Good morning, everyone, and welcome to the Victoria Gold Conference Call. We'll be discussing the company's 4th quarter and annual 2023 financial and operating results. Listeners are encouraged to read Victoria's annual 2023 consolidated financial statements and MD&A, available on the company's website and on SEDAR. Available on the call today are John McConnell, President and CEO; Mark Ayranto, COO; and myself, Marty Rendall, CFO. Note that listeners and viewers will be muted while management provides a short review of the results. After the review, there will be an opportunity to ask questions. To register a question during the presentation, please do so in the chat function, and the question will be addressed during the Q&A session. Also note that this video call will be recorded and available for playback on the company's website.
We will be making forward-looking statements on this call and encourage participants to read our disclosure documents, including our corporate presentation, AIF, and MD&A, and the cautionary notes therein, which can be found on SEDAR and, again, the company's website. I'll now turn the meeting over to John McConnell, Director and CEO.
Good morning, everyone. Thank you for joining the call. I'll provide a brief summary of the 4th quarter and annual results and then pass the call to Marty and Mark to provide more details. First and foremost, starting with safety, we had one lost-time injury reported in Q4 as one camp housekeeper contractor suffered a minor hip injury as a result of a slip. Our safety record continues to be strong as our total recordable injury frequency, or TRIF, for 2023 was 1.54, among the best in our industry. Operationally, the 4th quarter of 2023 saw the Eagle Gold Mine deliver consistent quarter-over-quarter production. For the year, we achieved an 11% year-over-year production increase. Both production and costs were well within our original guidance ranges for 2023. As with many other operators, despite inflation having peaked, we continue to see cost inflation at Eagle.
We expect production levels to increase through 2024 and 2025, which will result in lower unit and per-ounce costs as our largely fixed cost base is amortized over more ounces. We continue to deleverage our balance sheet in the 4th quarter as our total debt position decreased by CAD 15 million. On the exploration front, we are excited by the potential we see across our Yukon Holdings. At Dublin Gulch, we have the Eagle Mine along with Raven and Lynx targets. Other Yukon assets include Clear Creek and the recently acquired Brewery Creek and Gold Dome properties. We are currently finalizing our 2024 exploration plans and look forward to providing an update on our 2024 exploration program in the coming weeks. I will now turn the call over to Marty, our Chief Financial Officer.
Hello. I will briefly discuss our financials before passing it back to Mark to discuss operations. Currency will be in Canadian dollars unless otherwise mentioned. During the quarter, we sold 36,601 ounces of gold. This is about 4,000 ounces lower than Q4 of the previous year. About 2,000 ounces of this difference is attributable to lower gold production, while the remaining 2,000 ounces difference is due to timing of gold shipments. Even with the lower ounces of gold sold, quarterly revenue increased from CAD 92 million-CAD 95 million year-over-year due to higher average realized gold price. Quarterly production costs fell from CAD 77 million-CAD 70 million year-over-year. However, this was more than offset by changes in inventory and capitalized stripping adjustments, which were a CAD 6 million reduction in Q4 2023 vs. a CAD 32 million reduction in Q4 2022.
This results in cost of goods sold of CAD 64 million during the 4th quarter of 2023 compared to CAD 51 million in the 4th quarter of the previous year. The higher revenues during the quarter, combined with higher costs of goods sold year over year, resulted in a decrease in gross profit, operating earnings, and net income after tax, which was CAD 2.6 million in Q4 2023 vs. CAD 10.5 million net income in Q4 2022. If we look at the year, we sold 160,135 ounces of gold in 2023. This is more than 20,000 ounces higher than 2022. The increase is primarily due to increased gold production. The higher quantity of gold ounces sold, combined with higher average realized prices, led to 2023 revenue of CAD 417 million vs. CAD 322 million in the previous year.
Full-year production costs were CAD 285 million in 2023 compared to CAD 262 million in 2022, primarily due to cost inflation. Similar to the 4th quarter, adjustments due to changes in inventory and capitalized Stripping resulted in a much higher year-over-year reduction in cost of goods sold. In 2023, the combined adjustment was a CAD 21 million reduction compared to a CAD 95 million reduction in 2022. This leads to cost of goods sold in 2023 of CAD 264 million vs. CAD 166 million in 2022. Higher gold sales and revenues, combined with higher cost of goods sold year over year, resulted in a decrease to gross profit, operating earnings, and net income after tax, which was CAD 25 million in 2023 vs. CAD 35 million net income after tax in 2022. At the end of December 2023, the company held cash and equivalents of CAD 15 million.
I'd just like to remind listeners that we do use our revolving credit facility to manage our cash and treasury. Therefore, our cash balance stays fairly constant while debt will fluctuate to match our liquidity needs. Working capital at the end of December 2023 was CAD 147 million compared to CAD 95 million at the end of December 2022. This material increase in working capital is substantially the result of reductions in accounts payable and current debt. During the most recent quarter, total capital incurred was CAD 16 million, while full year-to-date total capital incurred was CAD 70 million. This is comprised of sustaining capital, capitalized stripping, growth capital, and growth exploration. A detailed breakdown is shared within our MD&A. I'll now review our non-IFRS performance measures. We'll be looking at the annual measures on the call.
However, quarterly metrics, along with detailed numerical breakdown and commentary on the calculations, can all be found within our MD&A. During this section, I will bounce around a little bit between Canadian and U.S. dollars as we want to allow for uniform peer comparison in areas like all-in sustaining costs. The average realized price per ounce of gold sold in 2023 was $1,929. This compares to 2022, where we realized $1,772 per ounce. Cash cost per ounce of gold sold during 2022 were $1,218. This compares to 2022, where cash costs were $916 per ounce. All-in sustaining costs per ounce of gold sold in 2022, rather 2023, were $1,488. This compares to 2022, where all-in sustaining costs were $1,441 per ounce.
Free cash flow before and after working capital in 2023 were CAD 31 million and CAD 5 million, respectively. The working capital usage of cash in 2023 was primarily due to repayment of accounts payable. Free cash flow before and after working capital in the previous year, 2022, was CAD 19 million and negative CAD 49 million, respectively. The significant use of working capital in 2022 was primarily due to the increase of gold inventory on the heap leach pad. EBITDA, or earnings before interest, taxes, and depreciation and amortization, in 2023 was CAD 142 million, or CAD 2.15 per share. This compares to 2022, where EBITDA was CAD 140 million, or CAD 2.19 per share. I'll now turn it over to Mark Ayranto, our Chief Operating Officer.
Good morning, everybody. I really appreciate everybody's time here this morning. First, to reiterate John's emphasis on safety. As John noted, the Eagle Gold Mine performed very well across all safety metrics in 2023. Behind these excellent statistics is a dedicated team of hardworking employees who bring a safety-first mindset to their jobs every single day. I'd like to commend Eagle's General Manager, Tim Fish, and our entire on-site operating team for the continued track record of safe work practices. In the 4th quarter of 2023, the Eagle Mine produced approximately 42,000 ounces of gold, demonstrating consistent quarter-over-quarter gold production. For 2023 as a whole, we're pleased to report that we achieved the production guidance we set forth at the beginning of this year.
We produced 167,000 ounces of gold at an all-in sustaining cost of $1,488 per ounce, a strong improvement in production year-over-year. Driving this production increase was a notable improvement in stacked tons as we stacked 9 million tons of ore onto our heap leach facility in 2023. This represents a 34% improvement over 2022 levels. The mining rate for 2023 was 55,000 tons per day, which is a 15% improvement over 2022. Both mining and stacking rates were relatively consistent for 2023, and it's a reflection of our achievement of year-round stacking, which largely reduces the seasonality of gold production at Eagle. Now, despite this, we do expect to see some moderate seasonality, and this is largely due to improved warmer temperatures during Q2 and Q3, which allow us to do some activities like side slope leaching and bring some ounces forward.
Our leaching pad performance remains strong for the 4th quarter. Recoveries are continuing to trend in line with our forecasted levels. Notably, we saw an approximate 7,000-ounce reduction in our recoverable mineral inventory in the 4th quarter and a 16,000-ounce reduction for the year as ounces stacked in prior quarters were recovered to doré. This is as expected in our leach recovery model. Stacked grade of 0.72 grams per ton in 2023 remained in line with the Eagle reserve model, which life of mine has reconciled well to actual production results. The slight decrease in stacked grade year-over-year reflects mine sequencing, the impact of lower-grade bonus ore, which was considered to be waste in our reserve model and has been converted over to ore, and a small amount of lower-grade stockpiles, which were processed during the year.
As demonstrated by our 2024 production guidance of 165,000-185,000 ounces, we are expecting production growth again at Eagle this year. We're planning for another increase in stacked tons in 2024, which we expect to drive increased production of gold at Eagle. We are also expecting to implement further cost optimizations in 2024 to improve the margin of our produced ounces over the long term. We have a number of optimization initiatives currently underway that we expect will contain inflation at Eagle across all our major cost centers. Although we believe we can fight and beat the persistent inflation impacting the global mining industry, the primary method by which we will reduce our per-ounce costs through 2024 and beyond is spreading our highly fixed cost base over a larger number of ounces. We expect to be able to achieve this in the quarters and years to come.
With that, John, I'll pass it back to you for concluding remarks.
Thank you, Marty and Mark. In summary, 2023 was a successful year for the Eagle Gold Mine as we achieved our stated production and cost targets. We expect to build on this success in 2024. Thank you all for listening, and we will now open the call for Q&A.
We do have a few questions in the chat that we'll go through first. But if anybody has any questions, you can raise your hand as well, and we'll get to you. The first question comes from Hans. It's, "In the last two years, you produced 17,000 ounces more than you sold. Why and where is the gold?" I'll answer this one. We have a 5% NSR royalty that we pay to Osisko Gold Royalties that we sold to help fund construction of the mine. So that 5% of our production is delivered in metal, and so that does not hit our sales. While it does hit our production, it also does not affect our revenue or costs. So life of mine and generally annually, our sold ounces will always be approximately 5% less than our produced ounces.
There may also be a little bit of timing differences due to timing of shipments, but primarily it's at 5% NSR. The next question is from Heiko at H.C. Wainwright. "Are there any planned large-scale repairs that may be needed during the remainder of the year that may lead to temporary shutdowns?" Mark, did you want to touch on that one?
Sure, I can do that. Morning, Heiko. We do have planned in our budget for this year planned shutdowns. None of them would be considered large by mining standards. Off the top of my head, we have a 3-day down and a 7-day down planned for later in the year. Beyond that, we have just regular maintenance scheduled throughout the year as we normally do.
The next question comes from Paul Harris. "How do you plan to address your liquidity issue in 2024? Cash is CAD 15 million, and you've got CAD 45 million current portion of long-term debt." I'll answer this one. As I mentioned quickly in my presentation, cash will always stay probably in the CAD 0-CAD 20 million range, and we'll use our revolving credit facility to manage our short-term cash needs. When we have extra cash, we pay down our revolver. When we need extra cash, we use our revolver. There is only a small amount of room on our revolver now, about $5 million. We also have room on our Caterpillar Financial equipment facility, which stands a little over CAD 30 million. It's got capacity of CAD 50 million.
But primarily, how we will meet our obligations on the current portion of long-term debt is from operations and producing gold and from free cash flow. The next question from Hans is, "What is the outlook for the current year on reduction of total debt?" So related to the previous question, our goal this year is to repay the term debt, which as of the end of 2023 was $25 million. That's our primary goal. Any excess free cash flow beyond that may be used to repay our revolver, although it may also be used for other items such as exploration or capital equipment or expansion. But our primary use of cash for the year is paying down the term debt, and then we'll look at paying down further debt beyond that. The next question, "When can we expect the next set of results from Raven?
Why are we not keenly targeting the debt vs. looking at investing in a smaller operation like the Brewery Creek Mine? The market seems not to appreciate our focus vis-à-vis the share price. How do we get the share price back to a point we are valued semi-fairly?" John, two-part question for you. Next set of results from Raven, and why are we not targeting debt vs. investing in Brewery Creek?
Sure. Yeah, I think there were three questions there. We're working through the Raven results currently, and I would expect the guys will have an update on Raven within the next 1 or 2 months, so either March or April. I guess the question on why are we looking at paying down debt as opposed to acquisitions, that's partly in discussions with our board, but we all feel that a focus on paying down debt right now is the appropriate thing to do. I will remind people, though, we did make a small acquisition last year of the Brewery Creek and Gold Dome assets, where we used CAD 8.5 million in cash for those assets. So we're open to doing that, but our priority is to pay down debt, and we continue to look at acquisition opportunities in the Yukon and throughout North America.
The next question from Delbrook to myself was, "Where do you see costs to be the stickiest?" There's a few areas. I would say the stickiest costs are, you could guess it, is labor. Labor is our largest cost, and it's very sticky. When inflation went up, labor needed to go up with it. Unfortunately, when inflation falls, labor does not fall back down. So it's very sticky. I would also say labor in the mining industry is still very difficult, especially in Western Canada and northwestern Canada. Labor is the stickiest. Related to that labor, also consulting costs, which is mostly labor as well. The other area we've noticed significant increases is in parts. That is an area we think we can battle back. There are opportunities to switch parts, go to different suppliers, so we're working through those.
One area that's been positive on the cost side is fuel. I know, price, that the pumps are a little high right now. However, compared to during the pandemic and over the last couple of years, we have seen a little bit of relief on our fuel delivered to site, and we saved a little bit of money vs. our budget. So fuel has been okay over the last year but has been more than offset by increases to labor and consultant costs. A follow-up call from Heiko, and that's to you, Mark. Heiko had asked around repairs and temporary shutdowns, if there are any. And the follow-up question is, "Can you provide timing on any temporary shutdowns or major shutdowns?
Yeah, Heiko, certainly happy to do that. Generally, we have a short shutdown, which short I would define as a week or less in the spring. And then we typically do a shorter one late summer or early fall as we head into the colder season. And that's usually that shorter one in the fall is usually kind of three days, allows us to change our loops to winter loops, our fuel to winter fuel, make sure we get ready for winter in a number of other activities. Our routine shutdowns, we'll typically do a very short shutdown, so one-shift shutdown once a week. We have found that to be rather productive in making sure that assets stay up and you get repairs completed prior to unplanned shutdowns. That's all baked into our budgets for this year and factored into our production guidance.
Thanks, Mark. A question from John Sclodnick . "Even factoring the deliveries to Osisko, there still looks to be roughly a 3,000-ounce inventory build in the quarter, and you expect that to reverse in Q1." 3,000 ounces is the fluctuation that we'll likely see around shipping schedules. We generally ship every couple of weeks, and we do expect the inventory build to reverse. I don't know if it will reverse in Q1 or Q2 or Q3. Again, it's just timing of shipping. And so if we have a shipment on the last day of the month, yes, it would reverse. But if our last shipment of the month is 10 days before month-end, then it will not reverse. And we probably shouldn't discuss the specific timing on our shipments on the call here. But over time, that will certainly reverse.
Outside of the NSR 5%, our sales will equal our production. Next question is from Shree at Sprott. "With the expected bump in free cash flow, will you be in a position to be in a very select company of producers who are buying back shares?" Do you want to answer this one, John, or would you like me to?
Yeah. Nope. We've certainly consistently had that suggestion from you, Shree, and we are certainly looking at that. And I think we'll probably put the mechanism in place over the next quarter to allow us to do that. Do you want to add anything to that, Marty?
Nope, that's great. I'd reiterate that first and foremost, we do want to pay back some debt. Once we get a little bit of debt paid back, there's other options with free cash flow, including buying back shares. Certainly, we're not happy with our current share price, and we think they're on sale. It seems like it might be a good time. Next question is from Mitch. "Is management considering a share issuance in 2024 to raise cash that can be used to offset or reduce debt?
There's no intent to do an equity financing at this time, and I don't expect that to even come up as a board discussion.
Thanks, John. Another question from John Sclodnick at Desjardins. "Any color on what to expect for grade this year? Just wondering if you expect more Bonus Ore to make the Stacked Grade lower this year vs. last year, or if that will be around the same." Mark?
Yeah, I think as I mentioned a bit earlier, the grade that we see is fairly consistent year-over-year. And while you see fluctuations quarter-over-quarter, year-to-year, you get pretty consistent grade through the deposit. And I would just say that the technical report, grades and tonnages remain very intact. That's on our website that we posted about a year ago.
Next question comes from Randall. "Do you expect further pressure on grades from greater sequencing Bonus Ore or other? Can you please remind of the average grade guidance?" I guess, Mark, again, you might have already answered that one.
Yeah, I think so. I mean, I think what you're seeing right now, year-over-year, is fairly consistent. So that is roughly in line with the technical report. And as mentioned earlier, our grade in tons are reconciling well to the reserve model. We do get a bit of this Bonus Ore. We are mindful that often that Bonus Ore is a bit lower grade. So we review our cutoff grades and our strategies usually quarterly.
Thanks, Mark. One more question here from Shree again. "How much visibility do you have on production and costs given your stacking year-round numbers?" Want to touch on that, Mark?
To be honest, not quite sure the other question. But I mean, from a production standpoint, it's fair to say that Q1 and Q4 are a bit tougher challenges for production. You got colder temperatures. You've got snow. Q2 and Q3 are certainly the quarters where we can really maximize area under leach, take opportunities, side slope leaching, and do a few other things that allow us to get a lot more tons to the pad, typically, and bring ounces forward. And Marty, maybe you can touch base on the cost aspect of that.
Yeah, sure. Just like production is a little more consistent year-over-year subject to a little bit of seasonality Mark touched on, costs are also very consistent, probably even more so than production. So if you look back at our production costs quarter-over-quarter over the last couple of years, you'll see they're quite consistent. Now, that's not necessarily the case with cost of goods sold and earnings because of the adjustments around capitalized stripping and inventory on the pad. But our production costs are pretty stable, and we have pretty good visibility on those costs. Capital, on the other hand, is a little more up and down, and we do a little more capital work in the summer vs. the winter. That's all the questions we have in the chat, and I don't see any other hands raised or questions.
Just give a couple of seconds here for any final questions. Okay. Thanks, everyone, for joining us, and have a great day.
Thanks, everyone.