Within 1,000 km, from basically Bulgaria across to our new asset in Bosnia. At Ada Tepe, which ran for seven years, running at $500 an ounce all-in sustaining costs, roughly 100,000 ounces per year. It's really set the stage in terms of free cash flow. That's going to be our next phase as we have both Vareš and Chelopech. We also have project assets in Serbia, which we're looking forward to realize into our near-term production. Just stepping out a little bit, very proud of our production track record. We're now 11 years meeting guidance. We've had a great deal of success in terms of discoveries in the areas that we're in. European presence, I think, is underestimated.
As Christian was saying, there's a lot of skills, a lot of young talent that's coming through, and we're happy to be taking advantage of that, building a company on that youth. Finally, we have a high margin business and capital discipline, which is going to support our growth profile. Just moving to that, on the left-hand side, you can see the increase in gold equivalent ounces until 2027. You'll notice as well that we'll have a slight reduction, which is indicated here in our three-year guidance in 2028. With the discovery that we found 15 months ago, underneath our existing asset at Chelopech, we're now anticipating that reduction in production is going to be eliminated, and we'll actually be adding high-grade ounces into the production, both in 2028 and also supporting our growth activities in 2029 with Čoka Rakita.
On top of that, we've had a great deal of success over the last few years with four different discoveries, one of which is Čoka Rakita, a kilometer to the north, Dumitru Potok, which has large-scale, high-grade copper-gold opportunity. Then more recently, we've discovered the Wedge Zone, which I talked about, plus, most excitingly, a porphyry underneath our existing operation at Chelopech, which has some real scale potential and some grades which I think are quite out of the ordinary. Just moving along a little bit. I've talked about the discovery. Our exploration team has done an absolutely amazing job of really looking at what we can find within our existing assets. As a consequence of that, have found four of the top six discoveries globally since 2024.
If you added Čoka Rakita to this, it would be probably six out of eight, because Čoka Rakita has at least two discovery holes that are at or above these grades. In the region, there's lots of 10-million-ounce-plus deposits, and therefore, there's good reason to keep looking over and above the discovery that we've found. If you have a look at the translation of value, discovery cost in Serbia on the Rakita camp at all levels is $20 an ounce. At the moment, we're at feasibility level, and what that's doing is it's translating into, for Čoka Rakita, a 33-fold increase in attributable EV per ounce on an asset that's at feasibility, and eight for Dumitru Potok, and expecting that we're going to see a similar sort of realization of value as we advance Dumitru Potok.
I think, as Christian was saying, and what we've seen, this is an area that's underappreciated in terms of capability. Typically, people have looked at the Balkans as maybe emerging market opportunity. But if you have a look at here, it really tells you that we're underestimating the capability. Lots of industrial skills available, plus technical knowledge, which is going to support quality production, high margins, and innovation. We're happy to say that that innovation is both well accepted and easily implemented relative to other places that I've had the privilege of working in. On top of that, if you have a look at the tax regimes, the average tax in the three areas that we're in is 12%. If you compare that to other regions where there's a lot of mining, clearly that's very attractive.
I'll just close in terms of this first part before I get into the exploration, talking about what we've been doing with the free cash flow we've generated. First, a good example of the cash we're generating is that September last year, we completed a transaction where there was $430 million of cash as part of a $1.3 billion transaction, clearing roughly $200 million of debt. We've recovered all of that, and our cash position is back to where it was a year ago, despite the fact that we returned $146 million as a combination of both dividends and buybacks last year. To this point, we're showing $91 million, which is a combination of $17 million of dividends and the balance buybacks.
We're accelerating those buybacks based on what we see as the value of our organization, and we're up to $121 million excluding dividends to the end of last week. Our all-in sustaining costs, as I'd mentioned, we're managing to maintain high margins and intend to continue doing that. Čoka Rakita, which is set to come online in 2029, will deliver at $644 an ounce all-in sustaining cost. The Wedge Zone, which has a lot of similarities to Čoka Rakita, where we've still to demonstrate the initial resource and what that's going to look like in terms of its potential. This, as part of our existing operation at a level 250- 300 m below our existing mine, should have similarly high returns. All-in sustaining costs should remain low relative to our peers. Just wanted to talk about the pipeline.
It's become quite congested recently, which is a very nice problem to have. I talked a little bit about the Wedge Zone. We will start being that we'll be able to generate production stopes to bring in towards the end of 2028, and we will see material, even at the average grade, more than three times the grade of our life of mine plan at that point. Displacing tonnage has a material impact. What we'll be doing is we're expecting then to be moving that to more into a normalized production position in 2029. If we have a look at Vareš, successfully brought that through commercial production, and they're now looking to demonstrate at the metallurgical facility full production in Q4. We're already at that level in the mines.
Very happy to say that we've very successfully identified and developed local talent, where all of our senior leadership now, with the exception of the general manager and some minor support, are local talent from either Sarajevo or locally within the area around the mines. If we're looking at then what's going into the future, I mentioned Čoka Rakita, but Dumitru Potok is behind this. Dumitru Potok is a contact skarn that I'll show you. We're anticipating that we're going to update the existing resource estimate in Q1 of 2027 and bring that to a PEA towards the end of 2027. Then the porphyry south in Chelopech, this is our most recent discovery, where we only started drilling it in January this year.
There, we're looking for resources at an initial estimate in the second half of next year, PEA early in 2028, and looking to move that towards a concession in 2029. There's two elements to that, partly in the concession, partly out of the concession. We will be advancing both in parallel. Let's touch on the assets a little. If we talk about Chelopech, it's been in operation since 1932. When you talk about tier 1 assets, this was clearly a tier 1 asset. Might consider it reaching the end of its mine life. It's been an 8- 10-year reserve life, as long as I've been with the company, and that's 14 years. We're now set to dramatically transform that. Runs at 2.2 million tons per annum. Has the capability to increase with relatively minor capital from that to 2.5 million tons.
Currently operating at 185,000 to 215,000 GEOs per year. We're actually set to step down to 160,000 as we get to 2028, and that's as a result of the grade reductions I was talking about when I was referring to Wedge Zone. This has always operated in class 1, tier 1, all-in sustaining costs. If we come then to talk about some very specific assets. I've mentioned Wedge Zone. Here are a couple of intercepts which give an idea of what we've got. So 68 m at 7 g a ton, 81 m at 8 g a ton. In the upper parts, we're seeing consistent high grades, in this case, shown as 58 m of 15 g a ton.
If you can imagine, what we're going to do is we're going to ramp to this from the bottom of Level 151, just below the area where we have the crushing and conveying system. We'll use that in order to have the ability to do some exploration from cuddies that we'll develop along that decline in order to look for other wedge zones. The reason why I mention that, initially this was thought to have been displaced, and it's why we looked where we did. Subsequently, the assessments that our geologists have done have shown that it looks to be formed in situ. There is not a single drill hole 300 m north, south and 3 km east, west. Therefore, lots of potential if this, in fact, has been a secondary formation for this type of material.
Another sort of comment here is that this is very similar to the high sulfidation epithermal material we have in the rest of Chelopech that contains enargite and tennantite and therefore arsenic. That will continue to go through a facility as we currently have, which will produce a concentrate which goes to certain smelters. The porphyry, on the other hand, which we started to look for most closely. I will zoom this back out in a moment. Here is Wedge Zone. As you will see, there is really no drilling in this area here and 3 km into the page. There clearly had to be a source for this new target. Now we have identified that there is something been formed at a couple of hundred meters below the existing resources and reserves. Targeting this particular area and using some methodologies to find the high-temperature zones.
There was work done from Chelopech where we found this phyllic to potassic transition, but the rig that was used was unable to get us into this to any degree. It was decided to move to a different pad from surface, and in January, we started drilling from here. At roughly 1 km below ground, we transition through that phyllic to potassic interface. If I zoom out, you will see the results in the second bullet point here. This is originally 712 m at 2.49 g a ton. We had another 300 m that had not been analyzed at the point that we reported on this. Happy to say that when we analyzed that, we got to 1,054 m at 2.49 g per ton. That finished not outside of the resource. It finished because we were at the mechanical limit of the drill.
The second hole is the top bullet, and this was just recently reported, 760 m at 3.3 g a ton, including the last 138 m at 5.7 g per ton, finishing in 6 g per ton. Again, limited by the mechanical capability of the drill, not the end of the resource. Therefore, we intend to put some more higher capacity drills in here in order to understand what is below this. I will give you another slide in a moment showing how we are exactly targeting that. At this point, this looks like a footprint with 500 by 500 by 1 km depth at least. If we sort of move on, I just want to show you this first, which has Wedge Zone as part of the overall footprint in gold of Chelopech.
You can see the relative size of this and why we are excited about the fact there are no drill holes down there. The reason for that is historically there was thinking that there would be nothing below sea level. The circumstances of formation were there, therefore no point looking, let us say, more than 100 m beyond the bottom of the existing Chelopech asset. Moving a little bit down then to what is going on with the porphyry.
First of all, we are working in an exploration license, which is at a stage where we are applying for a commercial discovery. Now that is completed, we are actually moving the drill rigs to focus inside the concession and working towards the Chelopech ore body. Happy to say that the last drilling that we reported indicated that we were in fact finding that this extended inside the ore body, so inside the concession.
If you look here, the goal at the moment is to understand how much further can this actually go in towards the constraining fault on the north side of the Chelopech ore body. In terms of targeting, we have done some work, which actually came about as some of the magnetite that we found in the holes as we were drilling down towards depth. What we found is a signature here that suggests a strong magnetic core just below the extent of where we have been drilling. Our intent is basically to extend the drilling from the depth of where we are now towards this magnetic core. Lots still to come from here, but this is obviously a very significant occurrence. These types of grades are very unusual, in this part of the world, or in fact, I think pretty much anywhere else.
You do not find too many assets like this. We are very excited in terms of the future. Just to sort of step back, there will be two parts to the future of Chelopech. The first part is continuity of the existing production, perhaps an expansion to that production with material which will go through the mill and generate an arsenic-containing concentrate, gold, copper concentrate. The other part of this will be a porphyry source, which will produce conventional concentrates with no issue in terms of deleterious elements. You have got these two different sources and something that is worthwhile looking at just for terms of reference. If you have a look at Chelopech, and if I were to zoom out and look at the town of Chelopech, what we can see here, looking towards Sofia, this is Chelopech, the lee of the hill. This is Chelopech town center.
This photograph is actually taken from the mayor's building. If you look in the distance on the right here, we have the second-biggest copper smelter in Europe. Therefore, lots of synergy in the area and benefit from finding something that is generating critical metals, as well as some other materials which are suitable for facilities here and elsewhere. Just coming back then to the other activities that we have got going on. If we had talked last year, we would have been focused entirely on Serbia. We have been adding to that information. We have had about four months of drilling after we got into the second three-year phase of the license in the Rakita camp. Happy to say that our focus in terms of extending Dumitru Potok is yielding some interesting numbers.
300 m away from the current extent of Dumitru Potok, we found 50 m at 3.68% copper at a level of roughly 1 km underground. There has been a number of other showings that were unusual relative to the initial findings. This is a good example. This is Rakita North. It is a little offset and under Rakita at roughly 1 km. Here just recently, we found something in an area where we have been expecting maybe 1% copper equivalent combined gold and copper. Here, 76 m at 2.66%. Much more to come from Serbia. If you look at where we are, this is the Rakita deposit that we are anticipating bringing into construction starting next year and operation in 2029. I talked about Dumitru Potok.
Everything that I've talked about so far is only 1 km to the north, and we still have a number of other targets up to 5 km north of this. Lots still to do in terms of our understanding. At the moment, if we go back to the resource estimate that we produced towards the end of last year, we started with 84 million tons, with 64 million tons of that in Dumitru Potok. Clearly, that's got the potential to expand and be a second major facility, a tier 1 facility, in Serbia. Just moving to Vareš, we acquired Adriatic Metals last year on 9/3. The goal here was to take the good work that had been done and translate that into a fully operating facility and develop local resources. Happy to say that we demonstrated all of our preparation for Čoka Rakita.
The operational readiness, we simply took those people and took them to Vareš to refine the practices we have ready. What that translated into was the capital development, where there'd been a struggle to achieve the rates of advance that were being looked at. Within eight weeks, with exactly the same people, we were at those advance rates. Where we are now is we've met exactly what we were looking for. This is the overall life of mine. We are now at the bottom of block 2. We're at the end of block 3, and this gives us a number of opportunities to support not only our outlook in terms of tonnage and ounces, but also our exploration opportunities, of which there are some material opportunities on the northwest of this property.
What I'll do is I'll maybe come back to the sort of news that's going to be coming out in the near future. We continue to work aggressively on our exploration. This year we'll spend $70 million on exploration. In the three-year outlook, we'd estimated that would drop back to 40 next year. Fully expect that to be at $70 million or more. Clearly, we've been generating some real value from that work. This is the pattern of activity, but what to watch for are obviously the resource estimates and the PEAs that come with that. Recognizing I'm almost out of time, I'll pause there.
Great. Any questions for David and his team? David, just picking up on Vareš . You've described it as a transition year. We're going to start working on some of these opportunity costs to bring that cost structure down. Just wondering how much of that is unit cost related, how much of it is volume related, and how can we look through 2027? When you mention things like mining method, reconciliation, dilution control, how do those factor into the cost structure?
You are quite right that it is a combination of volume plus opportunities in terms of reduction in some of the cost contributors. If you look at cement, currently we are using cemented aggregate fill, and we will be translating that into a paste fill. That will save considerably on cement, which is one of our main drivers. We are still working through to get the local workforce fully into position. That will also reduce costs as we reduce the amount of expats. Efficiencies and operation through the mill now as we get to full tonnage, they will give us a clear indication of what else we might be able to do. Sorry, the second part of that question?
Yes. Whether mining method and/or dilution control will factor into some of the cost savings.
Absolutely. Yeah. One of the things that we were asked often was, when are we going to go to an increase in tonnage? But in fact, we have been focusing on quality over quantity, particularly in the first year. What we said by going to bottom-up mining from top-down mining is we expected a reduction in dilution, and we have seen exactly that. It has been one of the key contributors to the grades being at or above what we expect it to be. Reconciliation is a process that has just started, but at this point, we seem to see a positive reconciliation to what we expected from our reserves and resources.
Well, that is great work so far. Please join me in thanking David for his presentation.