Are these two Tier 1 mines. In the middle is our Côte d'Ivoire asset. It is two mines that we treat as a complex. As a complex, they have been producing in the range of 180,000 ounces per year. That number will increase to over 200,000 ounces per year. It is short mine life, but we have now made new discoveries that are already improving in proven and probable reserves, and that continues to increase. That will extend mine life. At the opposite ends, the barbells, are these two Tier 1 assets. We have one in Ethiopia. That mine is just starting production. We are just a little behind where Koné is, but we expect to do our first gold pour within the course of the next couple of weeks, ramp up to the end of the year, and be in full production for 2027.
For the 15 years of strategic mine life that we have based on proven and probable reserves, resources, and where we have identified new ounces in inventory. At the opposite end of the continent of Africa, in Mali, is the Sadiola mine. It is a Tier 1 generational mine. We carry a large inventory of ounces, and it has been producing for at least a generation and will be producing for a generation to follow. A little bit then on the performance of these mines. As I said a few moments ago, we do produce from our Sadiola mine in Mali and from our Côte d'Ivoire complex. We produce in the range of 385,000 ounces-425,000 ounces per year. That is our guidance for this year. In the first half of the year, we produced 193,000 ounces. We are on track to meet that 385,000 ounces -plus.
We have said that the second half of the year is more heavily weighted to the first half of the year, and the fourth quarter is the heaviest weighted quarter of the year. There is a little bit more that occurs over the course of this year then. We also expect to improve costs in the second half of the year. We are running at about $2,200 all-in sustaining costs from our producing mines as they transition into better operations. By the end of the year, as I mentioned, we will also be in production at our newest mine in Ethiopia, and that is a low-cost producer, as I will mention in a couple of moments. We have a strong financial position, strong backing from our shareholders. We have a new shareholder in the company with Zijin Gold owning 9.2% of the stock and with a cash balance.
Our pro forma cash balance is at the end of the second quarter with the money that came in from the Zijin investment of $487 million. We spent about $36 million on exploration, and the reason for that, for the small company that we are, why we spend that much on exploration is that we are making new discoveries. Even with the long life assets that we have, we expect that we will continue to extend those long lives. A little bit then on the mines. What can we say about Kurmuk? Kurmuk is not yet in production.
We are literally around the corner on the start of production. Wheaton Precious Metals got a special endorsement in the last presentation because they financed the growth of that asset. Well, they did the same thing here, and we are very appreciative of the hard work that they put in in their due diligence. This is not a promotion for Wheaton Precious Metals, but it's an endorsement that this is a high-quality asset that will produce what we say here. We expect to produce 240,000 ounces- 270,000 ounces next year.
The average for the first four years of mine life because of a higher grade closer to surface from the two initial open pits is 300,000 ounces. Life of mine production of 240,000 ounces, and we expect that to increase. All-in sustaining costs that are in the range of $1,300 per ounce. That is assuming a $4,200 gold price. That all-in sustaining cost includes royalties, and those royalties reduce at a lower gold price and increase at a higher gold price. At $4,200, roughly where we are, we expect to produce every ounce of gold at $1,300 per ounce. Proven and probable reserves at 2.7 million ounces. That number continues to increase.
Our target mine life is 15 years. What have we done to get it into production? We're on budget. We're just a little behind schedule by a few weeks, but we expect to be there very soon. We've already advanced our mine plan. We're in mining. We're capturing grade. It's reconciling on tonnage and on grade. We have a stockpile on surface of 2/3 of where we expect it to be when we're in full production by the end of this year, with 1 million tons of ore stockpiled on surface. We're in the commissioning process, but heck, the most important part here is we're just about to start production.
When we start production, we have this substantial value creation with up to 270,000 ounces of production in the next year, an average of 300,000 ounces over the course of the four years beginning next year with an all-in sustaining cost that generates a margin to the gold price, the present gold price of about $4,200 per ounce. This is a big cash machine. I'm showing this picture just to show you the quality of work here. We talk about connection to the grid, but Ethiopia's power is about 97% hydroelectricity. They know how to build hydroelectric power plants. This is high quality. We are connected to the grid. We have put ore through the crushing circuit. We're about to start production, and our power costs are $0.04 per kWh .
Just for those of you who are Canadian in the audience, that's about 1/4 of the power cost that you pay in Canada. We're a low-cost producer, in part because for 20 years, we have a power purchase agreement of 20 years that we're carrying at $0.04 per kWh . At the opposite end of the continent, as I mentioned, is Sadiola. That's our other Tier 1 mine. Sadiola is going through a transition. I can describe it as a mine that has produced 8.8 million ounces over more than 20 years of production. It is transitioning from an oxide mine to a fresh ore, and we're going through the process then of accommodating that fresh ore with a plant that was not originally designed for it. It's a modular expansion. We've completed the first phase of that expansion.
That allows us to be able to get 60% of the ore by comparison to 20% from that fresh ore, more sulfide coming through that plant. As much as 70%, certainly 60% in that range, that is fresh ore. That is higher grade, lower recoveries, but that also increases production. We show here short-term production of 200,000 ounces- 230,000 ounces. That is what we are presently producing. If I go back three years to the first presentation we gave at this conference, we were producing just over 150,000 ounces, maybe around 155,000 ounces. So we are taking a very gradual approach to the transition of this mine.
Why it is important to talk about this transition that ultimately gets us to that 360,000 ounces that we show on the screen, and all-in sustaining costs of below $1,700, is because we are carrying an inventory of over 7 million ounces of proven and probable reserves, and that number continues to grow. That will be a big cash machine with a production platform that is larger than Kurmuk, about the same level of cash flow as Kurmuk. As I mentioned before in that barbell, in the center is this steak and potatoes complex, these two mines that produce each about 80,000 ounces- 100,000 ounces for an average of 180,000 ounces- 200,000 ounces. Again, if we go back several years ago, these mines were coming to the end of their mine life. We have extended mine life.
We are already carrying an inventory of about 1.7 million ounces of proven and probable reserves. At 180,000 ounces- 200,000 ounces, that gives us about 8 - 10 years of mine life toward a goal that we had set of a mine life. Earlier this year, we indicated that we can up that ante at least 10 years of mine life at 200,000 ounces- 220,000 ounces per year. Proven and probable reserves are already beginning to demonstrate that and will continue to show that these mines can generate production for a long life and generate cash flows. Exploration is important to this company. I talked about $36 million of exploration per year. Each of the three mines and projects carries different reasons for exploration. In the case of Sadiola, which you see to the far left, the objective here is to find more oxide ounces.
While we have a large inventory of fresh ore, those oxide ounces go through the plant even with the modifications, and they have higher recoveries. We are already carrying an inventory of close to 1 million ounces of oxides, and we intend to increase that. The other objective is to see if these open pits, because they are mineralized between the pits, can we create one large super pit that provides more mining flexibility and operational efficiency? In the case of Côte d'Ivoire, it is to extend mine life, and in the case of Kurmuk, to extend mine life, but also to take that 300,000 ounces per year for the first three years and carry it for a longer period of time. All of our inventory at Kurmuk is presently in two open pits, the Dish Mountain open pit and the Ashashire open pit.
We have mineralization in some of these other areas, and we are in a position to be able to say that we are already finding that that will be carried into proven and probable reserves over the course of the next year to 18 months. Similar to the two open pits, they carry higher grade closer to surface. So extending that 300,000 ounces per year for the four years for longer and extending mine life to that strategic goal of at least 15 years. We are an established mid-tier producer with a production platform of last year of 379,000 ounces. That increases next year to between 600,000 and 650,000 ounces, and we expect that number to increase further with the further modular expansions at Sadiola that take us to closer to 800,000 ounces between now and 2030. We have large scale, long life assets.
We have notable production growth, notable and more significant cash flow growth. While we have production growth, it is disproportionately more cash flow growth because all those new ounces are coming in at lower costs. We have strength in operational performance delivered on our growth projects. We have improved sustainability framework, strong financial position of almost CAD 500 million. We are increasing mine life, and we have further growth initiatives that will take that 600,000 ounces to 650,000 ounces next year to a higher level. Finally, let me conclude by saying that we have an attractive valuation. We are carrying a market capitalization of roughly CAD 4 billion - CAD 4.5 billion with a production platform, as I said, of already 400,000 ounces with that growth, with that improvement to costs, and with that improvement to cash flows.
In terms of upcoming immediate milestones and exploration update, that is important to us to show extension of mine life and all the reasons that I gave a few moments ago. For example, at Kurmuk, the startup of Kurmuk operations, then a very rapid ramp up to nameplate by the end of the year and full production next year. We give our Q3 results in early November, and we will provide an update in early November on what we intend to do with all of that cash flow. What is our cash distribution policy to shareholders?
With 16% of the shares held by management of the company, we bought our shares in this company. You can understand the importance of cash flow. You can understand the importance of cash flow distributions, and we think that is important for shareholders generally. The Sadiola next phase of expansion, that modular expansion that gets us to 7 million tons, that gets us to an initial 275,000 ounces by 2029 toward that goal of 360,000 ounces. We expect an analyst tour in the first quarter, probably with Sadiola, but certainly with Kurmuk. With that, if I can open it up to any questions that you have.
Thank you, Peter. If we do have some time for questions, which we do, please raise your hand and we can get a mic to you. I see one in the front here.
Hey, Peter, John Tumazos.
Good to see you, John.
Reflecting on your vast experience in Canada, South America, West Africa, now Ethiopia, Nubian Shield, how would you compare the literacy of the workforces, the fertility of the geology, the ability to do business?
Yeah. Let's start with the Arabian Nubian Shield. There's been much said about the Arabian Nubian Shield, particularly in Saudi Arabia. In Saudi Arabia, that Arabian Nubian Shield is covered by a layer of probably 40 meters of sand. As you extend into Egypt, Eritrea, and then into Ethiopia, where we are, there are surface outcroppings. There's gold literally everywhere, and you can see that gold. It's a prolific place for mining. Right now, we're carrying an inventory of 3 million ounces of resources, just over 3 million, 2.7 million, as I said, of proven and probable reserves. Publicly, we've said we're going to get to 5 million ounces. I think that that number is going to be higher than 5 million ounces because what we're seeing in our exploration effort is demonstrating that there are more ounces in these new deposits.
On your question of literacy, unquestionably, the literacy in West Africa for mining is better than it is in East Africa, certainly in Ethiopia, because Ethiopia does not have a culture for mining, and yet it graduates geologists, it graduates engineers. It does not graduate mining engineers. You mentioned South America with my experience, our collective mining management experience in dealing with Yamana Gold, the predecessor to Allied Gold, and what we did in South America. South America, 40 years ago, did not have the literacy that it has today on mining, and yet it has it today. We're doing is we're saying take those experiences that we've had over many, many decades, personal experiences and then cultural experiences, country experiences, and apply them to these parts of the world where that literacy isn't there.
An engineer is an engineer, and if we can retrain that engineer to become a mining engineer, then why not? We are more reliant on expats than we normally are in a place like Ethiopia, but we expect to wean ourselves off of that over the course of the next 18 months to two years. Let me make one more observation. Ethiopia is a country that has existed for 5,500 years. It is a culture that goes back to biblical times. There are biblical references to it. It is a proud nation, fast learners, entrepreneurial, and I would say the same is true for Côte d'Ivoire and for Mali as well.
There are lots of headlines about the things that are happening geopolitically in these countries, but there is an entrepreneurial spirit, and there is entrepreneurship, and they are fast learners. That is true in Ethiopia, and so we're taking that as an opportunity to say, "We can train you if you'd like to be trained," and then we are as reliant on locals as we have been in prior experiences in other parts of the world. Taking that South American and Canadian experience, and also West African experience and applying it to East Africa is going to deliver some very impressive returns for us.
Peter, I have a question. At CDI, we recently saw a 60% increase in proven and probable reserves, and that takes that reserve life out to 2030. Today, you presented a strategic mine life of 10+ years. How do we bridge that gap, and which of the exploration targets at CDI gets you most excited?
I called it a complex. It is two mines that are 17 km- 20 km apart with an access road between the two. Historically, the two mines were producing between 80,000 and 100,000 ounces per year, and they were small mines by the two prior owners. Combining them into one complex has given us a universe of possibilities. Let me unpackage and clarify what is in your question. In the case of Bonikro, the northern mine, we are already carrying an inventory of just about 1.4 million ounces of proven and probable reserves.
We can demonstrate there that we have at 100,000 ounces per year, that is its current nameplate production. We can demonstrate a mine life of at least 10 years and closer to 12 years. Agbaou is the runt of the litter at this point. We have changed the pit design. We have new areas of exploration near it. There is a possible underground opportunity at Agbaou. We have already extended mine life from roughly a year and a half in 18 months to four to five years, and we see line of sight to getting that to at least eight years.
Between the two operations then, a comfortable 200,000 ounces per year for 10 years. I called it 1.7 million ounces. Between the two, that is where it is at. A little bit more than 1.7 million ounces. If I looked at it and said 180,000 ounces per year, we are not yet at 10 years, but we are getting very close, and if we go back two years ago, we were nowhere near where we are today. 50% of our exploration budget has been devoted to Bonikro and Agbaou, to the CDI complex because of the very significant opportunity that it presents.
A couple of years ago, we would have valued it at a few hundred million dollars. But at 200,000 ounces per year, I always look at things from the perspective of what is the value creation. At 200,000 ounces per year, at all-in sustaining costs between the two of $1,800-$1,900 per ounce at a $4,200 gold price for 10 years, I cannot do the math fast enough, but somebody in the audience must have a calculator to be able to tell us that it is very close to $1.5 billion.
Finally, Peter, with the 45 seconds we have left, could you just mention capital allocation priorities, position, and how you feel about a dividend?
What a question to leave in the last 38 seconds. We are about to generate some very robust cash flows as we optimize and improve existing mines, as I mentioned. Kurmuk is really the one that is the cash machine. It is this big cash machine, $0.04 per kWh , $1,300 all-in sustaining costs at a $4,000-$4,200 gold price, 270,000 ounces, an average of 300,000 ounces for each of the next four years, and I think that that will be extended. Again, I use the term I cannot do the math fast enough. That is a lot of margin, and at a tax rate of 25%, that is a lot of cash flow.
Our objective then is to say, look at that cash flow, give patient shareholders a reward. How do we deliver dividends? How do we do stock buybacks? We will have leftover money. That leftover money will be used for the other areas where we think we can increase production, and boy, do I think there are a lot of opportunities out there that we could be looking at the right share price when it is that time. You should expect that before the end of the year, we will announce our cash distribution policy, as we generate that cash flow.
Ladies and gentlemen, please join me in thanking Peter for his presentation. Well done.
Thank you.