Thank you for standing by. This is the conference operator. Welcome to the Ero Copper Q4 and full year 2022 financial and operating results Conference Call. As a reminder, all participants are in listen only mode as the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Courtney Lynn, Vice President, Corporate Development and Investor Relations for opening remarks. Please go ahead.
Thank you, Brenda. Good morning and welcome to Ero Copper's Q4 and full year 2022 E arnings Call. Our operating and financial results were released yesterday afternoon and are available on our website, as are our financial statements in MD&A for the three and 12 months ended 31 December 2022. On the call today are David Strang, Ero's Co-founder and Chief Executive Officer, Makko DeFilippo, President, and Wayne Drier, Chief Financial Officer. We will be making forward-looking statements that involve risks and uncertainties from which actual results may differ materially. We would refer you to our most recent annual information form available on our website, SEDAR, and EDGAR, for a discussion of the risk factors of our business and their potential impact on future performance. As a reminder, and unless otherwise noted, all amounts are in U.S. dollars.
I will now pass the call over to David Strang.
Thank you, Courtney, and thank you everyone for joining us today. 2022 proved to be another pivotal year for Ero Copper as we kicked off a major growth phase for the company. We commenced several projects that are expected to double our annual copper production to approximately 100,000 tons of copper per year by 2025 and increase our annual gold production to 60,000 ounces. In early 2022, in preparation for the construction of the Tucumã Project, we significantly strengthened our balance sheet through the timely issuance of $400 million in senior notes. Throughout the year, we made significant progress across our portfolio of growth initiatives. At Caraíba, we continue to advance our Pilar 3.0 initiative. This ongoing initiative includes the mill expansion and construction of the new external shaft at the Pilar Mine.
Following our Q3 Earnings Call, we announced an updated strategic life-of-mine plan for our Caraíba operations, excuse me, showcasing the success of Project Honeypot and the notable extension of mine life to approximately 20 years. Integration of Project Honeypot enabled us to defer the delivery of the new external shaft by approximately nine months, improving the pace of our capital spend at Caraíba while maintaining production levels and operating margins. On the exploration front, we launched a dedicated nickel exploration initiative in early 2022 and commenced drilling on the first target in April. Just five months later, we were thrilled to announce the discovery of a new nickel sulfide system in the Curaçá Valley, located less than 20 kilometers from our Caraíba mill.
Based on the success of the 2022 program, we have made nickel exploration a core component of our exploration focus for 2023. Turning to our Tucumã Project, the road upgrades and drainage infrastructure completed during the Q3 of 2022 were instrumental in allowing us to build momentum during the Q4 's rainy season. As a result, we achieved our 20% physical completion by year-end and have made substantial progress on pre-stripping activities, which remain ahead of schedule. Subsequent to year-end, we completed the on-site concrete batch plant and mobilized our civil works contractor, who began pouring concrete for the plant foundation last month.
It's worth mentioning that our current project capital estimate of a project approximately $305 million remains unchanged from the Q3 , demonstrating our team's diligent efforts to deliver this project as close to budget as possible. We're also proud to have partnered with the National Service for Industrial Training, a highly regarded nonprofit organization focused on improving the competitiveness of Brazil's manufacturing sector through vocational education. Together, we have launched comprehensive training programs in the city of Tucumã and surrounding communities to enhance the skills of the local workforce, which will in turn support the development and operation of the Tucumã Project. In addition to the strategic advances made in 2022, our team in Brazil delivered record operating results, including copper production of nearly 46,400 tons and gold production of just under 42,700 ounces.
At our Caraíba Operations, we processed nearly 2.9 million tons of ore, representing a year-over-year increase in mill throughput of approximately 500,000 tons. On average, processed copper grade for the year of 1.76% exceeded our budgeted grade of 1.6%, largely due to the addition of high-grade Honeypot stopes to the production plan beginning in the Q2. As a result, we exceeded our full year copper production guidance of 43,000-46,000 tons. At our Xavantina Operations, we delivered both record Q4 and full year production and surpassed 2022's gold production guidance of 39,000-42,000 ounces. The average process grade during the Q4 was approximately 10.2 grams per ton, representing an increase of nearly 20% in process grade compared to the Q3 .
For the full year, higher than planned mill throughput of approximately 190,000 tons drove a year-on-year increase in gold production of 13%. Despite our strong operating performance, our 2022 financial results, including unit operating costs, were impacted by inflationary pressures experienced across the broader mining industry. At our Caraíba operations, obstacles at our domestic smelter necessitated a higher allocation of copper concentrate sales to the export market, resulting in reduced tax benefits during the year. Full year C1 cash costs of approximately $1.36 per pound of copper produced. At our Xavantina operations, the impact of inflation was partially offset by higher processed gold grades during the year, resulting in full year C1 cash costs and all-in sustaining costs of $560 and $1,124 respectively per ounce of gold produced.
While our 2023 copper C1 cash cost guidance of $1.40-$1.60 per pound assume 100% of our copper concentrate is sold to the export market, we resumed domestic sales on a limited basis subsequent to year-end. Lower planned copper grades in the Q1 are expected to result in a C1 cash cost range for the period that are slightly above the full year guidance range. We anticipate that production levels at both of our operations will be higher in the second half of 2023 as we continue to execute on our Pilar 3.0 and NX 60 growth initiatives.
At Caraíba, stope sequencing reflecting the incorporation of Project Honeypot as well as the anticipated completion of the Caraíba mill expansion in the Q4 are expected to give us a strong end to the year. At our Xavantina operations, the commencement of mining from the Matinha vein in the second half of the year is expected to drive higher mill throughput levels. The timing of our growth initiatives is becoming increasingly favorable due to the scarcity of new copper development projects around the world and the expected surge in demand from global decarbonization efforts. These tailwinds are providing greater support to copper prices, which have been performing well since the beginning of the year. We are witnessing stronger than expected operating margins as we enter 2023 and remain well positioned to execute on our growth strategy.
With that, I will now turn the call over to Wayne to review our Q4 and full year financial results.
Thank you, David. Good morning, everyone. As he noted, our Q4 and full year financial results reflect a combination of record operating performance and strong project execution, as well as the impact of a challenging macroeconomic environment impacting the broader mining industry. We faced some unique obstacles related to our domestic smelter, PMA, which required us to allocate more concentrate sales to the export market, resulting in reduced tax benefits and increased C1 cash costs, excuse me, at our Caraíba operations during the year.
We also entered into an agreement with PMA prior to its financial restructuring announcement in late November to convert outstanding amounts receivable of $23.9 million into a note receivable. This note is guaranteed by certain assets belonging to PMA and is payable in monthly installments over a 24-month period, beginning in February 2023.
As a result of this arrangement, we recognized a credit loss provision of $3.3 million in other finance expense during the quarter, which reduced our Q4 and full year adjusted net income attributable to owners of the company by approximately $0.04 per diluted share to $0.24 and $0.91, respectively. I'm pleased to report that subsequent to year-end, we resumed domestic sales on a limited and prepaid basis to PMA and will continue to review our sales channel allocations as they progress through their financial restructuring process. Our Q4 and full year financial results were also highlighted by adjusted EBITDA of $58.2 million and $208.6 million, respectively, as well as cash flow from operations of $34 million and $143.4 million, respectively.
Our capital expenditures were nearly $90 million in the Q4 as construction activity related to the company's strategic growth initiatives ramped up. Full year capital expenditures, including deposits on contracts, were just under $300 million, below 2022 capital expenditure guidance of between $308 million and $354 million. This primarily due to the success of Project Honeypot and the subsequent deferral of the new external shaft. As we execute on our transformational growth projects, we also continue to protect and strengthen our balance sheet. Subsequent to year-end, we entered into a zero-cost collar program on 3,000 tons of copper per month for February through December of 2023.
The collars establish a floor price at $3.50 per pound of copper on total hedge volumes of 33,000 tons of copper, representing approximately 75% of full year production volume in 2023. The program protects a meaningful portion of the company's revenue at our budgeted copper price of $3.50 per pound, which was used for capital, cash flow, and liquidity planning purposes. At the same time, we have maintained exposure to the upside with a cap of $4.76 per pound, which is within 5% of the all-time high copper price. The hedge contracts are financially settled on a monthly basis.
In January of this year, we also closed our amended senior secured revolving credit facility, increasing its capacity from $75 million to $150 million, and extending the maturity from March 2025 to December 2026. We also achieved improved terms on this facility, including a 25 basis point reduction to the applicable margin on drawn funds and reduced standby fees on undrawn commitments. At 31 December , 2022, available liquidity was $392 million, including cash and cash equivalents of $177.7 million, short-term investments of $139.7 million, and $75 million of undrawn availability under the credit facility. With the close of the amended credit facility, pro forma year-end liquidity was $467.4 million.
With that, I'll hand the call back to David to share some final comments.
Thank you, Wayne, and everyone who joined the call today. Before we open the call up to Q&A, I'd like to thank our co-founder and Chairman, Noel Dunn, who recently announced his retirement from our executive team to support his family's interest in wildlife conservation. Noel has made tremendous contributions to our company over the past seven years and will continue to do so in his capacity as chairman of our board. We expect that the wildlife conservation programs that he is now supporting, particularly rhino conservation, will benefit in the same way that Ero has from his contributions and efforts. I would also like to thank our team, both here in North America and in Brazil, for another quarter of fantastic operating performance and project execution. With that, I will now turn it back to the operator to open the line for questions.
Thank you. We will now begin the question-and-answer session. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We'll pause for a moment as callers join the queue. The first question comes from Orest Wowkodaw from Scotiabank. Please go ahead.
Good morning. Thanks for the update. Just curious if you still plan on releasing an updated five-year outlook, and if so, what the timing of that may be?
Great question, Orest. Probably should have addressed it in my comments. We are doing that, but what we are doing in order to do that, we have to finalize the Xavantina updated resource and reserves. We're anticipating that happening over the course of this month, and I hope that we will be putting something out towards the end of this month with respect to that.
That makes sense. Should we also anticipate if you're gonna update the reserves for the Tucumã, will there also be some kind of mine plan update with that as well, or would that likely come later?
I think right now, we've moved closer to finalizing the Tucumã life-of-mine plan in terms of its update. I think apart from what we've released previously in October, beginning of November when we saw you all, there's no material change to the life-of-mine plan that requires a new technical NI 43-101. What you will be able to see within the five-year plan is those metric impacts and changes with respect to those first couple of years or first three years that we have previously highlighted, where we saw this grade reconciliation to the upside with respect to that.
As it stands right now, no material change to the technical report, to the resources, and therefore, we don't anticipate doing a new updated NI 43-101, or additions to our NI 43-101 with regards to Tucumã at this stage.
Okay. Very helpful. Thank you.
Once again, if you have a question, please press star then one. The next question comes from Gordon Lawson from Paradigm Capital. Please go ahead.
Hey, good morning, thank you for taking my call. Just to follow up on that, can you please clarify if the 2023 estimates at Caraíba include the Honeypot deposit or is that expected to be updated with the five-year guidance?
No. Honeypot was incorporated into updated NI 43-101 that we released, I believe in January. I will say that Honeypot is an ongoing evolution in terms of how we continue to optimize Honeypot with regards to our mine plan over the next few years. Certainly, Honeypot, as we released in November and introduced to the marketplace at that particular time, that portion of Honeypot has been integrated into our life-of-mine plan and so is in the public domain. As I said, there are other areas in and around Honeypot we are investigating to see whether there's additional amounts that we may be able to add to Honeypot over the course of the next 12 to 24 months, and we will add those on an as on the come basis.
Likewise, as we continue to get greater and greater comfort with regards to our mine plan, with regards to Honeypot, which I think is reasonably conservative right now, so we may adjust the amount of material we mine in the future relative to what we've released in the public domain right now.
Okay. Thank you very much. Switching over to Xavantina. Tax rates there have been in the 5%-15% range for the past two years. Is there any guidance you can provide for next year and a little bit beyond?
Yeah. This is Makko. There's been no change to overall corporate tax rates in Brazil. The only thing I'd add to the tax discussion as it relates to Mato Grosso is that late last year there was some state level legislation that passed an administrative tax for the state of Mato Grosso that's based on a per ounce production. It's $19 per ounce, depending on using prevailing gold prices. That tax is related to the state being largely responsible for administering the licensing and permitting. So it was again a state level tax that was implemented and we'll see that flowing through, but no change overall to the corporate tax rate.
Okay, great. Thank you very much. That's it for me.
This concludes the question and answer session. I would like to turn the conference back over to management for any closing remarks.
Thank you, operator, and thanks to everybody who's joined us today on the call. We look forward to talking to you all at the next quarterly update, which will be in May, when we'll be releasing our Q1 results. Until then, the team here, Courtney and the rest of the IR team are always available to you with regards to any additional comments or questions you might have. With that, we'll close the call and thank you very much.
This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.