higher-grade stopes that reduce geotechnical risks. A wise man once told me, do less with less. So how do we do this? How do we do this with less sustainably, with where we enter Ulysses. This is a strategic asset located 35 kilometers due south of Leonora. The shallow ore body runs at 2,400 ounces per vertical meter. Its free milling, has competent geotechnical conditions. It's on granted mining tenure and open along strike and at depth. We are targeting first ore from this deposit in FY '24. Pre-development activities and future-proofing is underway, specifically grade control drilling designed to completely derisk this asset. In the June quarter '23, we will start mine development, and we'll also be publishing Maiden Ore Reserves on this asset. We'll look to ramp up this to full-scale mining between 0.6 million to 0.7 million tonnes per annum to feed into the Gwalia mill. So Ulysses provides the unique opportunity to restore Gwalia up to 200,000 ounces with lower cost and lower risk. The combination of Gwalia and Ulysses being traded as one enables Gwalia to operate at 0.7 million to 0.8 million tonnes per annum, targeting 120,000 to 130,000 ounces per annum. It's important to note that quarter-to-date or year-to-date production at Gwalia is running around 56,000 ounces, which is a run rate of 135,000 ounces, which is actually above the rate required under Hoover House for prediction. You will see full-scale production of 0.6 to 0.7 will deliver 60,000 to 70,000 ounces per annum giving us a combination of 180,000 to 200,000 ounces per annum. We'll be sharing fixed costs across the group, the excess equipment and people that are currently on site at Gwalia that were brought in to target, and increase in production to 1.1 million tonnes per annum, can now be redeployed 30 kilometer down the road to kick start Ulysses. It's important to note that Ulysses haulage from the bottom of the mine to the mill on a round trips around -- on the direct trips around 1 hour compared to about 1.5 hours coming from the bottom of Gwalia. So we could absolutely treat this as one operation. The lower vertical advance rate will mitigate geotechnical risk and the 650,000 tonnes less production required to come out of Gwalia results in 10,000 less trucks coming up and down the decline of Gwalia every year. It's a pressure release sales which reduces congestion, reduces ventilation and cooling, reduces costs and increases efficiency. Now I shouldn't have favorites, but this is one of my favorite assets in the portfolio, specifically Tower Hill. It's absolutely right in the Genesis wheelhouse, large-scale open pits, slightly higher grade than we used to, and not like Dunder box and not like super pit, which had some environmental obstacles ahead of it, which is a good thing. It's the reason why it's still there. The deposit of both 21 million tonnes at 1.8 grams per tonne for 1.2 million ounces in resource sitting within a AUD 2,500 pit shell. The current reserve is 560,000 ounces, but it was delineated and estimated on the basis that went through the lower tonnage, high cost Gwalia mill. As we get access to Mt Morgans, we expect to see a sharp increase in that ore reserve in the future. The asset runs at a very impressive 4,000 ounces per vertical meter. The magenta zone on that image long section on the right-hand side there runs at an average of 35 meters at 1.8 grams per tonne, which is 63-gram meters and has further underground potential at depth. Just moving on to a couple of cross-sections. We have the opportunity to apply the unique ex-Saracen open pit mining model with owner-operator and low costs and a track record of meeting or exceeding guidance for 8 years. Our Genesis Mining Services is being manned up, led by Lee Stephens who is ex-Carosue Dam, Thunderbox and KCGM. And Matt Walter, who'll start in January, who is ex-maintenance manager and mine superintendent for KCGM. We had the chance to re-evaluate ore reserves using lower-cost mining and milling, I mentioned earlier. It's important to note that the rail-line re-location is an important first up task for Hoover House. Conversations with key stakeholders is well advanced, but we are expecting a sort of 2- to 3-year approval development delay before we can start accessing Tower Hill. We had a similar issue when we started the when we purchased KCGM with the Fimiston South approval likely to take 3 years and we're able to get that in 5 months. It's important to note also on the intercepts on the left-hand side of this image, the bottom half of those intercepts average is 40 to 50 meters with the lowest being 2.5 grams per tonne and the highest intercept being 5.5 grams per tonne. Tower Hill is simple. It's high grade, and it's all from a single pit. The graph you can see here is West Australian mineral resources in excess of 1 million ounces. Of note, the 4 highest grade projects on the left-hand side of that graph. Tower Hill was only single deposit within that group, and it's over 1 million ounces in resource, and we'll be able to be out of be accessed through the Mt Morgans plant. I'd now like to throw it to Andrew Strelein, the newly minted MD of Phoenician Metals. Andrew has had about 7 hours sleep in the past 3 days. So hopefully, he can get through this.

Thanks, Ral. Thanks, Dan. So Phoenician Metals, what Ral just walk you through all the advantages for the merged Leonora operations. On the Phoenician Metals side, its purpose will be to realize the full potential of St Barbara's overseas assets and the domestic investment portfolio. We have a dedicated team lined up with funding and a slight strategic reset, which we'll walk through shortly. The Phoenician Metals will have 6.2 million ounces in mineral resources and 3.7 million ounces in ore reserves across the 2 operations. There are AUD 34 million approximately of ASX list investments, and it will also take over St Barbara's royalty portfolio. There's a good exploration portfolio across those operations, but also in New South Wales and the broader Nova Scotia. And there'll be -- we have a strong balance sheet with AUD 85 million of cash pro forma and nil debt. On this slide, it's worthwhile mapping out just the assets that are coming across to the proposed Phoenician Metals, again, we just walked through the reserves and the resources for each operation. Both operations are in production at the moment with Atlantic on track with guidance of 40,000 to 50,000 ounces this year and Simberi on track for guidance of 70,000 to 80,000 ounces this year. And we've mapped out the investment portfolio on this slide. The proposed Board and leadership team, so for Phoenician Metals. So 4 -- 3 of the current directors from St Barbara coming across. So David Moroney is proposed to be -- is stepping up as chair. Stef Loader, Dan, of course, and I will be becoming Managing Director and Chief Executive Officer. We also have Lucas Welsh, the current Chief Financial Officer of St Barbara will join, and we then expect to select the people from primarily from St Barbara to man up Phoenician Metals. We already have a very established teams at the operations, and they're well led by [ Randy McMahan and Merrill ]. So the operations are in good stead. But yes, we'll intend to have a small corporate team that will support the growth objectives of those 2 projects. We -- I mentioned before that will -- we are well funded. There's a team that's going to be dedicated to these assets, but there will be a slight strategic reset. We have announced or included the announcement with the Atlantic. We have paused permitting on Beaver Dam. We've made that decision. Engagement continues with the stakeholders there, but with more time still required for those engagements we've concluded that we won't be able to achieve first ore from Beaver Dam before completion of the stockpiles at Touquoy. This does allow us, however, to return our focus to the main project, 15-mile stream, it's the bigger asset and it has the bulk of the future value for the Atlantic operations. So with that, our strategic slight strategic reset becomes prioritizing with the development of Fifteen Mile Stream, and we'll now target that for development in FY '26. It doesn't give us the opportunity to investigate re-purposing of Touquoy plant. So rather than have 2 plants, we'll be able to revert back to having the main -- one main operation for grinding and milling. We'll intend to complete processing of stockpiles at Touquoy by the end of 2024. As I said, we'll pause the permitting to allow more time there, but we'll accelerate exploration at Mooseland South-West and Goldboro East. And at Cochrane Hill, we'll also advance the work there. We have always wanted to and bring on that second hub to the east in Nova Scotia. So we've got more work planned at Cochrane Hill. At Simberi, we had good success with the extension of anticipated oxide production. This has been through the strategic review that we announced earlier in the year. We are winding up the sale process as a result. We didn't get any proposals that we thought were compelling enough to take us away from our own strategy here of extending the oxide production through FY '25 and into FY '26. We want to go back and finish the drilling on the mineral resource and ore extension -- Ore Reserve extension. Previously, we pulled up the drilling at Simberi Sulphides, because we thought there was enough for the feasibility study, but we still have some encouraging higher-grade zones that we would like to push the resource out into. So that's on our plan. We'll then plan to revisit the Sulphides expansion development plan, and we want to do that by FY '26, incorporating the new resource extensions -- reserve extensions. And on that basis, we'll look to prepare for investment decision, I've said here, we're in plenty of time for the mining renewal in FY '28. But obviously, as soon as we can get that -- the reserve and resource extension in place, we can revisit the plan and then work with the government for an earlier mining release if possible. So just in summary, we have the Phoenician metals. We have 2 operating gold assets. As I said, we've got this financial year production of 110,000 to 130,000 ounces and both with significant organic expansion options. We have a strong and flexible balance sheet. So pro forma AUD 85 million cash, no debt and a portfolio of liquid investments to help along. So we've got the team, we'll have the resources to get us through this strategic focus and realize the full potential of these assets. Ral asked me to mention the background of Phoenician Metals, Phoenicians were antiquities, greatest metal traders, they were spread around the known well at the time. So it was a little bit similar to the asset portfolio, it will be advancing. With that, I hand back to Ral.

Andrew. So just going to run you through the equity raising before we throw Q&A. So there will be a conditional placement to raise up to AUD 275 million. The placement is interconditional with the merger. And the raising prices at AUD 1.20 per share, which represents a 0.4% premium to Genesis last close of AUD 1.195. The placement is subject to Genesis shareholder approving the new issue of shares under the placement and the scheme being effective. As I mentioned, it's not so important to note that RCF and Aussie Super are taking on 5 months of time risk and absolutely highlights of confidence in this transaction. Aussie Super has committed AUD 164 million, subject to scale-back and RCF has committed AUD 75 million and other institutional investors, including Paradice, Australian Capital Equity, and Eley Griffiths Group have an aggregate committed to AUD 36 million. I'd particularly like to take this opportunity to thank Aussie Super and RCF for the support, resilience and assistance over the last 6 months, whilst we've conducted D-Day. Sternship is acting as financial adviser and Thomson Geer as legal adviser. I'd like to thank all the legal teams and advisory teams for the transaction. Euroz Hartleys and Canaccord will be assisting on the road show that we'll embark on through both the Melbourne and Sydney as well as the U.K. and the U.S. in the latter part of this week. Just by way of use of funds, specifically the Gwalia reset future proofing. It's about progressing organic growth opportunities across Gwalia. And as I mentioned previously, prioritizing waste development, waste removal and cost reductions to the order of AUD 50 million. Tower Hill early developments, so we're targeting approvals and the rail relocation as high priority past there. The Phoenician Metals working capital of AUD 65 million of general working capital comes by the placement of Genesis to appropriately capitalize Phoenician into the future. And likewise, AUD 90 million will be put to debt repayment at the Atlantic operations to leave Phoenician in a very well-capitalized AUD 119 million of cash and investments and will be debt free. Another transaction costs of circa AUD 50 million totaling AUD 275 million. So I'll just quickly summarize the transaction and the benefits of Hoover House and Phoenician before I open to Q&A. So Hoover House is a genuine win-win-win. It creates a leading ASX Gold House, extensive position in prolifically in already 5 million ounces of resources and 3 million ounces in reserve. We'll have a capital-light, fully funded production growth target of 300,000 ounces per annum. There is high investor appetite for sensible regional consolidation and the merger benefit both sets of shareholders. There's a capable management team, financial flexibility and a better manager of growth -- is the mandate to grow the West Australian assets. And this company has the ability to rerate and fill the gap to the ASX 100 gold producers. So Phoenician Metals will provide a diverse new company were industry-leading resources, reserves and exploration upside. It has a high-quality board and management led by Andrew. It is well funded the strong, flexible and unlevered balance sheet. It will become the natural owner of this outstanding growth and development opportunities at both Simberi and Atlantic. It allows Hoover House to focus 100% on Australia, the Western Australia Leonora district. Hoover House will remain a supportive 20% shareholder in Phoenician and also has a potential to rerate with a clear disconnect between the market cap and its very large gold inventory. So on that note, I'd like to throw to Q&A. Thank you, Rachel.

[Operator Instructions] Your first question comes from David Radclyffe with Global Mining Research.

I've got a few questions. Maybe starting with the Gwalia underground, that's likely a big cash flow lever for the new business. So maybe could you expand on the benefit of slowing the Gwalia underground down, taking the pressure off the mine, especially in terms of grade development reliability going forward, which has been an issue and costs. And could we see maybe grade substantially better going forward in the midterm than current reserves, which are half what they used to be?

Yes. Thanks, David. Look, really, you just constructed the crux this transaction worked so well for both our shareholders. So obviously, the benefit of bringing Ulysses on 30 kilometers down the road. It takes a lot, as I mentioned, takes a lot of the pressure risk of Gwalia. And as you can recall, the asset has been running at 700,000 to 800,000 tonnes per annum for about the last 5 or 6 years. There was a target to 1.1 million tonnes per annum as the grade has come off in reserves, as you can see, for me, personally, that's adding more equipment condition down the hole. So as I mentioned earlier, we can treat Gwalia and Ulysses as 1 mine, take some equipment out of Gwalia put the 30 kilometers down the road. So essentially, our cost base will remain very much the same, but we get the benefit where we can bring Ulysses on and take a lot of pressure off Gwalia. And of course, that's going to sustain that asset over long term. If you think about that production rates across 2.1 million ounces of reserve, we're looking here for a very long life asset with a combination of Ulysses coming on.

Then maybe in terms of a bit of the broader strategy, I mean, St Barbara has talked a lot about processing of refractory ores and align themselves to a degree that way. This looks have now been deferred. Is there a place for Hoover House to develop process refractory assets? And if so, what's the time line there?

Yes, great question, David. I think the key point here is if you look at forward outlook for, St Barbara, there was quite a lot of CapEx coming through the business. When you think about Simberi CapEx, you think about Beaver Dam CapEx and then you think about bringing on Zoroastrian and our Aphrodite, the expansion of the plant and the Albion. So 1 of the key tenets of this transaction is a capital-light focus. So we're removing $400 million of immediate capital demands as well as taking a lot of risk out. So simply at the moment, we want to focus sharply on Gwalia and making this a sustainable long life asset and obviously, the benefit of bringing on Ulysses. But it's not to say that Aphrodite and Harbour Lights, absolutely future profitabilities that we look to exploit and that would simply be deferred as opposed to forgotten. So there's a bit more time to optimize that and see how to best capitalize on those assets.

Okay. Cool. And if I could just maybe just thinking 1 last one. So Tower Hill has made a lot of sense for a very long time, but it just has never progressed due to the constraints. So what are you going to do differently here, I guess? Because you're still talking about a 2 or 3 time frame. Do you have sort of an estimate of what you think it would cost to actually move the rail line? And if that's not possible, do you sort of -- what's Plan B? Do you go back to thinking about this as an underground, which I think you remember as we talked about it in the past?

Yes. Look, we're really de dovetailing off the transition, if you like, the pivot St Barbara did a few months ago, where it converted from an underground reserve moved it to an open pit resource. And you would have seen in the last quarterly report, they actually published their open pit reserve, but as I mentioned during the presentation, what it didn't have the benefit of us being able to access a larger, lower cost mill as far as that analysis on cutting those reserves. So as part of this transaction, again, 1 of the key tenets is being able to access the Morgan's mill in time, noting it's sort of 2 to 3 years away for approvals. But obviously, that enables us to get a potential step change in reserves. And if we couple that with applying the Genesis Mining services open pits on operator costs, we might see a step change again. And as far as costs and time lines, so obviously, we're clearly articulated that we're going to do market briefing in September quarter. We will come out with a 5-year plan and CapEx, OpEx, production rates, mill strategies all that will be articulated i.e., once we've got the keys and obviously spend some more time on the ground before we articulate that in the September quarter.

Your next question comes from Alex Barkley with RBC.

Congrats on the deal. Question to Dan and St Barbara management, I guess. Just sort of wondering why bring Genesis in? And I mean, you could have almost gone a sort of regional play on your own. The obvious synergies with Dacian Mill, but I think you had your own numbers there, $180 million for a 3 million tonne per annum Tower Hill mill. Why not maybe a big capital raise on your own or create your own sort of regional hub strategy? Why did you think Genesis was the best option to get that value?

Yes. Good question. Look, I think that when you look at the -- I guess, the CapEx build going forward, you look at the availability of ores around Leonora, the requirement to, I guess, reset Gwalia mine, which is 1 of my main focuses right now, which we can chat a little bit about. But the bottom line was that, yes, we could have gone alone and we could have gone and would mean that we would need to do a significant raise. When we look at the overall picture, though, it's -- we can do the Ulysses, it basically brings Gwalia at a lower cost. And at the end of the day, we believe that a management team that the Genesis guys could go and do the raising of $275 million at market with very strong cornerstone sort of underwriting that. So yes, look, I guess you could argue but we believe that this is a much clear -- cleaner and then allowing the Phoenician Metals to be spun out as a, I guess, a bit of a premium to the St Barbara shareholders and allows us to go back and refocus on bringing in the Tower Hill project based on a revised strategy using the Dacian Mill. So if we were to do that alone, I think it's fine that the -- it will be a significant capital bill without actually then talking about the refractory ores. So I guess, yes, you could go another way, but we believe that in the long term for shareholder value, and to get that across the line, I think, is much cleaner. And I think it's a good deal for all shareholders.

You sort of touched on the premium there. I suppose, obviously, you have a view on the relative valuations of the 2 companies, pretty similar market caps, I guess. Did you think maybe you deserved a little bit more of the synergy benefit? Maybe there should be a premium to St Barbara or just very happy with mill premium. Is that the best way to get it over the line? And happy your thoughts as well Ral?

Andrew here, firstly, and I'll throw to Ral. But the -- I mean when we talk about mill premiums, mill premium really at the Leonora assets and putting those together. And I mean, Dan just talked about how that comes together and bringing on the funding from these sources at mill discount really was -- it still meant that the right combination of those assets. I think the Phoenician assets they're underappreciated. It's -- it doesn't get full visibility under St Barbara. So it's a fairly healthy premium when you look at it when you got the 2 assets, there will be $65 million put in on top of the $20 million that's sitting in there and the investment portfolio. So just those alone to pursue the other 2 assets and their development potentials, we think is quite a healthy return to the St Barbara shareholders. But -- and I'll let Ral finish off.

Yes. So I think, yes, it's important to look at that. I think that equity raising is really important to obviously that's coming in from Genesis holders. And again, acknowledging the cornerstones are taking on 5 months of deal risk here. So that creates in my opinion, a really attractive premium to St Barbara shareholders when you think about particularly Canada, its new strategy under Andrew's ownership to have that well funded. If you think about what that asset could be worth into the future, and that's for the benefit of St Barbara shareholders, I think that upside is significant. And frankly, that's why we're retaining a 20% holding in that company under Andrew stewardship. I think that's a really important point. But I think the other side of the equation is looking at it and going, you can see the stress that Gwalia is under 56,000 ounces up to November to be able to take the pressure off of that asset by bringing Ulysses on, which has got significant life can share a lot of the equipment and people, as I said, is going to get quicker to get to into the face that Ulysses and it would be down the face at Gwalia coming from the same camp. So I think that's actually the benefit to both to shareholders that we can't lose sight of as well. It enables us to probably utilize that plant, which is well suited to both ore bodies. And as we've said, having Mt Morgans available time off the value at Tower Hill is a significant step change as well. So I think there's actually 2 sides of 1 that need to be properly looked at.

Yes. Just a quick 1 on Atlantic. Is it right the 15-mile stream will be coming on before Beaver Dam now FY '26, is that right? What exactly is the issue at Beaver Dam and why the delay? And how long is that going to take?

Yes, thanks. It's Andrew here. So the -- on Beaver Dam, so we're in primarily to areas where engagement with First Nations Group that are affected by that potential project and also the Department of Fish Originations. So there's probably main consultations that are ongoing. And at this stage, with we need further time with those stakeholders. And so at this rate, we can therefore foresee that we won't be able to maintain continuity. So obviously, continuity was important there's a lot of value in keeping the operations running in steady state, and that was what Beaver Dam offered. It's relatively close. Well, it's roughly midway between the 2 sites. So the idea was that, that all from Beaver Dam will be trucked over to Touquoy and provide feed after the stockpiles are finished at the end 2024. But the bigger value project has always been 15-mile stream, and we've been pursuing that through permitting and studies in parallel, although Beaver Dam being the most pressing one, that was the main 1 spoken about. So 15-mile stream becomes -- it really just becomes our focus for the near term and then Beaver Dam once we've resolved the matters with the stakeholders, we can look at the development options then. But it does open up for us the opportunity that we didn't have if we were going to have Beaver Dam going to Touquoy is that we can look at repurposing the Touquoy processing plant for application of 15 miles stream, 15-mile stream probably about a 2 million tonne per annum proposition. The Touquoy plant is above that scale. So it would be more than sufficient. So we'll look at repurchasing that and coming up with more efficient capital design for that project.

The next question comes from Peter O'Connor with Shaw and Partners.

Raleigh, Andrew, Dan, congratulations, a big deal. It's a long-time coming congratulations. Raleigh to you first, a couple. The new premium issue. So if you look at the ratio of Genesis and Simberi going back not 1 month, 3 months, 6 months but 1 year plus, 2 years was about 3:1. Now it's been at a mill premium for a while. Looking at the scheme ahead in that time risk of 5 months and the fact that 12.5 of the register can effectively scale the scheme, how well placed are you with the minorities at St Barbara to be comfortable. You'll get the requisite voting or there's no rejection just cover scheme?

Like I said, I think the -- as I articulated in this presentation, we're targeting all shareholders to get into the indoors. This deal is including, obviously, Genesis shareholders have to vote this 75% in favor for it to happen as well. So we're very much focused on the fact that we think this is a very compelling transaction for St Barbara shareholders on the premium of Phoenician as we've talked about. The value you can unlock at Gwalia. I think this asset can get back to 200,000 ounces per annum with a similar cost base of what we've currently got, I think, is a massive lever that is really compelling for both sets of shareholders. There's obviously a 50% vote required from St Barbara to go through the demerger of Phoenician as part of this transaction, which again, it's -- I think it's an opportunity for them to probably assess the business and obviously have a look at what the combination looks like. And hopefully, we've articulated all this information clearly into the presentation is why we think this is really compelling that we've been in the detail. But we're super excited about what both companies look quite frankly.

Well, is this bid last in final, this scheme?

Yes. As you can see, we're trying to thread the needle here. So we're obviously trying to get both companies comfortable with how the transaction looks and making sure that it's appropriately funded on both sides, obviously, with Cornerstone. So this is the plan that both boards are recommending mostly to shareholders.

But to be clear, this is the last pricing of the scheme, the last term of the scheme?

No, we haven't said that it's the last pricing on the scheme. So again this scheme...

Not the last and final pricing on the scheme. Okay. So still available for variation anyway if needed?

Yes, if needed. But I think at the end of the day, like I said, we think this is actually really finally balanced, and we've done a pretty good job of making sure that both shareholders are getting a really good outcome here, including dosing shareholders, they want to be a part of Hoover House as I mentioned at the start. So again, that's what's been recommended to both sets of shareholders.

Just -- you mentioned Dacian, your most recent transaction has been not quite so clean with Kin Mining. Does Kin Mining have any influence on the use of the Mt Morgan mill or any of the resources? Or does your stewardship with your current holding give you enough certainty this can play out the way that you suggested?

Look, independent of this transaction, I said we're at 77% of Dacian, we're very comfortable that obviously, the Dacian board is there to act in the best interest of Dacian holders, Dacian holders including us at 77% Kin and the other minorities. So that remains unchanged. If we'll keep a bit open if Dacian holders think it's compelling to become a Hoover House shareholder and be a part of all the merger benefits well the opportunity to do that in the next month, but we're very clear even prior to this transaction that the Dacian board running the process of expressions of interest on the plant once that was received. There was -- they're acting in the best interest of Dacian holders, most likely would enable us to be able to get access to the plant and then obviously Dacian be able to get access to our Genesis Mining Services. So we saw that had a good viable strategy. And obviously, this has been enhanced with the transaction we're announcing today.

Probably before I go to Andrew, the escrow period for the holding that you've got in finishing, how long is that? Is there that in the document anywhere I couldn't search for it, just struggling to find it.

If it's not in the document, but the escrow period we've been talking about is 2 years. But I'll -- yes, I'll try and find it for you and point that out, but 2 years growth period on the 20%.

Andrew also -- got you. So Simberi, the sale process. How many bids did you receive? Where are they from? Were they cash? Were they stock? Were they mix? And why weren't they in numeric form compelling?

I obviously won't share with you how many and what the bids were. That would -- that's confidential for us. But we had 2 rounds, I can probably give you a little bit of color. So -- and we got proposals in each. But none of them are really compelling. And again, we -- I know strategic review sometimes gets clean as code for sale process only, but the strategic review was actually also reviewing our opportunities and the outlook for Simberi, given that we decided not to go straight into a final investment decision. So I think given the excellent work that the team have done to give us confidence in the extension of the oxides and given the opportunity that we were basically promoting to the potential expressing interest on the resource upside potential in the sulfides, I think that's best for us to keep going under this structure and with funding.

So when you say compelling, there wasn't compelling versus factoring that future upside of both the sulfide and oxide?

Correct. And compelling. I mean, we also -- obviously, we've had a long presence on Simberi Island, so we also wanted the right future development proposal for the island and PNG. But financially as well, we didn't see sufficient reward in accepting any of those indications of interest.

Last 1 for me. Simberi, life of mine, the mining license FY '28. It's an old St Barbara problem. Do we value this asset to '28 or do we value it on the option that it may go ahead, thoughts?

It's a mining lease renewals. So it's not -- I mean, it's not a start from scratch and no expectation. So -- and this can -- with cooperation from the government can be renewed earlier if the right decisions need to be made based on that. So certainly, I do want Phoenician to be in a position that by the time we're having those renewal discussions we've fully proved up the potential and can make our final investment decision based on that new information. So I think the time line you say there's option value in the sulfides project that isn't currently recognized. The cash flows in the near term. I mean, the emphasis for the oxides is to be cash positive and contribute so we can get the exploration funding in. But I think the real value in Simberi is the project upside.

The next question comes from Alexander Papaioanou with Citi. Alex, your line is live in to the call. You may be on mute. It doesn't seem like he's there. We'll just go to the next question. Your next question comes from Nick Evans with The Australian.

Yes. 1 for, I guess, Dan, and the St Barbara side. I mean St Barbara brings the only operating gold mine roughly 75% of the reserves. And the market caps are roughly equivalent. Why would St Barbara shareholders vote for this deal?

So Andrew here. So I think just reemphasizing the premium firstly, and I'll come back to the question of the asset contributions. So we are actually pulling off the St Barbara overseas assets and significant amount of cash and equity investments, which I get overlooked into Phoenician Metals. So that's how we've structured essentially what we think the St Barbara shareholders should be rewarded with as the upside. Then I think we also -- when we talk about the reserves and the production assets, Ulysses is actually substantially as indicated. And if once you dial in the access to the mill, that will obviously be converted, and I think the expectation is the maiden reserve coming up. So Obviously, when we look at the mineralization, we're looking at the measured indicated status and the viability of that come into Gwalia mill as well as the other assets. So I think it's probably the headline numbers on reserves is 1 thing. We look behind that in terms of the economic value of the measured indicated material and how it will be converted have access to the processing plant. So I think the Leonora assets combination together with the expectation that we'll be able to make arrangements that are beneficial to all the various shareholders in terms of the Tower Hill development and the access to Mt Morgans. We think that, that combination brings about a great sum of the elements.

And Nick, it's Raleigh here. Just 1 other point to add to that. Bear in mind, at the Phoenician demerger is obviously the St Barbara shareholders as a premium, but the intention is for that asset to be listed, and I suspect we let the market decide where its value is. But I think we probably shouldn't lose sight of a few points. One is, obviously, the Genesis placement of $275 million locked in at a slight premium with 5 months of time is there. He's contributing $65 million of cash into that vehicle as well as we're paying down all of its debt. So it's actually creating a really clean, well-funded vehicle, obviously, led by Andrew. And if you think about the scale and scope, it's over 6 million ounces in resource and appreciate 3.7 million ounces in ore reserves. So any sort of comparison on similar assets of that scale of asset. I think there's the opposite argument could be that's a pretty impressive premium, which means when it accounts on the other side, getting Genesis shareholders to buy 75% in favor of the merger as well.

Why have been not allow those St Barbara shareholders who supported this deal to take part of that placement? Why not structure that those support of shareholders can sort of get themselves through St Barbara, position themselves a little bit better rather than sort of running on this through the takeover target, which is effectively Genesis?

Yes. So the key point on that is thinking about that $275 million funding. It's all conditional on the deal, and there's obviously 5 months of time risk here. So obviously, having the cornerstones of North RCF having done DD and being so supportive of this transaction with that time risk, I think, is a really big tick and endorsement for this transaction. So I think that shouldn't be lost on people. I think as well as you think about what comes of that combined entity, obviously, having the funding benefit going into the offshore assets, but also what happens back with Ulysses coming on stream, taking a lot of the risk out. There's compelling argument there in North RCFs, also -- sorry people committed to scale back which will get access in the next 24 hours to talk to those larger St Barbara shareholders to enable them to participate as well. But we've got to bear in mind that we need to have Cornerstones in here for this transaction to take place with that 5 months of deal risk hanging out there.

Your next question comes from Paul Kaner with Ord Minnett.

Raleigh, just on that synergy value of $200 million, it seems like $65 million to $90 million of that is the tax benefit. Am I right in thinking the remaining value is made up from deferred capital and corporate cost benefits?

Yes, that's right. Yes, deferred capital is obviously a component of it. And I think the tax benefit is around $65 million to $90 million from memory. And then obviously, the benefit of bringing the 2 organizations together from a corporate cost savings, the other part of it.

Yes, no drama. And then just on putting that Ulysses material through the Gwalia mill. Are there any sort of mineralogical differences in the ore types that requires any further changes to the existing Gwalia mill?

Actually, the opposite, very well suited. So the deposits are 30 kilometers of part of a similar strike, similar deep and for us, the mineralogy is actually very similar and actually perfectly suited to the Gwalia plant. So the Gwalia plant runs at anywhere between 75 or 90 microns, the Dacian plant runs up to 120. So it is ideally suited running Ulysses through this plant. So obviously, having a blend of Gwalia and Ulysses with some top-up from ASX slot hub, takes some risk out, fee increases in metallurgical recoveries and most importantly takes a lot of pressure off Gwalia.

Your next question is a follow-up question from Alex Barkley with RBC.

Just a quick 1 around the timing of Zoroastrian and you will see. I thought sort of Zoro in FY '24 might have been that diversifying ore source. Is Ulysses going to be replacing that for FY '24? And then Zoroastrian would be delayed until a Mt Morgan mill restart? Is that the new plan?

Yes. Look, probably the best thing to look at that 0.5 in the rationale, the focus on Leonora. We obviously had Gwalia continuing, Ulysses coming on, which is starting in FY '24 will be at full scale by FY '26. And what we talked about is the gap filler, if you like, to put through the Leonora plant potentially comes from the open pit sweeteners, particularly their red cliff assets hubs, particularly is 1 of the key short-term opportunities, which is obviously a benefit to St Barbara as well as Dacian as well. So that's 1 strategic option as far as Zoroastrian, it will feature in the life of mine plan. But obviously, at the moment, we've got a situation in Ulysses and Gwalia is perfectly suited to the size of the mill and the net recoveries I have spoken about. So it isn't a life of mine plan, but after the Ulysses.

Yes, okay. Maybe a comment from you, Dan, sort of why is Ulysses the pick there?

Well, I think it's about 100 kilometers closer. So look, yes, look, it really comes down to what is the best fit for our mill here. I mean, we are reviewing that we can make that middle up to sort of more like 1.4, 1.5, which we think is doable with very minor capital. So I mean, Zoroastrian really in terms of its life of mine and stuff will be mined. And it will come in at some point. But the fact that we've got the -- I guess, the Ulysses project future mine just down the road. We can increase, obviously, bring in -- that will produce around about 600,000 tonnes. It's so close that admin costs would go down because we can share a lot of the admin costs. And of course, we -- as we mentioned earlier on, the optimization of Gwalia underground will require some equipment to be taken out of the mine, and that can actually then be deployed straight down at Ulysses mine. So there's a lot of pros for bringing the Ulysses ore up to here, as Raleigh said, mineralogically, Raleigh had said that word this morning, mineralogically, it's a perfect fit for our mill and 1 would then assume that we're getting a huge amount of benefits on recoveries. And as we all know, the costs then will go down. And as part of that synergy that we just spoke about earlier on. But Ulysses it's got a huge resource base sort of close to 0.8 million ounces. It's got a good grade of 3.4, which will complement the Gwalia grade. So -- but look, I mean, what we'll do is at the end of the day, we'll go back at the now and work through a lot more detail around the projects and project time lines on what's best fit for the Leonora there are a lot of other potential operations that probably have not been ignored, but probably didn't quite fit into the Leonora mill sort of capacity and quality of ore. Andrew, do you want to comment?

Just clarifying the earlier comments. So for Zoroastrian, we were expecting to bring on about 200,000 to 400,000 tonnes per annum. So -- and it's for about 3 years in our plans. So obviously with Ulysses, that's looking at more like 600,000 tonnes per annum plus and a longer life. So it's -- I mean, lower cost, higher and newer tonnage that can be produced and sufficiently close that essentially, the 2 underground fleets will be shared and the management shared whereas Zoroastrian here being 100 kilometers further away, it was going to require a different approach. So that it makes a normal sense to switch those 2 as part of this plan.

Your next question comes from Matt Greene with Credit Suisse.

Just a question on Morgans mill, Ral if I can. The -- you mentioned Tower Hill committing 2 to 3 years. Can you just touch on the Leonora Open Pit, Jupiter Open Pit? What's the permitting status for those pits?

Yes. Thanks, Matt. So as I mentioned at the outset, we are currently updating our resource position at the Jupiter Open Pit having done an extensive drill program there. We'll be looking to publish reserves also in the June quarter. That's obviously with the benefit of the larger Genesis Mining Services fleet, which we look to use there and obviously, utilized at Tower Hill to make good use of that equipment. That will be published in the June quarter, as I mentioned along with all the open pits within the Genesis tenure, which currently are a bit of a flux capacity. So it depends on, as I said, we'll come out with our full 5-year outlook in the September quarter, numerous options ahead of us, whether we start with Jupiter those pits on or say if we want to Tower Hill comes online. So they are the types of things we'll be obviously knocking down and optimizing over the course of the next 6 months before we come out with that 5-year plan in September.

Okay. So just to confirm then, the Leonora Open Pit and Jupiter are fully permitted to go ahead. You're just waiting on Tower Hill on the permitting side.

Yes, that's right. The only caveat on that is if there is a significant step change on Jupiter, we would require an updated mining proposal. But again, the timing of that would be pretty short considering a mining lease that is already had mining undertaking look, but again, the good problems there.

Yes, understood. And I mean, it sounds like permitting is quite a headwind facing the industry in WA at the moment. So if we assume Tower Hill does take sort of 3 years, perhaps, is there a riskier that you can't fill the Morgans mill?

Yes. Just on Tower Hill, to be clear, I think the permitting is actually pretty good order. It is on a grounded mining tenure. It's probably more around the infrastructure. So I mentioned the rail line to be clear, we're not talking about a relocation. The actual rail line on only permits about 2 kilometers away to the north. So it's actually about setting up a new intermodal hub to the south of the line. And then that line would become redundant. So Andrew and us got done a heap of work on that in the last 12 months, particularly. So we'll just be running with that work. So that's probably the key item and is again, everything else will come through. Again, for us at the moment, it's about pull all that data together and we'll come out with all of our disclosure about exactly what we'll do when in the September quarter. So that's probably a bit early to comment at this stage.

No, that's great. Thanks for clarifying and congrats on the deal.

Thanks, Matt.

We've come to the end of the Q&A session. I'll now hand back to Mr. Lougher for closing remarks.

Thank you, Rachel. Thanks again for joining us. We are delighted to have had the opportunity to make this announcement today. We are looking forward to ongoing collaboration between St Barbara and Genesis as we work towards completion of this compelling transaction. Please be assured that I will continue to safely drive improvements at all of St Barbara's assets over the coming months, irrespective of the outcome of this opportunity. As I said earlier on, Gwalia is a key asset in whichever way you slice and dice this area. We look forward to talking with many of you later this week and into the new year. That now brings us to the end of the presentation. So once again, thank you very much for listening and taking part. Thank you.