Good afternoon, ladies and gentlemen, and welcome to Capstone Copper Q4 2023 Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, February 22nd, 2024. I would now like to turn the conference over to Jerrold Annett, please go ahead.
Hello. I'd like to welcome y'all to Capstone Copper's Q4 2023 conference call. Please note that the news release and regulatory filings announcing Capstone Copper's 2023 fourth quarter financial and operational results are available on our website and on SEDAR+. If you're logged into the webcast, we will announce or advance the slides of today's presentation, which are also available in the investor section of our website. I'm joined today by our CEO, John MacKenzie, our President and COO, Cashel Meagher, our Chief Financial Officer, Raman Randhawa, and our Senior Vice President, Risk, ESG, and General Counsel, Wendy King. Following our brief remarks, there will be an opportunity for questions. Please note that the comments made on the call today will contain forward-looking information within the meaning of applicable securities laws.
This information, by its nature, is subject to risks and uncertainties, and actual results may differ materially from the views expressed today. For further information on the risks and uncertainties pertaining to our business, please see Capstone's most recent filings, which are available on our website and on SEDAR+. Finally, I'll just note that all amounts we will discuss today are in U.S. dollars, unless otherwise specified. Now I'll turn the call over to John MacKenzie.
Thank you, Jerrold. Good afternoon, everyone in North America, and good morning to those dialing in from Australia. We're pleased to present our fourth quarter 2023 results and our achievements for the year. Starting with slide five, we produced just over 44,000 tons of copper at consolidated C1 cash costs of $2.67 per pound in Q4. It was our strongest quarter of the year with respect to both production and costs, and that translated into our strongest quarter of the year from a financial perspective. After a strong finish to 2023, our operations are set up well for 2024. For the full year in 2023, we produced 164,000 tons of copper, which is in line with our second half guidance. Our consolidated C1 cash costs were impacted by lower production levels at the start of the year and our higher cost cap at production.
However, we expect our consolidated unit costs to decline as our Mantoverde Development Project in Chile ramps up. It was a significant accomplishment for our team to have completed the construction phase of MVDP and to now be focused on the commissioning and ramp-up of the project. There are no changes to our previously announced total capital budget of $870 million for the project, nor for the commissioning timeline as described in our guidance release in January. This project is a culmination of many years of dedicated effort by our team, from the exploration, studies, permitting, and engineering to the building of the mine, and it's tremendously exciting that we're now approaching first production. MVDP is transformational for Capstone Copper and will drive a step change improvements in our consolidated unit costs and a pathway to record operating cash flow generation.
Continuing with our achievements in 2023, I'm also very proud to highlight that both our Mantoverde and Mantos Blancos mines in Chile were awarded the Copper Mark. Responsible operating practices are a vital component of our commitment to the environments, our employees, local communities, and governments, and must remain front of mind in everything we do. The Copper Mark is a powerful assurance of transparency and accountability and reinforces our values on responsible, sustainable production. We take pride in the achievements of our Chilean operations, and we're actively striving to replicate the success at Pinto Valley in Cozamin. We also made great strides this year by broadening our senior management bench strength. We now have new general managers at three of our mines, and we've made several key additions throughout the year to our corporate technical team.
We've been able to attract very talented and experienced individuals to join our team, and I believe we're poised for success. Lastly, I would also like to highlight that in 2023, we diversified our shareholder base through a secondary placement of shares by our largest shareholder, Orion Mine Finance. We continued to bolster our shareholder register earlier this year with a further sell down by Orion, in addition to a primary equity raise by Capstone. On February the 2nd, we announced that our shares commenced trading on the Australian Securities Exchange under the ticker symbol CSC. We grew our shareholder base in the Asia-Pacific region substantially last year. The ASX is a premium market with a long track record as a platform for mining companies. We're committed to improving the liquidity on our shares on the ASX over time.
With that, I'll pass over to Raman for our financial results.
Thank you, John. We are now on slide six. In Q4, we recorded copper production of 44,100 tons and copper sales of 43,300 tons. LME copper prices during the quarter averaged $3.70 per pound, down 2% compared to $3.79 per pound in Q3 2023. Our realized copper prices of $3.74 per pound were largely in line with the LME average price. As a result, we recognized net revenues in the quarter of $354 million. We recorded consolidated C1 cash costs of $2.67 per payable pound in Q4, which were within our second half guidance range and represented our lowest quarterly C1 cost of the year.
We expect cost to trend similarly in the first half of this year between $0.265-$0.285 per pound before a large step change in our consolidated unit cost in the second half, driven by our Mantoverde Development Project, down to $2.10-$2.30 per pound. Adjusted EBITDA in Q4 of $88.3 million increased by 41% compared to Q3, driven by our stronger operational quarter with 10% higher production results. Adjusted net income to shareholders of $10.8 million or $0.02 per share excludes unrealized derivative and FX losses of $21 million. Moving on to slide seven. On the left-hand side, we summarize our available liquidity, which as at year-end 2023 was approximately $353 million, including $127 million of cash and short-term investments and $226 million of undrawn amounts on our $700 million corporate revolving credit facility.
Earlier this month, we closed a $356 million primary equity raise as part of a larger CAD 431 million bought deal, which included a secondary sale by our largest shareholder, Orion Mine Finance. The equity raise improves our liquidity and financial flexibility. Our pro-form liquidity, including the net proceeds of the primary offering totals, is now $606 million. After accounting for the offering on a pro-forma basis, we have a consolidated net debt of $674 million and an attributable net debt balance of $523 million. Our balance sheet is in excellent shape. The chart on the right-hand side illustrates our EBITDA sensitivity at various copper prices. In the first two bars, you can see that we expect significant near-term EBITDA growth with Mantoverde sulfides at full run rate production. In the near term, this year in 2024, our EBITDA will double from our 2023 levels, with MVDP ramping up.
Then with MVDP at full capacity, we expect to generate approximately $1 billion of annual EBITDA, assuming a $4 copper price. The EBITDA generation associated with Mantoverde will enable us to focus on generating free cash flow to delever our balance sheet and be below one-times net leverage at spot copper prices, which provides additional liquidity to advance our future growth pipeline in terms of Mantoverde Optimized, expansion, and Santo Domingo, depending on market conditions. Now I'll hand it over to Cashel for the operations review.
Thanks, Raman. We're now on slide eight. Pinto Valley produced 15,933 tons of copper at a C1 cash cost of $2.36 per payable pound during Q4. It was our strongest quarter of the year at Pinto Valley as we started to see benefits from our new asset integrity program, and in my view, the mine is positioned well for this year. We have guided for 58,000-64,000 tons of copper production at Pinto Valley in 2024 at a C1 cash cost of $2.50-$2.70 per payable pound. We expect copper production to be weighted towards the second half of the year, driven by grades. Our guidance implies throughput of around 52,000 tons of ore per day versus the mill capacity of 60,000 tons per day.
As we continue to execute on our asset integrity program, we believe we will be able to increase the meantime between failures and improve our overall availability to be able to deliver more consistently higher throughput. Also of note, last year, Pinto Valley completed a third-party gap assessment for the Copper Mark. In 2024, our capital expenditure guidance also reflects our efforts to improve tailings stewardship as we work towards implementing the Global Industry Standards for Tailings management by year-end 2028. Moving to slide nine. Cozamin Mine delivered a solid Q4, producing 6,564 tons of copper at a C1 cash cost of $1.76 per payable pound. The mine demonstrated another quarter of nameplate mining rates after transitioning to the new cut-and-fill mining method earlier last year. We have guided for 2024 production from Cozamin of 22,000-24,000 tons of copper.
2024 costs are higher than those in our most recently published technical report due to a stronger Mexican peso and additional use of the new cut-and-fill mining method. We believe there are opportunities to reduce unit costs in the future as the workforce improves its proficiency with cut-and-fill. Our Mantos Blancos asset is highlighted on slide 10. Total sulfide and cathode production yielded 11,587 tons of copper at a blended C1 cash cost of $2.71 per payable pound. Sulfide operations this year have not performed consistently at nameplate levels. While the major components, including the crushing, grinding, and floating circuits, remain more capable of throughput rates in excess of 20,000 tons per day, linkages between these systems, including pumps and pipes, have exhibited bottlenecks. In Q4, we continue to execute on our plan to address plant stability that includes improved maintenance and optimization of the concentrator and tailings system.
We have also incorporated the learnings to date from operating the plant since the expansion was completed. We worked through several areas during the quarter, and we have addressed several of the bottlenecks in the crushing and grinding area of the mine. Operating rates so far in 2024 have tracked more closely with our plan. We've guided for sulfide production of 43,000-49,000 tons of copper, with a larger weighting in the second half driven by higher throughput. During the first half of the year, our focus is on receiving and installing the engineering and infrastructure upgrades required in the tailings dewatering area of the plant. We expect to receive and install the necessary equipment in Q2, after which we expect Mantos Blancos to be operating at nameplate throughput rates.
Included in our sustaining capital guidance at Mantos Blancos for 2024 is approximately $35 million related to achieving sustainable run rate production. We are confident that we have both the team in place and the asset that will support full run rates. Our efforts are focused on achieving this, and after that, we will recommence our studies related to Mantos Blancos Phase II, as we believe the ore body can support a further expansion. Now on to Mantoverde, on slide 11. Q4 2023 oxide production was 10,019 tons of copper cathode at a C1 cash cost of $3.68 per payable pound.
During the first quarter of 2024, we welcomed a new general manager at Mantoverde, Óscar Flores, who has significant experience ramping up and operating sulfide concentrators in his previous roles with Kinross, Antofagasta, Anglo American, and Codelco in Chile, plus his time at New Gold in Mexico, Australia, and Canada. Our previous GM, Pablo Asiain, will be staying on through the end of Q1 ahead of his retirement. We thank him for his stewardship at Mantoverde and wish him all the best. Importantly, significant progress was achieved at the MVDP during Q4. Construction is effectively complete. Our project capital estimate of $870 million is unchanged, and at this stage, we do not anticipate any further increases to the capital budget for the project.
Our key commissioning milestones are listed on the right side of the screen, with first ore to the mill expected in Q1, first saleable concentrate in Q2, and the mine hitting its nameplate operating rates during the third quarter. Mantoverde will produce approximately 120,000 tons of combined cathode and copper concentrate, with over 30,000 oz of gold per year once fully ramped up. During this ramp-up year, we plan to produce between 61,000-75,000 tons of combined copper at Mantoverde. Around mid-2024, we plan to release a study for Mantoverde Optimized, which is a brownfield expansion to increase the ore throughput by approximately 40%. With a resource of over 1 billion tons of material not currently included in reserves, we would also continue to evaluate the addition of a second concentrator line at Mantoverde.
Slides 12 through 16 show our construction and commissioning progress at several key areas of the MVDP. Slide 12 shows the primary crusher on the left and the covered coarse ore stockpile on the right. We fed first ore into the primary crusher during the fourth quarter, and our covered coarse ore stockpile now sits about a third full ahead of the ramp-up. Recall that the mining activities took place throughout 2023, and we have now stockpiled around 6 million tons of sulfide ore waiting to be fed to the primary crusher in mills. We also have a further six months of sulfide ore exposed in the pit, further de-risking the ramp-up. Slide 13 shows a close-up of the SAG and ball mills. This is the next major step in our systematic commissioning process. Our engineering contractor, Ausenco, is engaged for the commissioning and ramp-up of the mill operations.
We have also hired a full complement of sulfide operators in addition to our new plant manager, who are working alongside the Ausenco ramp-up team. Last week, the mills were energized and have been turning without ore. We are working with FLSmidth, our equipment manufacturer, as they perform their final instrumentation and calibration tracks prior to the first ore being fed into the mills, which we expect later this quarter. On slide 14, you can see a bird's-eye view of the processing flow sheet. We will continue to systematically commission the plant, working through the flotation, filtration, and tailings areas over the next few months. On slide 15, you'll see the tailing storage facility. Mantoverde sits approximately 900 m above sea level and is one of the driest areas on the planet.
In our view, it is among the best places on Earth to have built and be ramping up a copper concentrator. Lastly, on slide 16, you'll find our desalination plant on the coast, about 30 km away from the mine. It has now been expanded to support the MVDP. I'm excited to continue commissioning and ramping up the Mantoverde Development Project over the next few months. Now over to Wendy King for the sustainability review.
Thank you, Cashel. We're now on slide 17 with a review of our sustainability highlights. In November, we published our first combined sustainability report for Capstone Copper, Growing Responsibly. This report provides enhanced information on our global sustainability policies and more in-depth information on community engagement and biodiversity management. We also reported emissions intensity data per unit of ore processed and unit of copper produced to give a clear and transparent picture for our emissions. In 2024, we will continue this trend of enhanced reporting by disclosing the results of our climate-related risk and opportunity assessment and scenario analysis, which we started in 2023. This work will further inform our business strategy and decarbonization plan. Along with other Canadian mining companies, we will issue our first modern slavery report on our supply chain responsible sourcing practices.
We are pleased to report that Mantoverde was named the 2023 Company of the Year by CORPROA at its annual general meeting. Cozamin was recognized with three different awards, including the Socially Responsible Company Distinction Award from the Mexican Center for Philanthropy, the Ethics and Values Award for its corporate social responsibility practices from the Confederation of Industrial Chambers of Mexico, and the Company Committed to Human Rights Awards from the Zacatecas State Human Rights Commission. These awards are a testament to the work done by our sites to be corporate and industry leaders in our communities. At Mantoverde, we are working with Econssa Chile and the Atacama Regional Government to provide desalinated water to the towns of Flamenco and Las Piscinas to meet all of their water needs.
This is an important example of how mining companies can give back and improve the well-being of the communities in which we operate. At Pinto Valley, water supply wells have been converted from diesel powered to electric, and in our mine fleet, we are working to replace diesel equipment with electric or lower emission equipment as replacements come due. We have implemented a new dust suppression system that saved approximately 17 million gallons of water last year. Initiatives like these will reduce our carbon footprint and improve our sustainability. In 2023, Cozamin published a biodiversity handbook based on a two-year flora and fauna monitoring program, which provides the basis for estimating net losses and gains at the site.
This handbook was shared with universities and schools as part of our environmental education program and helps to illustrate the delicate balance between human activity and wildlife preservation and how mining can coexist with nature. In 2024, Capstone will be developing a global biodiversity standard outlining our commitments related to biodiversity. All of our sites continued to support local community priorities during the fourth quarter, highlighted by the removal of an 8,000 ft abandoned water pipe from National Forest land in Arizona, and Mantos Blancos hosted an idea fair in Antofagasta with children and youth to promote the themes of innovation, development, and entrepreneurship, important skills to promote in our youth. With that, I'd like to pass it back to John.
Thanks, Wendy. Turning to slide 18, we've outlined our sector-leading growth plans and some of the additional upside within our portfolio. As can be seen, we expect MVDP at its full production run rates to bring us to a consolidated annual level of around 260,000 tons of copper at costs approaching close to $2 per pound. As Cashel mentioned, we plan to release a feasibility study for our Mantoverde Optimized project later this year, which is a low-risk brownfield expansion that we think will unlock another 20,000 tons of copper per year with a highly attractive capital efficiency of $7,500 per ton of annual production. From there, we have a pathway to over 380,000 tons of copper production with a fully permitted Santo Domingo project, which is 35 km from Mantoverde, and we believe will create a world-class mining district in Chile.
Beyond that is further upside across our portfolio with underutilized SX-EW capacity in Chile, another low-risk brownfield expansion opportunity at Mantos Blancos, the ability to unlock cobalts in our MV-SD district, and lastly, we believe we can also create a world-class mining district at our Pinto Valley mine in Arizona. On slide 19, we highlight the timelines for some of the aforementioned studies and other milestones as we execute on our growth plans. Finally, I would like to highlight that we're on the cusp of a transformation of Capstone as we ramp up Mantoverde while delivering the studies that will define our next stage of growth. And with that, we're now ready to take questions.
Thank you, ladies and gentlemen. We will now conduct the question-and-answer session. If at any time you have a question, please press star one on your touch-tone phone. If you wish to cancel your request, please press star two. Your first question comes from Orest Wowkodaw from Scotiabank. Your line is now open.
Hi, good afternoon. Congrats on completing the construction on the Mantoverde sulfide. The question for Cashel, I mean, as you're, I guess, you're in second month here of commissioning. Where do you think is if you had to pick one area of the startup, where do you think the biggest risk is to meeting the timeline that you put out for ramp-up?
Yeah. So obviously, the way we're doing it is we're doing sequential commissioning. It's not that one area is at risk. It's that risk that exists in every single ramp-up that I've been involved with and that I'm familiar with within the industry, that you could run into problems that were baked in several years ago during the fabrication process. And that's why you have vendor affirmation on all these processes, is that they ensure that their warranties are stable and good because their products are functioning as designed. So that process, the risk it would have, it typically adds a week here or a week there with the individual items that might be identified. But there's not really a massive risk otherwise. And one of the reasons I say that is it's a rather simple process line.
It's been proven time and again in some six mines that Ausenco has commissioned in the past, including Carrapateena most recently, Mina Justa, Constancia, Cadia East, Lumwana, among and I might be missing a couple. But this is one line. They have done this in the past. It's led by their very experienced ramp-up team, which is different from their construction team that have most recently done this, like I said, at Carrapateena and Mina Justa. So we feel we're in very good hands. The other thing we have is we have our operators on site also that are facilitating, monitoring, and learning the process. 127 people have been employed, including the plant manager, his supervisors, the operators, and the maintenance personnel.
We feel we have a good complement of people there to review any of the normal commissioning risks and processes that are there so that we attain a very efficient and robust sort of commissioning process through this ramp-up.
So at this point, you're not seeing anything to get you overly concerned?
No, no, not at all. Like I said in what I spoke about, the project and the update is we're just turning the two mills now under FLSmidth's supervision. So we tend to be able to start loading them with ball charges very shortly. So that's a very good sign for us because that's really the most critical piece of equipment in the whole area. The rest, we've undergone all the hydro testing, moving water around the whole process and plant site. And so then it's all about, will it handle slurry? And those are pumps and pipes, and we're pretty certain with the design that Ausenco has delivered to us.
Okay. And just one quick follow-up, if I could. Do you still envision the CapEx for the optimization study or optimization work, the expansion to go to 45,000 tons a day at Mantoverde? Do you still expect that CapEx to be around $150 million?
Yeah, yeah, somewhere in that ballpark, I'd say.
Thank you.
Yeah, no problem.
Your next question comes from Ralph Profiti from Eight Capital. Your line is now open.
Thanks, operator. Good afternoon. My question is on the challenges that you think you could possibly face in meeting that second half 2024 cash cost guidance, right, that $1.45-$1.75. I'm just wondering if you're seeing in these early days any deviations, things like concentrate logistics or energy costs or other cost pressures versus when those guidance expectations were set?
Yeah. Thanks for the question, Ralph. I think at this stage, we're not seeing anything that makes us think any differently to what we've put out in the guidance. I would sort of emphasize that the primary driver behind the cost reduction that we see in the second half is the ramp-up of Mantoverde. And the reason that the cost comes down is it just raises the percentage of high-grade sulfide ore that we're processing across our business. We're almost doubling the grade of our sort of across our average portfolio as we bring Mantoverde on, from 0.35% last year up to sort of 0.6% sort of across the portfolio this year. And with that comes increased recovery. We get better recoveries out of the concentrators than we do out of the leach plants. So there are a few other things as well.
Sort of obviously, there's sort of scale, there's throughput. But those are the sort of fundamental drivers behind the reduction in costs that we forecast. And I would also say that so it's really about sort of grade and recovery. We've already got 6 million tons of sulfide ore stockpiled at Mantoverde. I would say there's been excellent reconciliation between our sort of block model and what we've actually mined. So I think at this stage, we don't see any reason to be deviating from the guidance we've given.
Thanks, John. And maybe there's a question for Raman. There's $75 million in Mantoverde capitalized stripping in 2024. And presumably, a lot of that is associated with the sulfide ramp-up. But just wondering, how much does that fall off, if any? Is there a significance to the falloff starting in 2025? And what's a good run rate for cap stripping at Mantoverde specifically?
Yeah. It's more of a function of the accounting, Ralph. It's based on the obvious ore/waste ratios. And the accounting we're doing is different than the tech reports, which assume no deferred stripping capitalization. So that number, it's going to vary by year, but it'll be in that ballpark of like 50-70 kind of going forward. And it's actually capitalized by pit. So it depends which—it's not just what we're moving in the year for the total mine. It's by pit. And there's multiple pits we're in. So even though we're mining in a particular pit for sulfides now, at the same time, we're actually stripping two more pits that we're going to mine the sulfides in from three years from now. So that's why you kind of see that run rate continue in your model.
That's very helpful. Yeah, very helpful. Thanks, everyone.
Your next question comes from Dalton Baretto from Canaccord . Your line is now open.
Great. Thanks very much. Good afternoon, guys. I wanted to ask about the upcoming Santo Domingo study. Presumably, you guys are getting close to the finish line here. And I'm just wondering, in addition to taking to market the CapEx and the OpEx, what are some of the material differences, I guess, we can expect versus the existing feasibility study?
Yeah. Thanks, Dalton, for the question. I think I'll probably pass most of that across to Cashel to respond to. But I would say it's looking in really good shape. I think we're sort of really excited about kind of the direction that it's headed in. I think obviously, we did do a sort of the original feasibility was done in 2018. So there's been sort of now six years of capital inflation that we've included since that time. But there were two other elements that have come into it. So the one is incorporating synergies with Mantoverde and various sort of infrastructure-type synergies. And the other one was just relooking at the actual design itself, sort of design optimizations. I think we've been able to take out about 40% of the footprint as a result of just more efficient design than it was in previously.
I think just with a bit more experience in our technical team about processing ores in that area, we've made some adjustments to the process flow sheet that certainly give us, I'd say, higher confidence in the actual process flow sheet itself, but also will perhaps not sort of lowering CapEx, but will give significant benefits on the operating cost side in the future. So maybe with that just sort of passing across to Cashel just to add anything to that.
Yeah. There's been a real complete revamp on the design while maintaining the same critical footprint as required by the permit. Of course, this has its DL 600 and is a permitted plant. There's an opportunity we see here to increase throughput. Change in the flow sheet, John mentioned the reduction in steel and concrete required based on the footprint. So we are being more capital efficient. And that's just using what Ausenco has done for us at Mantoverde and some of their other plants here at Santo Domingo. With that being said, we're looking to bring in more tons, a little more of life of mine opportunity. We also noted that with the reevaluation of the resource itself, there's actually a little higher-grade copper there than what we had previously thought due to density weighting.
The iron ore, as you know, has a higher density, and we weren't weighting it properly. So that's been a little modification that we believe will bring more copper sooner for longer, I should say, over a longer period of time where the copper grade dropped off maybe in year six or seven. We might get a couple more years out of it. So that's another sort of area of improvement. And then I think this will more break out the opportunity section within the feasibility study where we'll have a better idea and evaluation of what possibly some of the strip material, John mentioned the synergies, some of the oxide that's available to us in that strip material would never merit on its own, an SX-EW plant. However, Mantoverde has capacity, as we know.
And there's a real opportunity there, we believe, in the future to process that material. And the other one, of course, is our budding cobalt business. We're doing some pilot testing right now in Mantoverde. And we believe that Santo Domingo could provide a considerable amount of feed to that processing plant that we might achieve at Mantoverde in the future. So it'll outline, among other things, all those things. And I think one of the important things for the analyst community is it'll have a refresh of a present and achievable capital cost estimate and also the returns we expect from that project. So it's a good time to update all those things. So we're really looking forward to completing it.
Great. Thanks, Cashel. And then just as a follow-up, I know the cobalt study is coming a little bit later. But just in terms of the JV process that you guys are running, is this study going to be enough to move that forward, or are you going to wait until the cobalt study is done?
Sorry, Dalton, when you talk about the JV process?
Yeah, just the partnership on Santo Domingo.
Oh, bringing in a partner for Santo Domingo. Yeah. Look, ultimately, I think the partner process will sort of require us to have the sort of completed feasibility study. I think within that study, as Cashel mentioned, is the base case, which I think he described well. And then on top of that are the opportunity sections. So I think those areas just the work on them started a little bit later than sort of the feasibility work that's been done on the rest of Santo Domingo. So there's a slightly longer timeline to bring those to the same level of study and of confidence. But we're already quite some distance down the track. So I think those will certainly be sort of opportunities that we would be discussing with potential partners for Santo Domingo.
Got it. Thanks, John. Maybe if I can just squeeze one last one in. John, can you talk a little bit about the rationale behind the recent equity raise?
Yeah, certainly. So when we, I would say, first of all, we saw sort of in the markets sort of a relatively attractive sort of opportunity in terms of windows to raise certain amounts of funding at what seemed to be a reasonable valuation. And what we've been doing is we're relatively conservative in terms of the way we sort of approach our balance sheet. And what we've been doing is really holding back on a lot of expenditure that would sort of drive some really interesting future value. And the real reason for that is, whilst we're sort of fully funded for the Mantoverde project, I certainly don't want to be sort of spending money until we've actually sort of seen the ramp-up, seen the project delivering the cash flow that we expect.
However, that does mean that we've been holding back a little bit on some sort of really exciting opportunities. Just to sort of list some of those, we've got in the northern section of Mantoverde, we've got highly, highly prospective exploration targets that we believe could sort of significantly sort of increase the resource base for Mantoverde. We've obviously got Mantoverde Optimized. And Cashel mentioned earlier sort of a CapEx number of probably about $150 million. It's got a really short payback period, that project. And so the sooner we can do it, the better. And then also, as we approach sort of Santo Domingo thereafter, to me, sort of it's best practice to actually advance the detailed engineering of the project before one actually kind of gives full notice to proceed on the actual construction.
It just gives you a much tighter confidence level in terms of kind of where your CapEx is going to be for the project. So this raise sort of facilitates our ability to execute on each of those things, which had we not done the raise, we would probably have been kind of keeping the brakes on for certainly a little bit longer. I would say there were on the other hand as well, part of it was the secondary sale by Orion. I think that's both with the primary and the secondary, we improved the liquidity in our stock. I think that's clearly sort of an objective of ours to do that.
And then I think finally, when we looked at our shareholder register, there were quite a number of blue-chip shareholders that sort of were sort of blue-chip funds that we saw on some of our competitors' register and who were not on ours. And so one of the objectives was to facilitate the entry of some of those funds onto our register. And I think we were really pleased to see kind of the uptake by those funds. And we think in terms of our share register now, it's sort of looking in a good place.
That's great, John. Thank you for that. That's all from me.
Your next question comes from Stefan Ioannou from Cormark Securities. Your line is now open.
Yeah, great. Thanks, guys. Maybe just more of a curiosity from me with MVDP. Just curious, you mentioned you've got a good chunk of material now stockpiled and then also opened up in the open pit. Is the grade fairly variable or not, or is it all mostly low-grade material? I'm just curious, as you do ramp up, do you have any flexibility on grade as you go through that process to play with?
Yes, Stefan. Within the stockpiling strategy, they put some high-grade and low-grade. So they're separated out. So just with the normal ramp-up process, in the very beginning, with very few tons, there's very little grade going through, obviously, because I dial in the flotation cells and those types of things. But after that, when we got the process going and things, we want to put through the high-grade, and that's available to us.
Okay. So yeah, so you have access to both. Great. Okay. Thanks very much, guys.
Yep.
Ladies and gentlemen, as a reminder, should you have a question, please press star followed by the number one. There are no further questions at this time. Mr. John MacKenzie, please continue.
Thank you. We look forward to updating you again in early May with our Q1 results. Until then, keep well and feel free to reach out to Jerrold or Daniel if you have any further questions. Thank you for your continued support, and have a good day.
Ladies and gentlemen, this concludes today's conference call. Thank you for joining. You may now disconnect.