Hello and welcome everyone. My name is Johan Andreassen, and we want to welcome you to the Q4 operational update for Atlantic Sapphire. As normal, with me to present today is our CFO, Karl Øyehaug.
Hello everyone, and thank you for listening in. This time we've chosen to do this Q4 2023 presentation as a prerecorded presentation, which means that any questions you might have to Johan or myself after the presentation can be directed to us. So with that, I'm going to give the word back to Johan to go through the operational updates.
Thank you, Karl. So, kicking off the main message here, which is that we have seen improvement in performance and much more stable conditions in the farm, since we have completed the very critical infrastructure upgrades last year. We have strong biomass growth across all the recent batches. The batches that have been transferred into the grow-out system tanks after Q3 are performing in line with expectations or better. The farming conditions are stable, and that is supporting a good growth of biomass. Feeding and feed conversion rates are at solid levels. The recent batches of fish are absorbing feed well, indicating strong operation conditions. The mortalities are trending downwards and improved feed conversion ratios, which reflects good water quality. The farming temperatures are stable around 14 degrees Celsius. Stable operations across all the grow-out systems at optimal farming temperatures.
The new rental chillers are functioning in accordance with expectation. A new heat exchanger is being brought online and will further increase the buffer on our cooling capacity going into the summer months. The share of high-quality salmon is steadily increasing. The batches, impacted by prior temperature issues, are being harvested out as we speak and will be completed in the next few months. Around the half-year of this year, all the remaining fish in the farm will be unaffected by the Q3 2023 legacy issues. The mix of batches are quickly improving. As I mentioned earlier, parts of the pre-Q3 batches went into early maturation due to the temporary challenges we had with temperature. The farming conditions have significantly improved since, and that is reducing the share of maturing fish in the standing biomass as a total.
As I said, all the Q3 batches will be harvested by mid this year, and the remaining biomass has not had the exposure to the elevated temperatures. Improved quality of harvested fish is also expected to yield improved financial performance. On the right-hand side in this slide, you will see a graphical view, that basically shows that as of end of January, a little bit more than 60% of the total biomass in the farm was the so-called, pre-Q3 batches that has, some degree of maturation in them. But it also shows you that this is quickly improving, as we are harvesting those fish out and the production capacity is immediately replaced with the post-Q3 batches that are, batches that have had a good temperature throughout, its entire cycle.
So it is a situation now where we are harvesting a lot of fish with reduced quality, but that is quickly improving in the next few months. The stable temperature and growth conditions have improved the have improved the performance. On the left-hand side here, it's a graphical view that shows you the breakdown of the monthly biomass gain on the pre-Q3 and post-Q3 batches, respectively. And as you can see, the post-Q3 batches are quickly taking over the majority of the biomass gain. The standing biomass at the end of last year was approximately 3,050 tons round living weight. And the total net biomass gain in Q4 last year, including freshwater, was approximately 1,100 tons round living weight. On the chart on the right-hand side, you will see the percent of net biomass gain to standing biomass, again broken up with the pre-Q3 batches and the post-Q3 batches.
And as you can see, the post-Q3 batches have a growth rate of above 29% monthly the last three months, which is in line with our targeted growth for the relevant size fish. And as you also can see, the pre-Q3 batches that have been impacted by temperature and other issues have a poorer growth, partly because they are maturing. Feed conversion, we see supporting feed rates and conversion ratios. On the left-hand side here, you see again broken into two categories. You see the pre-Q3 batches that has a feed conversion of biological feed conversion of 1.7 and economical feed conversion of 2.4, while we see the post-Q3 batches being at one and 1.1, respectively. And this is a significant improvement.
It's worth mentioning that, of course, these post-Q3 batches are not fully grown out, and it's normal to see the feed conversion increase towards the end of the cycle, but still they are tracking way better than what we have seen in the past. On the right-hand side, you will see the chart of the monthly feeding for the last five months. As you can see, the feeding is increasing steadily, slowly but surely. This is a reflection of the increased performance throughout the farm. Again, for the post-Q3 batches, the current level of feed conversion versus standing biomass is in line with the company's expectations for good and stable performance. Switching to temperatures, the system temperatures have stabilized, as I mentioned earlier after the chiller improvements.
As a matter of fact, we, as you can see from the chart on the right-hand side here, we are now at temperatures of around 14 degrees Celsius, which we have never had before since the farm in Miami was established. Some of us of the listeners might question, is this because it's wintertime? The reality is that in previous winters, we have had much higher temperatures. As you can see, we are now trending to more than two and a half, approximately 2.5 degrees under what we used to be for the time of the year. We have approximately 9,000 cooling tons of chiller capacity installed as we speak. We expect 7,000 cooling tons to be what we need on peak days of summer. So we do have redundancy in capacity.
We are also bringing online another pre-cooler for the well water, which basically is utilizing the discharge water from the farm, adding on another 2,000 tons worth of cooling. And this comes without electrical cost because we are just utilizing the cold water going out from the farm before it's disposed into the Boulder Zone. So, this has been a game changer for the company. We never had the temperatures we wanted since beginning in Miami. Now we have it. So now it's the time to show what we can do. And I think things are looking quite promising. And with that, I will give the word to you, Karl.
Thank you so much, Johan. Then we'll turn over to the financial update, and I'll start with a summary of the year-end 2023 cash balance. The balance at the end of the year was in line with the guidance we gave back in September of 2023. We closed off the year with $38 million of cash on the balance sheet, including the $15 million of restricted cash. If you add on top the $10-$17 million of available liquidity from our revolving credit facility, that brings total liquidity to $48-$55 million at year-end. As we have talked about in the past, and as Johan also touched upon, we have experienced higher maturation levels than expected, which has impacted prices and also biological performance on those specific batches of our biomass.
It's based on this that we've reviewed our first half 2024 budgeted revenues and think that the contemplated equity raise, together with the favorable debt amendments, are necessary to secure sufficient runway to prove phase one operations and have a sufficiently large capital buffer. Going on to the cost base, we've included some more detail on what we call our fixed cost base, to just illustrate how sensitive our cost per kilo is to how much output we get out of the facility. Our cost base is scaled to support the higher volume. And if you look at the approximately $70 million of what we call fixed costs in phase one at the moment, this is both the fixed production costs of around $53 million and around $16 million of overhead costs or SG&A. Then this is, of course, a relatively high number.
What you'll add on top to the fixed costs is simply the feed cost, which is truly variable, and any external processing services that we choose to use. We do see room for improvement on the current phase one cost base. One good example is as we get further and further into stable operations, we also expect to be able to phase out of larger maintenance programs that we've been setting up so far and that we think we'll see more and more of going forward. We also expect to see very limited need for extra resources when we go over to phase two. Another cost base that we're illustrating here is what we think the total fixed costs for phase one and two combined is going to be. As you'll see, it's going to approximately go from $70-$130 million of fixed costs.
However, as we illustrate, in the middle of this slide, volumes are expected to increase up to 25,000 tons. So what, you'll be able to see on this slide is that, we are definitely very operationally leveraged and, that, of course, one thing is the exact volume we get out of phase one and how that impacts the phase one EBITDA cost per kilo. But also importantly, you'll see how critical it is for us to get to phase two, because that is really when the cost per kilo gets down to an attractive level and also our margin potential increases accordingly. The next slide gives an estimate of, what the sources and uses, are going to look like after we've completed the contemplated equity raise, where we're planning to raise $35 million of new equity.
If you add on top the $17 million in our revolving credit facility and the cash as of year-end 2023 of $38 million, that leaves you with around $90 million of total liquidity to support phase one. The uses of the equity raise is to support our phase one business plan and together with the RCF and the amendments to the debt, give us sufficient funding, sufficient liquidity to prove phase one performance. Proving phase one performance is going to be key to unlock phase two and the inherent value creation that we see in scaling up from 10 to 25,000 tons of annual production. On the right-hand side of this slide, we've also summarized the debt side of the company.
If you look at the overview of the facilities and the total number, $162 million split between our phase one term debt, the undrawn phase two debt, and our revolving credit facility is still the same number. However, certain favorable amendments are being approved and are subject to the private placement, such as an extension of the whole debt package by one and a half years until October of 2026. Certain adjustments to our financial covenants. We're also being granted a 50% reduction in the installments for 2024, which has a positive liquidity effect of $2.5 million in 2024. Also, we're being granted improved borrowing base terms on our RCF, which all else equal means that with the same standing biomass, with the same number of accounts receivables outstanding from our customers, we're able to draw upon more of that facility, which improves our liquidity.
And finally, also, the incurrence tests to draw upon the phase two debt have been improved, and, also been adjusted to our updated financial projections. Going over to the offtake and the revenue side, our view of the future continues to be that in stable conditions, in stable, steady state production, we expect to produce 80%-90% superior fish that we can sell at our premium prices, which is why we are targeting the $12 per kilo as an average price, as you'll see here, makeup of $14 per kilo for the premium fish. With downgrades, you'll get to that $12 all-in blended average. If you look at the pricing in Q3 and Q4, you'll see that the Q4 premium price was down a notch from what we've been trending the previous quarters.
The reason for this was that we had committed a relatively high share of the premium volumes to promotional programs a long time before Q4 when we were getting ready for a big ramp-up that we were expecting at the end of the year. So those promotional programs is really the reason why the premium price is down, not because of any other kind of underlying demand effects. The average price in Q4 was $7.4 per kilo, including all downgrades, which is pretty flat versus where we've been trending the last few quarters. We saw a very good development of branded sales and the programs for the superior quality fish.
The focus of the sales team is on new value-added and convenience product lines, not only for the superior fish, but also to make sure that the downgrades that we do have, although we expect a much lower share of it, is also being sold at the premium prices compared to other comparable products. Finally, on the right-hand side, we have also included the overview of where Atlantic Sapphire's product is currently for sale, with over 2,000 retail locations that are currently carrying Atlantic Sapphire's Bluehouse Salmon at the moment. The second last slide we'd like to take you through is just a summary of where we are at. A helicopter view of the farm shows you the $388 million of total assets that the company has at the year-end of 2023. Phase one is fully permitted, fully constructed, and operational.
The only last box to tick is to get up to steady state volumes so that we can also prove the phase one biology and unit economics. On the phase two side, we are fully permitted. We're roughly a third along the way on the construction side and are looking forward to get that facility operational and proven in the not too distant future, which will bring up our total capacity from the current 9,500 tons in phase one to a total of 25,000 tons approximately when phase two is also brought online. If you take a look at the asset values that we have, and if you look at the invested equity in the company over the last decade or so, this is a considerably higher number than what the current market cap to company is.
Also, we note that replacement values for our existing infrastructure likely are much higher than what we spent historically to build what we sit on today. To summarize, we have a slide that just showcases the powerful equity story that Atlantic Sapphire has. First of all, we are capturing a U.S. megatrend by being in the largest single market for salmon in the world, with more than 600,000 tons of consumption. However, also a market where the consumers are generally relying on importing fish from Europe or South America, which we can solve with significant freight cost savings. Secondly, we have a large-scale facility that is operational and very close to proving the unit economics. The phase one with its 9,500 tons and also the strong operational performance that we've seen since mid-October of 2023 is supportive that we will get there.
Third, the phase two that is under construction will more than double capacity. We've invested over $100 million into that development so far, capturing all of the key learnings from the phase one project. Once complete, our 25,000 tons of salmon is going to give us significant economies of scale. Also, on the financing side, to recap, we have $100 million of undrawn term debt, fully committed from the bank that is going to support us in financing that the rest of the phase two project. We have a unique economic and environmental proposition with a proven ability to get premium pricing for our Bluehouse Salmon, with significant cost savings by removing the air freight from or compared to the conventional production markets, and also the ability to reduce to deliver a product to U.S. consumers with a significantly lower carbon footprint.
Our existing network of stores, which is going to increase rapidly as we're scaling up harvest volumes now in 2024, shows that we have the offtake ready. And finally, we are backed by highly renowned financial and industry experts that in total have invested over $650 million of equity since inception. The leading salmon farmer and the largest shareholder, Nordlaks, continues to be a strong partner that is engaged in the operation and making sure that when we take the right steps, we're taking them in the right direction with all of the decision support that we can have. So with that, we'd like to thank you for your attention. And again, any follow-up questions that you may have can be directed directly to Johan or myself afterwards. So with that, thank you so much.
Thank you.