Good afternoon and good morning, everybody, and welcome to AngloGold Ashanti's First Half Results Presentation. Before we get into the presentation, I would ask you to look at the safe harbor statement at the front of the presentation as always, which contains important information regarding the contents of this presentation and the remarks made around it. I urge you, please, to read it. We've got a full slate of presenters today as always at the half. So I'm going to hand over to Christine to make our opening remarks.
Thanks, Stuart, and good day, everyone. Regrettably, we recorded 2 fatalities over the half, the first at Sever Grant Mine in Brazil from our operations. We're implementing our revitalized safety strategy focused on the controls Needed to eliminate high consequence, low frequency events from our sites. We continue to invest considerable resources in understanding the root causes of all accidents and also high potential incidents or near misses in order to prevent recurrences. Our emphasis on COVID-nineteen remains on safely ensuring business continuity.
We continue to work hand in glove with authorities and local communities to provide healthcare support and also assistance in other areas that are feeling strained from the pandemic. Access to the vaccines is improving our operating In our operating jurisdictions, with all sites making good progress with about a quarter of our workforce having received their first dose, About 9%, mainly from Siguiri and Abuwasi have been fully vaccinated. Momentum is picking up and higher vaccination levels will be a significant plus for our employees and our business. Still, we saw an impact on the business from a production and cost perspective and with respect to moving people around to our sites. The first half has been challenging.
The ongoing pandemic has had a direct and secondary impact on production and costs. We also saw lower grades across certain operations and the suspension at Abuasi following the fatality in May. Graeme will cover that in more detail in a few minutes. These headwinds came amid a period of elevated investment, first to transition our Brazil TSFs to dry stacking and second to increase reserve conversion, at stripping and underground development. We completed 4 65 kilometers of brownfields drilling over the 6 months.
We're growing the Frankie orebody at Sunrise Dam and seeing high grade intercepts at Nayamulimo, Confirming the scale and growth potential of this open pit orebody at Geita, which will be in production at year end. 2021 2022 remain important transitional years with the added waste stripping and development alongside lower grades and stockpiles drawdowns. You'll notice that we relied on stockpiles more than planned at certain operations. At CVSA, we use them to offset the continued direct impacts of COVID-nineteen. At Abuasi, they feed the plant after the May shutdown.
At Sunrise Dam, we used them to supplement underground production given poor grade reconciliation, Which improved in Q2, but remained below plan. At Ideoprium, where cut 2 was delayed and at Geita, We underground tons felt short. So we see both the lower mined grades And the use of stockpiles as temporary. Our inward investment program will improve our flexibility And access to higher grades and increased vaccination rates across our business will alleviate pressure, Skills availability and efficiencies, allowing us to meet physical targets. There's also been significant pressure on costs related to the TSF transition in Brazil, But this will also be transitory as this program winds down early next year.
Looking at production, we produced 1,200,000 ounces for the half, which came with good improvements from Siguiri And also the solid performance from Tropicana. Reinvestments in our bigger assets, Gaeta, Tropicana and Ideoprim Have tracked well and remain on schedule. Brazil is working aggressively to complete its tailings conversion to comply with new legislation. The higher oil price was a key driver of inflation across the group, along with COVID-nineteen productivity and wage related increases. In Australia and Brazil, competition for key mining and related Skills, which we spoke to in May, remains a factor driving salaries higher and in some instances causing key personnel shortages.
COVID-nineteen impacted production by 42,000 ounces and all in sustaining costs by $54 an ounce. All in sustaining costs were also higher because of the higher cash costs and the planned step up in sustaining capital. Free cash flow was impacted by the lower gold sold and the higher costs, but also increased tax payments at the slow cash repatriation from Kibali. Net debt was down 41% year on year and gearing at 0.37 times, which sits well below our target. We've declared an interim dividend of US0.06 dollars On guidance, we revised guidance to factor at the challenges at Abuasi and the higher than expected costs we are seeing, and Ian will unpack that in detail.
The Abuasi suspension is clearly a setback, but a necessary one as we look to set up the mine for a very long term future. We remain confident of its long term value proposition. At Quebradona, we Completed the feasibility study and the environmental and mining applications are with the authorities. Detailed engineering for early works And finalization of contract pricing for mine access and earthworks are continuing in the meantime. Lastly, the proposed acquisition of Corbus is firmly aligned to our strategy of growing ore reserves, at building low cost production and generating sustainable returns.
And with that, I'll now hand over to Iain, who will talk to the financials.
Thank you, Christine, and good day, everyone. First half production was 120 3,000 ounces or 9% lower year on year. We saw solid production performances at both operations in Australia, at Kibali, Idioprem, GATA and CVSA. Obehasi progressed its ramp up efforts despite COVID challenges until suspension of production on 18 May. Adjusted EBITDA decreased by 15% to $876,000,000 from $1,040,000,000 last year.
Total capital expenditure increased by 33% year on year to $461,000,000 This was driven by a 56% increase in sustaining CapEx to $311,000,000 mainly due to the higher The sustaining CapEx spend rate of $2.56 per ounce was achieved, below our estimated $2.70 to $2.90 per ounce level for the year but in line with expected levels for the first half. We saw a free cash outflow of $25,000,000 impacted by lower gold sold, higher costs and higher taxes paid, partly offset by the higher gold price. These impacts sorry, yes. We received dividends of $71,000,000 from Kibali compared to $54,000,000 in the same period last year, While our attributable share of Kibali's cash awaiting repatriation was $485,000,000 at the end of June, at free cash flow before growth capital. The metric on which dividends are calculated was $125,000,000 resulting in a dividend declared of $0.06 per share.
Our cash cost increased 30% $2.33 per ounce to $1.03 per ounce, reflecting lower grades, movements in stockpiles and gold in process at inflationary pressure. This year and next remains transitional once with increased waste stripping and underground development accompanied by lower grades and movements of stockpiles. Recovered grades are 10% lower year on year, with all operations reflecting lower grades except Sigiri, where grades were up 26% year on year, partly offset by a 6% drop in tonnes treated. All in sustaining costs were 33% or $3.31 per ounce higher at $13.33 per ounce on the back of higher cash costs and the planned higher CapEx on ore body investment and tailings compliance. COVID impacted all in sustaining costs by about at $54 per ounce comprising an estimated $51 per ounce in production impacts, mainly at Ouiacy, CVSA and in Brazil and an estimated net £23 in cost impacts.
The balance sheet remains in good shape. Leverage improved to 0.37x at the end of June from 0.73x a year ago. Maintaining a flexible balance sheet with a target ratio of 1x through the cycle remains our priority. The higher net debt over the end of 2020 at $850,000,000 Reflects the free cash outflow for the first half as well as the $197,000,000 dividends paid in March. Liquidity remains strong and continues to be to provide good flexibility in a volatile climate.
Cash is close to $1,100,000,000 at the end of June, with almost $500,000,000 of Kibali cash still locked up and excluded from this balance. We also retained our undrawn €1,400,000,000 revolver. The continuing suspension of mining operations at Abeasi, while sustaining and growth CapEx continues, will impact free cash flow for the second half. We have revised our guidance for 2021, necessitated by the Obehasi suspension, cost pressures from lower than planned production performances and additional unplanned CapEx in Brazil. With regards to inflation, We have been closely monitoring inflationary pressures across our supply chain and specifically key strategic commodities in an attempt to minimize the impact on our cost profile.
Existing contractual controls and high inventory levels have helped dampen inflationary effects in the first half. However, inflation started to negatively impact our costs in the latter parts of the second quarter as inventories were consumed and pricing on several commodities accelerated upward. Several categories of spend have come under pressure due to supply constraints and increased global demand, and we anticipate this trend will continue into the second half of the year as well as next year. The tailings conversion program in Brazil taking place amidst COVID challenges is increasing competition for skills and engineering resources and has resulted in an increase in the investment planned to complete the conversion by the legal deadlines. We estimate that the Brazil's production outlook for the remainder of the year will be affected by an estimated 15,000 to 20,000 ounces as a result of the skill shortage affecting the completion of these conversion efforts.
CapEx to complete the program is now estimated at about $120,000,000 to $130,000,000 at an increase of $50,000,000 from previously reported. Due to the current suspension of mining activities at Obehasi, the company withdrew production and cost guidance related to OBEAZE on 26 May. OBEAZE's estimated Contribution to the company's 2021 guidance was production of 300,000 to 350,000 ounces at an estimated total cash cost of $6.60 to $7.10 per ounce and an estimated all in sustaining cost of $950 to $10.50 per ounce. The mine produced 85,000 ounces in the first half of the year at a total cash cost of $9.99 per ounce and an all in sustaining cost of $13.16 per ounce. Since our current estimate is that mining activities at Obearcie will likely only resume towards the end of 2021, Any anticipated production contribution for the remainder of the year has been removed from the revised guidance.
Group guidance has been revised to 2,450,000 to 2,600,000 ounces of production at a cash cost of $8.90 to $9.50 per ounce, all in sustaining cost of $12.40 to 1,000 £340,000,000 and capital expenditure of $1,030,000,000 to $1,190,000,000 In addition to OBEA, further production adjustments were required for the anticipated Brazil tailings conversion impacts as well as other delays in production outputs, notably at Idioprine due to a revised mine schedule and at Tropicana due to the recent pit wall failure. Cash costs are impacted by OBEIC by $10 to $20 and by $80 to $90 bounce from the lower than planned grade and operational performance, higher oil prices at emerging inflationary pressures. All in sustaining costs have been revised by the cash cost impacts at an additional $10 reflecting further OBEAOSI impacts relating to all in sustaining costs. CapEx for OBEA see for the remainder of the year is included in the revised guidance given the continuation of work related to the redevelopment project. RBAC is expected to incur $35,000,000 to $45,000,000 of sustaining CapEx at $70,000,000 to $80,000,000 of non sustaining CapEx during the remainder of the year.
Overall, Revised total CapEx guidance is mainly impacted by the additional $50,000,000 related to the Brazil tailings transition. The split between sustaining and non sustaining CapEx has been adjusted because of the Tropicana Havana cutback classification as a growth project from 1 July onwards. Other operating expenses now include $50,000,000 for care and maintenance expenditure at Obehasi following the suspension of mining activities. Finally, The impact of OBRC on next year's guidance will be considered once the mine wide review is complete and the ramp up plan has been finalized. With that, I will now hand over to Sikelo to cover the Africa operations.
Thanks, Iain. I'll be providing an update on the Africa region's first half performance and give a progress update on our reinvestment strategies. Looking at our first half performance in detail, on the safety front, I'm pleased to report that Geita and Deguri remain injury free during the period. Globally, our operations continue to see both the direct and indirect impacts at COVID. Our top priority is and will remain the health and safety of our workforce in host communities.
Against the backdrop of some reduced operational flexibility, COVID-nineteen challenges at the Obuasi stoppage. The region produced 717,000 ounces at an all in sustaining cost of $11.57 an ounce. This temporary reduction in mining flexibility Was expected, given limited mining fronts during our reinvestment to access higher grade ore sources after the depletion of Nyankanga open pit at Geita and Cat 1 at Idwaprim last year. As a result, we have drawn on stockpiles this year to maintain production levels, placing temporary upward pressure on costs year on year. Looking at the assets in more detail and starting with Gaeta.
Production at Gaeta was exclusively from Star at Nkomet and Nyankanga underground operations supplemented by stockpiles. That's versus last year when we still had the benefit of the high grade Nyan Kanga ore. Gata's transition will see both the new Nyamalalimo open pit at Geita Hill underground operations fully ramped up in the second half of next year. Kibali recorded another solid performance coming in at 177,000 ounces aligned to the same period in 2020, with higher cost resulting from increased waste stripping and stockpile utilization. We continue to see improving results from Siguiri with 19% increase in production year on year.
This means we are seeing the investment in the combination plant yielding the desired outcome as we continue further to improve performance metrics. At Idwa Prem, performance was impacted by lower grades after the depletion of Cut 1 last year as we strip cut to and drawdown on stockpiles. After a record 274,000 ounces of production last year, Idua Prim is now stripping Block 7 and 8 to create a further decade of mine life. Obuasi Contributed 85,000 ounces before the suspension, which Graham will cover in more detail. Let's look at the reinvestment strategies in more detail, again starting with Gaeta.
Gaeta is undertaking 2 key projects. Firstly, the 1,000,000 ounce plus Nyamalalimu open pit at the Gator Hill underground project. These will slot in with the already established Nyankanga and Steyn Comet underground operations, creating a combination that will sustain a production rate above 500,000 ounces per annum once these two new at Dishin's rich steady state in the second half of next year. Starting with the Yamalalimu open pit. We have received all the mining and environmental permits.
We have also been able to execute open pit operations ahead of schedule based on excellent planning and preparations by the site team. We are scheduled to start hauling ore this month and will be in the main ore body in under a year. We are aiming at an average mining rate of 200,000 ore tonnes a month at 3 grams per tonne, greatly offsetting the loss of Nyankanga, and we believe there is more to come. To this end, we have extended exploration beyond the current pit to other targets in the Nyamalalimu district where we expect to declare further reserves soon. Geita Hill underground is just over a third of the way into an 18 month establishment phase.
We expect it to reach full steady state production in the second half of twenty twenty two, stably mining between 60,000 to 70,000 tonnes of ore a month from this long life deposit. We also expect to declare a maiden reserve from Geita Hill at the end of this year. In summary, By around this time next year, Geita will comprise 3 underground mines and an open pit mine, all at steady state filling the plant with fresh ore. In the short term, as planned, production is lower in costs higher than recent years as we focus on establishing high grade or access across the operation. In the medium to long term, both cost and production will improve as the 2 new mining fronts create sufficient mining flexibility to maintain Gaeta's position as a Tier 1 asset with long life of mine.
Siguri continues to improve. Production was up 19% compared to the first half of last year with a consequent improvement in all in sustaining cost. If we look at the critical parameters of the combination plant, which we completed last year, we are pleased to see recovery maintained at above 80% threshold. We expect further improvements into this year and next year as we bring in Block II higher grade oxide material. We are also happy to announce that the Block II project, which is a satellite Source approximately 40 kilometers away from the plant officially kicked off.
In fact, we expect to start hauling ore to Block 1 in the next few days. In summary, for Siguiri, with the plant primarily stabilized and Block 2 operations ramped up, the forecast for this site will shift to increasing life of mine. Accordingly, we have intensified our exploration efforts as we turn our focus to the remaining high at potential lease area, particularly the Block 3. As previously communicated, IGWA Prim's reinvestments fall into 2 areas. The first is the waste stripping in Block 7 and 8 with cut 2 expected to reach ore in early 2022.
Our mining strategy is to sequence the waste stripping such that delivery of high grade ore is consistent throughout the life of mine. Cut 2 will deliver ore from 2022 onwards, while Cut 5 and Cut 6 will follow 2 years later. To support this stripping program, we have signed a new 5 year mining contract to extract efficiencies and support delivery. The second investment area is a new TSF to match the extended Mine Life, which has been approved by the regulator and is expected to be operational by mid-twenty 23. This TSF will be developed in phases to optimize cash flow, extending capacity as needed to coincide with the life of mine.
In summary, we are confident that next year, Idua Prim will be back to the 230,000 to 250,000 ounces production level ranges going forward. In conclusion, we are working through this transition phase as we execute on our reinvestment projects. In the short term, we are incurring some transitionary costs due to lower grades and higher stockpile utilization. Looking at the second half, we will continue to focus on executing Yamalalimu open pit and Gator Hill underground projects. At Siguri, we will see continued improvements in the plant performance as we bring Block 2 open pit to account.
At Idua Prem, we expect to access Cut 2 or in early 2022 as we start construction of the new TSF. At Kibali. We will continue to work closely with Barrick to support operational performance and to secure cash repatriation. Finally, We are focused on executing on our strategy and improving our overall performance. We will stay the course to unlock the potential of all of our assets.
I'll hand over to my colleague, Ludwig, who will take us through the international portfolio.
Thanks, Gelo, and good day, everyone. The international operations faced a number of headwinds in the 1st 6 months as COVID-nineteen continued to impact our operations. Brazil, Argentina and Colombia were among the countries most impacted by the pandemic. This is reflected in the fact that 2 in 5 employees in Brazil have so far tested positive for the virus, contributing to the Brazilian Operations losing over 40,000 workdays to the absenteeism in 2021. The prolonged lockdown in Argentina continued to restrict the movement And border closures resulted in the shortage of skilled mining operators and mining staff.
This has intensified competition for mining skills and increase the staff turnover on our sites. This in turn has resulted in new workers entering the industry, This is having a near term impact on productivity and costs. Our COVID-nineteen mitigation protocols are firmly in place, And we remain committed to ensuring the well-being and safety of our employees and surrounding communities. We're supporting vaccine rollouts and expect us To gain momentum as the year progresses. By way of example, I'm pleased to report that around 50% of our staff in Brazil have received at least one vaccination.
Pandemic or no pandemic, our Brazil operations face tight regulatory deadlines to transition to dry stack tailings. This has required the installation of a new filter and water plant treatment plants and the mobilization of an additional roundabout 1800 employees and contractors to our sites, all with the necessary COVID protocols and safety procedures. Accelerating inflation, scope changes, skill shortages and supply chain disruptions have added to these costs in 2021. It also made it necessary to restrict plant throughput at certain of our operations to ensure we remain within permitted limits for tailings storage. I'm pleased to report that all operations are on track to complete the transition in early 2022.
In summary, the international operations saw marginally improved gold production compared to Q1 at lower year on year. Starting with the Americas, production was lower year on year on reduced output in Argentina and Brazil. The lower production and additional capital expenditure of $2.44 per ounce, mainly due to the tailings compliance and additional development and exploration drilling, push cost higher. AGA Mineracao reported similar production year on year, but with an additional 2 at $8 per ounce tailings investment. Cerro Grande's production was impacted by the high turnover of critical production staff Together with lower development rates with restricted access to higher grade ore.
We have since recruited this extensive critical skills and are seeing early signs of improvement. Capital expenditure, which was $4.41 an ounce higher than the previous year, In Argentina, Cerro Vanguard Performance reflects the impact of ongoing travel restrictions on underground and open pit mining. Mine plans have been revised to concentrate mining Mining ore to fill the plant, supplemented with lower grade stockpiled material. Shifting to Australia, Production was lower than the previous year, which reflects the planned decrease of around 20,000 ounces at Tropicana. Gold production at Tropicana includes a contribution from the new Boston Shaker underground mine, which ramped up to 182,000 tonnes of ore mined during the quarter relative to 140,000 tonnes in Q1.
Unit costs were impacted by lower production and strengthening of the Australian dollar, but these should normalize as underground production increases going forward. Looking ahead, we experienced a war failure in the Boston Shaker open pit in early June. This had no reserve impact, But we'll defer all delivery into the next year, given that the open pit is currently the primary fresh ore source. Despite achieving all the operating metrics and unfavorable great reconciliation that Sunrise Dam persisted during the quarter, The negative mine call factor can be ascribed to a specific area of the ore body mined over the last 8 months, and we should see improvement as we start to mine other ore bodies. All in sustaining cost for the period was consequently elevated at Southern Rose Dam, which has a relatively high fixed cost base.
The unit costs are expected to normalize in the subsequent years as production increases and reconciliations improve. Investment in exploration drilling continues to target the recently discovered Franke orebody within the Western Shear rams and extensions to the Voke and the Kheri Shear orebodies. The new higher grade gold and delicious open pit satellite deposit at Sunrise Dam achieved commercial production towards the end of the quarter on time and within cost budget. 1st, ore was delivered to the processing plant in Q2. And as volumes increased from Q3 onwards, Golden Delicious ore will displace marginal stockpiles for the remainder of the year.
It will continue displacing marginal stockpiles well into 2023. Golden Delicious is on track to achieve commercial production towards the end of the quarter and contribute around 3,000,000 tonnes of material at a grade of 1.5 grams per tonne. Staying with Sunrise Dam, we've continued to invest in the exploration drilling, Focusing on the recently discovery Franky orebody along with extensions to Vogue and the Keri Shea orebodies. These results are encouraging, and we delivered around 800,000 ounces of resource growth during the last quarter alone. Franky, which is shown on this slide, is close to both surface and current infrastructure.
We're drilling Aggressively and we expect to bring a small parcel of high grade ore into the plan by year end. Frank is open in all directions And we'll provide additional mining front to increase flexibility. There's also option to mine higher grade remnant ore from the Western Share Zone. The Boston Schoeke underground mine at Tropicana continues to ramp up production and is expected to reach full capacity later this year. At the trade off study to assist the optimal method of mining the deeper ore in the Havana ore body has determined that the final cutback of the Havana The Vela pit will provide superior returns to an early underground strategy.
A new underground drill drive has Also been developed after Boston Shaker decline to provide additional platforms to drill the northern extent and down below the Tropicana pit. Value results are promising and suggest the potential for additional underground mining areas. We will continue to invest in the exploration and look for Despite the operational challenges noted earlier, Keyhubar continued to invest in drilling and development to accelerate the grade control drilling and access the deeper ore body below the 20 level. I'm pleased to report that the Drilling has also continued in a new Discoboto ore body, which is situated within the existing mining license. In summary, it's likely that many of the current operational challenges will persist for the remainder of the year.
However, we have plans in place to mitigate the impacts on our operations. The operational focus for the second half of twenty twenty one remains unchanged and is to maximize the value By successfully converting the Brazilian tailings facility to dry stacking, drive operational excellence to improve cost, capital and efficiencies, Continuing to invest in drilling and development to improve mineral resource confidence and grow near term ore reserves to create flexibility in our operations. At progress new low cost projects in Colombia and Nevada and strengthening our focus on ESG by developing concept studies to With that, I will hand over to Graeme to cover Obuasi.
Thank you, Ludwig. Today, I'll comment briefly on construction progress at Obuasi and spend a bit more time on the outlook Following the tragic fatal incident on 18th May. Year on year, gold production For the first half increased as the project progressed with the Phase 2 ramp up. All in sustaining costs were $13.16 an ounce on relatively low production. Phase 2 construction was completed, also on budget.
I'll cover this in the next slide with a few photographs. Phase 3 establishment has commenced. This runs through to 2023 And involves the refurbishment of the KMS shaft, a new ventilation shaft, pump stations and other infrastructure. The purpose is to service the mine as the center of production moves north and deeper into Blocks 9, 10 and 11. The tragic incident in May has severely curtailed the Phase 2 production ramp up.
Mining operations were immediately suspended. As we were in ramp up, ROM stocks were limited and were soon exhausted. Minimal production is being maintained with the processing of reclaimed residues and the retreatment of some tailings. We are focused on understanding and dealing with the current issues and resuming the ramp up as soon as possible. This is a setback.
Nevertheless, Obuasi remains a high grade, low cost and long life operation. The final elements of Phase 2 construction were completed last quarter, including the pace fill plant, at the GCVS ventilation shaft and fans, the underground fiber network, a new high voltage switch room and power factor correction equipment, at the Adansi Rock Winder and Surface Drainage Works. In regard to the fall of ground incident, The incident occurred in the narrow hanging wall structure of Block 8 shown in this slide. Block 8 is one of several at the Obuasi resource and with Sansu is the main source of mining for this year. The Hanging Wall load is narrow and is being mined longitudinally compared with the main loads of Block 8, which are being mined transversely.
Putting things in perspective, Obawasi's reserve is 8,700,000 ounces. Block 8 contains 1,500,000 So approximately 20% of the reserve. The hanging wall is a small structure within Block 8 containing about 130,000 ounces. Samsu contains about 500,000 ounces or about 6% of the reserve. Now turning to the approach to the resumption of mining.
The investigation identified a range of factors that contributed to the incident. These include the localized geology, the geotechnical structures and historical mining and backfill in the vicinity of the sill pillar failure. ACORS was the unexpected settlement of backfill in an old stope immediately below the sill pillar footwall drive. The pillar then failed between 2 carbonaceous shears, which are narrow areas of very weak rock mass. Considering all the factors that contributed to the incident and due to the nature of the incident in a geotechnically designed structure, We're undertaking a detailed review of all underground work areas.
We have resumed work in the Obuasi Deeps decline and in several development headings. We've also resumed diamond drilling, service functions and underground construction activities. We are working with Australian mining consultants who have been engaged to undertake an independent review of the mine design, schedule and the ground management plan. This work has commenced with Block 8 and is progressing well. The review will then move to Sansu and then to Blocks 9, 10 and 11, Which will be mined from 2023, 2024.
The review of Block 8 is expected to be completed during this quarter. Following the implementation of the recommendations of the review and the incident investigation recommendations, mining is We are targeting ramp up to 4,000 tonne per day by the middle of 2022. But I should emphasize that the schedule for this remains work in progress, and we'll provide further updates as the work progresses. With that, I'll hand over to Tim to cover exploration. Thank you.
Thanks, Graham. Our generative exploration programs are active across the portfolio, We saw a significant increase in drilling meters compared to the same period in 2020. Positive drill results were received from Butcher Well in Western Australia and in Nevada with the study work initiated for the Silicon project and also at the New Merlin target near Silicon. Our mine site exploration programs continued their focused drilling programs while targeting increased mine life with ore reserve addition while balancing against mobilization delays and reduced crew availability in some areas related to COVID restrictions. In the past few years, we've consistently grown ore reserves in our mine site portfolio.
Our current 3 year focused investment program for additional mine site drilling and ore reserve development will continue to preserve these gains and provide a stable ore reserve base for the company. We are expecting another good year for ore reserve replacement in 2021 with mine sites That have been allocated some of the larger focused drilling investments such as Gata and Sunrise Dam forecast to lead the way. The early results of both sites have been good. We have an excellent record for discoveries in ore reserve conversion guided by our E-4B exploration management system with 19,200,000 ounces added to ore reserve within the current portfolio in the last 5 years. This averages 3,800,000 ounces a year at an all in cost of just over $27 an ounce.
On July 13, we submitted a non binding cash proposal for the remaining 80.5 percent interest in Corvus Gold after conducting a detailed due diligence of their assets. This proposal is aligned with our own organic Growth prospects to bolster our own organically developed exploration portfolio by combining neighboring properties with clear synergies. We see this district as one of the largest new gold districts identified in Nevada in the past 15 years. It will allow us over the medium and longer term to create meaningful low cost production base in Nevada. Corvus has completed PEA studies for its North Bullfrog and Motherlode deposits, which have a combined 4,200,000 ounces of gold, Production could start in the medium term from North Bullfrog before growing to one of our larger contributing jurisdictions by the end of the decade, Bringing low cost production in the medium to long term from our own exploration assets in the Mother-in-law deposit.
Our own due diligence suggests these deposits will be mined initially as open pits. They will be processed using heap leaching In gravity recovery where applicable, sulfide processing and underground mining could be evaluated in the longer term. We see direct synergies from economies of scale and integrated infrastructure over the enlarged district. And a combination would also allow for a streamlined engagement with federal, state and local shareholders to advance the sustainability goals and other district benefits. This proposal is aligned with our strategy of growing ore reserves in adding low cost and low risk production opportunities.
We're excited by this opportunity and we're confident that our proposal represents compelling value to Sure, Corvus' shareholders. I'll hand back now to Christine to conclude. Thank you.
Thanks, Tim. It was a challenging quarter, but the strategy outlined earlier this year remains intact. At its Core lies a disciplined approach to capital allocation and a commitment to a strong balance sheet to mitigate volatility. We remain committed to our investment to achieve growth first through low risk, high return brownfield options. Converting more of our endowment into reserve is key and we'll see steadily declining costs over the coming years as our investments bear fruit.
Our project pipeline underpins our production plans for the long term. Our capital allocation framework guides us in ensuring our investments provide returns well above our cost of capital. And our commitment to strong and improving ESG provides us the social license to operate across our base. We have our work cut out for us, keeping our people safe and well And supporting our communities through this incredibly difficult time is a priority. There is no getting around the fact that this was a tough first half.
We're committed to turning that around. We're driving operational excellence initiatives across the portfolio. A particular emphasis will be placed on operating and capital efficiencies, and we'll continue to look for appropriate capital savings. At Abuasi, we have 2 main aims. 1st, to finish the review and to safely bring this mine back to production.
And second, to continue our work on the project so that when we do get back up and running, the ramp up is as smooth as possible. As you all know, Alberto Calderon will join as CEO at the start of next month and many of you will know Alberto from his time at BHP. We held several high profile positions over a number of years, including line responsibility for its nickel at aluminum businesses. Prior to that, he ran Cerrojon, which is Colombia's biggest mining operation. Most recently, Alberto was CEO of Orica, the world's largest commercial explosives maker at a large multinational business servicing the global mining industry.
And both myself and the rest of the executive team are looking forward to this new chapter for AngloGold with Alberto as CEO. So with that, I'd like to open the call for questions.
The first question comes from Patrick Mann from Bank of America.
I just wanted to ask, looking at your revised guidance for the full year and excluding Obuasi, about a 20% increase on the rest of the assets, kind of half on half. Could you maybe give us a bit of guidance about where you're expecting to see the improvement? Or is it broadly across the board? Thanks. That's my first question.
Yeah, I think thanks for the question, Patrick. I think it's fair to say that we are expecting improvements across the portfolio. And like we said, we are expecting both improvements in production and grades, in particular coming through in the second half of the year. As you know, second half is more back weighted. But I think it's fair to say it's really across the portfolio.
That's where we actually expecting it to be. And of course, Obuasi is removed from the second half guidance.
Okay. Thank you. And then just more, if I may. In terms of the consolidation of Nevada and I mean, have you got any indicative time lines for us around feasibility, feasibility when we could maybe start to see more information around the potential of that region? Thanks.
Yeah. So I think, Patrick, one step at a time. I think, firstly, we will need to conclude at the acquisition on Corvus and then we'll be able to flesh out plans. But I think certainly in terms of concluding the feasibility and we'd hope to if it's successfully concluded get your production certainly in the medium term on Nevada, but we'll flesh that out in future calls.
Okay. Thank you very much.
Thank you.
Thank you. The next question comes from Jared Humber From RMB Morgan Stanley. Please go ahead, Jarrod.
Afternoon, team. Thanks for the call. A few questions from my side, please. And I think you guys touched on it a bit earlier on the sell side call as well, but just coming back to Obuasi, The sales failure seems to obviously have been due to poor quality backfill in the historically mined areas. Can you just give me an indication of the percentage of the result that's sitting in historically mined areas?
And do you have a ballpark number about what it might cost to supplement that backlog. I'll follow-up with a few more after this.
Thanks for the question. I'm going to hand over to Graeme To answer your questions. Thanks, Jarrod.
Thanks, Christine. Thanks, Jarrod. At the time of the feasibility study and committing to the project, we were well aware that fill would become a key feature or was a required feature The mine, that's why we've invested in a paste fill plant. Prior to that, fill use at Obuasi was rock fill and I'd write fill with and without cement. So it's a key feature of the ongoing mining process.
The extent of old workings varies across the mine. It's not constant at all. Block 8 is one of the more intensively mined areas. The lower part of Block A, however, is a new area. Sansu is an old mining area, And the cemented rock fuels currently being used.
As we move to Block 9 and Block 10, The level of mining in those areas is much less. And then we get down to Block 11, which is a quite high grade at deeper load, and that's a new area untouched at this point. So it varies across the operation. In terms of our approach going forward now, learning out of these incidents, it will be to test the quality of fill in that area through probe drilling, test for voids with further survey and downhole survey. And where needed to supplement the fill in the old workings and establish stable mining conditions.
That will be part of the overall mining process. I don't expect that costs will be materially higher. This will be an additional cost, but already the cost of ORD into those areas, the drill and blast of stoping, haulage, processing and G and A costs all included in the cutoff grades. So we're expecting costs to be more on the fringes and therefore not have any Material impact on reserve in Block 8 and certainly not in the rest of the mine.
Great. Thanks for that. So basically, it really just seems like there shouldn't be too much more OpEx. And it's really just a case of completing the review and timing getting pushed out, is there potentially any more CapEx we can expect?
I'm not expecting any additional CapEx from a construction point of view with the various facilities, no. However, because of the delay in the ramp up, there is a move of some operating or staying business capital into project growth capital. Ian might like to comment on that.
Maybe to add that, Jarrod, yes, the CapEx, as Graham has mentioned, is still within the total overall CapEx budget. The allocation between sustaining and growth is slightly different. As you go through the various phases and running up to commercial production. You treat the ORD development as growth. As you then enter into commercial production, you then turn it into sustaining CapEx with the delay now in Phase 2, more of the ORD development that would have fallen into the sustaining CapEx category remains in the growth CapEx category.
It's just not a reallocation, but just that's the way it works pre commercial production, post commercial production from an accounting And then I think the second thing is with the delay now, some of the operational costs because the mine is standing still drops out to care and maintenance, still being expensed, but it sits outside of the operating cost and cost of sale lines on the income statement.
Great. Thanks. That was very clear. And then 2 more on Obuasi. I think you also mentioned that There was some carbonaceous material that contributed to the soil failure.
So if that carbonaceous material is prevalent throughout the entire mining area, would that be something considered as a structural problem for Obuasi?
That's a feature of the mine. It's associated with the mineralization. It's been dealt with over many years. What happened in these circumstances when the support for the sill pillar was lost when the with the settlement of Phil in the sil pillar footwall drive. The sil pillar filed between 2 carbonaceous shears.
If that support was there, it wouldn't have failed. So it's just the point at which the Silpilla failed.
Okay. Great. And then would you be able to I mean, you've carved out FY 2021 guidance prior to the well, when the saw failure happened. Would you be able to carve out what FY22 what Obuasi metrics look like just to give us a steer on how we should adjust our guidance or adjust the guidance for next year.
Jarrod, a bit hard to tell at this point. I think better that we progressive with the work that we're doing, understand what the timing impact will be and we'll get a better handle on that towards the end of this quarter and we can report to that in the next set of So a bit early to try and push that out into 2022. Our aim is to resume Ramp up after we've commenced mining at the end of the year and get back to the planned production rate by the middle of next year.
Okay, great. And then I've just got one more question and then I'll hand it back over. I think your revised guidance points to, obviously, at improvements in grade across the existing portfolio. But if I have a look at your cash cost waterfall chart, it seems to indicate that there are a few unplanned issues causing lower grade, more stockpile processing. So can you just give us a feel for some of the risks in your portfolio that you're most worried about that could potentially translate into unplanned lower grade and unplanned further stockpile processing in the second half of the year.
Thanks. I'll leave it there.
Thanks, Jarrod. I think in particular, what we have done in the guidance, like you say, is we've removed Abuasi's contribution. But what we did do is also adjust costs, production being the denominator for both for inflationary as well as we saw risk across our operations Or more risk than what we envisaged. And so I think just as an overlay, we are expecting production improvements as well as grade improvements over the entire portfolio in the second half of the year, quite significant improvements to actually come through. And I think Where we have anticipated some risk, I think certainly and maybe Ludwig can talk to his area has really been at Sunrise Dam, we saw some grade reconciliation issues.
It was an issue in Q1. How ever it has persisted in Q2. However, we have seen improvements coming through, but that's where we've had to make at some risk adjustments in the mine call factor. For Sunrise Dam, at Tropicana, there was the pit wall failure. So there's some deferral of ounces that has been made in the plan.
Likewise, in particular at Ideopriem in Ghana, there was delayed access by about 3 months to cut 2. So there's been some deferral of ounces The by whole quarter into next year. And so those are sort of the main areas where there has been some risk adjustments, particularly with respect to grades. I think maybe Ludwig can just talk to that in his portfolio and just give a flavor there for international and then Sekilo can elaborate on that in Africa, in particular as relates to EDA Premium. Thanks.
Thanks, Christine. Thanks, Thierry, for the question. I think Kristine actually summarized it quite well. At Sunrise Dam, we've seen quarter on quarter 23% increase in the Improvement on the grade or the mine coal factor. And we have actually removed the previously positive mine call factor we built into our plans.
We've removed that for the rest of the year. So all the risks are basically built into at the outlook for the year. Similar to Brazil, we have actually Built in risk in our forecast for the year. Obviously, depending on the pandemic and how many We can actually get back and which is related to the vaccination rate and how we can drop out COVID protocols. That can vary.
So that could be positive as well if we can actually see improvement on our absenteeism. Thanks.
Thanks, Gerard. Also, I think Kristine summarized it well. We have factored in the risks in our outlook for this year as well as going forward. Particularly at Geita, we will be seeing flexibility coming back as we begin to haul off from Yamalolemo starting now in August. So that will and minimize the, I guess, the reliance on stockpiles.
The same at Sikuri as well with the Block 2 also coming in now in Q3. That's going to help to improve on the grades. The impact at Idwa Prem is really weighted in the second half of the year because of the access delay for about 3 months in cut 2. However, that impact has also been factored into our outlook. Thanks.
Thank you. I'd like to hand over to Stuart for questions from the webcast.
Thanks very much, Claudia. So the first question is from Catherine Cunningham at JPMorgan Chase. So the first is, you mentioned 24% of the workforce has received at least 1 vaccine and 9% fully vaccinated mostly from Sigiri and Obuasi, which regions have the lowest vaccinations. I would say that Tanzania is a sort of clear laggard in that regard so far. And but that is improving now.
I think from really a standing start in the last few weeks. First shipments of vaccine have arrived this week. And actually the President, which is a huge improvement, the President was actually vaccinated on live TV. So we hope to see some momentum building there pretty soon. The other thing is that so far in Australia, not that vaccination it's a big issue in Australia, but the rates are typically lower than elsewhere in our portfolio, but we expect that to start ticking up as well.
The other thing just to note is that Latin America in particular is building momentum and you can see some of that coming through the next from Catherine as well is which regions have sorry, 42,000 ounces production impact in H1, what has the impact been in July, August? I think a bit early for August, but maybe I'll just hand over to Ludwig to talk a little bit about what he's seen in July and then to Stelo.
Thanks, Kevin, for that question. Look, I don't have a number on that yet. But what we've seen in Brazil is less absenteeism. We previously saw up to 4 50 people being absent per day. We've seen anything between 20 to 80 at the day in the last month.
That's a year to improvement. It's most probably on the back of the vaccines and also as things stabilize In Brazil. Is there a follow-up question?
I think we'll just quickly in what you're seeing in Continental Africa at the moment is you are seeing some an uptick in COVID cases generally across the continent. I think that is largely to do with the Delta virus, still overwhelmingly asymptomatic at the moment. So, yes, a little bit early to tell yet, but certainly some cases ticking up, but Catherine, sorry, Christine, you were going to add something?
Yes, I just want you to say that with COVID, It's also the 2nd order with indirect impacts. I think that we're still seeing and expect that to prevail. I think Like we said 42,000 ounces in production, but of that I think 27,000 ounces related to Bawasi, the balance related to CVSA as well as Brazil. And so I think in CVSA in particular, it's still operating at the 60% to 80% production capacity level. So I think we will expect that to prevail Sort of coming through because we haven't really seen that improvement coming through.
And in Brazil, like Ludwig said, That will that is evading, but it still remains a risk. On costs, you've got at that impact coming through. So we've given you $20 that's about $20 $23 an ounce, which actually relates to costs. That's a scientific sort of calculation best estimated, but it's all those indirect impacts we that it is having I think Ludwig spoke to the levels of absenteeism, but I think with the restrictions specifically on movements between provinces And also the impact on expat rotation. It is harder to do and people are not willing to sort of rotate, they'd rather stay in their home province or in their home country.
It does actually cause at that inflationary pressure to come through because you're having to pay more to either attract those people or retain those at people or the skills that you have. And so it's really the indirect impacts of COVID that does remain a risk. And we're trying our best through the operational excellence initiatives to mitigate that risk as well. But you'll notice that in the guidance that we put out, COVID-nineteen does remain a caveat for the guidance.
Thanks very much, Christine. The third part of Catherine's question is, in Australia and Brazil, where you cite wage pressure, what is labor as a percentage of costs in those regions, Ian?
So to give you a sense in Australia, the labor Component is approximately 20% of the total costs. And in Brazil, the labor component approximates around the 35%
I think just to contextualize it further The percentage so the increases and where we're seeing the pressures, it's not across the entire labor category. So it's a percentage of that 20% or 30% at cost categories. So it's really on the critical skills, the technical skills, where those critical shortages are applying and that's where we're having to put retention incentives and wage increases in place.
Thanks very much, Christine. Next one from Ahmad Hakim from Oasis says regarding your revised guidance, what level of cash cost per ounce and production do you expect to realistically achieve in H2 with inflationary pressures still expected to persist as well as the Delta variant possibly continuing to impact production.
So I think we've put out the guidance there and we're comfortable with the range and that it's taken into account the risks that we actually see at the moment. I think COVID, like I said, is excluded from that, that we've put out. So I think when it comes to what we have accounted for in the guidance is inflation and as we experiencing it currently and I think in particular, we have revised the cost guidance to take that into account. You'll notice that we have increased the oil price assumption And exchange rate assumptions in the outlook that we've actually provided. And like I said, it's our best estimate.
I mean, the iron is competing for critical skills and so the costs as we foreseen it is certainly factored in more on the labor side. But What we are also seeing is that there's the increase in steel prices, generally the increase in commodity Prices that actually does impact the grinding media, the reagents, spares, tire costs as well. And then there's the increase in logistics costs. And so how we're trying to counter that is, yes, we understand we in certain instances our price taker, but how we're looking at mitigating it is through our operational excellence initiatives across the various regions that we do operate in. Our best estimates in the numbers.
Thanks very much, Christine. The next one from Tania Jakusconek from Scotiabank. Tania says, can you provide more clarity where you're seeing inflation? What percentage is in labor, what is for explosive steel, fuel, cyanide, etcetera? Are you seeing inflation in transportation?
And are you seeing the same 5% to 6% inflation similar to your peers? Ian?
Yes. So Christine has alluded already to that and and what's our prices on the consumable side. But just to give you a little bit more sense of that. With regards to steel pricing, it will affect grinding media and underground support. And on grinding media, depending on which continent we are operating, to see increases anything from 5% to 15%.
On the explosives side, up to 8% increases in explosives. And to give you a sense, ammonia input pricing for explosives has increased as much as up to 70% in the first half of twenty twenty one, which will then start to come through on the explosive pricing. With regards to spares, increases up to 6%, tire costs increases up to 12%. And then as Kristine alluded to a significant amount of logistical issues on the supply chain. Globally, port congestion and shortage of containers is coming through.
We're expecting to see longer lead times, especially on spares and the availability thereof and then also other very specific country impacts on the supply chain at regulatory approvals and delays at ports in certain countries. And then specifically to South Africa, at the recent civil unrest that we've experienced is putting some pressure on the ports and it's an important port for us for our African operations. And I hope that gives a little bit more flavor on the consumable side.
Thanks very much, Ian. I'm going to go back to the phone line. And Claudia, if you don't mind, I think Adrian Hammond is next up in the queue.
Yes, yes. Thank you, sir. The next question comes from Adrian Hammond from SBG Securities. Please go ahead, Adrian.
Good afternoon, everyone, and thanks for entertaining all our questions. Clearly, a tough set of results, and I have quite a few of my own, But I'll be quite candid, if I may. Firstly, you acknowledge that you could do better and Perhaps you can expand where mistakes were made in H1 apart from the issues at Abu Wasi. And where does accountability sit? Certainly, your share price is reflecting that things aren't right.
Secondly, on Obawasi, are you not maybe perhaps throwing good money off the bat with this asset, Given that since inception, you bought this thing for $600,000,000 you haven't ever generated a free cash flow profit except for A couple of $1,000,000 in 20.1011. Crude losses now total $2,000,000,000 You've just convinced your shareholders that pursuing this mine with another $500,000,000 investment is the right way to go. You now have another unfortunate event, which has delayed this further out. Is there not perhaps
Thanks for those questions, Adrian. And like we say, we expect more to come. But I think in particular, Your observations regarding what did we underestimate, what did we get wrong in the first half? And I think let's just contextualize it. I think certainly the first half is always softer compared to 2nd half and this is no different from what we've seen in the past.
What we have guided to for this year and next year is that these are transition years. So in particular, contextualizing it is we are in reinvestment years. So There are a number of big projects that we're doing across a number of the mines in the portfolio. So when you look at Gaeta in Tanzania, we've got 2 big projects there. We've actually got the Gaeta Hill underground And we've got the Namu Lima open pit.
Both of them are actually transitioning. We've got the Tropicana at cutback that we're doing after Boston Shaker Underground was actually completed late last year. And so clearly, that's also ramping up. At Ideoprium, we've got the cut too. And so that's progressing according to plan, but there was a delay in access And there are some uncontrollable factors there.
I think particularly, there were some community issues and Sikela can talk more to that. And then of course, Sunrise Dam, these are great reconciliation issues. It's all body issues. So I think from what you've heard from both Sikelo and Ludwig earlier, I think see these as transitory. It's not it's a timing issue.
And so first half compared to second half, you will actually see at improvement, but it is a 2 year transition strategy. It's a reinvestment strategy and one could say that in the past we did we could have done some of these reinvestment projects earlier, but it is where it is and the mines are at a point where they are constrained and we do actually have to progress the reinvestment strategy to have improved flexibility, improved grades And so that we also can sustain production there going forward. So of course, as a management team, we hold ourselves fully accountable for delivering on the reinvestment strategy, but it's important that we're not measured on a quarter or a half year. We've outlined the plans to the market and we are on our way to delivering on those plans and we need to be held accountable for what we actually do deliver and the targets that we've actually put out. So very, very clear on that.
As relates to Obuasi, this is a hurdle in a long race. We're comfortable that the long term value proposition of Abouasi remains intact. This is at least a 25 year mine. There's been a tragic incident and we have voluntarily suspended the mine and it's absolutely appropriate that The investigation is being done and that we're cautious about firstly, the review needs to be completed And we need to be cautious about how we actually advance and progress the plan for the mining. And Graeme has actually It's important that we ensure that this does not happen again.
And so, when you say Good money after bad. I think bear in mind, Abuasi at the beginning of this year was already behind with its oil reserve development. And so what this does allow us to do is to catch up on the ore reserve development. And so when the mine does actually commence production, That we've got adequate order of reserves there to complete To get to the ramp up levels and we spoke to be aiming for Q4. At the back end of this year to be able to get to production and ramp up targeted to the same Phase 2 ramp up levels by mid next year.
So these are not switches that one turns on and off. These are big mines and big ore bodies that we're actually dealing with. This has happened in a portion of Block 8. And so we're really being responsible about how we would be looking to advance the mine plan there.
It's Kristine. It's not nicely that answering to my next question is which is to look sort of more long term. And you recently held an Investor There was an upside to 3,600,000 ounces by 2025. There's been a lot of changes Since then, is that number still intact? And secondly, is the Board still aligned with your strategy that you gave at Investor Day?
Yes. With bigger company with a larger CapEx spend, or is it perhaps maybe not the route to take that a smaller business with a low CapEx spend is something that you need to consider.
So absolutely the board is fully behind the strategy and the plans that we actually put out to the market at Capital Markets Day. This was all subject to board approval. And so both management, Yvonne management needs to execute, but the board is actually fully behind us in terms of the strategy. So absolutely. The Capital Markets Day clearly, we have put out guidance.
It's an indicative outlook that we've put out. It is a wide range that did account for volatility. And I think certainly, as I've said, Abuasi has actually got it's a core asset in our portfolio. There is a setback. And so we really see this as a timing issue in terms of getting to the ramp up and hence We've said that we will be able to give you firmer guidance on 2022 once we've got clarity on the ramp up plan.
And so that we'll be able to give you certainly by year end. And so we're still comfortable with the indicative outlook that we've put out there. Of course, what we did say, the caveats to that is subject to investment decisions that need to be made. And once feasibility studies have been completed and those pertain particularly to Gramalote and to Quebradona. What is not included in those plans or in the indicative outlook rather is the Corvus acquisition.
And I think we'll need to depending on where we're at, no investment decisions have been made at this point. And so we'll be clear on that as we move forward and we'd be in a position to do so.
Just on that, Christine, Corbus Gold, do you think it could be replacement So I wonder if you have the projects?
We see this so like I said, no investment decisions have been made. What we're very clear Yes, on our capital allocation framework, the fact that all of these projects would be self funded. I think in particular, at this We're keeping all options open. So in our long term plan, we've certainly catered for funding Gramalote as well as Quebradona. These projects are phased and staggered.
1 Gramalote in particular is a 2.5 year build period. We said the feasibility study expected to be completed by the end of Q2 next year. Gramalote, we're still waiting for the environmental permit and the mining license. And so no investment decision will be made until we have those critical permits as well. That is a 4 year build period and the spend is back ended to the last 2 years.
As regards Corvus, you know that we've accumulated cash on the balance sheet. We've got $1,000,000,000 in cash. And so we'll be able to fund Corvus, but at this stage really keeping options open as to when investment decisions are made.
Thanks, Christine.
Thank you.
Thanks, Adrian.
Thank you. The next question comes from Leroy Ngodi from SBC, please go ahead Leroy.
Good afternoon, guys. Thanks for the opportunity. Most of my questions have been asked. I've just got I've got 2 more. You mentioned that on Gator Hill, you're expecting to to declare a maiden reserve there towards the end of the year.
Are there any other areas in your portfolio that you're quite confident on that you may be declaring additional reserves. And then my second question is Block 8 at the Bawasi, you said is about 20% of the reserves. Could you maybe give us an indication of what percentage of your production out of Obuasi was initially planned to come out of Block 8 over the next 3 years or so.
Thanks for those questions, Leroy. So Tim did actually speak to 3,500,000 ounces is what we're looking to add to our reserves for this year. Tim, do you want to actually talk to other areas in addition to Gator Hill. And then Graeme, if you can please handle the Block 8 and percentage of production that we envisaged getting from there. Thanks.
Yes, thank you. That's a good question. When you take a look at Gaeta, both Gaeta Hill It's a new reserve, but we also expect to see additions coming from Aimulalima. An important Expansion will be coming with Frankie at Sunrise Dam, which Ludwig spoke to earlier. And then we will continue to see other gains really across the portfolio in Africa, Argentina and other gains in Brazil.
So the portfolio is going to provide a 3,500,000 ounce Our reserve gain this year, which is above depletion, and that's our forecast at this time.
Thank you, Tim.
Graham?
Thanks, Christine. Thanks Leroy. In terms of Block 8, yes, 20% of reserves. Over the first two years of mine production, the production areas were Block 8 and Sansu. And Block 8 Represents around twothree of that production for 'twenty one and for 'twenty two.
And when you get out to 'twenty three, it starts to reduce And Block 8 becomes something like 50% and Blocks 9 and 10 come into play. And then from 2024, 2005 on, then we get down to Block 11 and that starts to make a contribution. So at this stage of the ramp up, Block 8 is a significant part of production.
Thank you. That's very clear.
Thanks, Leroy. Claudia?
Thank you. We have no further questions on the audio lines. Stuart, can I hand back to you for questions on the webcast?
Yes. I've got just kind of 1.5 question. One was just a we just to round back on Tanja's question on inflation, just to look at 5% to 6% that peers are using, is that a good level? Yes. Yes, Tania, it is.
And then Sipelele Mdudu from Excelsior has asked a question about just contact with sorry, I can't find it here, but from my memory the cash lock up in the DRC, sort of what kind of contact have we had in the DRC and when will this be resolved?
Okay, thanks. And then it is a question unfortunately that we get asked at every call. And so yes, it's $485,000,000 our share that's locked up there. We maintain contacts with Barrick all of the time regularly. So we're talking a few times a week, both between Sigdalo sits on the board of the Kibali JV and is in regular contact with Barrick and myself.
I'm also in very regular contact with Barrick, both with the Chief Operating Office of Africa and as well as the CEO. And so certainly, what is happening there is the as we Recall in the last quarter, cabinet was appointed, a new cabinet was appointed by the President. And there has been a commission that's been appointed to deal with the approval of the cash repatriation at exemption from the mining code. So Kibali JV has had made an application for exemption because it qualifies for that. A new Central Bank Governor has been appointed.
And so we do take comfort from the fact that both the cabinet and the Central Bank Governor aligned to the President and so that is positive momentum and there's an industry wide approach That is being considered and Barrick's CEO has had a few high level visits to the DRC quite recently and we're really hoping to see a positive resolution soon. Unfortunately, I'm unable to give you an exact timing of that and we'll have to keep you posted on that.
Thanks very much, Kristine. I think that brings us to a close. Kristine, would you like to make any closing remarks?
Yes, I'd like to thank everybody for dialing into the call today and asking all the questions and being engaged with us. The comfort that I'd like to give you is that we as a management team are really committed to improving performance in the second half to also delivering on managing actually the financial and operating risks to the business. We remain firmly focused on our strategy to create long term value for ROTH shareholders. And finally, this will be my last report as Interim CEO. I'll revert to my role as CFO from the 1st September.
And I'd like to thank you all for your engagement and support over the past year. And we're looking forward to having Alberto on board from the beginning of September. Thank you.