Joanne Jobin: Yeah.
Andrew Gubbels: So look, with respect to holding cash or operating expenses from this year, we are tracking towards our guidance of recurring cash operating expenses for 2023. We’ve seen subsequent decreases quarter-over-quarter, and that’s really eliminating redundancies connected with prior corporate transactions, there’s been disciplined use of consultants, professional services, et cetera, there may be some additional refining of contracts as we go into 2024. That being said, I look to sustain roughly consistent operating costs. I’ll have to assess how 2024 is looking and see where the cost profile will fall out. But we’ve reduced our costs really to be consistent with a number of companies in the sector, which is an achievement.
With respect to profitability going forward in the future, as Dave mentioned at the outset, we have reached a point where free cash flow neutrality is being reached on a monthly basis. In the quarter, we are very close this past quarter. And I suspect in future quarters, certainly through 2024, we will be free cash flow positive, which I think is great for profitability. Now, we don’t put out guidance for revenue beyond this year, we’ll assess what we do next year. All I can comment on is, what is in the public domain that the Street puts out there for revenue forecast and based on what I’ve seen for 2024 and 2025, based on revenue. And if we do keep a consistent operating cost base, we will generate profitability next year, depending on what analyst you pick, depending on the cash — gold price they have — assumption they have, it will be a variation on what that profitability is.
But certainly, we’ve turned the corner and we’ll join the ranks of profitable free cash flow generating royalty companies in 2024.
Joanne Jobin: Excellent, that’s a great milestone. And going back to the cash costs, are there any further cost reductions expected? Like, is there any way you can squeeze some more margin out of there? We have a lot of questions on that. That’s why I’m coming back to it.
Andrew Gubbels: Yeah. Look, there’s — we’ve taken a fairly conservative approach to our budgeting through 2023, and we’ll do it again in 2024. I mean, there are some fundamental costs in our company that are difficult to avoid. For instance, we have certain insurance costs that are associated with structures in management as well as general insurance that is somewhat contingent on the fact that we IPO-ed in 2021, and it takes a track record before some of those costs start to decrease, we are having a track record over the last couple of years. Also the fact that we’re only listed in New York, has an impact on our regulatory and listing fees being listed only in New York is a relatively fixed cost as well. So when you look at our company compared to other Canadian listed companies or foreign listed companies, we do have some fundamental costs that are difficult to decrease.
And that’s really the benefit also to scale, is that, you can spread those costs across a larger base as companies get bigger, it’s a good rationale for consolidation going forward. Can we bring more costs out of the system? That’s going to be a function of where we get to in some of those fixed costs like insurance for one thing in 2024, which we don’t renew until next year, as well as just generally looking at our vendor selection is the ways we can trim down the costs a little more materially in different areas. But I suspect we’ll have to look at the budget next year and where we can start picking away. But I think we got to a stage where we’re much more similar to where our peers are now.
Joanne Jobin: Okay. So let’s move on to the portfolio before we go back to more financing questions. Do you see Cote entering production next year? And will it impact your bottom line?
Peter Behncke: Yeah. Absolutely, yeah at 92% complete construction as of September 30th, targeting 5 million tonnes of stockpile ready to go in early 2024. We expect initial production in Q1 and a smooth ramp-up through next year. Impact on the bottom line is close to 500,000 ounces of annual production next year, reporting in and translating close to 2,000 GEOs for Gold Royalty Corp., next year alone, a meaningful increase in our overall attributable production revenue and a direct impact on the bottom line cash flow.
Joanne Jobin: Great. Thanks, Peter. And can you comment on the news regarding Fenelon and Tonopah West projects, and what other catalysts should we be looking forward to such as Granite Creek, Odyssey, Cote, all of these completions, which I know you went through in the presentation, but maybe you can —
Peter Behncke: Yeah I know I think I spoke to Granite Creek, Odyssey and Cote at some length. But Fenelon and Tonopah West are great examples of some of the advanced exploration assets within our portfolio. Tonopah West had over a 100% increase in its underlying mineral resource, really attractive high-grade silver deposit down in Nevada. Similarly, Fenelon, an asset that’s now published its initial economics, and they continue to look for ways to grow and expand that production profile. These are catalysts across our portfolio that, we really don’t get much value attributed to as there’s potential cash flow that’s 8, 10-plus years away, albeit does create meaningful value across the portfolio. And just a couple of examples of the 20 some odd advanced exploration assets on the 170-plus early-stage exploration assets, all of which are having some kind of work or many of which are having some kind of work across the portfolio.
