Good morning, ladies and gentlemen. Welcome to Aura's Third Quarter 2023 Earnings Call. This conference is being recorded, and the replay will be available at the company's website at auraminerals.com. The presentation will also be available for download. This call is also available in Portuguese. To access, you can press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room. After that, select Mute Original Audio. Para acessar nossa conferência em português, clique no ícone do globo ao lado inferior direito da sua tela Zoom e selecione a opção Portuguese room. Ao acessar a nova sala, certifique-se de mutar o áudio original. We would like to inform that all attendees will only be listening to the conference during the presentation, and then we will start the question and answer section, when further instructions will be provided.
Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Aura's Executive Board and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events, and therefore depend on circumstances that may or may not occur. Investors should be aware of events related to the macroeconomic scenario, the industry, and other factors that could cause results to differ materially from those expressed in the respective forward-looking statements. Present at this conference, we have Rodrigo Barbosa, President and CEO, and Kleber Cardoso, the CFO. Now, I'll turn the conference over to Rodrigo Barbosa. You may begin your conference.
Good morning, all, and thank you for being here with us. We're gonna present the third quarter results and some review on the guidance that we just disclosed yesterday. Third quarter was very important for us as a turning point. As we were gonna see, we're gonna share with all of you. We have increased the production, and then we will continue to increase production then along the next quarters. So we changed the curve that we were decreasing a little bit, the production in the last 12 months. Now we recover and started to increase back on track again.
And also, this quarter has shown a very significant appreciation on the gold price, not only because of the geopolitical situation, but also the market starting to realize the debasement of the currency and the fiat currency, and migrating to hard assets such as gold and other commodities. I would also invite you all to take a look at how the central banks have positioned themselves and going on record-breaking purchasing a new gold reserves in order to preserve their value and get a little bit other alternatives instead of just to be supporting the dollar. China, for example, is selling U.S. Treasuries and buying gold, and this is going for the last 12 months, and it should continue to happen along the next years.
But with all of this information, I will invite all you, all of you to join us in Aura Days. That will be in early December, that we are gonna give you more information, goal to bring some experts and also present in more detail our operations as we have done in the last couple of years. Now, going back to the quarter. The quarter has shown a significant increase in gold production. We achieved close to 65 gold equivalent ounces, which is a 34% higher than Q2, and we had an increase in all of operations. We increased in EPP by 62%, we increased Aranzazu by 11%, and we increased San Andrés 7%. And very importantly, we started to sell gold from Almas project that we implemented along the first semester.
We ramped it up on the record level, and now we start to produce in September and October. The operations, the increase in operations we saw in the production. Then we also increased the EBITDA that reached a value of $30 million compared to $26.5 million on the last quarter. That EBITDA was also negatively affected by a one-time high cash cost that we saw in Apoena that we used, and I will explain a little bit more in the next slides, that we used a stockpile with a low grade and high cash costs during the quarter that has gone already through the plant. We generated cash, but the cost was higher than the other quarters.
We finished the quarter on Q3 already with a low cash cost on the inventory, and now we are assessing, although slightly delayed, we are now assessing Ernesto pit with a higher grade. And the all-in sustaining cash costs because of this high cash cost that came from Apoena, Brazil, together with some one-time investment in Honduras, and we reached $1,437 all-in sustaining cash costs dollars per gold equivalent ounces. And as we're gonna see, for the year, we projected to have an average between $1,260-$1,330 on the all-in sustaining cash costs. That means that on the fourth quarter, we have prepared the basis to have a significant lower cash cost across all operations.
Important to highlight during the quarter are the two things that I mentioned. One is Almas, we ramped up Almas in record levels in only less than 5 months, reaching levels that has never been reached or very occasionally was reached in the past. That's a combination of a strategy of keeping simple and a lot of management attention. And also, the Borborema project that we published a new feasibility study with a highly accretive internal rate of return, going to close to 52% internal rate of return, leveraged at a gold price of $1,900, not including the expansion that we are already planning in terms of resource and reserves once we move the road, and we'll go more in details. We published a new feasibility study.
We secured also $100 million on leverage to build the project. We bought additional 20% participation that used to belong to Dundee. And now we are finalizing—we've just finalized the hedging program that we also cash in $14.5 million dollars to help us on the equity. And now we are finalizing the royalty agreements in order to finish the funding package to the project. And also, while we are moving forward with the construction. Very remarkable achievement that we did during this quarter, and I'm very proud of what the team has been working hard to achieve those levels. We are now at a zero lost time injury in the entire year in 2023.
Actually, in our operation, it's been 12 months that we have a zero Lost Time Injury in operation. That is a significant achievement that all the team has been working for several years. And now, of course, the challenge is to keep at this, this position. But we are working hard to make sure that everybody that works with us has a very safe environment and can return to their homes the same way they come. That's the main priority we have in all across our operations. In terms of stability of the structures, we continue to monitor.
We have third parties that do reports, and, every quarter they come, and, all the structures, geotechnical structures, either tailings dam, the leach pads, the underground structures, they're all according to satisfactory levels, and being constantly monitored, by third parties and including also our internal team. So as I mentioned, as a turning point, as we see on the chart on the left side of the bars are the production of gold per quarter, and the line is the last 12 month production accumulated. So we saw that we were slightly decreasing the production on a quarter basis, due some challenge that we had also in Honduras.
And now with the recovery of production and operation, plus the commercial production for Almas, we see this curve starting to go up, back again, and we should continue to see the curve going up as we're moving forward in the next quarters, including now Almas production. On the right side, as for production, we see on the chart that we increased production in Aranzazu, we increased production in EPP, we increased production in San Andrés, and now we see this, the light blue one, which I'm very proud, Almas project producing. In Aranzazu we could increase productivity and increase production. In EPP we also increased significantly, however, below our expectations due to unexpected heavy rain during this quarter.
What happens is, in Ernesto pit, we are going to the bottom of the pit by the end of the high grade. At the bottom of the pit, once you have significant rains, a lot of water gets accumulated, and then that jeopardizes a lot the mine development and the mine production. So that delayed the interest that we had to do when we were planning for the high grade in EPP. That is now going on the third quarter, but on the fourth quarter, but also going to be pushed to early 2024. So that's main reason that we also reviewed our guidance, is that those ounces that we were planning this year, some of those ounces now is pushed to 2024.
So once we did not have access to the high grades as we were expecting in Ernesto, we used the stockpile with the low grades to fulfill the plan. That decreased the production because we are replacing high grade with low grade. But not only that, the low grade had a high cash cost as a stockpile, so that also went through the results and increased the cost specifically for EPP. And as we can-- we'll see, the cost that we had in the beginning of the quarter of the stockpile was close to $1,000, and now we are-- we finished the quarter with the cost of the stockpile, which is the inventory, close to $600 and slightly below $600.
In terms of all-in sustaining cash costs, that is also negatively impacted by this high cash cost that came from inventory of the stockpile low grade in EPP. We saw a slight increase compared to Q2, but I would highlight here on the right side in EPP, as you can see, we started the quarter with the stockpile, with inventory of ore that is very in front of the plant at $1,000 an ounce. We took a lot of those low grade and produced the gold, and now we finished the quarter at $569 per ounce on the stockpile. And that will also be mixed with the high grade that's coming from Ernesto.
We expect a significant decrease in all-in sustaining cash cost for the fourth quarter, as we are projecting now to have all-in sustaining cash costs for the whole year of 2023 between close to $1,260-$1,330 per ounce. So, with those unexpected rain and delay in the Ernesto pit mostly, and also some delay in Almas that I will further explain. We are reviewing the guidance that we were projecting at 273, between 273 gold equivalent ounces to 245. Now it should be 231 and 253.
The high level is still within the low, the old range, but we now thought it would be important to be more conservative and make sure we achieve this guidance until the end of the year. And the lower production also reflects on the cash cost per ounce in the all-in sustaining cash costs. The all-in sustaining cash costs now, we were projected to be $1,162-$1,261, now it's $1,225-$1,324. On the right side, we have the guidance for CapEx. I would highlight that the previous guidance we were not including the Borborema project. As we approved the Borborema, the construction of Borborema project during Q3, we are now including a Borborema project on this guidance.
That is what explains most of the change on the new project and expansion. Then we remain with the same guidance for exploration and also sustaining. Now, going back to that, on the production guidance, as I mentioned, there was delay on entering in high grade in Ernesto, and also some slightly less production projected for Almas. Mainly due to what is happening now in Almas, we ramped up very efficiently. The plant is producing above its nominal capacity. Now we are going more on the hard, I would say, fresh rock, which is the hard rock. So there's a transition of a very soft rocks into the hard rock. Normally, this is not a major issue, but you need to adapt your mining methodology and mining implementation procedures.
And that, as it's a new mine, it's a new contractor, we are now adjusting all the procedures need to have in mining the hard rock. This is a managerial decisions, so that is now being implemented to guarantee that we'll be able to reach the production during the next year, 2024, and perhaps even more than we were projecting as we did implementation to increase capacity in the whole system. So all those decisions are being made and fixed to recover productivity now with the fresh and hard rock, in order to have a strong production for next year. So in Almas project, which we are very proud that we have built this project on time, on budget, during the pandemic and during high inflationary pressures.
We not only did that, but we also ramped up this project in less than 5 months. Normally, when you see the chart on the right bottom side, you see on the dotted line is the theoretical curve of ramp up, where most of the companies reach above 80%, in six-seven months and close to 100% in 12-18 months of ramp up. The other lines are important companies such as Newmont and other ones that are ramped up. Anglo ramped up in the last five years, and Almas, we could ramp up to 100% of capacity within five months, setting new benchmarks.
This is quite an achievement on the team and is a result of a very hard work, significant integration between the team that is running the plant together with the team that was building the plant, plus a result of our strategy to keep simple projects, easy to build, easy to operate. Borborema, the same team that built Almas, now moved to Borborema. Borborema project, although it's a higher scale compared to Almas, it's also simple to build and simple to operate. Highlighting Borborema, as I mentioned, there was a very busy quarter in order to structure the whole financial strategy to fund Borborema, published a new feasibility study, start construction. We hired already EPCM. We already had ordered since the Q2 second quarter the mill that will be delivered by the end of 2024.
So we are moving very much in line with our expectation in order to have Borborema coming online in early 2025. The results of the feasibility study, it's expressive. We have the payback in three point two years, internal rate of return at 52% leveraged at the gold price $1,900. And that I would also, and I did this, and I will invite again all the analysts, and also invite the investors to take a look at this project that we are starting, with eight hundred and fourteen thousand ounces of reserves, but the potential is to reach up to 2 million ounces once we move the road. We could not include, and we cannot include ounces that is not free for mining.... free to be mined.
So we all those feasibility study focus only in 814,000 ounces. While the project potentially can be expanded without new trials, without significant new studies, up to two million ounces of production. So we expect Borborema to be significantly higher return compared to what we published on the feasibility study. Of course, that will take a while. Moving the road, we have already started the procedures, can take several years, up to three or four years, in order to be concluded. So I'll now turn the floor to Kleber, that will go and highlight more the results, and then I will come back to Q&A.
Okay, thanks, Rodrigo. Good morning, everyone. Morning, everyone. On this page, as we always do, we bring a summary of the main financial KPIs recorded for the company in the current quarter, the last few quarters, and accumulated at the end of 12 months accumulated at the end of each reporting periods. In spite of some headwinds we saw in Rodrigo's explanation, mainly EPP operations. What we see is improvements in almost all financial KPIs on this quarter. Revenues exceeding $100 million, again, achieving $111 million at the end of this quarter. And then were accumulated 12-month revenues close to $400 million again.
When you go to adjusted EBITDA, we see an increase of $10 million in EBITDA this quarter, coming from $27 million-$30 million at the end of Q3, with an expectation of additional increase in the fourth quarter as we expect to see increase in production with the reduction in the cash costs. At least for now, the average gold price in Q4 is higher than in Q3. When we look at the 12 months accumulated number, also another improvement. We come from $116 million accumulated in the past quarter to $129 million at the current quarter. Switching to net income. The net income, we see a reduction this quarter from $11 million-$8 million.
This is mainly because on the previous quarter, we recognized some a non-cash gains, which was associated with the appreciation of the Brazilian real during that quarter, which didn't not repeat on the third quarter. And when we see accumulated 12 months, we see another improvement, net income reaching $50 million in the last 12 months. And then finally, in terms of cash and net debt, we see also improvement in the net debt, ending the quarter with $112 million, and an improvement in our cash and cash equivalents to close to $180 million at the end of this quarter. Mainly because the debt we raised to funding the Borborema project during the quarter.
Here we bring a page detailing the main items between our adjusted EBITDA and net income for the quarter. As we saw previously, adjusted EBITDA of $30 million, of which Aranzazu once again the strongest, reportedly the strongest results. EBITDA of close to $19 million in Aranzazu. San Andrés is still, we know, is still below its potential, but continues showing signs of recovery, reporting EBITDA of $7 million. Almas, we highlight it was a strong quarter, considering only two months in production. In only two months, Almas generate almost $7 million in EBITDA. EPP among the business units in production, with the lowest EBITDA in the quarter, $2 million.
As, because of mainly the accounting impact, for the reason Rodrigo explained, the high cost inventories, which now we start Q4 with lower inventories, so we also expect to see EPP's EBITDA going up, in this next quarter. Amortization and depletion, $13 million, as we expected. Finance expenses of $5 million, which includes this quarter, some effects, non-cash loss, because then unlike the previous quarter, in the third quarter, there was a depreciation of the Brazilian real, which caused us some FX losses. So finance expenses are negative at $5 million. On this quarter, we recognized a $5 million other gain, which was related to the acquisition of the 20% stake in Borborema project, which we completed during the quarter. This $5 million is an accounting gain.
It's calculated with the fair value of the estimated value of the 20% acquisition of the company stake, minus the estimated fair value of the royalties that we gave in exchange for this acquisition. And we can see it's a great deal for the company. And then income tax expenses of $8 million, mainly taxes due to the results in Aranzazu, and some deferred tax expenses of $4 million. It's a non- again, non-cash loss we recognize on this quarter, again, due to the depreciation of the Brazilian real, bringing the net income to $8 million at the end of the quarter. And then finally, on this page, we bring the detailed analysis, manager review for the change in cash and cash positions of the company throughout the quarter.
In the first side of the left side of the page, in red, we see we started the quarter with $110 million. Then on this left side of the page, what we call adjusted free cash flow for, which was the cash generated by now the four mines in production, without including investments in the growth of our business. So we see that portion of the business generated $14 million in the quarter. Then in the middle of the chart, what we call investment for growth, most of the $11 million was used in our exploration program. We invested $7 million in exploration. Expansion CapEx came down this quarter due to the completion of Almas in commercial production declaration, only $4 million.
We do expect to see an increase in this number in the quarters to come, now with the program under construction. Into the right side, we see the financial items, mainly highlighting the net proceeds from debts, which was close to $70 million, mainly the $100 million term loan we raised to develop the Borborema project. And also, minus the payments of the first installment of the inventories by our Almas, bringing our cash position to close to $180 million at the end of the quarter. With this, we end our presentation, and I'm open to questions. Thank you.
We are going to start the question and answer section for investors and analysts. If you wish to ask a question, please press the Reaction button and then click on Raise Hand. If your question has already been answered, you can leave the queue by clicking on Put Your Hand Down. Our first question is from Caio Greiner, from BTG Pactual. Caio, your microphone is open.
Yes, good morning, guys. Thank you. So two questions on my side. The first one on the Almas startup. Rodrigo, I'm sorry if you already mentioned this, but I had some connection issues in the beginning. But I was particularly worried about the Almas guidance downgrade. So I just wanted to understand a little bit more how this impacts your input plan going into especially into 2024 and into 2025. I mean, should we expect this to be a long-lasting event? I mean, are we still expected to see this materially impacting production and shipments into the first half of 2024, even into the second half of 2024? Or do you expect this to be settled already in the short term?
The second question on the acquisition you guys announced earlier today on Altamira. So I just wanted to understand a little bit more on the rationale of this move. I mean, this, you guys are acquiring a minority stake in another company as an investment. This is not really out of the usual standards. So just wanted to hear a little bit more, what caught your eye in this company, and why not go for a complete acquisition? Do you guys have any instruments that you can raise your stake to 100%? I mean, was this previously negotiated? So just wanted to understand a little bit more. Thank you.
No, thank you very much, Caio, and thank you for being here with us. So first question on Almas. We expect it to be a short-term transitionary challenge that we have. I mentioned that what happens is we did a ramp-up very fast. The plant is working very well above actually our nominal capacity. Yeah, what happened is, once we started mining, and normally the beginning of the mine is soft rocks, that it's easier to mine and to process. Once we reach the transition from softer rock to hard rock, which we operate in EPP, and we operate in the other mines, then that destabilize the productivity of our contractor together with our mine team.
So what this is pure managerial decisions that destabilize this contractor. They're learning how to run mines. They are beginning to operate mines as well. So we are teaching them a lot, how to improve efficiency. A lot of team is going there in order to regain efficiency at the mine. So we do not expect this to be lasting to 2024, and then we do not expect this to impact the results or the projection that we have in 2024, 2025, compared to what we had in the base case. Actually, as we published recently, we did small investment in order to increase capacity. So we are increasing capacity of Almas to be able to produce above the feasibility study production compare in 2024.
We expect these managerial decisions and improved efficiency to happen along this fourth quarter. That's why we change a little bit the guidance, but we do not expect significant impact on 2024. Perhaps in the first one or so of the January and February, but then we fast, we rapidly recover the productivity. So in the second question on Altamira. We saw Altamira. It's a early-stage company. They don't have reserves yet. They have resources in inferred. But we believe very much in the potential. It's in Alta Floresta region. It's close to where we have the project Matupá, not close enough to have a significant G&A and synergies, because it's close over 200 kilometers, but it's a trend that we like.
We see a lot of potential on the project to significantly increase resource and reserves. So what we have, the strategy there is that the market has scarce capital for new companies that need to raise equities. These junior miners are starving for capital, and the prices of the shares has significantly dropped across the world. The junior miner is struggling to raise capital and with the low prices. But we saw a project is good, has a lot of potential, so we saw an opportunity to put a small amount of capital, and let them work and see they improve the results. So we have warrants that we can increase our participation close to 18%.
We don't have options to go beyond this. However, we found it's natural that once you're there and they start to have a successful results with drilling, that we can gradually also increase our participation in the project according to both interests. So, why we are not doing this at all, right? We could do exploration. We are not an early-stage company. Our focus is to operate with one. We are not early stage, so our focus is to build and to operate, and also increase resource and reserves within the mines that we operate.
We don't have the team, the technical knowledge to be at early stage, so that's why our strategy is let's invest in companies that specialize in early stage, that have management, full-time CEO and all the senior management, the technical team, full-time doing exploration in order not to distract us from our plan. So we are planting seeds for us to increase production, increase participation in those projects along the next four or five years. Those, again, early stage projects that will take several years to mature, but we will be monitoring close the advancements on those companies. And the price that we have today to join and to enter on those companies is very attractive.
All right, thank you very much.
Our next question is from Edgar Souza, from Itaú BBA. Your microphone is open.
Hi, Rodrigo. Hi, Kleber. Thank you for the, the questions. So my, my first question is regarding EPP. I understood that the main impact for production was due to those heavy, heavy rains in the quarter. So what, what can we expect for a normalized production level for EPP per year, maybe thinking about next year and 2025? And, and then my second question, guys, is regarding Matupá. Are there any news, any updates on the projects? When do you have to start up the construction to make sure that you will deliver that guidance of 450,000 ounces per year, by 2025? Thank you, guys.
Okay. Thank you, Edgar. So your question about EPP projected production, and then what we need to do in Matupá in order to achieve the 25th, end of 2025 analyzed production. So in EPP, we are discussing now the budget for next year. But and so we don't have yet the numbers to share with you. However, as you I would invite you to take a look to what we produced in the past without the high grade of Ernesto. Although early next year, we should have some high grade of Ernesto, but along the year, we should go back to the normal levels of grades ranging at 1 gram, 0.9-1.1 grams per ton.
So we don't expect to have those high, high levels that we had along the last two years due to Ernesto. We'll be releasing the new guidance for 2024 as we finish the budget discussions and then disclose the production for the Q4. Upon Matupá, we are advancing all the permitting process in order to start the construction of this project during the second quarter next year. That's what, that's our target to reach the guidance of 2025, because those projects, Matupá, can be built in 12 months, 14 months, and then you can ramp up very fast, as we did with Almas. Second quarter of next year is our target to start the construction of Matupá.
Okay, thank you very much.
Our next question is from Roman Rossi from Canaccord Genuity. Your microphone is open.
Good morning, guys. Thanks for taking the questions, and congrats on the advancements made on Borborema project. So, just a follow-up on Edgar's question regarding EPP. You mentioned the grades should be lower compared to what we saw on the last quarter of last year. But, so what will be the normalized and now that you will be closing the Ernesto pit, what will be the life of mine you are expecting? Because you are investing significantly in exploration there as well. And additionally, you reported 11,000 ounces of production, but you only sold around 9,600, right? So, this was related to the heavy rains as well, and this inventory you build is expected to be sold at higher prices, or it was the pricing was already fixed?
... Roman, I'm not sure if I understood the last question. I think it was breaking up. I lost a little bit.
Mm-hmm. Oh, the second one is regarding the difference between the ounces produced at EPP and the ounces sold. You have around 1,500 ounces there, and so that should be considering higher prices that we are seeing these days, or the pricing was already fixed?
Kleber, if you wanna-
Yeah. So hi, everyone. Going to your second question. Yeah, no, that was the only difference in shipments from the time of producing the gold and being able to sell everything at the end of the quarter. It was already sold in the fourth quarter at fourth quarter prices, so we didn't fix those ounces in the target for the end of the quarter.
Okay, awesome. Yeah, and the first one on EPP was regarding the grades you are expecting for the fourth quarter and the first quarter of 2024, particularly considering the stock, the stockpile you build.
Now, on the fourth quarter, we will continue to see improvement in grades because we are accessing now the Ernesto pit. Although it was delayed, we will see high grade coming in in Q4, and also some high grade coming in January, February next year. So, the guidance that we gave is based on these levels of grade, which will be Ernesto and also not 100% Ernesto, but Ernesto mix it with other mines that we have, the Nosde or some stockpile. For the remaining years, as I was mentioning, we should not expect to see higher grade of Ernesto back in our plans once we will exhaust the mine early next year.
We were projected to exhaust the mine by the end of this year on Q3 and Q4, and the delay has pushed some of those high grades to early next year. So then after that, we go back to the normal levels of grades that we worked in 2018, 2019, 2017, which is 0.9-1.1, 1.2 grams per ton, depending where you are on the mine. And you also asked about the life of mine, and yes, we are heavily invested in the expansion of a life of mine, particularly in EPP, where we have a shorter life of mine. The results has been very interesting and positive, particularly connecting some of our pits that we already work.
So we should see, we expect to see an increase in life of mine in the next AISC, and probably also we can release something before that, showing to the market this increase in life of mine and the potential to further increase during EPP. Again, EPP, we expect as we are doing, we started operating this mine with three years life of mine back in 2016. We already operated seven years, and now we have more than three years of life of mine. And only in the last two years, we started increasing investment in exploration. So we should continue to see a gradual expansion in the life of mine of EPP as we move forward to the production.
So, the results has been very interesting in showing this trend for us to gradually increase life of mine of operations.
Awesome. And just one last question, following up what Caio asked regarding the acquisition of Altamira, this minority stake. Just wanted to know if there is any specific project that caught your attention and drove your investment decision?
Well, they have several, but Cajueiro probably is the most promising. They also have one copper gold project that's earlier stage that can offer potential porphyry discovery. Again, it's a early-stage company that will take several years in order to consolidate the resource and reserves, but we are very positive. We caught an attention the whole trend of that area that we know very well has a promising. That project has 190,000 hectares in an area that has already produced between 7-10 million ounces of gold. And, that was mostly came from artisanal, and now those they are doing a professional drilling in order to consolidate a bigger resource and reserve, and then later on produce.
G Mining, for example, in Tocantinzinho, is operating similar structures, and they will be able to produce over 100,000 ounces, 150,000-160,000 ounces per year in that kind of a geo-exploration and geology.
Awesome. Thank you very much.
Our next question is from Rabi Nizami, from National Bank Financial. Your microphone is open.
Hi, Rodrigo. Hi, Kleber. Thank you for taking the call. A lot of my questions on EPP have been answered, but I'll just add on. You mentioned you had acquired this land package adjacent to it, adjacent to the Japanese pit, that had some interesting exploration potential. Could you comment a bit about how that's turning out so far? And, second question, on San Andrés, if you could tell us a bit more about some of the one-time maintenance items and your thoughts on 2024, costs for that asset.
... So, you asked about Japonês Oeste. Japonês is the land package that we bought last year. We are doing now exploration in that area, drilling. We saw continuity of the Japonês trend on that area. So we are now narrowing and making sure that we can publish the resource and reserves in the next AIF or along next year. So a lot of drilling has been done already in that area. Some of the drillings confirmed the extension on the step out. Some drillings, of course, you don't have 100% of a hit rate on those drillings.
But we are very optimistic that we'll be able to expand those bits and expand the resources and reserves of EPP along the strike of Japonês Oeste, and the new results should be coming in until the AIF that will be published in next year. Then your question about Minosa. How much was the one-time investment? We did over two-
Yeah.
$2 million, $2.3 million, a one-timer investment to upgrade the productivity, upgrade the belts, upgrade the whole system in order to increase the productivity of the plant and then recover the production that we had in the past. So we don't expect this $2.3 million that will be non-recurring to happen until for this year.
That's right, Rodrigo. And there was also a comment in your financials about recovery being a bit lower in that mine for the time being, based on the kind of ore that you're in. What's your expectation for how long that might continue? Can you tell us a bit about 2024 production and cost for Honduras?
So yeah, the ore that we are processing now, that is on the pit that we are working, has some other contaminants that has reduced a little bit the recoveries. Some of this has been addressed, and then we should see recoveries going up. But it seems that that area is not... will not have the recovery that we had in the past of 76%-78%. We are more down to 68%-70% of recoveries in those ore, and not the 75-78. And we should probably see those kind of results for next year.
Okay. Thank you for answering my questions. Thank you.
Our next question is from Ricardo Monegaglia, from Safra. The first question is: Could you give some color on EPP's AISC from second quarter 2024 onwards? Should the cost be closer to the actual 2023 guidance, above or below those levels? The second question: Could you please disclose further details on the deal structure and rationale and the timeline of Altamira's project?
So the guidance for 2024 will be disclosing on January 24. So I cannot go in more much details what would be the cost so. But what I can share is that the Q3 is not the levels that we'll be practicing, because what happened, we used an inventory of low-grade ore that was very close to the plant. When you mine along the last two or three years, what we do is we give preference for higher grades, and then we fulfill the plant with the highest grade we can, and the lower grade that comes from the mine, we stock, we put in stockpile closer to the plant to use in situations that we had this quarter, that we had a delay in the mine.
So we used a low grade with a high cash cost that has been accumulated in the- close to the plant for the last, couple of years. And we will not have this situation next year, that we will be mining, uh, fresh ore, uh, in the lower grade, but not as low that, uh, we passed through the plant. So I think, uh, a, a good, good guidance would be to see Q1, Q2 or, uh, a, a few years ago, plus some impact of the inflation that we had. Uh, in Altamira, uh, they are conducting, uh, several, uh, new drills. This is why they raised the capital. Uh, the drill campaign can last six months, one year.
Uh, so and, and that-- Those early-stage projects is a gradual information, so we should expect new results of drilling coming in early next year. But the consolidation of our resource and reserves, the consolidation, uh, of the, the, the view that we will have about the potential, uh, with, uh, confirmed the resource and reserves, will take several years. Uh, it might take three, four years, depending on the results they have, uh, along the next, uh, one or two years.
Thank you. The question and answer section is over. We would like to hand the floor back to Mr. Rodrigo Barbosa for the company's final remarks.
Well, thank you all for being here again. It was unfortunate to reveal the guidance for the year. That was mainly due to Apoena in some slight the Almas that we explained. However, that was a very important and remarkable quarter that we achieved zero lost time incidents. And also, we turned the point putting Almas into production, increased production in all the operations that we have. So the trend of the delay the last 12 months, it has been inverted, and we should continue to see the increase in production in all our operations.
We've improved the margins with the Q4, not only for reduced cash costs, particularly for Minosa and also Apoena, that will not have this one-time in Minosa, and the higher cash costs on stockpile, with combining with a higher gold price. So Q4 will be higher production, lower cash costs, and higher price if gold continue to be in this level. And with all that, in Q3, we also paved the way to achieve our growth commitment to 450,000 ounces, with significant advancement in Almas already producing, and then Borborema, with new feasibility study, funding package, start of construction that's already moving according to our plan. So I thank you all, and I will invite you all again to be with us in Aura Day.
Then we'll go more in detail of each operations, also with the detailed strategy in finance, and also talking a little bit more about the strategy of the company, and experts to talk about the gold price and some numbers that I would invite everybody to take a look, particularly in this moment that we see a strong belief of debasement of fiat currencies due to the high fiscal deficits and a lot of U.S. dollars being printed on top of the geopolitical problems. So thank you all.
Our conference is now closed. We thank you for your participation and wish you a nice day.