So, we don’t expect to see a big increase in cost from what we saw at the back end of ’23 going into ’24 from an inflation perspective.
Renaud Adams: Yes. And if I may add something. If you look at Essakane in the last six months, right, we’ve seen the beautiful of how it is when you’re steady, when you have no disruptions achieving, as we said, below the 1,600 towards at 15.50. And we’ve seen as well like pressure on cost or 1,800 when we feel sometimes disruption. So should we have like a year of steady good productions, and no issues with the reconciliations, and no disruptions, could we rather achieve towards like the lower end of the cost, top hand of the productions. But we’ve seen that it’s kind of operates some things in a tough environment. So, I think this is how you should look at it. It’s a bit of a balance weighted. You know further experience over the last six months, I should say, a bit the same with at Westwood.
I mean we’ve been consistently improving. We’ve seen like a Q4 achieving nearly $2,000 an ounce. We’re going to continue to improve. We’re going to continue to improve the grade and so forth. So this is how – it’s both mines have been like with the Westwood continuously improving, we feel strong that we overall can beat Q4 for the year. And Essakane is very depending on how stable it will be. But should we be stable, I think we’ll have a great deal.
Lawson Winder: Okay. Thank you both for those comments. It’s very helpful. And then – so overall, cost inflation in control for 2024 versus ’23. What was actually realized in 2023 in terms of year-over-year cost inflation?
Renaud Adams: I will give that to Maarten.
Maarten Theunissen: Lawson, we saw – we did see a big impact, especially in Burkina Faso and – but that was impacted by higher landed cost as well because of the cost of getting our convoys to site safely now. So, I don’t have a specific number for you right now to say what, was the impact of inflation. But the cost in the second half of 2024 have those inflation impacts impacted, and you can see that compared to what we were doing in the first half of the year.
Renaud Adams: I think one is the most obvious one, I guess, like when you look at the impact of fuel costs and Essakane, most mine will say their labor cost is the higher cost as Essakane is more like towards like the power and the user field has a big impact. And over the last two years, we’ve seen as high as probably like doubling a double price and those. So this was like – this is from far the one that has impacted probably the most. And can we see some reduction down the road. We’re not necessarily counting on it in the short-term. But just to give you a bit of an idea of what fuel power has been the main contributor to that over the last two years.
Lawson Winder: Yes, that’s really helpful. And then just one final question on cost, really pertaining to Burkina Faso. When does the new sort of higher royalty regime take effect? Was it the first of this year?
Renaud Adams: The new royalty regime is in effect, and that’s included in our cost. And it entered into in the back end of last year in Q4, yes.
Lawson Winder: Great. And then one final question, I guess, on Westwood. At the current gold price of about $2,000 per ounce and with the significant improvements you’ve seen at that asset. Do you anticipate generating positive free cash flow in 2024? And if not, what is kind of your benchmark that you think about internally that you need to get to before that asset is generating material positive free cash flow, to the overall business? Thanks very much.
Renaud Adams: So, there isn’t any significant expansion CapEx at Westwood. So the all-in sustaining cost range that we have in our guidance for Westwood is also an indication of free cash flow. So, if we meet our cost guidance and the gold price is higher, it should be generating cash flow, and that’s kind of how we manage that as well. What we always also did, is with those high cost ranges, we saw an opportunity to put in some gold hedges in Q1. So there’s 60,000 ounces that we hedged, and it was zero cost collars and the bits on those are between $1,915, $1,975. So that’s also how we just making sure that, with that higher cost profile at Westwood that we can be breakeven or cash flow positive.
Lawson Winder: Okay. Fantastic. Thank you so much for the responses and best of luck for 2024.
Renaud Adams: Thank you.
Operator: The next question is from Carey MacRury with Canaccord Genuity. Please go ahead.
Carey MacRury: Hi. Good morning, guys. Maarten, could you just remind us what sort of minimum cash balance you’d like to keep through the ramp-up here like corporately?
Maarten Theunissen: So the minimum cash balance is actually driven by one of the covenants in our credit agreements. So we have to maintain $150 million of cash on the balance sheet, our cash and cash equivalents. Now because of the corporate structure, there’s always the cash balance at Essakane. And it’s actually also a cash balance that needs to be maintained at Côté. So the $150 million covers that. But – so that’s the amount that we need to maintain and it works well with the cash out by those 2 entities.
Carey MacRury: Okay. Great. And then just on the mining side, you’ve got 5 million tonnes stockpiled. Is that stockpile going to grow ahead of ramp up? Or is it sort of constrained? And just more broadly, like how does the mining ramp-up look like through this year?
Graeme Jennings: Carey, can you speak up — we can’t hear you very well.
Carey MacRury: Sorry, I can hear me now? Can you hear me?
Renaud Adams: Yes it’s fair.
Carey MacRury: Yes. So I was asking about the stockpile. You’ve got 5 million tonnes on the stockpile. Is that going to continue to grow over the next couple of quarters as the mills ramping up? Or is that constrained at 5 million tonnes? And secondly, just broadly, like how does the mining ramp-up look in 2024?
Renaud Adams: No. Definitely, we see that — well, there would be an in and out of course, as we ramp up the grid of telling Anita earlier. You will be using, of course, some of them. But yes, the mine plan considers, of course, to continue to do that segregation, continue to add high grade and super high grade to the stockpile and managing the grade two roughly a range about 1.5 at the mill for the year, definitely. The mine is ramping up quite well. We now have – we commissioned like towards like the 14 trucks. We got the second shovel now in the pit. So in terms of mining capacity, we’re there, if we achieve an overall 50 million tonnes mined for the years, that would allow us to properly produce the ore require, and continue to segregate stockpile and feed the mill at the proper head grade. So that’s roughly what I can say.
Carey MacRury: Great. That’s it for me. Thanks
Renaud Adams: Thanks.
Operator: Next question is from Tanya Jakusconek with Scotiabank. Please go ahead.
Tanya Jakusconek: Good morning, everyone. Thank you so much for taking my questions. I’m going to move just to the accounting of all of this. I think thank you very much for all the detail on Côté. Maybe, Maarten, over to you just to walk us through how all of this is going to show up through the income statement and cash flow for the year. So maybe I’ll start off with the first of the 220,000 to 290,000 ounces on a 100% basis, what is going to be commercial in that amount?
Maarten Theunissen: So after every ounce that will be produced will be reported as revenue. So the concept of commercial production that doesn’t…
Tanya Jakusconek: Okay. So from day one, everything will go through the revenue line. Okay?
Maarten Theunissen: Day 1, everything goes through the revenue line, and then you have to show the cost as well. So – and that includes some stockpile accounting, where the mining cost comes off stockpile, so you have cost of sales in the beginning part of the year, of course, that cost of sales number would be elevated somewhat. But some of those cost lines up on the balance sheet. And so, up to commercial production, the cost we will have revenue and the cost to produce that revenue will be split between cost of sales and that $40 million that we mentioned in our capital guidance. So we shouldn’t double account that we are showing some of our operating cost in capital in our guidance number.
Tanya Jakusconek: Okay. So if we were to think of it from a high level, so operating costs plus that $40 million, which is on a 100% basis that would come in through your cost of sales. And then the remaining amount of that capital will be under capital.
Maarten Theunissen: Yes.
Tanya Jakusconek: Okay. Perfect. Okay. So that’s through the year. And any – and the reserves that you reported, which you’re reporting on a 100% basis, when you look at put your 2023 attributable on the website, because the statement is not there yet, will we be looking at it on a 60%? Is that how you’re going to report it on a 60% basis all the attributable versus 70% in 2022?
Maarten Theunissen: So because of that option to repurchase our 9.7% interest, we’ll be showing the assets and liabilities at 70% until the point where either we repurchase it or it expires — if it expires, things will go back to 60%. But I think to keep things simple, the balance sheet will be at 70%, but revenue and cost of sales will be at 60%. In fact, real cash flows is at 60% as well. So to get it up to 70% is just an accounting adjustment.
