Anglogold Ashanti PLC (AU) 2023 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to AngloGold Ashanti's 2023 Half Year Results Market Update. (Operator Instructions) I will now hand the conference over to Mr. Stewart Bailey. Please go ahead, sir.

Thanks, Judith. Welcome, everybody. Good morning, and good afternoon to those in this time zone. We've got a reasonably detailed presentation today. Alberto and Gillian will run through the operating performance strategy and the financial performance. Just before we start, I would just point you to the safe harbor statement on Slide 2 of this presentation. That contains important information regarding forward-looking statements. And we would suggest you do refer to it when you have a minute. Without further ado, I'll hand over to Alberto.

Thank you, Stewart. Good day all. Thanks for joining us. Let's start by recapping some of the milestones so far in our journey to turn our performance around and regain cost competitiveness. The priorities we laid out last year, probably 18 months ago, we're all ultimately aimed at safely closing the cost gap with our peers, which had opened up to the widest ever.

We continue to believe that to sustainably re-rate our equity we must look to the cumulative impact of several interlocking initiatives that together will improve our overall business. Those form my core priorities when taking over to improve safety and set new climate targets to evaluate our culture and values to renew our leadership and simplify our operating structure to restart and ramp up Obuasi to initiate our full potential and implement our full asset potential program to basically start and then consolidate our Nevada footprint to extend our mine lives to take pragmatic commercial steps to our [RUG] volume and finally, to assess our portfolio and to decide what belong and what did not belong in our portfolio.

Like any turnaround, there has been some bumps along -- along the road, I would probably say that the biggest one that has affected all of us is inflation, stronger and higher than we all anticipated. You would have seen in our H1, there's a 9% inflationary impact in our cash cost, very significant. You look at how that produces, for example, in our quarter, Q2, all-in sustaining costs 9% increase versus last year. Then again, it's affecting all, as I said, our top competitors, if you take a beverage at the top core, they're all-in sustaining went up 15%, 15% versus our 9%.

We've also faced our share of operating headwinds, which have frustrated our progress earlier this year. We had the time failure in our processing circuit at Siguiri, which was repaired as I'll talk about it later. And Brazil, again, we had the issues in Cuiabá and the underperforming in CDS specifically. They continue to draw significant time and resources, but we are again taking strong steps, and we'll talk about that later, too.

So we're on the right track with good progress made. We're among the safest mining companies in the world. We've set up a clear path to reducing greenhouse gases. We've attracted world-class talent from some of the best companies in the sector, melding external perspective with the deep institutional knowledge inside the company. Obuasi we started safely and is ramping up as scheduled and will become one of the preeminent assets in our portfolio.

Our full asset potential program is working to counter the unprecedented inflationary headwinds and to even decrease cash costs, as we will see with Sunrise Nevada, we basically, in a very short space of time went from nothing to now -- we expect by the end of the year to have around 14 million ounces of resource declared. Right now, we are identifying a target of 6% to 8% in Merlin.

We've more than replaced depletion in the past 2 years. We proposed a combination of our Iduapriem operation in Ghana with coal fields, creating the largest gold mine in Africa. And we're now working to close a transaction that will in a single clean step align our corporate footprint with our operating portfolio, giving us a primary listing on the New York Stock Exchange, while maintaining important listings in South Africa and Ghana.

Next slide. I will spend some time on this slide. And this is the reassessing, let's say, of the portfolio, and you will see we subdivided into Tier 1 assets, Tier 2 assets and other. Starting with the Tier 1 that are self-explanatory, but you can see 1.7 million ounces of production a year at total cash cost of $940 already sustaining of $1,200. So that would situate you along as, let's say, first quartile of big assets in the world in all metrics. It accounts for 80% of the EBITDA of AngloGold and 75% of the mineral resource. So long life and very competitive assets.

Let me go over each one quickly. So Geita is performing well. We did have an issue in the first quarter just as scheduled maintenance, but we expect to make it up. So if you look at H2 production, we expect to be roughly repeating what we did last year. Last year, in H2, we did around 300. We'll do probably a little bit less than that, but it will skew hence engage that to a 40-60 production. We've done it before. We will do it again. That will have important impact in lowering our cash cost and keeping our cash costs guidance as I'll talk about it later.

Obuasi -- we started with -- that will also have like a 40-60 split, probably a bit even more skewed. We did about 120,000, and we are saying and we're planning to do 180,000 in the second half. Last year, we did 160. But last year, we were, at that time, being able to hoist about 4,000 tonnes per day from the mine up, let's say, up from the underground. Right now, we're up to 6,000 tonnes per day with much more flexibility.

So the team on the ground, and we all -- the corporate team are confident that we'll be there or thereabouts in Obuasi. What does that do to cash costs again? If you take the first half and compare it to the half -- second half just on the sheer size of production. And the fact that about half of the costs are fixed, half of the costs are variable that would decrease cash flow in Obuasi by a significant amount in nominal terms, in real terms by about $160.

If you take then Kibali, Kibali seeks to repeat what it did last year of 180,000 ounces, so again, better production in H2 to H1. It will bring, we will also expect about 14,000 higher and Tropicana similarly. So that completes the Tier 1 assets that are the cornerstone of the company in the very near future.

Then you have the Tier 2 assets, those are the ones where probably there will be run more for cash. They will come in second in the rank in terms of new capital where the Tier 1s probably will have priority, but we will still obviously nurture them with sustaining the necessary sustaining CapEx. You start with Sunrise, and that's an interesting one. It was the first asset that we started the full asset potential.

And I've always been sort of reluctant to put a number to those programs because you hear a lot of companies saying we did 500, we did 1 billion, but then the profits never changed. In the end, what matters in the bottom line, and that's what we are talking about you today. Was the cash, we expect a cash costs of Sunrise to go down by 100 -- more than $100 an ounce this year. And you all see -- already see that in the Q2 results. So we're quite happy that, it's not the only reason, but clearly, a significant impact of the full asset potential on Sunrise.

Siguiri, it was an issue. We lost about 25,000 ounces because of the tank collapse. The team on the ground did a magnificent job in putting it sooner than we all expected, and we're now right back to normal operations. The metallurgical recovery is a bit lower than usual. But as we bring in 2 new plants that are finalizing, repairing it should go completely normal. The production is normal so expect to see, again, a better second half versus first half of Siguiri.

Cerro Vanguardia will be probably similar and Cuiaba. So Cuiaba we're quite happy. We will exceed the outlook on production. It is covering not only its operational costs, but it's also covering all-in sustaining CapEx in the second half. So we basically now stabilized into a, let's say, 120 -- maybe 140 to 70,000 ounces of so 2:1 ratio of concentrate to gold production and the cooperation of concentrate is moving quite well. And so it is not -- it lost money in the first quarter because we couldn't export any concentrate. But as we now normalize it, we are also expecting a much better second half.

And then we have the other ones. The other ones, we've said before [buys] AngloGold, but we are still responsible stewards. We want to obviously make sure that they are in the best handle in the -- but in CDS, what we've said is -- it's a complex mine. And at some point this year, we'll take a decision. We'll try to sell it as we did before. And if we can't, we will take other decisions by putting it in care of maintenance. No decision has been taken, but you shouldn't expect that, that is part of the AngloGold.

We expect it to be cash positive in the second half. It was slightly negative in the first half, but it's small in nature. If at some point any losses in the second half, it's back to, let's say, to covering for its own core. I think let me probably say 1 last thing. In Brazil, we were devoting, and just from a lot of gold experience on Valley. He will be the the SVP, let's say, the head of all of the Americas eventually including Nevada to do this in the best, safest and best way.

We have been a long time in Brazil, and we will do things like we always do in the right way. And we also have a new finance team, and so we're giving them all of the support and a lot of resources in this transitional period.

Okay. If we move now to safety, safety continues to trend in the right direction. It's cleared out to a clear safety strategy, where we emphasize on the few things that can have serious harm. That's the major hazards program, and it is so far working well. Our total recordable injuries are 0.9 per million hours. That would be a best -- top performance in the mining world, not only in the gold world.

Let's go to the next slide, and I will again, divide between Q2 and Q1, and then I'll give you some ideas of what we expect between H2 and H1. The second quarter was a much better performance from every point of view than the first quarter. I would have to say we're -- anyway, I will talk about market reaction, but clearly, we would expect that there's significant good news in the second quarter, and I'll try to tell you why.

Production was 12% better in Q2 than Q1. All-in sustaining costs were 4% lower in Q2 versus Q1. Net operation cash flow, net cash flow from operations was significantly better in Q2. So in Q1, we had net operating cash flow -- cash flow from operations at about $90 million. You can see that in the report. That moved to almost 300 in the second quarter. So a very big jump for -- both because of the greater production and because we have basically controlled and isolated the bulk of the negative impact in Brazil. So in Q2, we have a -- we're feeling much less the negative impact on Brazil than in Q2.

So that really -- probably the other consequence of this, if you look at free cash outflow -- it went from negative 160 to negative 45, and that's even with losing about 25,000 ounces of Siguiri, and we missed the latest declared dividend in Kibali. So we would have been roughly breakeven. So as we look into H2, I've already talked about production. So we expect significantly greater production in H2, and that has a definite impact in cash cost. We expect lower all-in sustaining cost, probably that trend of reduction of 4% quarter-on-quarter, we expect it to continue. And hence, that will -- we also expect to be positive in the second half in free cash flow.

So all in all, a much better H2 and more in line with what we are gearing the company to deliver. You will see more of the impacts of full asset potential and the other operations, other things that we are doing. Let me -- I'll talk later about Nevada. So let me just pass on to Gillian, and I'll come back later.

I'm sorry. We have a too many meetings. H1 production performance. Look, I think inadvertently I covered this already. So I think I will skip this slide, and I will go to the next slide, which is full asset potential, which I like quite a bit. So this is Sunrise Dam, and this illustrates very well what we are talking about. Very briefly, you see underground mines 200,000 tonnes of underground ore tonnes in the previous period and then the full asset potential goal of taking it to 250.

And you can see that we have already reached around 240. So what does that mean? If you look at 200,000 tons, the cost per tonne are about $100 when you move to 240, the cost goes down to $80 a tonne. So a very significant drop. These are the -- we have 5 or 6 of these that, in the end, translates into the $100 for cash cost per ounce reduction that we expect to see and that we are already seeing in some ways in 2023.

Let's move to the other one. These are the Geita tonnage, but something is dissimilar. One of the key initiatives was to improve underground output to 1.4 million tonnes per annum bringing forward high grade ore and increasing mild feed grades from Nyankanga underground. The immediate focus is to increase cemented backfill rates to a low earlier mining of secondary slopes. We've also redeployed 3 from store and come into Nyankanga to increase of tonnes.

You will remember me flagging the processing opportunities that Tim identified last quarter all of which have implementation lead times as we do studies at order equipment. Since implementation, we've seen improving run time with new crushing screens and additional cyclones and that we should then see tonnages lift from 5.6 million tonnes per annum to 5.8 million tonnes per annum. And we've seen a very strong lift in metallurgical recoveries from 88% to 92%. There is still more to do, but we're starting to see the early wins at Geita.

Let me talk about our commitment on renewables. We entered into an agreement with Pacific Energy to construct and operate 62 megawatts of wind and solar generation capacity at the site. Pacific Energy will construct a renewables project and continue to operate a combined renewables gas power station under a 10-year purchase power agreement. Once complete, the project is expected to deliver a 50% reduction in overall natural gas consumption. The capital cost of constructing the renewable infrastructure will be incorporated into the ongoing power costs charged to the Tropicana JV partners.

The project is decided to maximize the emission reduction, while maintaining power costs at current levels. The project is due for completion in early 2025 with on-site construction expected to commence in the second half of this year. I will hand now to Gillian.

Thank you, Alberto, and hello, everyone. Let's first take a look at the macro environment and its impact on our business. Gold price closed in Q2 at around $1,920 an ounce up about 8% year-to-date, with price received in the first half, up 2% year-on-year. We have 135,000 ounces or just under 5% of our production hedged with a 0 cost collar option with a floor of $1,950 the net ounce and a ceiling of $229 an ounce. And this is essentially in place to protect the downside in price risk at our Brazilian assets.

On inflation, we do see some easing albeit significantly higher than the same period last year, specifically in some of our key jurisdictions. So you can see there, Ghana, Guinea, Argentina and even though Australia has come down slightly, still very high and particularly in Western Australia where we operate. You may recall, we anticipated 6% inflation for the full year of '23 or current $98 an ounce on the half.

In currency, we do see continued weakness in the Aussie dollar, the Argentinian peso, the Guinean CD, and this improves our cash cost by $48 a mix. Oil prices, as all of you will know, has continued to come down across the year. We have a hedge in place for about 40% of our consumption at $89.20 a barrel under realized loss of $5 million year-to-date.

We look at the key financial highlights. We ended the first half of '23 with revenues of $2.2 billion, up 3% from the first half of '22. Adjusted EBITDA was $678 million in the first half versus $864 million for the first half of last year. This is mainly due to increases in inflation, as I mentioned, higher operating costs, higher investment in exploration and evaluation as we've planned and then environmental provisions related to new legislation in Brazil as well as legal and project fees related to our corporate restructuring. This is partially offset by higher gold sold and the higher gold price.

H1 headline earnings were $139 million or $0.33 per share compared with $300 million or $0.71 per share in the first half of last year. Net cash inflow from operating activities was $293 million versus $992 million year-on-year. Remembering that half 1 of last year, benefited from the release of the $460 million cash lockup in Kibali

After accounting for growth CapEx and corporate-related expenses, we recorded a free cash outflow of $205 million for the half. Adjusted net debts of $1.2 billion was $454 million higher year-on-year and reflects $230 million for the acquisition of Nevada assets. Adjusted net debt to adjusted EBITDA was 0.74x at the end of the half, below our through-the-cycle target. We've declared a dividend of $0.04 per share on the back of our improving cost and production profile through the remainder of this year and our commitment to generate positive cash flow performance.

We take a look specifically at our cash costs for the half. We ended the half with cash cost of $1,189 per ounce, 11% higher than the same period last year. We then flex for macro factors that I mentioned earlier. We've seen an increase of 6%, and that includes the impact of the one-off tank failure in Siguiri and also the impact of concentrate sales at Cuiaba. In underlying performance or the things we control, we had a number of moving parts. Three key areas in volumes and grades. So Kibali, lower recovered grade of 14% due to changes in mine sequencing, partially offset by higher tonnes milled. Geita, lower tonnes treated of 8% during the half compared to the same period last year, and that was in line with our plan and the shutdown that was scheduled February -- in February this year. And then Tropicana, lower recovered grade of 2%.

We did have offsetting cash -- sorry, I forgot about the strong improvement actually in volume and grade at Obuasi and Sunrise Dam. So Alberto spoke about Sunrise Dam, higher recovery grade of 9%, really demonstrating the embedding of full asset potential and that Obuasi, higher gold production due to the continued ramp-up higher underground throughputs, resulting in 39% higher underground tonnes mined and also the recovered grade increased by 11% year-on-year.

On cash costs, we did have a few prior period impacts related to insurance and legal fees on a tax audit and then we also had lower cash costs coming through actually from lower strip ratios in some of our assets and also some cost relief in the regions. As Alberto mentioned, in Q2, we saw a robust improvement in cash costs and we're showing that in the bottom slide, which -- sorry, bottom chart, which shows despite the tank fail at Siguiri, Q1 and Q2 improved and provision was affected again by the one-off events Siguiri as well as working capital needs during the transition to concentrate sales at Cuiaba.

Comparing the outflow of $205 million versus an inflow of $471 million for the same period last year, the Kibali one-off payment of $460 million is obviously the biggest factor. On top of this were the higher operating costs that I just spoke to as well as $50 million change in working capital against the prior year. The primary drivers of working capital movement in the period with the movement being $186 million relates to -- predominantly to the concentrate sales at Cuiaba, inventory on hand and debtor's balances. Just remembering that we actually didn't -- we shipped our first vessel in April of this year.

We expect most of our assets to improve operationally in half 2 and to benefit from some tailwinds on input costs. We're also working really hard to turn the tide in Brazil, as Alberto already mentioned. And to really improve that cash flow position that has impacted us by $140 million in this half. Okay. I think that on free cash flow.

Okay. So balance sheet and liquidity. The balance sheet continue to be solid. We have long-dated debt maturities, low leverage and $2.3 billion in liquidity, including cash of over $700 million. Adjusted net debt, as I already mentioned, $1.2 billion, 6% higher than Q1. Leverage of 0.7x remaining below our target. The group's corporate restructure with the change in domicile and primary listing location is expected to close in September and is anticipated to result in a one-off transaction cost just below 5% of market capital on the day, obviously, depending on share price and exchange rate at that point.

Finally then, we go to guidance. As Alberto mentioned, we're reconfirming our 2023 guidance. Based on our first half performance, we do remain on track to achieve this. Production is planned to be second half weighted, roughly 40-60, consistent with prior years. We also expect unit cost to decline in the second half of '23 as we see fuel and input prices continuing to come down, and the temporary production stoppage in Siguiri not recurring. We have a clear plan to improve our cash conversion and overall cash generation in the second half. And these -- with the efforts and the focus on Brazil, we anticipate managing within our current guidance. And with that, I'll hand back to Alberto to conclude.

Thank you, Gillian. So moving to Nevada. Our position in the BT district has the potential to produce north of 300,000 ounces of gold, multi-decades at, let's say, high-900s all-in sustaining costs. As a reminder, we've declared 8.4 mineral ounces of mineral resource across the tenement. And what you see today is the enormous potential for growth is outstripping our earlier expectations

Our improving understanding of the geology, the structures and operation in the area, is helping us to identify new targets and increasing our confidence of what this property will deliver. We've now successfully consolidated the Silicon Merlin complex after integrating the ground acquired from Coeur. To date, we have drilled more than 200 kilometers across both properties, which we now refer as the expanded Silicon project.

Next slide. Completion of the feasibility study for the North Bullfrog project is anticipated by year-end. The feasibility study is proposing an open pit mining alternative using both gravity, milling and heap leaching or ore processing. Results from recent mineral resource conversion drilling are being incorporated into an update of the minerals resource model. This model will be the basis for the final optimization of the feasibility study. Permitting processes are underway for the North Bullfrog project and environmental baseline studies are being reviewed by the agencies for completeness.

Federal and State Permitting Processes are expected to formally commence during the first quarter of 2024. Now this is the expanded silicon project that covers the northern and southern deposits of silicon and Merlin, respectively. As I said before, we fold the core Sterling project into our land package and has allowed us to optimize the inferred mineral resource drilling program, targeting in particular, the Merlin resource. We're incredibly excited about the results from this drilling so far this year for the mineralization at Merlin open in several directions. You can see the drill holes and more than, again, 50 kilometers in that tenement.

The section shows a representation of the extent and size of the deposit, along with some very exciting intercepts. You will obviously take your time to look through this cross-section in detail. But I'd like to point out that you will see 285 meters at 3.3 grams per tonne, 250 meters at 2.5 and just over 100 meters of 2.4. We are now using this latest information to update our geological understanding for input to a conceptual study and initial mineral resource declaration anticipated at year end.

We disclosed an exploration target in Merlin alone of 6 million ounces to 8 million ounces, and we expect to formally declare that resource by the end of 2023. Given the considerable and growing potential of Merlin, we are integrating the silicon project into the expanded silicon project. This will capture the synergies from increased economies of scale and integrated infrastructure with potential for large-scale mining.

Moving to the JV in Canada. We continue to work progress with the proposed joint venture between our Iduapriem mine and Gold Fields' Tarkwa mine in Ghana. This complex will have an estimated annual production of more than 300,000 ounces over the first 3 years, and it will have a large effect after that when we formally have the JV to optimize the mine and to probably have numbers that are already [prohibit] right now. So -- but we have a reasonable confidence of how big and how good it will be in the first 3 years. So it will have [sales]. It will become the largest gold mine in Africa.

We expect reserves on the proposed joint venture will exceed the sum of the reserves for the stand-alone operations given the extent of the anticipated operational synergies. The structure is straightforward, assuming the necessary approvals are received and incorporated joint venture will be established with Gold Fields in Ghana. At the end, it is proposed that the government of Ghana will have a 10% stake in that entity, with AGA holding 30% and Gold Fields 60%.

We have begun discussions with the Government of Ghana to ensure they have an understanding of the combination and its benefits for all stakeholders. We will continue this engagement and look forward to concluding it in due course.

Focus areas. As I've said before, 2023 remains a transitional year for us. We remain focused on making more improvements and on delivering more consistent results in line with the targets that we have set out. The full potential program is working as intended. Our Tier 1 assets are performing well with improvements in the pipeline. We're focused on further optimizing our important Tier 2 mines and determining with our stakeholders the best forward for our remaining assets.

Obuasi's ramp-up continues to progress. We have the right people and the right organizational structure in place. We're focused on improving operational and capital efficiencies. Our world-class exploration team continues to add value through the drill bit across our properties. Our technical team continues to progress on Nevada opportunities, and we're working to optimize our corporative structure. We expect, as I said before, a second half that is cash positive, more than 200,000 ounces increasing production versus H1, lower cash costs that would put us within guidance and lower all-in sustaining costs that will be within or very close to the guidance that we have put out in previously.

Next slide. This is a new one entry to the slide. Since the beginning, I alluded to the priority of closing the gap between, let's say, the top 3, 4 mining -- gold mining companies in the world and ourselves. When this journey started AGS, cost inflation was at the top end of the peer group. As you can see in the slide, in the last 12 months, we moved first to the mid point and then to the lower end of the range.

We know there is more work needed to do even better and ultimately to bend our cost curve downward, but we're quite expect to continue this trend of regaining our cost competitiveness and to close even further the gap. How will we do that? We will continue our full asset potential that will deliver results Obuasi going in 2025. And in the long term, we will, as I've said before, streamlined the Brazil operations. That will be an important part. And finally, in the medium to our cost competitiveness.

Let me discuss our corporate restructuring briefly. By now -- the corporate structure was announced on May 12 and will provide AGA with a U.K. corporate domicile and transition our current ADR listing in the U.S. to is move [Mineração] transition of our portfolio over several years. and matches our corporate footprint to that reality [at most] value gold miners, to increase the size of our sell-side coverage universe and improve our overall strategic, let's say, 18th of August

A refresher on the before and after corporate structure tools business as we put in place the new UK underlying shareholders as AngloGold Ashanti immediately prior to implementation no change of economic substance, the current AngloGold Ashanti group at now a 2x and Ghana. Relevant approvals to implement the proposed transactions have been obtained from the South African regulatory authorities annual growth required from other jurisdictions.

As we mentioned in May, there are anticipated to be one-off costs in implementing the proposed transaction, compromise gap. These costs, primarily taxes in South Africa were broadly in line with the change in market value and will be funded from available cash resources. And other, we talk about the largest cap for gold market being the U.S., but it's important to see what it looks like.

This is, by any measure, the largest and mostly 66% of it is in the United States, U.K. 23%. Rest of the World, 4%. Europe 7%. So I guess, you will see -- when we talked that we are underrepresented in the largest pool of gold capital, this is what it means. So we believe there's in particular -- when you look at their holdings across the universe of North America, we see a lot of headroom to lift their positions as we transition...

(Operator Instructions) Catherine Cunningham of JPMorgan.

Just 1 question for me. So I appreciate -- [Technical Difficulty].

Look we -- we still expect inflation. So when we talk about this guidance, and it's interesting, we too see that in Q2, and then we fully saw inflation in Q3. So as you move into Q3, just by the denominator effect, you would expect 7% to 7.5% increased inflation for the full year. Then again, the issue with guidance is you have to meet it, whatever it is and we plan to do it also by the effect of the significantly higher production that will bring down by, again, at the normal required to substantiate what I have said before.

The degree of volatility in your business and probably aligned for the full asset potential as well. And I mean, I appreciate the comments on the call that you seem to have quite a high decremented this year by the one-offs at Siguiri and Cuiaba and I guess that's why when you have free cash flow negative quarters like the first quarter and the second quarter to grow that the turnaround is working. So I guess my question really is when do you think we might get to a stage where you have less volatility (inaudible) buy into the investment case at AngloGold. So that's my first question.

My second question is just around costs. And you've got quite a nice waterfall chart in your pack, where you outlined the noncontrollable factors and the one-offs. I think Siguiri and Cuiaba were about $20 an ounce each in the first half of the year. I'm just trying to understand the amount of those costs that would be repeated into the second half of the year. And for example, if you don't manage to sell all of your concentrate at Cuiaba, would we see some of those costs potentially in 2024 as well?

My last question is on Slide 33, regarding your restructure. I think you've got a table on the left-hand side. And I guess my takeaway from this is that you're almost telling us that it doesn't matter in those indexes. And potentially, if you don't get inclusion in Russell 2000 either, that there still is quite a big pool of capital in -- to take positions. So have you had any discussions with some of these global investor #1 to #15, who you think might be interested in your stock? I'll leave it there.

Thank you. Okay. Look, there are some things that you can control and others that you can't, at Siguiri. As I told the team, you will always strip this how you stand up and they did a very good job. Yes, I wouldn't -- I'm not happy that losing 25,000 ounces, but I'm very happy that everybody was safe and that they fix it so quickly, and they were back to normal. So that volatility, you can never really do anything about it.

Brazil, it's been an issue for a while. And it takes some time you can shrink yourself into greatness. So you try to fix things, but at some point, you take decisions and say, okay, this is the way forward. And that's what we're communicating with you today. I expect that in the -- let's say, in 2024 with the Tier 1 and Tier 2 assets and the Tier 1 being much, much more predictable we will go back to -- historically, it's a 45%-55% split. It's always like that. This now for those 3 assets, it's going to be like a maybe 42% split a little bit more skewed, but there's good reasons as to why.

In Geita, there was good reasons as to why, in Obuasi were ramping up and in Geita -- and I'm sorry, in Geita, we were doing scheduled maintenance. And Kibali, probably it also has its seasonality. So I think that investors should have confidence that there's always that seasonality in 45%-55%. And what you probably -- what we're going into so much detail is saying, well, we are expecting an increase in production, driven by things that we have done in the past. We've done it in Geita. We've done it in Obuasi and we've done it in Kibali. So there's no reason why we won't do it again.

So I'm -- I probably would see it a bit different than you if people understand the business and understand what our seasonality is, I think, that we should be fine. But I do agree that when you have too many things, we had the issues in Cuiaba. We have the issues of regulators and then you have an issue at Siguiri. There's a bit more volatility than you would want to. But that's -- I'm just trying to convey that the very solid reasons why H2 will be better.

Let me ask Gillian to help me on the cost one, she has it very clear.

Yes. No worries. Thanks for the question. So I think we see Siguiri and Cuiaba as truly one-off, and I'd like to just sort of help you understand why we see that. So firstly, in Siguiri, as Alberto has mentioned, the team have successfully recovered and they're coming back -- that come back online. And we see this as a sort of one-off event that happened in the first half

For Cuiaba specifically, what you just need to remember is that the team needed to mobilize very quickly from a mining processing, refining business to concentrate sales. And so in the first half, they needed to very quickly mobilize set out logistics, pathways, storage facilities, negotiate with the port, arrange contracts with traders. So very much almost sort of new sort of business operations needed to be thought through.

And so that had a cost associated with it in the first half. They have successfully built that capacity in Cuiaba and they have -- we run 3 trials before we settled on a contract with the trader and which we have done. We feel relatively comfortable with the pricing mechanism that we have in place and also with the terms to help us kind of release the cash flows and optimize the working capital in the second half.

So for those 2 reasons, we sort of see both of those items as absolutely one-off impacts and not to be repeated in the second half and also not impacting our 2024 performance. So I think that's probably all of it.

Yes, that's it -- thank you. On the restructure, I'll ask Stewart to help you, but overall we expect in the medium to longer term with quite positive inputs and also our own plant in the short term, there's going to be pluses and minus. But there is...

Yes, I think your characterization, Jared, was pretty much there. And correct that MSCI will keep us the transaction and neither is it something we control. But to repeat, Alberto, we're still positive in the medium to longer term that the indexation -- and so I think we are reasonably comfortable of the fact that there's a latent demand there for us to tap into once the shift is made.

So maybe I've got 2, 3 questions. First on the property in Nevada, the Bullfrog. How much -- can you remind us again how much wiIl (technical difficulty) run to date, you are almost back to that now to 2016 or so level, which was -- what is driving this? What seemingly is coming out as a deterioration in your business.

It's that asset quality deterioration. Well, I know you've got your full potential program, but why not empty it up, why take it an asset at a time? Why not make the decline in this quality of asset that mainly is coming through your results? That will be all for me.

Talk about the results of the feasibility study in North Bullfrog. And we will anticipate what we can say of the concept study. And we'll talk more about CapEx. What we have said today is that these -- what we anticipate is low CapEx, [leaching] some mills, but nothing low side. What we do know, what we have said is that we -- when we model the whole sort of district is really -- these are not complex projects. Look, on the all-in sustaining, I'd probably categorize it different. There is inflation. We can't be hold accountable for inflation, like no other mining company can. We have a few advise you to look carefully at that graph that we put in our all-in sustaining costs and you can see how [Technical Difficulty].

(inaudible) conclude the question?

Two questions, please. Firstly, for Stewart (inaudible) perhaps address my query around credit ratings and whether the redone mining and whether you have identified any obvious opportunities?

Just I think it's your rating to your sovereign wherever you're based. So the -- you will trade -- you cannot trade more than 2 runs away from the best and fastest way to a credit rating changes to just stick with what we're doing, improve margins, improve costs and keep the balance sheet.

We were -- yes, we were being held back. So in time, I do expect that we should improve, as we continue to deliver.

We got how Alberto is characterizing the portfolio. We have a set of Tier 1 world-class assets. And -- and so that's both from a finance perspective, of course, but also from a technical perspective, I believe in the future of results at the end of the year.

Thanks, Gillian, and we look forward to that, too. Thanks.

How challenging do you think this sort of result of Sunrise Dam is going to be to replicate across the portfolio? Is it a case that a lot of these measures in exploration. I'm just interested, given the kind of nature of gold mining and gold assets. How are you thinking about the right amount to be spending here [Technical Difficulty]

Given a team led by a very experienced, let's say, veterans in the company and continues. (technical difficulty).

One that I would highlight is on plant recovery, metallurgic recovery improvements. And that's what I see that we're increasing the recoveries from -- and it's enormous. If you go from Sunrise 82 data, everything around increasing efficiency of transportation, be it underground -- so they're relatively sort of not rocket science, but they do take time implementing. This one, in particular, commonality and learnings that we quickly that this team that is, let's say, in weekly cumbersome greenfields. And that team has earned its money. Every -- on average, the -- the objective is to discover a Tier 1 every 5 years.

And this was -- this particular acreage of silicon was out of -- you couldn't claim it because it was under a nuclear we could buy Corvus and pay the premium on Corvus because we were going to have shared infrastructure on their acreage and our (inaudible) and we've moved right to look at ways to probably optimize the $280 million. So -- is that the right amount or that we could spend a bit less, but that's part of the -- that's what an operating model does and the focus on a probably company lens versus an asset lens will do.

The next question comes from Leroy Mnguni of HSBC..

(technical difficulty) and then if you were to close them today, what would that cost you? And then a lot of internal cash -- is there a scenario, where you decide to use equity instead? It does make sense to use your equity, especially if you have credit agencies trying to (technical difficulty).

Leroy -- so look, they're different. (inaudible) that will move in the second half and we're already seeing it in, let's say, in July into a breakeven. It lost not a lot, about $15 million, $20 million in the first half -- but still, we don't want to have any low -- the fact that they become, let's say, breakeven in second half takes a lot of the pressure out.

In the longer term, it's just the size, it's not the size of a company like ours. But if there is no buyer, we're going to keep it open. We're going to keep producing and we'll continue to be good stewards. We have a good team on the ground. So there's really no rush. CDS is a bit different. It's very high all-in sustaining cost of close to 30,000. And and really difficult to improve production. So we have to take a decision this year. We haven't taken the decision.

We would love to be able to sell it. And there is some interest again in some companies that would probably be good stewards. So we will keep trying to do that. But what I've said is that you don't expect to have that 1 particularly as an ongoing concern in, let's say, towards the end of the year. So we would have done 1 or the other. Because at this stage (technical difficulty).

I will now hand back over to Mr. Stewart Bailey for a question from the webcast.

(technical difficulty)

We continue to optimize. It is a great project, and we will build it 1 day. Unfortunately, the country is in a big turmoil you can see right now -- it just makes it very difficult to get any right now a permission. So we continue to engage with the government progress because it's -- there's the mention of mines change. It's new. So it's -- right now, probably no news. It's still, I would put it -- it fits well with the sequencing of CapEx, the big CapEx of Nevada will come, let's say, in '26, '27, '28 and then Quebradona would come in. That's my expectation. But at this stage, I can't give you any update.

All right. Alberta, that's it. Any closing remarks?

Look, the closing remarks is I hope that we were able to convey why Q2 was much better than Q1 and why the things that hampered us in Q2 and partly in Q1, Brazil, Siguiri are now in a much better state and why we have confidence that our Tier 1 assets our big cash providers will have a much better second half, Kibali, Obuasi and Geita. So we're confident on our H2. We're confident on our guidance.

We don't take our guidance slightly. Last year, we were probably the only 1 of the big companies that kept guidance. We work hard on credibility. And so when we are putting out and saying, we will keep guidance on production, we will keep guidance on cash cost -- and on all-in sustaining, we say, we think we can, but if anything, we're a little bit higher, but only a couple of points. It's because we value and we respect again, our stakeholders and we want to keep our credibility. So we have confidence that we can do that. And I hope that we have given you the details to underpin that confidence. And I hope we can guide it. But anyway, -- thank you all, and we'll again look forward to Q3 and seeing you again. Thank you.