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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Thank you for joining us today for our annual results presentation. I am Ignacio Bustamante and also with me is Eduardo Noriega, our CFO. So let me start with the key highlights for 2022. So in terms of the financial figures, you have probably seen already in the release, $736 million of revenues and EBITDA of $249 million, EPS with $0.01 per share, cash balance of $144 million and a net debt of $175 million.
On the operational front, we have also announced a production of 359,000 pretty much ounces, [Indiscernible] ounces at an average all-in sustaining cash cost of $1,364. And something that is very important, as you know, is that we are expecting the Inmaculada permit decision during Q2 as we highlighted a couple of weeks ago.
On the exploration front and business development front, we're doing very good progress with our Mara Rosa project and we get into a little bit more detail in the presentation. We are already over 70% completion, which is very good, on time and on budget. Our attributable reserves are up by 35% and our resources up by 18%, which is very good and it's mostly as a result of the incorporation of Mara Rosa to our portfolio and the discovery of the Royropata resources during 2022.
Talking about Royropata, we have also announced a fantastic discovery there, which is a new resource of over 51.2 million silver equivalent ounces, still completely open to the west and with significant geological potential. And we're looking there at bench that are about 5 meters wide and around 850 grams of silver equivalent material per tonne. So it's a fantastic, very fantastic business. This should be a great resource for the long term in Pallancata. And as we also announced recently, we decided to terminate our option at Snip because basically, we wanted to reallocate our priorities in terms of investment and focus more on the development of Mara Rosa and Royropata.
Talking about ESG. So it was a very positive year in terms of safety. Our frequency rate was at 1.37, very similar to what we had the previous year. Accident severity was 93, one of the best ones that we have had ever, very good results. We have successfully continued implementing our 62.0 program, which is basically a cultural change to make sure that people continue having safety as our top priority. We implemented the Seguscore, which is equivalent to the ECO Score, but is, in short, it's basically a new system that allows us to track and monitor not only the reactive factors such as frequency or severity, but also proactive measures such as inspections, all its training and that sort of things. And it's working out very well. And we continue working on training and helping doing safety leadership in all our different operating units.
On the environmental front, also very positive ECO Score, 5.27 out of 6, very similar to last year. We continue participating in the carbon development plan with obtaining a B rating, which is good. We continue reporting in line with a task for some climate-related financial disclosures as well TCFD. And working also in developing our carbon strategy, we already have our metrics for being carbon neutral by 2050. We're now working on the metric for 2030, which we expect to disclose this year. And continue also working on our cultural transformation plan also to make sure that people have environment as a top priority in their minds.
On the people and culture, we continue working on diversity programs, continue trying to employ as much people as we can from our communities. We're at 35% already and wanting to continue growing that number. And of course, working in conjunction with our unions at all our units.
And finally, on the community front, we continue investing with our communities. Last year, we have invested about $6.4 million in benefits to the local -- direct benefit to local communities, also significant purchases from our local areas, about $87 million in 2022, working on many different initiatives on education, on health, on water, now on connectivity with all our communities to make sure that we guarantee a better standard of living for them because as you may recall [Indiscernible], there's very little government presence.
And something that is very important here is after the good positive success that we had with our cultural transformation plans in safety and environment, we have decided to do a similar plan for community relations in terms of our social programs and community relations and develop a plan that should allow us to be successful on the social front for the next decades. So we're in the process of devising that plan. And I can say that we're all very excited by the potential that this is going to bring to prepare us for the next decade of working with the communities under completely different social and political scenarios.
So those are the key summaries. I'm going to continue talking later about the rest of the company. But now let me pass it to Eduardo Noriega, so he can walk you through our financials.
Thank you, Ignacio. On our P&L results for the year, we had a revenue of $735.6 million, a gross profit at 28%, reaching $208 million. Our net profit for the year was $6.7 million and the attributable net profit was $4.9 million. The EBITDA for 2022 was $250 million. And now the main differences versus the 2021 results are starting in revenue. We had lower production as guided, close to 8% in gold and silver. Silver prices also went down versus 2021 by 13%. Our cost of sales was at $39.9 million, mainly related to a higher proportion of conventional mining methods versus mechanized mining methods that are less expensive. We also had inflation mainly in Argentina.
Our exploration expenses went up 17% -- $17 million, that's mainly in connection with the investment we did in Snip, our project in Canada. In terms of finance cost variance, we had a positive variance of $11.8 million, mainly related to lower cost to acquire U.S. dollars in Argentina, which was something we had in 2021. The effective tax rate was at 72%, mainly affected by non-recognized tax losses that we had in jurisdictions we wouldn't have operations, mainly in Canada and in the U.K. that explains close to 36% of the 72% effective tax rate. But we also have in this line, royalties and special mining tax that account for another 30%, but then a positive variance of close to 24% from FX variations in Peru and Argentina.
We also recorded exceptional items, mainly including a reversal of impairment in Pallancata due to a discovery that we made in the Royropata area that was $15.6 million, the maximum reversal we could do from accounting purposes. And that amount was partially offset by an impairment of $4.2 million in Azuca, our project in Peru. And finally, an impairment of $9.9 million in our investment in Aclara that was recognized in our half year results.
If we look at our balance sheet, our cash went from $387 million at the beginning of 2022 to $144 million at the end of the period. Inmaculada generated $176 million, San Jose $22 million. In Pallancata, we used $50 million of our cash and that helps us execute our exploration strategy, which allow us to discover the Royropata new area. We invested $38 million in exploration expenses, mainly brownfield in Pallancata, but also San Jose with positive results and our recovery expenses, admin expenses that accounted for $57 million.
In addition, we paid taxes for an amount of $55 million, which include $15 million, as you can see in the table that relates to our 2021 tax charge paid in 2022. That's a timing effect. We also paid $11 million of legal work profit sharing in Peru. We paid $21 million in care and maintenance and mine closure expenses executing our mine closure expenses plan, $5 million of expenses related to short-term stoppage we had in San Jose due to COVID mainly. Our net interest cost was $8 million. We raised $60 million of short-term debt for working capital purposes in Argentina. We paid $22 million of dividends during the period and we had a temporary variation in working capital of $8 million negative.
But as you know, we also invested in Mara Rosa and we invested in Snip and we're showing those amounts in the right-hand side of this chart, $124 million to acquire Mara Rosa and the CapEx executed as of December '22 was $76 million. In Snip, we invested $21 million in total for the period.
Talking our all-in sustaining costs. We have to say that it was for the year, $1,364 per ounce of gold equivalent ounce. That result is aligned with guidance, but higher than 2021 as expected, mainly due to lower average grades in Inmaculada and Pallancata, also as expected. The use of a higher proportion of conventional mining methods compared to mechanized methods, I referred to that on the P&L statement. Higher net inflation, especially in Argentina, also higher CapEx to access new resources discovered in San Jose.
We had the impact of road blockades and temporary stoppages in Argentina, which impacted negatively our all-in sustaining cost versus 2021. And these effects were partially offset by efficiencies and savings mainly related to improvements on the use of equipment and efficiencies achieved at the team level and negotiation with vendors.
In terms of capital expenditures, we invested $142 million in our operations, slightly below than the CapEx we provided, mainly in Inmaculada, due to the temporary effect of the delay in the MEIA. This effect was partially offset by higher CapEx or mine development CapEx in San Jose to access the new resources we discovered.
In terms of the Mara Rosa CapEx, it end up being $75 million, slightly below guidance as well, and -- but this is a timing effect because the CapEx will be transferred to 2022 and 2020 -- sorry, 2023 and 2024. In terms of balance sheet, with $144 million in cash, we're well-positioned to finance our short-term growth, mainly the CapEx that we have scheduled for Mara Rosa to complete the construction at the beginning of next year. We also would like to tell you that we closed a financing facility with 2 years of availability with Scotiabank and BBVA. It's a 5-year medium-term loan with 2 years of grace period. Those are $200 million that we have available at a very -- at a very good rate of SOFR plus 2.05%.
We also have the following hedges. A couple of them were closed in the last 2 weeks. The first one we have for 2023, a hedge of gold of 29,250 ounces at $2,047 per ounce. We have a silver hedge of $3.3 million at 25. This hedge was closed a year ago. And the other hedges that we managed to execute in the recent days was a go hedge for 2024 production, 27,600 ounces of gold at $2,100 per ounce. As you can see on the graphs, our -- the schedule of our -- the schedule for the debt repayments of the existing debt starts in December 2023 by the end of this year, with $25 million amortization. And then we have 3 more years to complete amortization of the loan.
That's what I have on the financial section. Ignacio, back to you.
Thank you, Eduardo. So we go to questions after the full presentation, but thank you, Eduardo. So if we continue, going very quickly, we have our growth strategy. We want to continue growing the business. The strategy is basically 3 pillars. The first pillar is brownfield, basically to continue developing our resources in Inmaculada, in Pallancata and in San Jose. The second pillar is our development projects, which is mostly focused now on completing Mara Rosa project on time and on budget and also continue at full speed with the Royropata project. We have already started the permitting process and we're very excited with the potential that is going to have on the medium to long-term production of Pallancata.
And finally, we're going to continue looking at the business development opportunities in the Americas, gold and silver in the Americas and looking at leveraging our capacities, skills and experience in other areas in the continent that fit our criteria.
Getting to the detail Inmaculada. Inmaculada, as you know, is an asset that has been consistently beating its guidance. In 2022, we produced around 237,000 gold equivalent ounces at an average all-in of $1,059. As we talked about, we are expecting the MEIA decision during the second quarter of 2023. So we're approaching the last stage. We continue seeing a positive support from the government. And as you probably may have seen in February, there was the PDAC event in Toronto and the Prime Minister was there, the Minister of Energy and Mines was there, the Minister of Economy was there and all of them very positive about mining as an important and the most important economic activity for the growth of the economy in Peru and the fact that they wanted to promote in particular, 9 different mining projects, one of them being Inmaculada, so we have political support. We are seeing a significantly more active scheduling the reviews of the different governmental entities. So we're just waiting for the final decision, hopefully before the end of the quarter.
The guidance that we have given for 2023 is about, say, around 210,000 gold equivalent ounces at an average all-in sustaining cash cost of between $1,260 and $1,320 gold equivalent ounce. And we continue having a very large and significantly underexplored exploration package. You can see there the focus for once we get the MEIA is going to be on this area called Eduardo belt, which is between the Eduardo and the [Lita Falls] and has all these different structures [Hosafe Valley], [Aluz], [Lauda Mila] that we're going to be drilling as soon as we get the MEIA permit during this year.
It has a lot of potential, you may recall that between 2019 and 2021, we discovered all these areas here in Angela Northeast that gave us about a million ounces of gold equivalent material. We believe that this area, the Eduardo Belt area has another 1 million ounces in potential that we should be untapping in the next couple of years, 2023 and 2024. And on top of that, we have other areas in Lineamiento 3, [Ina Minas Cucho] areas and also here Inmaculada South, that has still plenty of potential. So as we have always said, we see this as a district and an area that should continue giving us production for the next decades.
Our other operating mines, we have Pallancata in Peru. As you know, Pallancata is an asset that is approaching its last stages. It's an asset that should be getting into current maintenance this year. We continue still looking for targets to see if we can send it more, but no success in the permitted area so far, but we have been very successful on the medium to long-term potential with this new Royropata asset that we'll talk a little bit later on.
So the most likely scenario for Pallancata is navigating in temporary current maintenance until the permit for Royropata is achieved. But once we had the permit for Royropata is basically a mine development that we will need to do because it's going to be processed. It's right there. It's actually less than 1 kilometer from where we are currently operating, but unfortunately outside of the permitted area. So it's going to be process and the entire chain is going to follow what we already have in Pallancata. So it should be relatively decent CapEx and timing to production.
The guidance that we have given for Pallancata, assuming production until late this year and the second half is between 2 million to 2.2 million silver equivalent ounces at an average all-in sustaining cash cost of around spot price. And in the case of San Jose, Argentina, 51% owned by us, we're giving a guidance of between 12 to 12.4 at an average holding of around $17 to $17.7 per silver equivalent ounce. We continue adding resources. 2022 was a very successful year. We added another 20 million ounces, which is a clear standard the mine continues showing significant potential. And we also have very interesting drilling targets for 2023 as well.
Getting to Brazil, Mara Rosa is a product that we are very excited about. It's located, as you know, in Goias in the center of Brazil. Brazil -- Goias is a state that is very favorable to mining. There are many other operations and projects there. It has very robust project economics. You can see here the highlights. It has an initial life of mine of 10 years that we believe it should be significantly more than this. Total IRR of the project between 18 and 20, with very conservative prices, particularly when considering the price of around $2,000 for gold now. It has like 1.2 million ounces of resources at an average grade of 1.7 and a strong local exploration potential and we are currently focusing on trying to find more resources in Pastinho, Campos Verdes and Morro Redondo, Filo Zorongo areas, et cetera.
The project is at 71% progress, so very well advanced. Engineering work is pretty much complete. 93% of the equipment has already purchase orders. 83% of the project already has closed contracts so that the possibilities of overruns is diminishing as we continue advancing, which is very good. We have had also the big help of a positive movement of the reais compared to the dollar. We have already been operating 2 million hours without any accident, which is also very good, very strong safety and environmental and ESG general standards from day 1. As you can see here some pictures of the advance of the project, actually, yes, we received the crushers as well. So far, it's looking very good and we expect to finish the project as we have mentioned on time and on budget. There's no reason or indication on why that wouldn't be the case as of yet.
And you can see the impact that this project is going to have in the company is very material. So in terms of reserves, it's going to allow us to increase our reserves by 75%. In terms of production, it's going to allow us to increase our production by 32%. And in terms of all-in sustaining cash cost, it is our estimated cash cost for the year. And you can see how Mara Rosa has a very attractive profile that should allow us to get a significantly better all-in sustaining cash cost profile on a corporate standpoint.
Talking about Royropata, this is just to show you how close it is. These are the areas that we're currently operating and mining. And this is the area that we're currently working on, which is what we call here the Pablo belt located between the Eureka fault and the Pablo fault and is, I think, like about 700 meters from the area that we're currently operating. And we have been very successful. The material that we have obtained in resources last year has been in this Royropata vein mostly, also some in Marco. And for once we have started operating in the area, it has the potential to [Indiscernible] completely open that we have not been able to drill because we can only drill from the permitted area. So we have only been able to reach this area.
But once we have the permit to drill this area, we're going to be able to prove the potential that in our view has potential for another 50 million and more ounces just right there. But just we cannot drill for those reasons. But in our view, it has absolutely no reason why it shouldn't continue. So plenty of potential in this belt. And for permitting purposes, this is going to be also a very different process than Inmaculada because Inmaculada permitted area is a very large area. Here, all the resources are concentrated in a very small area, a very small footprint. So the permitting process should allow us for a much speedier and simpler process than Inmaculada one.
So looking forward to that, as we say, this is the future of Pallancata in our view is [Indiscernible] to produce at fast levels, which is always very exciting. You can see here the history of Pallancata. First, when we started with the Pallancata vein, we reached production at some point at around 10 million to 12 million ounces per year. Then when we run out of resources in the Pallancata vein, we found the Pablo vein. Pablo vein started giving us levels of production at around 10 million ounces or so.
And we believe Royropata should also allow us to get very close to previous production levels for many more years to come and with a huge difference, which is that these veins that we're finding here are by far the best quality veins that we have ever encountered in Pallancata. So the production could be at similar levels. The cash flow potential for these ounces is significantly higher than what we have ever had in either Pallancata vein or the Pablo vein. So we're very excited about this.
In terms of key upcoming catalysts for the company, we obviously have very interesting growth catalysts on the growth front. Inmaculada made a decision, which would happen, as we said in the second quarter of the year, the completion of Mara Rosa, the Royropata development that we believe is going to continue giving us very positive news. And of course, there are few potential that we have in all our operations. And then that is underpinned by our cash flow generation from Inmaculada, from the medium-term cost reductions that we're putting in place and obviously, from the cash flow from Mara Rosa once it starts operating. And finally, with a strong balance sheet to support our current operations and growth.
Obviously, you can see that mostly as a result of the delay in the MEIA decision, how our stock price is significantly undervalued compared to our peers. So EBIT to EBITDA or price to earnings, where on the west part of the core because of the MEIA decision basically. So we do expect that that should materially change once we have the final decision. And on the other hand, the free cash flow yield is by far the best opportunity of our peers for those reasons. So we believe that there's plenty of potential here once we are past the MEIA decision.
And in summary, we believe that this business has been significantly transformed with the growth options that we have that are being advanced. Inmaculada cash flow underpin with extensive brownfield opportunities that we have seen. We believe it's an asset that is going to continue giving us very high-quality ounces for the long future. Mara Rosa, we are very happy with the project, continues giving us positive surprises, progressing on time and on budget, which is very good and very unheard of in probably developments lately, but we are very proud with that. I'm very excited. Royropata discovery, which is set to deliver a very important medium-term growth in terms of ounces and in terms of average all-in sustaining cash flow profile and of course, a highly compelling valuation.
So let me stop there to see if you have any questions. Yes. How are you?
Just 2 sort of big picture questions here. We were talking a little bit outside about the Peruvian government and how things have changed versus 3 months ago, 6 months ago. So could you maybe give us a little more color there? Second one would be just around Argentina. Things seemed to be changing and some metals companies are getting special dispensations to take hard currency out. Where are you with Argentina?
Yes, absolutely. So let me cover the first part. The second part I will pass it to Eduardo who has been working very closely with Argentinean team to see what can we get as a mining association there in terms of things that could help us on the currency and conversion fronts.
So in terms of Peru, what I can tell is that we have seen a very material change with the new government in place, positive material change. We have moved from a government that was at the best neutral with many people even against mining activities and with completely different approach towards a private sector mining investment in the country, private sector investment in general.
With the new government that we're seeing is a completely different focus. It's a government that from day 1, led by Prime Minister Otarola from day 1 has a very clear that the main focus of his mandate is going to be to retake the country in the growth path that you should have to have grow the country and reduce the levels of poverty and increase the average income of the people.
And he believes seriously that mining is going to be the most important driver for that economic growth. He is convinced of that, same as the rest of his cabinet. So from the very beginning, from the day he presented, he says speech to the Congress before the government -- the Congress gave him the vote of confidence. He was very clear with that. He put mining in the front of his strategy. He mentioned there that he was here to support the acceleration and development of 9 different mining projects. Inmaculada was mentioned as one of those 9 mining projects. So from the very beginning, the attitude has been very positive.
A few months later came PDAC in Toronto, in Toronto, which is something that is not that usual -- was not been -- has not been that usual lately. We had the presence of the Prime Minister, the Minister of Economy, the Minister of Energy and Mines and the President of the Central Bank, all of them giving very positive messages around mining. The only presence there was enough to say that it was important for them, but also in the presentations to the press and to the other companies and investors and so the suppliers, the message that they gave were really, really positive. And they also mentioned again, both the Minister of Economy and the Prime Minister, they also mentioned the 9 projects that they wanted to promote and we were included in those projects.
So that's something that we have not seen in the past, in the previous government. So we believe that that is a very positive change. We believe that the government is putting a lot more pressure because they are conscious on how important the promotion of these mining priorities to the country. And they're putting significantly more pressure and completely speeding up the permitting processes, all across the most important projects, many projects in the country.
So we feel that the political support has changed materially. Obviously, they're also dealing with other matter because as part of this new approach, they are also working on certain changes in certain different organizations. So that is taking also some time. So I think it's going to be an equilibrium, but we do believe that the landscape is significantly better and our best understanding as of today is that we believe that the decision should be made before the quarter ends. So we're counting on that.
So all in all, I would say a very positive additive. They are still going to have to deal with the challenges. The social front is, I would say, right now in a relative term, but there are certain areas of the country that continue being a complex such as Puno, for instance. And other areas that could get also into other social issues going forward. So I think it's very important that I continue monitoring that. On our particular front that you may recall, we had certain social issues at the end of the year. The government is doing a very good job in putting together in discussion tables the communities, the companies with the participation of the mining sector in order to make sure that we reach agreements and we work together on a sustainable long-term relationship. So it was a very positive changes in general. And regarding Argentina, Eduardo?
Thank you, Ignacio. Thank you, Jason. Yes, we have seen other sectors requesting and having access to U.S. dollars at a special rate, like the agricultural industry. In our case, we now have access to U.S. dollars at the official rate, which is beneficial for us to pay for imports. In the past, we had to go to the secondary market to acquire dollars at a higher rate, we now can do it at the official rate, which is very positive.
And then we have also seen for mining special treatment for -- on the FX front for associated to specific investments. So as a way to promote investment in Argentina. But I would say that the mining association is working together to talk to the government to see if mining in general could access a better rate compared to the secondary rate. So all in all, yes, we're getting access to dollars at a better rate for imports. There are mechanisms that would allow us to access dollars for -- at a higher rate for, let's say, paying your company bills or dividends. But I would just like to highlight that we're seeing Argentina that there's a lot of pressure from a fiscal standpoint.
Due to the dry season, the agricultural business is not bringing as much dollars as expected. So the level of reserves is getting low. So I think the probability of a devaluation soon is higher than it was in the past, and that will come certainly with more flexibility to access to U.S. dollars. So we see the future of Argentina. We're optimistic about what we know, what we will happen on that front.
Dan Major from UBS. A couple of questions. Just the first one on the specific points related to the approval of the extension of environmental permit. Can you give us any color, I mean, what is the exact sort of sticking point? What's the key final component that needs to come into place for the license to be approved?
Yes. So basically, there are several governmental entities that participate in the permitting process. And there's at the end, one office that is called the [CENACE], which is part of the Ministry of the Environment that makes the final decision. Of those entities that comment, there are some that comment and whose opinion is binding and some that comment, but their opinion is not binding.
I would say we are already very well advanced in the opinions and comments of the different stages. And once that is completed, then it's an asset who has to consolidate the other observations, but also has their own observations. We need to be comfortable with that, review the situation. And then the one that pronounces itself is CENACE, so as -- [Indiscernible] ascribed in the Ministry of Environment.
I would say we are already under the final round of observations and discussions. We have already submitted all our answers. We are still waiting for the final stage in which we're going to be getting any potential final questions. And after that, the process should be completed.
Okay. So just to be clear, there is still possible dialogue that's required. It's not just all -- they got all the information they need to make the decision...
There's ongoing dialogue. Yes.
But it's not one specific outstanding issue or opposition, it's just multiple streams of...
Yes, exactly. No, it's a document that has about 40,000 pages. So as you can imagine, there are comments in terms of subjects and orders in terms of forms and it's a long document. And obviously, they are also struggling with -- the governments are also struggling with lack of personnel. So going through that, and we're not the only company applying for a permit. So they have to go through that. But we believe that they are already very well advanced. This is a process that has already taken us 3.5 years. And I would say now that the speed up and the priority level that we are seeing is significantly better now with the new government. So we feel confident that the timing that we have given to the market with information that we have as of today should be the right one.
Okay. And then just a second one, looking at the -- on the balance sheet. In a scenario that you were not able to extend the permit and you would have to announce to the market that you would be curtailing production Inmaculada. Can you walk us through the covenant structure on your debt and what the options would be under that scenario?
The main financial covenants we have in our debt contracts are to the total debt to EBITDA, and that's a range of -- a covenant of 3x. And the interest coverage ratio, meaning EBITDA divided by total interest of 4. So we're going to be fine for the entire year. And then if we stop Inmaculada, we may have issues in the -- I would say, at the end of the first half of 2024. But I would say the -- we are -- we have a very good relationship with our banks. We have been working with them for year and we are working closely with them. They are monitoring this situation, and they are supportive.
So it would be mid-'24, that you wouldn't incur any issues until at least the end of this year. So if it did run over, you wouldn't...
Until the end of this year, we're going to be fine.
Patrick Jones, JPMorgan. Just a question on the Mara Rosa CapEx breakdown, given the focus on conserving cash at the moment. Can you just talk a little bit about how much of the CapEx breakdown of what's left to spend is, say, for yellow goods equipment, things like trucks or rigs that -- have you considered anything like moving that to a leasing model instead?
Do you want me to answer that?
Yes, we're looking at all options. Right now we are assuming that we are -- we're using contractors. And we're looking at all alternatives. And the advancement of the project is in very good shape at above 70%. But more importantly, as Ignacio mentioned, most of the contracts have been already closed, so that the amount to be spent is pretty much fixed. So it's a matter of executing and the company's -- and the team is executing very well on that front.
We have spent already $65 million last year. We expect to complete the guidance that we're giving is $100 million to $110 million. So there should be something that left over for 2024, but pretty much most of the investment is going to be completed between now and the end of the year and the guidance remains at 198.
Richard Hatch from Berenberg. A few questions. First one is just on Royropata and your slide points to -- am I right in thinking it's probably a 2-year sort of suspension of production at Pallancata whilst you bring that into production?
Yes. Roughly.
And how much are you going to spend at Pallancata in terms of proving up those resources into reserves and then bringing it into a position where you can mine it? That's the first one.
Yes. So basically, where we stand right now is that we are going to be doing infill work in Royropata this year to prove them. The budget is not too much because of the high grades, relatively low tonnage and the concentration of the reserves and the width of the structure. So we're looking at probably $3 million, $4 million this year for infill. And after that, not that we have that proven and put into our model, then our goal is that we're working on the drilling permit for the cleaning cap or hopefully more of the vein, so we can drill and increase the resource.
And in [Indiscernible], we're going to be working on the permitting. And once we have the permit ready, the idea is to start developing the mine and starting those resources as much as quickly as we can. And the mine development should be similar to all our other operations because we probably one mine entrance, not too much ventilation in addition to what we already have and certain new ones because it's right there. And we're going to use as much as we can from the also underground infrastructure that we can for current works and use the same processing facility. So total CapEx in general for this project should be relatively low.
As in kind of what sort of low tens of millions, something like that?
Yes, I would say mid-tens when you take into account everything.
Yes.
Yes.
Okay. And then the cost of keeping Pallancata on care and maintenance for those 2 years, just keeping the lights on and everything?
Yes, there will be an important cost at the beginning because we will need to let people go. And obviously, we need to see if we can find the efficiencies there and try to see if there are other alternative opportunities for them in our other operations. But I would say once that happens, the cost of current maintenance when you take into account the minimum sheet, the certain pumping requirements that you need to do, environmental controls and that sort of things should be around $4 million or so per year.
Yes. And then Eduardo, you talked about the tax kind of elastic band coming in this year from last year where you had to pay more. The tax payment this year was a lot less than the previous year. So would you expect any significant reduction in cash tax paid in 2023 versus 2022? Any movements on that like kind of a benefit to you, any rebates, anything like that we should be thinking about or not so much?
Not rebates, no, but we will not have the carry -- the carrying from the previous year being paid this year. So as I said, those $50 million that were paid in 2022 for the 2021 period will not be impacting this year. And then the rest -- the payments that will go for this period will depend on the performance of our operations during the year, so.
Okay. And then the last one is just on exploration spend. Obviously, Snip was $19 million, I think, in the exploration expense in the income statement that rolls away. How much are you going to spend on exploration this year, next? What's the kind of planned budget for [Indiscernible] --
Corporate-wise?
Yes, corporate-wise.
Yes. For corporate-wise the budget for this year has been very low on purpose because we want to wait for the MEIA. So in Inmaculada, the budget is very reduced. Of course, once we have the MEIA, the idea is to put a budget in place for that. But so far, we have considered a very limited, just minimum drilling in Inmaculada, not much -- less than a couple of million dollars a year.
In the case of Pallancata, we have also a limited budget. Part of that is going to be for the infill of Royropata. But in terms of new drilling, we are budgeting around $1 million or so to be spent in looking for other potential targets. San Jose is a similar budget as usual, which is around $5 million, $6 million or so. And where we do have certain budgets for drilling is in Mara Rosa in Brazil. So in Mara Rosa in Brazil, where we're trying to pull over a targets. So we were probably going to be spending somewhere between $3 million and $4 million this year.
Okay. So really, it kind of shakes out at sort of $15 million, $20 million, something like that?
Yes.
Jason Fairclough. Can I push you a little bit here on Pallancata? I mean you showed that good chart where you had the big surge in production and then it collapsed and then another big surge in production and then it collapsed. Now we're looking for another big surge in production. How come you guys can't manage that asset in such a way that it's not so variable? I mean this thing you found is only 1 kilometer away. Like why is it playing out like this?
Sure. Sure. That's a fantastic question. I can tell you, Jason, that the most important challenge that we face and it's not only us, it's a country, there is underground mining in the country, in general, is a permitting situation. So for every drilling company that you need to do outside of your area or the area, you have to wait at just an awful lot of time and that's when these type of situations happen. If we had the permit to drill the entire area, these things wouldn't happen, but the problem is that you are allowed to get your permits for the area that you know and that you have defined as a reserve and is part of your mine plan.
Once that happens, then you need to start getting other exploration permits or you can drill from underground. But when you drill from underground, you're limited to where you can drill and what you can test. So mostly the only reasons that you have once your permits are circumscribed to a certain area is drilling from underground, which is not easy. And then once you find something that you start getting the drilling permit, you go to another area, but you could be spending a year, 2 year, 3 years in those permitting process.
So that's something that in the past has not been understood by the government. I can tell you because it was a public event. Last week, the Minister of Energy and Mines called pretty much all the CEOs of all different mining companies in the country in a large roundtable to ask about our key concerns as miners. I can tell you not only on a miner, but the entire mining communities' main concern was around permits. You had other regions such as royalty use, but the unanimous comment was around mining permits and the time it's taking to get them. And the government has created a taskforce to see how they can accelerate that.
And we have made sure also that it was very clear that they cannot treat open pit mining and underground mining in the same category because it's completely different situation. And I'm sure the message came across and we have the message from the Minister of Energy and Mines that they are already working on at as for to materially simplify the permitting process. So we believe that that is going to be the case. But otherwise you have those issue. The same thing happened to us in Arcata. In the past, the permission to continue drilling was pretty much in it. And that's why we were operating Arcata for 50 consecutive years, 60 consecutive years.
In the case of Pallancata, we have been circumscribed to that. That's why we decided in Inmaculada to let's cover as much as we can and go for the permit for the next 20 years because we don't want that to happen to us. In the case of Pallancata, we didn't have that option because when we had the permit in 2017, it was circumscribed to a certain area. So now if you want to go outside of that, you need to modify the environmental impact statement and that is a process that takes 3 years. So that's the key challenge. I would say it's completely related to permit -- it's the permitting process was materially simplified. Those things wouldn't happen and you will have a smooth production.
[Indiscernible] from Liberum. In the FY '22 report this morning, you mentioned that while you said here that you're confident about the timing for the MEIA permit, you've also looked at various scenarios ranging from not getting the permit onwards. Could you shed some light on some of the key scenarios that you looked at?
Yes. So there are basically 2 scenarios and one in the middle. But the 2 stream scenarios is once we get the decision in Q2 and the decision is positive and we kind of start all the mining development and production in the new areas of Inmaculada. So that's scenario 1.
The worst-case scenario is the one in which the permit gets denied. And in that case, obviously, we will need to produce Inmaculada until the end of the year and then put it on current maintenance when we submit the permit probably in a much more narrow area. We wait for that permitting time. And after that happens, we start operating Inmaculada again. So those are the extreme scenarios. In our view, I mean, the probabilities for the [Indiscernible] are significantly larger than the other one.
There's also some potential intermit scenario, which is that we come back with a denial for a certain reason, that could be corrected or that we are requesting additional information. So those are things that could delay the process. But I would say that scenario is one into which we are assigning a lower probability as well. But if that were to happen, I would say, in the big scheme of things, that wouldn't be a critical thing as long as they can be corrected. And we believe that if there was something that could be corrected is something that shouldn't take us too long because there has been 3.5 years of work here on 40,000 pages or pretty much all of the answers are already there.
Okay. In the previous press release where you first spoke about this, you've mentioned operational factors in deciding how quickly also the operation will be shut down during the second half. Could you expand on that?
Yes. Basically, the guidance that we have even is the same. So we believe that if -- with the current permit that we have, we are going to continue operating Inmaculada until the end of the year.
Okay. So the end of the year unless the permit is denied?
Even if the permit is denied, we will continue operating until the end of the year.
It's Marina Calero from RBC Capital Markets. Given your recent experience with the permit of Inmaculada, do you think you could make any changes to the way you permit Pallancata to speed up the process?
Yes. So I mean, hopefully, let's hope that the initiative of the government of simplify the permitting process goes ahead because it will be very important for the entire country. And they are aware of that, so we have expectations that that is going to happen. But if that were not to happen, I would say the most important change in Pallancata will be to try to narrow down the area to be permitted as much as we can. And when you take into account the area where the resources are and the area where the potential is that is a small fraction of the entire property that we are permitting in Inmaculada, a tiny fraction, okay?
So there are significantly less impact, significantly less area that you need to monitor, significantly less water samples that you need to take, significantly less communities that you're going to be impacting, significantly less issues in terms of road accesses in terms of mine entrances, in terms of ventilation chute. So the impact will be significantly lower. The amount of engineering required to be done is significantly less as well. So it will be a much simpler process to follow. That will be key.
Having said that, also this one has other challenges that Inmaculada didn't have. The proximity to certain water bodies that we need to make sure that the engineering covers that very well. There's also certain issues that we will need to mix that permitting with [Indiscernible] plant permitting because of new regulations. So we will need to be a new process that -- that comprises the new area plus the plant, which also is going to be a little bit more time-consuming. But all in all, we believe that the Pallancata permitting situation itself, even if the regulation doesn't change, should be a much simpler process than the one that we follow through Inmaculada.
Simple one on Snip. Could you just run through the total investment made by the group on the project and how you intend to recover that investment for investors? And also just peripherally, more regarding the current price environment, you've got a couple of assets that are noncore on the portfolio. And you talked about prices around about $25 an ounce historically that would re-encourage you to look at those projects. Clearly, you have not got the bandwidth to start assets such as Ocado, et cetera, again. But would you look to then divest those assets and monetize them in the current price environment?
Sure. Thank you very much. So in the case of Snip, we did a couple of investments. The first one as part to get the option to acquire 60%. We did a private placement in the company. I think at that point then, it was about 4.5% or so -- $4.5 million of investment. That gave us the option to acquire up to 60%. Then we sold that investment with a very important profit, okay? So -- and we just kept the option to acquire up to 60% by following a certain set of investments.
So since it's an option and you don't get your value until you complete your earning, if you walk away before that happens, that money is basically lost, okay? So we -- the way we saw it was more like a brownfield, greenfield type of investment, in which it was all money at risk, but we believe that there was some interesting potential to continue developing the project. So we managed to get in. We managed to settle there, take control of the project and assemble a very professional team, develop very good relationships with the First Nations [Indiscernible] there that we continue managing until today.
And at the end, we got the project, we got the PA and the PA gave us positive results -- positive results. In the meantime, what happens was that we are still struggling with investment in Mara Rosa. We still need to invest a total of $200 million in Mara Rosa. Mara Rosa will not stop production until next year or the guidance that we have given until H1 2024. We are also now -- we didn't have at that time, but we also have now this Royropata resource that is looking amazing and that is going to require capital commitments as well.
And on top of that, we have also a balance sheet that we need to take care of because right now, we have data and while we wait for the MEIA permit, we need to be very careful on how we manage our balance sheet. So taking that into account, taking into account all the different investment priorities that we have, the balance sheet, the main uncertainty as of yet and putting that Snip project into our entire mix, we decided that the best use of our money was not even though we had a profitable project, it was not at that particular project, but to focus on the other priorities that we have within the company.
So we will look at different alternatives to try to see if we could monetize part of that investment. But unfortunately, we couldn't find a way to monetize it. So we returned the option. The investment made is lost and it was expensed from day 1 because we saw it all the time as a risk investment, as a briefing type investment. And -- but that gave us significant knowledge of the area, significant experience in Canada, a significant tools to continue evaluating other type of projects of that nature. But unfortunately, the investment was lost.
I think no further questions in the room. So let's ask if we can go to questions from the conference call, please.
[Operator Instructions] There appears to be no questions at the moment. So I'd like to hand back over for webcast questions.
Thank you for that. Okay. We've got no questions from the webcast at the moment. So Ignacio, back to you for any closing remarks.
Thank you. Thank you very much. No, there are no final remarks. I think we have covered everything. I thank you for your time and for coming here. And if you have any remaining questions, we are here today and tomorrow and always Charlie is here as well. So thank you. Thank you again, and pleasure to see you.