Good afternoon, everyone, and to those joining us from North America, good morning again today, and welcome to our Capital Markets Day presentation. Before we start, as always, please let me call your attention to the fact that we'll be making forward looking statements During the course of these remarks, Slide 2 is our safe harbor statement. You'll see on Slide 3 our competent person statement, which is related to our Oil Reserve and Mineral Resource declaration. They're both important documents, and I please ask you to read them. We've got a full agenda today.
We've designed the session, which is roughly 2 hours in all, to provide a useful lens through which to view AngloGold, both its strategic outlook and also our future prospects and our approach to capital allocation. As I say, a full agenda. In the first session, we'll start with an exposition of our strategy from Christine through to a useful discussion or one at least that we hope will be useful, financial discussion to assist in modeling through to an overview of our ESG and exploration programs. After that, we'll have take questions for 10 to 15 minutes and then a break. During the break, we'll be showing a video which has a look at our Quebradona project, which I think will be informative and useful too.
In the second session, Vaughan Chamberlain is going to start off with a look at our Mineral Resource Management program, and then each of the operators will walk through our operations and the very exciting slate of projects we've got in front of us. Christine will then wrap at the end, and we'll take another set of questions. Christine, without further ado, I'll hand over to you.
Thanks, Stuart, And good morning or good afternoon for those joining us from South Africa. Thank you for joining us today as we take you through the basis of the strong performance that we announced yesterday. So as we look to the future, AGA is at an exciting inflection point in its growth path. The global team has worked steady over a long period of time to optimize our portfolio. Today, we're well positioned to capitalize on that hard work.
The entire leadership of this company and the Board All aligned between behind our strategy and we continue to work together to deliver on it. As the world's 3rd largest producer of gold, we've built the strategy around our great strengths: A diverse portfolio full of optionality and an exceptional team, we have in place a detailed mine by mine growth plan backed by a disciplined capital allocation strategy, which are designed to unlock the full underlying value of our portfolio. What do we expect to achieve over the next 5 years? We'll grow production by up to 20%, mainly through brownfields options plus 2 excellent greenfield projects that will come to the board for approval this year. We'll see steadily declining costs over the period as our investments bear fruit and we'll stay laser focused on converting more of our vast mineral resource endowment into ore reserves.
AGA has the foundation to deliver on this. We're approaching our strategic plans from a position of financial strength. Our balance sheet and free cash flow profile are the strongest they've been in a decade. We have a well defined capital allocation framework Focused on making careful investments that provide returns above our cost of capital and Iain will talk to this just now. Our brownfield and greenfield project pipeline, which is fully self generated and self funded, Can support our production plans for the long term.
And our strong ESG track record gives us the social license to operate In the communities we share around the world, we are also building on a strong climate track record and are committed to charting a pathway to net 0. 2020 was a solid year for the company Despite the restrictions imposed by COVID-nineteen, our resilience owed largely to the diversity of our portfolio, which helped offset declines from sites impacted by the pandemic. During this period, we focused our efforts on business continuity and meeting our strategic objectives while prioritizing the safety of our employees and Communities. You can see here the fruits of our efforts. Thanks to our strategy of streamlining our portfolio to focus on higher return And of course, due to the higher gold price, we more than doubled free cash flow before gross capital to $1,000,000,000 This, coupled with a more generous dividend policy, ensured a fivefold increase in dividends declared.
We've used the opportunity to further fortify our balance sheet, which now has $2,800,000,000 in liquidity, Manageable near term maturities and our leverage ratio is about 80% below our onetime target. Our very deliberate all reserve reinvestment strategy has performed exceptionally well. You've seen the reserve life of our portfolio rise to around 11 years, adding 6,100,000 ounces of gross ore reserve, this reflected a net increase of 2,700,000 ounces from 2019 and that's after only 1 year of focused effort. ESG is a central plank of our strategy and a condition without which we simply can't create long term value. As you'll hear from Stuart a little later, Sustainability is embedded in each of our corporate objectives, but it's also at the heart of other key areas like our compensation metrics, our key performance indicators and in our annual mine and development plans.
And this focus on ESG creates A virtuous circle, strengthening the business and creating value for a wide range of stakeholders. A key aspect is ensuring the health and well-being of our people and the communities in our zone of influence. This extends to partnership with our hosts and the support and development opportunities we're able to provide as a result. It comes in the form of local jobs and skills development. It includes running a healthy, profitable business that pays taxes and royalties and grows and supports local business with procurement.
This is What forms the basis of durable, trusting partnerships and what in the long term will create more efficient operations with lower risk profiles and more opportunities for growth. As you can see from our key metrics, Sustainability is at the heart of all aspects of our business and value chain. I'm encouraged by our performance on critical metrics But realize that we still have much work to do. We'll provide more detail around our performance in the ESG section of this presentation. Our confidence in executing our strategy is underpinned by a strong track record of delivering on our commitments.
This business is led by a transparent, decisive management team focused on minimizing risk and improving shareholder returns. The data speaks for itself. We've met our cost and production guidance for 8 consecutive years. And in the past 5 years, we've shored up the balance sheet, reducing net debt I'm more than 80% since peaking in 2013. This leaves us with leverage of 0.24x well below our target We've improved shareholder returns.
Dividend payments resumed in 2016. We doubled the payout ratio last year to a competitive 20% Our free cash flow before growth capital and we've increased our portfolio's reserve life to almost 11 years and streamlined our portfolio to focus on higher return options. Abu Wasi is making steady progress. So from a big picture standpoint, we've made tremendous progress on several fronts in a challenging operating landscape. Let's take a step back to focus on AGA from a high level.
Our greatest strength is our world class portfolio of assets run by a truly excellent team. We've made steady progress to make that portfolio even stronger and more sustainable. As we focus on higher quality, lower cost mines, we've taken decisive and sometimes difficult steps to optimize the portfolio. Now as I look across our global footprint, there's exciting progress. We're extending mine lives and upgrading assets by bringing in lower cost ounces.
At Abu Wasi, where our redevelopment efforts are creating a world class high margin asset for the long term. In a visit late last year, the enthusiasm And pride of the team on the ground was very hard to miss. This team has come together in an incredibly challenging environment To complete Phase 1 and get to the final steps of Phase 2, it remains on budget and on track to a very tight schedule, which Graeme will elaborate on in a while. Ore reserves are being added across the portfolio, Notably at Gaeta, a truly world class asset and at Siguiri, Abu Wasi At AGA Mineracao and Sunrise Dam, there's also the collective experience and commitment from across the business, which has come together to provide a robust evaluation of our greenfield projects in Colombia. The future has never been brighter.
So we're certainly committed to maximizing long term shareholder value and returns, And we want to be transparent about how we do it. Our capital allocation framework is balanced and clear And has proven itself over more difficult market conditions than the current one to be robust. Like everything we do, it starts with Prioritizing investment in our asset base to support the health and sustainability of the business. From Sustaining free cash flow that comes as a result, we have 3 main priorities: to self fund growth capital With an absolute disciplined focus on risk adjusted returns to maintain a solid balance sheet giving us strategic flexibility through the cycle and to return cash to shareholders through our increased dividend payout ratio. At every point of capital allocation decisions, we are mindful to be careful stewards of capital.
Increasing all reserves is a clear priority. Just in the last Here, we managed to increase the reserve life of our portfolio to 11 years. We saw additions at Abu Wasi, Geita and Kibali. This strategy will continue across the portfolio to achieve further reserve growth. We see a clear connection between unblocking latent value in our portfolio and our ability to successfully grow reserves from the drill bit.
Importantly, our aim to continue growing those reserves on a per share basis truly sets us apart. Equally important, between 2016 2019, we posted steady year on year increases in the group reserve grade, achieving a 17% increase in the proved category. In 2020, On the back of our aggressive exploration program and the divestment of assets in Mali and South Africa, We recorded a 45% increase in the average grade of our proved and probable resources. So where does this place us over the longer term? On a 5 year outlook, we're expecting an average 5% Compound annual growth in our gold production.
The primary driver of production growth over the next 2 years is related to Obuasi operating at steady state Tropicana reverting to normalized production levels following the current reinvestment in its life extension and then planned production gains from AGA Minerozao, Siguiri and Sunrise Dam. In fact, most of the growth over the period is driven by improvements in our current suite of operating assets supplemented in the outer years by Quebradona and Gramalote projects. Sustaining capital expenditure for each of 20212022 is Expected to range between $720,000,000 to $820,000,000 which equates to 2.60 to $290 an ounce. This includes investment of $330,000,000 and $380,000,000 in all reserve development and exploration and Brazil tailings compliance capital this year of $70,000,000 to $80,000,000 On a per ounce basis, however, sustaining capital will decline next year as production notches higher. The Colombia investments mean total capital expenditure is expected to increase in 2022 to 2024 before falling off.
So following the completion of these projects as well as the expected return of sustaining capital to normalized levels at around $160 to $200 an ounce when the current intensive Brownfield's investment campaign comes to an end. All in sustaining costs are expected to decline to between 900 to $11.50 an ounce in 2025. And Ian will unpack some of the details shortly and that's in nominal terms. The Colombian projects have a material impact on the production and cost trajectory of the business over the long term. These are long life, low cost projects and at steady state are expected to reduce Absolutely focused on unlocking shareholder value.
We've shown year in and year out that we deliver on our commitments at every stage of the cycle. This, combined with our long history of new ounce conversion, Project execution and capital discipline puts us in prime position to deliver. Our capability And potential is, of course, directed toward a focus on sustainable, High margin answers that benefit our shareholders and communities. We will build on the positive momentum in converting Resource to reserves and these investments are expected to position us to replace all reserves over time And restock the pipeline with new mineral resource. It's an exciting time for us and that is supplemented by several catalysts.
We have Abuasi to complete and new world class projects in Colombia to take to an investment decision. Cash lockups in Tanzania The DRC are being worked on and will provide a clear uplift once resolved. In the meantime, we're laser focused on realizing our catalysts and delivering on our strategic objectives. Having seen what we've talked through today, I'm sure You're excited as I am about the future of AngloGold Ashanti. Our business is primed to release significant value, firmly grounded in our values with ESG as a motivating component of all our business decisions.
As I think about AngloGold Ashanti's next chapter, I'm confident that our rigorous capital allocation framework, which you heard about in-depth Today will guide us as we execute on our strategy. We've optimized our world class portfolio And now we are harnessing the collective knowledge of our team to unlock the tremendous value it holds. This starts with exploration and mineral resource management, But it extends to all operations and ultimately to the successful extraction of ore in a safe, low cost and high value manner. And with that, I'll hand over to Iain, who'll provide the detail on our capital allocation framework.
Thank you, Kristine, and good day, everybody. We have been transparent with regards to the capital allocation discipline that we applied in order to maximize long term shareholder value and returns. This discipline has been consistently applied
and stood
us in good stead over a number of years when low gold price levels put significant pressure on our margins achieved. With the current increased gold price levels, this capital discipline does not change and continues to be relevant. The immediate focus is on reinvesting continuously in our asset base to support the long term sustainability of our business. I will elaborate on this later. Our focus of maintaining a strong balance sheet and decreasing debt levels remains More so in the current operating environment where the COVID-nineteen pandemic has created a significant layer of additional complexity and risk to the mining industry in general.
We are confident that we have proven our commitment to return cash to our shareholders. Our increased dividend payout percentage as well as the increased frequency of payout to biannual from 2021 Is testimony thereof? Yesterday's dividend declaration results in a fivefold increase in cash returns to shareholders compared to the previous year. Our growth projects in Colombia, which when approved by a board and once in full production, will result in a step change in our portfolio in terms of the cost profile, margins achieved and free cash flow generated. In combination with Obbiahsee, it provides us with a layer of new long term lower cost Any remaining cash will continue to be applied to additional opportunities, which may include Any combination of enhanced dividend payouts and other growth organic growth opportunities.
Under the right circumstances, Inorganic growth opportunities will also be considered. We have a strong track record of operating and developing major projects. From a sustaining capital perspective, our intention is to increase our capital intensity with regards to our reinvestment Strategy in exploration or reserve development and deferred stripping initiatives across our portfolio. We have commenced this process in 2020 and based on the outcomes last year, increasing our efforts on this front will create opportunities to further enhance mining flexibility. Overlaying the additional reinvestment, which is anticipated to be continued for another 2 years, is the increased regulatory requirements of tailing storage facilities or TSF compliance in Brazil and further spend required for TSF infrastructure at other operations including Ideoprim, Tropicana and Cerro Vanguardia.
Furthermore, with Oberhousie continuing its Phase II construction and ramp up efforts In 2021, there's a shift from growth capital to sustaining capital and all reserve development at that operation. Directionally, the expectation is for sustaining capital to increase to levels between $2.60 per ounce to $2.90 balance in both 2021 2022, whereafter the expectation is that the level of normalize at around $160 to $200 from 2023 onwards. The key areas of estimated additional spend in the next 2 years includes approximately $50 per ounce For the continued targeted reinvestment efforts, approximately $35 per ounce for efforts on tailings compliance and other infrastructure expenses And approximately $30 per ounce for additional OVIC or reserve development and sustaining capital expenditure. Turning the focus to growth CapEx. The outflows is mainly related to the Gramalote and Cuberadona projects in Colombia.
The RBAC redevelopment growth capital spend is anticipated to be completed in 2022, while significant growth capital outflows are estimated from 2022 and reaching a high in 2023 before starting to decrease as Gramalote starts to enter its production phase. At steady state, Gramalote will add attributable ounces of between 125 1,000 to 150,000 ounces to the portfolio at a nominal all in sustaining cost of between £600 to £700. Quebradona allows the group to diversify into copper production at an attractive estimated copper all in sustaining cost margin of between 60% to 70%. Our capital allocation discipline focus on appropriately balancing capital returns to shareholders on the short and long term. Our efforts in this regard ensure that we do not return capital to shareholders in the short term to the detriment of long term development and sustainability of the business.
Our dividend policy remains focused on providing leverage to the gold price Since the dividend payout is determined based on a free cash flow metric, this will result in variability in payouts as the gold price fluctuates. Our ability to generate free cash flow significantly increases as the gold price level increases. Our portfolio is geared to generate free cash flow levels comparable to our current market capitalization at the $1900 per ounce gold price. Cumulative dividend payout levels are reflected on the table in this slide, indicating that even at Gold price levels as low as $1300 per ounce, dividend payouts over the 5 year period will occur. Our focus to maintain a strong balance sheet remains even after our net debt level has reached its lowest level in the decade, decreasing to below $600,000,000 We currently have strong liquidity with cash balances exceeding $1,300,000,000 which excludes the cash lockup in the DRC of $424,000,000 Our multicurrency, dollars 1,400,000,000 RCF is currently undrawn.
Our new $700,000,000 10 year bond was issued at a coupon of 3.75%, the lowest in the history of the company. This position allows us to consider optionality with regards to liquidity management efforts focused on the 2022 $750,000,000 bonds. It further provides optionality with regards to the funding of the Colombia operations, allowing us to consider whether we self fund, which is our preference, or enter into green or other funding opportunities. Although we have canceled the $1,000,000,000 standby facility we entered into when the COVID-nineteen pandemic first emerged, Our current liquidity levels provide us with sufficient comfort that we can manage any unfavorable and unforeseen impacts of this pandemic Our leverage target remains to be less than 1x through the cycle, and all of this can be achieved while we continue to pay sizable dividends. On our debt maturity profile, the most significant near term item is the upcoming of the $750,000,000 bonds in 2022.
As mentioned, we currently have optionality in evaluating our next steps. It is clear that the current combination of cash, funding options and undrawn facilities available allow us to withstand market volatility to a large degree. At our current cash flow levels, We are in a position to evaluate further optionality. From a growth perspective, we will continue to target value accretive organic opportunities as well as inorganic opportunities under the right circumstances. From a balance sheet perspective, we will continue to maintain our balance sheet strength and consider what our optimal capital structure should be.
We will continue to monitor the appropriateness of our dividend payout rate and potentially consider other capital return options. Finally, Our financial reporting is very complex and requires careful consideration of how production, costs and free cash flow results are presented from subsidiaries, joint operations and joint ventures, let alone preproduction stage operations and discontinued operations. The purpose of today is not to focus on these complexities. However, we remain open and willing to engage with anybody requiring a more in-depth discussion and explanation with regards to our accounting complexities. Thank you.
And with that, I will hand over to Stuart. Thanks, Ian.
One thing that sets us apart from many of our peers is a clear set of sustainability driven values. We're very proud of the fact that our core business values set well over a decade ago so closely aligned with an increasingly sophisticated ESG landscape and also with many of the UN Sustainable Development Goals. These ensure that our business decisions are always made through an ESG lens. Our ESG efforts are at all times guided by a comprehensive materiality assessment, which determines our key priorities. I'll cover the 5 issues listed here in more detail today.
We arrive at each of these issues after a comprehensive mapping exercise, during which we consult with a range of internal and external stakeholders. Then in turn, we structure our sustainability interventions to respond proactively to our material issues. These priorities are underpinned by strong governance systems and a culture of transparency in how we operate and how we interact with others. These priorities are embedded in the fabric of our company, not only through our values, but also through our organizational objectives and importantly, in how our senior leaders are compensated. We believe this creates the condition that enables the company to effectively create both social and financial value over the long term.
In ESG, the G for governance is clearly foundational. It's what helps us sleep at night. We have a culture of transparent reporting internally and externally to provide confidence that things are working as they should, right all the way down to the site level. And when they're not, we can move quickly to address them. I've highlighted 4 of the most critical governance systems in AngloGold, starting with a very active oversight and engagement from our Board.
It's difficult to overstate how much importance our board places on ESG in ensuring the protection of our communities and the environments we work in and ensuring we safeguard our reputation as we meet our business objectives. 2nd, we have a stable of world class policies and standards, which form the backbone of our management systems. These are fully aligned to industry best practice. 3rd is the active engagement and oversight of our executive management team. This ensures that risk, Impacts and opportunities are flagged and managed, which ultimately prevents problems from turning into crises.
Last year's management of the COVID-nineteen pandemic is a case in point. We were able to respond quickly to not only ensure business continuity and delivery on our strategic objectives, but to ensure that our people and our communities were strongly supported throughout. Last is our rigorous approach to assurance, again, both internal and external. This brings an additional level of scrutiny and oversight and an extra layer of confidence for our stakeholders. We prioritize health and safety in everything we do.
Our performance over time, including in South Africa, highlights progress that can be made in relatively complex conditions. The reduction in industry rate in injury rates and in occupational disease rates has been a result of steady, deliberate work and interventions over 10 years. It's an area where we are never satisfied and one in which we know we're only ever as good as today's performance. We're working continuously to strengthen our systems and to reinforce our very strong culture around health and safety. We're also constantly looking at the deployment of technology, whether in ground control monitoring systems or proximity detection systems to further reduce the risk of injury.
We're also working to continually review and improve our COVID-nineteen response to do everything we can to ensure our employees are safe. We are reinforcing and refining those protocols that have helped keep us safe over the past year and we're also engaging with stakeholders to explore ways to support community based vaccination campaigns as COVID-nineteen vaccines become more widely available. We are no strangers to creating public health partnerships. We have a long track record in South Africa with respect to HIV and TB and in West Africa with the last Ebola outbreak and also in fighting malaria, which is endemic to much of the region. In 2,005, we started an ambitious plan to eliminate malaria in Obuasi.
It started with a detailed census of the local community and mapping hundreds of thousands of structures in the community. That informed an indoor spraying campaign and the mass rollout of bed nets to all homes. We did that alongside a comprehensive education and awareness campaign. Obviously, this requires close cooperation with communities, which has continued throughout the program's 15 year lifespan. Fast forward to today, malaria rates in the region are down 90%.
Work and school absenteeism An epidemic itself when we started are down a similar amount. The program is recognized widely as one of the best of its kind in the world and we're working closely with the Global Fund in extending it to 16 districts in Ghana, and it now covers almost 1,000,000 people, and we have similar programs in place at our other sites. It's a true model for community partnerships and shows how mining companies can be leaders in delivering social benefit. Climate change is another of our priorities, both at the board and management level. We set our first targets back in 2,008, well before it became commonplace to do so.
We aim to cut emissions intensity of our portfolio by 30% over 15 years. That seemed hopelessly optimistic at the time. But since then, Carbon intensity is down 43%, meeting our goal with some years to spare. In fact, the overall emissions of our portfolio have almost halved over that time. This was not only achieved by selling off high GHG emitting assets.
We did it by strategically relocating and switching off large compressors in underground shafts in South Africa. We reused waste heat from compressors to heat water in underground shafts. We developed 3 pipe chamber systems to recover electric energy from ice and water sent from surface to underground to assist with pumping water back to surface. We also made smaller changes that with scale had big impacts like replacing incandescent and capped lamp bulbs with LEDs and installing heat pumps and solar systems in our accommodation units. In Australia, we switched Sunrise Dams generators from diesel to LNG And after commissioning Tropicana, we switched both to pipe natural gas.
In addition, new projects in Colombia will be hydropower, adding to our other hydropower sites in Brazil and the DRC. We're taking lessons from our past experience and consulting new science and climate models as we look to set new targets later this year. We'll follow that by charting a pathway to net 0, something we're firmly committed to. All of this is backed by bottom up work currently being done at each site. It includes detailed climate risk assessments, considering an aggressive set of future climate scenarios.
And this, in turn, will help us publish our inaugural TCFD report this year, bringing our disclosure in line with good practice. We have a strong track record in managing an international portfolio of different types of TSFs. We're also committed to implementing the global industry standard on tailings management. Our tailings governance system is robust and has 4 distinct levels of assurance with a comprehensive system of checks and balances. This includes specialist inspections and detailed assurance.
There are clear mechanisms for reporting risk and tracking mitigation measures and also clear channels for escalating issues at any site. It's important to note in line with the overall governance framework I spoke to earlier that EXCOM and the Board are kept abreast of TSF status on a regular basis. Our aim is to build communities that are free of poverty and inequality. AngloGold Ashanti was one of the first signatories to the United Nations Women's Empowerment Principles. This raises the bar for our performance with respect to gender and inclusivity.
Gender diversity is also a KPI for senior management. We established a specific gender diversity policy in 2015, which continues to guide our efforts to enhance gender inclusivity across the organization. We have also completed diversity and inclusion assessments across every one of our sites to identify roadblocks to inclusion in the workplace. Our responsiveness on these issues, in addition to our policy frameworks and initiatives, a part of the reason we are one of only 4 gold companies included in the Bloomberg Gender Equality Index. We continually seek ways to improve our human rights performance and are mindful that we cannot allow complacency to creep into our business.
Last year, we trained over 11,000 people, human rights awareness, including every one almost every one of our security personnel. The integration of human rights standards throughout our supply chain is also an area of focus and we've implemented a responsible sourcing program across our Africa region, which helps us identify and handle possible risks posed by any supplier. We're also very cognizant of human rights associated with indigenous peoples, which are distinct societies defined clearly by the UN. We operate in only one country, Australia, where indigenous communities as defined live nearby. Our relationships with these communities and the areas they live in are governed by a specific set of policies and standards.
I'm pleased to say that in Australia, we have, over almost 30 years, developed a strong level of trust and cooperation with the traditional owners of the land on which we operate. There is a clear way to obtain and improve the social license to operate. It's about responsibly mitigating impacts from mining, constructively and transparently engaging with communities impacted by our operations and ensuring that the benefits of mining are shared fairly. These benefits can often represent a significant injection of wealth and development to areas with otherwise limited alternatives. Consider more than $1,000,000,000 paid to governments last year in royalties and taxes from our business.
Think about how important these funds are in the recovery from the COVID pandemic where entire economic sectors have been decimated or more than $2,000,000,000 paid to employees and local businesses, which in turn help fuel an engine of economic prosperity around our mines and beyond. Promoting local hiring and procurement is a strategic priority for us and we have the data to back that up. 85% of our procurement budget is spent locally, representing a further injection of capital into these areas. We support that aim with significant education and training programs and skills development interventions for our employees and broader communities. Our strong local partnerships mean we can better leverage our resources to magnify our overall development impact.
We are working to better hear our stakeholders and to more clearly understand their priorities and aspirations to eliminate white elephant CSI projects and embark on those that will leave a lasting benefit. At every one of our mine sites, we have a community development plan built with our government and community partners with the priorities of local people in mind. This slide shows some examples of how we're working hand in glove with our hosts to support development and upliftment and to meet a number of the UN Sustainable Development Goals in the process. In fact, if you step back, you'll see that few other industries are as well placed to have this impact in many of the areas we operate and that is something the gold sector should be proud of. We live in the age of transparency And a range of unrelated external service providers have analyzed and ranked our disclosure and performance independently.
We do not shy away from this kind of external review. It provides an invaluable opportunity to benchmark ourselves against our peers. Of course, we're proud of areas where we compare well, but we're more interested in finding areas of improvement. Christine said it well, good ESG equals good performance. Without continuous improvement in this area, We simply cannot create long term value.
We must continue to ensure the highest standards of governance and transparency in everything we do. We've done good work on reducing emissions and reducing water use, where almost 3 quarters of our total requirements are recycled, but we're pushing hard to do better. It's difficult not to see ESG as a simple virtuous cycle. Get it right, and it's mutually reinforcing, creating value for all stakeholders and cementing our license to operate. That license to operate ensures the ability to generate wealth and benefit, which in turn is shared among a wide range of stakeholders.
It manifests in support for countries and communities through local procurement, training and taxes and in the development and transfer of the skills that are important in growing economy. It manifests in greater access to ore bodies, which in turn are the wellspring for more value and wealth creation. So while some may see ESG as a form of corporate philanthropy, they really miss the point. By protecting and enhancing the communities and the environment And by promoting a truly diverse and inclusive business, we're promoting the long term sustainability of our business. I'll now hand over to Tim.
Stuart, Our exploration programs work to consistent standards and processes across the portfolio and are guided by peer review. If we look at the past 5 years, brownfields exploration investment in the portfolio range between $90,000,000 $100,000,000 in the prior 4 years before increasing to just over $130,000,000 in 2020. The increase was linked to our focused investment strategy in exploration drilling and ore reserve development to grow the ore reserve base and add years of reserve life in the portfolio. In this period, ore reserves Grew from 24,900,000 to 29,700,000 ounces with the overall addition of 19,200,000 ounces offsetting depletion by mining of 51, excuse me, of 15,100,000 ounces. The ore reserve and mineral resources additions shown here for 2020 Our net after the removal linked to the sale of the Sadiola mine.
2020 kept 4 consecutive years Annual ore reserve additions above 4,000,000 ounces in our current portfolio, well above the average annual depletion in the same period, giving us a steady year on year expansion of reserve life in the portfolio. Our exploration process is focused on identifying the best group of drill targets and prioritizing those with the highest potential for success to be advanced first. This applies in both the greenfields and brownfields exploration areas. In our greenfields programs, we want to make Tier 1 discoveries in stable jurisdictions that will have the potential to improve the production and cost metrics of the portfolio. At MineSite Programs, our planning and prioritization processes allow us to advance Best targets first, so that we are able to replace and grow our reserves by providing a mine site project pipeline at each site that leads us to reliable production schedules.
Our equity investments are targeted toward companies within highly perspective terrains and districts that have the potential for the discovery of ore deposits that may be a fit for the company's portfolio. Our planned investment in brownfields exploration drilling ramps up again in 2021 to approximately $150,000,000 to 1,000,000, formal reserve and mineral resource addition. We expect another good year of performance across the portfolio, but we'd like to call out here the We expect to see from the Sunrise Dam targets drill out, Tropicana, Havana expansion and underground opportunities, the new additions To the Gata portfolio, along with Obuasi, Sigiri and Itau Prem Opportunities in the Africa Group, The Brazilian Mines and Cerro Vanguardia. Meeting our ore reserve addition target would Add the new ounces at or less than an all in inclusive cost of $45 per ounce. We have expanded our greenfields exploration budget in 2021 to allow for additional drilling in Western Australia and Nevada targets as well as to support exploration opportunities across our portfolio.
We will work on the expectation that we'll be able to conduct field work in all jurisdictions within the portfolio as there is progress toward pandemic conditions reducing. We were able to take advantage of field restrictions that were in place in some areas during most of 2020 to generate a new group of terrains and districts through desktop reviews and other data reviews for field validation now in 2021. In our equity investment portfolio, 2 companies saw positive advances in 2020 with pure gold mining, Achieving first gold production at the Madsen Mine Redevelopment in Red Lake, Ontario and Corvus Gold continued advanced exploration at their projects in Nevada and published updated PEA studies for the North Bullfrog and Motherlode projects. The other companies were active last year aligned with elevated gold prices And saw progress in their projects and portfolios. AngloGold Ashanti actively monitors for new early stage opportunities that have the In this slide, we see the continuing development of our exploration project pipeline of greenfields and mine site programs in every jurisdiction where we operate.
There are additional early stage projects being established coming out of the work of our target generation teams And the other projects advance through exploration phases and stage gate reviews, where if we have continued success, will lead to new mines for the company such as Tropicana or the advanced projects like Gramalote and Quebradona. The organic growth pipeline supports and complements the ongoing parallel discovery and development exploration that's occurring in the mine site exploration programs And that have provided the stable growth in recent years that we have highlighted from within our portfolio. I'll now turn it back over to Stuart.
Thanks, Tim. We'll now take some questions. Irene, if we could take some questions off the line first, please.
Thank you. Our first question from the conference is from Shulan Modi of UBS.
Good afternoon, everyone. Thanks for hosting The presentation today and thanks for all the information you're providing us. A couple of questions from me, primarily relating to the outlook for production and CapEx. Firstly, would you consider hedging at least part of your production and that could be in the form of 0 cost collars or forward contracts or even put options, while you're going through a high capital spend phase, I mean, you're guiding to almost $1,000,000,000 per year In CapEx for the next 5 years, given the volatility in the gold price, have you thought about hedging? The second thing is the range for the all in sustaining costs in the guidance, especially when you're looking at 2025, It's quite broad.
Can you just break down the gap for us? So that €900,000,000 to €11,000,000 gap. I understand part of it is CapEx and I understand part of it is production volumes, but maybe give us some more information on how to think about that. Thanks. Okay.
I'll handle thanks, Shielen, and good day to you. I'll handle the question on the gold price and hedging, what our views are in that regard. And if Ian can please deal with the question On the all in sustaining costs. I think it's very clear that our policy is actually not to hedge gold. And I think in particular, firstly, it's a stated policy.
I think secondly, we've only hedged The gold price in very unique instances when we, for example, have been disposing of operations Such as in South Africa in the past and we did hedge a portion of CBSAs production last year. But those are the only unique circumstances that we have actually hedged. I think specifically as relates to the capital expenditure, We would hedge capital like sort of long lead items where it makes sense to do so, But we do keep that quite separate from our production and gold hedging itself. Ian?
Yes. Thanks, Kristine. Just on the all in sustaining cost range out in 2025. This is our first attempt to put out guidance and indicative outlook 5 years into the future. So I think we've been a little bit probably on the conservative We are dealing with multiple jurisdictions with impacts of foreign currency movements in those countries and with a COVID pandemic.
So we think of that as a significant amount of uncertainty and we just want To guide a range that we believe is achievable, I think that's what I want to say on that. Thanks.
Okay, thanks. I've got one follow-up question, if that's okay. Just the CapEx for the projects of Quebradona, Gramalote and some of the other project CapEx that you have, Have you hedged any of that? Or have you derisked those projects in any way as things stand today?
So, Shieland, at this point in time, no, there is no hedging that's been applied to the capital. I mean, firstly, we haven't actually Make commitments for any long lead items. I think certainly when we're in a position to do so, we'll definitely consider hedging. I think right now, the capital expenditure there is more related to the drilling and exploration Expenditure and then of course we have made land acquisitions And for Gramalote, there will be reent settlements that will be done. I think that's not really the kind of expenditure that you would actually be hedging.
But certainly, going forward, when it comes to long lead items, that's something that we will consider hedging in future. And then of course when we look at other types of risk mitigation around the project, I think particularly for Quebradona, we would be looking at different types of financing risk mitigation. I think certainly what comes to mind is project financing for the project. So although Iain Stated that our preference is to self fund it and we've got significant headroom in our balance sheet. We would consider project financing on a limited recourse basis.
We also consider long term offtake agreements and other types of risk mitigation, financial risk mitigation around the project. But that's all part of the feasibility study. And by the time we make an investment decision, we'll be able to give you better line of sight from that perspective.
Just on those long term offtake agreements, would that be for the copper?
Yes. That is what we would be looking for the copper products. And of course, these long term offtake agreements, as much as you'd have a fixed formula, I think it would be actually linked Also to market pricing in there and I think that the details of that are still being considered at this point in time, but we'll give you better visibility on it once the feasibility study has been completed.
Irene?
Thank you. Our next question is from Arun Van Horn of Nedbank.
Yes, good afternoon. I have two questions from my side. The first one relates to greenfields exploration. So you're spending about $35,000,000 this year. How does that compare to, let's say, last 3 years?
And then strategically, what is your view on exploration as a way of adding long term Value and what's the best approach? Do you go at it yourself or is it better to invest in a junior company as you've alluded to this? So that's the 1st one on exploration. And then secondly, just practically on drytack sailings, a quick one. Does it have any impact on productivity, first of all?
So in other words, you just keep on producing at the same rate even if you do that? And is there any cost impact associated further down the line with tailings management when you've got right stacks tailings. Thank you very much.
Okay. So I'd like Tim to handle the question relating To greenfields exploration and the detail. But I think just as an overall, I think we've proven as a company that we've been quite successful at exploration doing it ourselves. And we sort of added at about to resources at about $33 an ounce. And so we've got a very successful track record in that regard.
Tim, would you like to add And more to that and I think specifically flesh out the greenfields exploration track record and the spend in that regard. And Ludwig, if I can ask you to please deal with the question on the dry stack tailings facilities, please?
Yes. Thank you, Christine. With respect to the greenfields investment or exploration programs and budgets that we've had over the past 2 years, we have been running at roughly $30,000,000 a year for the past 4 or 5 years. However, we've seen some new opportunities Developing within our Western Australia and Nevada portfolios. So we have incrementally increased those budgets to be able to accommodate Additional drilling.
And then to the second part of your question, in terms of our strategic view on greenfields exploration, It's very much a portfolio management approach, where we are able to State tenements and be able to take 100% control of targets at the right stage early on. We will, Of course, make that a priority within our greenfields exploration portfolio. But at the same time, if we recognize opportunities In the space that are in the right terrains or with the right companies in the right projects, that's where we also Maintain that optionality to look at the opportunity for strategic investments.
Okay. Ludwig, if you can please handle the question on dry stack tailings and any future costs that we envisage in that regard.
Thank you. Yes, thanks for the question, Arnold. In terms of capacity, we've designed the dry stacking to match our current capacity. So it won't impact the capacity. In terms of cost, obviously, it will there will be an element of operational costs that will be added.
But then you should also remember that we offset the capital required for tailings, dams, lifts. So there's a bit of a balance on that. In terms of the material, we're going to stack on top of the mostly on top of the existing tailings. So if you look at the footprint, You're also saving cost by actually stacking on top of your existing footprints and also eliminate some of the rehabilitation work
Irene?
Thank you.
Thanks.
Our next question is from Dominic O'Kane of JPMorgan.
Hi, guys. Thank you very much for the presentation. Very, very detailed. Just two questions. The first is maybe a bit of a broad question and goes back To the first question, which is, could you maybe just give us some insights to what you're thinking on risk mitigation for Gramalote and for Quebradona.
So maybe some of the technical risk mitigation Considerations that you've made and also maybe some of the downside stress tests that you're thinking in terms of gold price and copper price assumptions. In addition to that, just could you maybe just comment in a bit more detail on power for those projects and how renewables are currently fitting into your thinking and the cost competitiveness of renewables in Colombia, given that it's a relatively virgin jurisdiction for gold mining. And that's yes, those are my key questions. Thank you.
Okay. Thanks, Dominique, for those questions. I mean, of course, Risk mitigation is at the forefront of our mind. And as we look at our capital allocation framework and also in the way that we look at Decision making around projects, the criteria that we apply, I think bear in mind very prudent assumptions is part of The financial risk mitigation that we do apply on these projects. So I have spoken a little bit earlier to Sheila and about the Around financial risk mitigation options, but I think built into that prudency around the assumptions that we make.
And of course, when it comes to also the copper price assumptions, we've given the assumption At the time of the pre feasibility study, we said we've assumed $2.89 per pound of copper long term price At that stage and of course, it is largely a copper product although there is gold content. You can see even in the price assumption that it's actually very conservative and of course this is very premium copper concentrate, and we have not factored that premium into the assumptions. I spoke a little bit yesterday about the Technical, social and fiscal, but I am going to ask Graeme and Stuart to talk more around the social But I think just broadly, this also, like you say, it plays very much into Renewable Technologies. And We're very comfortable around the long term view in terms of supply demand fundamentals around copper And the assumptions we've made on that. Of course, when it comes to technical, Graeme will talk now.
But I think for us, it's also in terms of how we've looked at both projects and how we've split our Execution capabilities, bear in mind that V2Gold being the JV partner on Gramalote will be Executing fully on that project. However, there is a management committee structure that we have in terms of joint decision making around the project. And I think it's very important because it's To ensure alignment given the capital that we'll be spending there. And from a technical execution capability perspective, bear in mind on Prepridona, our teams have actually executed on the feasibility study and we are ensuring we do already have Significant technical capability in our company. Abuasi is just about to be completed.
And clearly, there is going to be Capacity in those technical skills that we will also be able to transfer to Quebradona. On the social side, we're seeing a good Just good momentum in the social, let's just say, support for the Project Social and Environmental. And of course, the environmental and mining license are critical Milestones that we'll have to meet before decision making is made in that regard. So and just overall, Colombia, from a fiscal We're very comfortable with the fiscal framework in Colombia. I mean, like I said, we've been there now for more than 10 years.
We've developed also very good relationships with the government, with the ministries. And so I think in particular as regards fiscal assumptions in the project, we're not making any We're not reliant on any capital allowances or any special sort of exemptions from the government and that's actually quite important. In terms of the royalty structure, it's 4% on copper. It's 3.2% on the gold content. And then certainly when it comes to the tax rate that we're assuming, it's 30% from 2020 2 onwards that has been included in the project and no special requirements, like I said, for capital allowances.
So that's quite important that the project works without any special requirements or requests from the government. So I'm going to hand over to Stuart first to social. And then Graeme, if you can just please deal with the technical and the power renewables aspect of the project as well.
Dominic, just very briefly on the actual power generation side, 80% of Colombia's power installed The 20% thermal component or actually just under 20% thermal is really In most instances, just standby power capacity in the event of drought or other issues with the hydro baseload. So this will be the overwhelming Power draw for this project will be satisfied by hydro. The price will come back to you within a second. On the social front, as Christine said, we've steadily been building support in the local community for the project, obviously have A fairly elaborate set of programs to ensure that benefit is shared with the community, including development of a community trust, which ensures that benefit from the project goes directly to the community, not only to the National Fiscus. But we're happy to talk about that in a little bit more detail.
And if you watch the video after this Q and A session, some of the other questions will be answered as well. I'm just going to hand over to Graeme.
Thanks, Stuart. Thanks, Dominique. I think Christine gave you a very Full and comprehensive answer in terms of managing risk. I'll try and add to that in probably 3 parts. Firstly, we have quite a rigorous process in terms of how feasibility studies are conducted.
We commence early on with concept studies. We move into pre feasibility studies, and then we move into feasibility studies. And at each time, One is refining the scope of the project and one is bringing more engineering effort to the project. So by the time it's The project is not fully engineered, obviously, but it's well engineered such that The quantities, the cost, the equipment selection are very tightly defined, and the scope of the project is tightly defined. And the costs that go into the estimate are budget quotations and It also reflects the contracting strategy that will be used for the project's execution.
So in the case of Quebradona, we've used pricing from contractors that we would use within Colombia to give confidence to the capital estimate. Then the next part would be to look at how one is going to build the project and how one is going to operate the project. And from a build point of view, we'll undertake a or prepare a detailed project execution plan. It defines not only schedule, but covers all the other Elements from safety, environment, commercial procurement, through the construction management, commissioning and so on. So quite a detailed approach to How the project would be built and how the team would be put together and how they would work together.
The other element is the operational readiness plan. 1 can build, but then one needs to operate. So how does one put a team together? When does that team come together? How does the team work?
What skill sets do you use? What are the operating systems that you're going to put in place? So that's quite detailed work. So and that's done in parallel with project construction. And that can often take quite an effort to put together so that when you're operating and ready to operate, you've got all the systems and I think then we do some checks and balances in the course of all of that.
Obviously, the technical reviews with external experts, we have our own internal stage gate review process. But where we need a check with international experts, we bring them in, such as a mining expert on sublevelcaving. And as a final check on execution, planning and readiness, we use the International Projects Association, who Have examined capital projects across the globe and can advise and check Whether we have got everything in place and whether we're ready to actually start the build. So in that way, we de risk the project execution. Thank you.
Thank you. Our next question is from Adrian Hammond of FBG.
Good day. I've got 3 quick questions for Stuart, one for Ian and 2 for Tim. Stuart, firstly, ESG is still quite gray in my mind In terms of all the metrics out there, so how do you pick a benchmark given all the bodies that you that represent ESG? And what are your top 2 ESG metrics that your shareholders are measuring you on? And how do you benchmark yourself There's your peers on those metrics and you think it plays a part in your discount.
And then on the ESG side of costs, You've given us some information on tailings. You've mentioned Your intentions to cut emissions, etcetera. So is there a what is the dollar balance cost on AISC? Is that something that's included in these forecasts. And then for Iain, you've got some money owed to you from the DRC.
What are your intentions to do with that cash? Will some come to shareholders? And then for Tim, I was quite impressed With your exploration portfolio, but I don't find a conclusion as to where Does that leave your reserve base in 5 years from now? So, a lot of work being done, but does that allow you is that enough To at least sustain your reserves and replenish them 5 years from now, because What's missing from here is that we've got a 2025 outlook That you're also cognizant of your portfolio with short mine life. So could you perhaps give us a color on Is that exploration enough to paint a picture beyond 2025?
Thanks.
Thanks, Adrian. Let me handle those ESG ones first, and then I'll hand off to Iain. I think ESG being gray in your mind, you're probably not the only one. I think ESG as this as an intense Focus for companies and for investors together at the same time is reasonably new And I think there's still a lot of attention being paid to or focus on what areas specifically matter. So I think there's a statistic that It gets bandied about a lot, which is about the lack of sort of congruency between the different ESG ratings firms and service providers given how fragmented that industry is, so whereas you get credit ratings Agencies between Fitch, Moody's and S and P because of quite common frameworks in terms of analyzing the credit risk for companies, You'll get similar ratings between those agencies for the same companies.
But there's that kind of close or that correlation does not exist yet amongst the ratings agencies. And I think what you've seen recently is a lot of more consolidation in the ratings agency space and that will start to bring those together and start to help companies and ratings agencies come together with respect to what they're focused on. So that's still I think a work in progress for the industry. We don't have a specific area that we're focused on. I can tell you some Areas that matter to us, local procurement matters to us enormously because it matters to our host Communities that happens to our host governments and I think increasingly you're seeing it come into legislation in a lot of jurisdictions.
So There's a lot of attention, particularly in our Africa business, to make sure that we are putting as much benefit back into those local communities as possible. I think you saw the underground mining contract at Obuasi is a great case in point, huge amount of work happening at Geita as well on that front to make sure that the biggest chunk of your or as big a chunk as possible of your procurement budget is going into the first the local community and then the country. Local employment ditto for that. If you look at Quebradona, huge focus to make sure that people in the town of Gerico, people in the province of Anteokhia And then Colombians more generally, those are the kind of levels of priority for employment. And I think if you want that lasting Social license to operate in the communities that you're in that matters.
So, I think the days of flying in hundreds of expats In areas where the skills may not exist are really at an end and you use expats on a target basis Then you better have a plan to transfer skills as quickly as possible. Climate is obviously enormously important for us. So greenhouse gas emissions intensity, not on a per ounce basis, but on a per tonne basis and then on an absolute basis It's something that is obviously front and center not only for us, but certainly for a lot of our investors. If you look at the BlackRock letter from Larry Fink over the last 2 years, I think it really sort of underlines why that is such a big focus. So in line with that, it's making sure that our disclosure in line with TCFD is done.
Some of our peers are doing it. We're certainly in that queue as well. And I think that increasingly without unifying or having uniform disclosure around that, You're going to battle to remain attractive as an investment over the long term. In terms of Capital or OpEx required to get to your emission targets over time, that's something that's a work in progress and certainly we'll look to dovetail those medium term targets with our existing capital plans to the greatest extent possible. So some of it is around substitution.
It's not just throwing out what you have, you'll transition To the greatest extent possible, in the near term, what the big focus on is mitigating climate risk. And again, you just have to look at what's happened in Texas over this last week or 2, where extreme weather events Create problems for existing infrastructure, so it really is a big focus on what happens in inclement weather or heavy rain events, what happens in extreme heat, etcetera. And a lot of that is not actually hugely expensive. For example, on the wet weather, it's making sure that your drainage systems aren't blocked, that they're sufficient to carry large volumes of water, etcetera. And we're busy doing all that detailed work at the moment, making sure that our policies are adequate to deal with it and then that the oversight matches that too.
So it's on 3 really on 3 levels and it's not all about capital, but we'll be prudent on that basis as well. I'm going to hand over to Iain and hopefully I've answered your questions on the ESG And Iain will take it from here.
Thanks. Adrian, thanks for giving me the question that I don't have to give you such a long response. Mine is probably very simple. We have indicated before that any cash lockup releases will roll into our free cash flow metric and dividend payouts. That definitely remains the intention.
So any DOC cash that we manage to release in the next while Which roll into our next biannual dividend payouts, as I've mentioned, from 2021 onwards, we Start to do the payouts on a biannual basis. So it will definitely run-in there as we get it released. Thanks.
Great. And then Tim on exploration and the reserve base.
Yes. Hi, Adrian. To I think to cover your question, if you want to look at this next 5 year window, One of the things we do have is, I mentioned that we have an exploration process that we use to plan and prioritize our And that's actually something that allows us to look at planning not only the activities, but also the funding that goes with it. And that's linked to the expected target advancement and eventual ore reserve addition. As it moves through the pipeline of Establishing an inferred resource, upgrading that inferred resource to measure and indicated and then eventually moving it forward into And ore reserve.
So each of our mine sites following this process, and Van will actually speak to it in more detail later. Following that process, we're able to give an outlook within or have an expectation within our Exploration processes of being able to replace depletion within our portfolio by staying on track with our programs. When you look at and I think you had a And question with regard to our ability to sustain that 5 years out. If you look at a lot of our deposits, The portfolio has quite a few underground mines in it compared to where we were say 5 or 6 years ago. And while some of those underground mines may have what appears to be a short mine life, if you look at those mines, they're 20 year old mines It have had essentially the same sort of reserve profile for 20 years.
And where we're investing more additional strategic Funding into the program right now is to be able to push that ore reserve development out farther. And by pushing that ore reserve development out farther, That gives us the ability to extend that life out from sort of the 3 year into the 4 or 5 year range.
Thanks. And just while I have the floor, you've done well to go from 9 to 11 years on life of mine And many of your senior peers could say that premiums are sort of a 14, 5 year level, but largely because of single assets Getting them there. Do you need a single asset discovery to take you there? Or do you think you can get there What you're doing with the multiple portfolio approach?
I think we're in a fortunate position compared to a lot of our peers because we do have the robust brownfields exploration programs They essentially are able to sustain the assets within that portfolio. And in some cases, we have the opportunities And one of the things that you'll hear about later in the presentation and was mentioned yesterday in the results call was the addition of a brand new Open pit mined at Geita, Nyamalulima. We have these types of opportunities within our portfolio Being able to add a new discovery, whether it's a Tropicana, Gramalote, Caverdona, La Colosa Or other projects, they come through on a fairly regular basis about every 5, 6, 7 years that a new one of those projects comes into the portfolio, that is a meaningful new single asset discovery.
Thanks very much. Irene, we're going to just go straight to the webcast. There's a few questions. We're mindful of Keeping to time, so what we're going to do please if you'll indulge us is move some of those questions to the Q and A session at the end of this session. I am going to ask just a couple off the line.
Starting off with Marcelo Kim from Paulson, Who says in your 2025 guidance, which includes Kepler Donner, have you incorporated an all in sustaining cost guidance Using copper as a byproduct. If so, what is the impact?
So Stuart, in 2025, the uptick in Cubberadona is very minimal, so it has really a very small effect on that ASIC number.
Got it. And beyond, Ian?
Beyond that, we will As I've indicated, we will look at Quebradona as a copper project and disclose in guidance going forward a copper ASIC separated from the rest of the portfolio, which will have a gold ASIC.
Another one From Jonathan Bloom at Bulliontop Investments says, Given the exciting reserve additions at Gaeta and Obuasi, Could you please look at issuing 40three-1 101 reports on these mines? Jonathan, I'll tell you what, we'll come to that with Vaughan Chamberlain, who's Going to speak about MRM in just a few minutes. The final question then We'll be from Lunwabo Maccobela, he says from Perpetua, he says, can you expand on your project team's ability to deliver on the projects in the pipeline. And I think Graham, maybe we'll throw that one over to you.
Thanks, Stuart. Thanks for the question. I think what maybe the best example there Is to look at our track record. And in terms of project delivery, the Tropicana project was built From around 2013, also commissioned in 2013. At the same time, we worked successfully with Randgold at the time On the delivery of Kibali, Randgold were the operator.
As we move into Colombia now, We will be the operator and manager for Quebradona, and we'll work with B2 as the partner and operating partner for Gramalote. So That focuses our effort. Tropicana was very successful as a project and subsequent to that, it's gone through a number of upgrades, also done successfully and also managed by AGA. And we're just coming to the final laps on Obuasi, Obuasi was very complex project, probably one of the more complex than a greenfields project because it was very much a rebuild and a redevelopment as well as a new construction, and we're progressing on that successfully. So I think the track record sort of Demonstrates that we have the capability to deliver the projects.
For Quebradona, we've already got a pretty experienced engineering team in place. The person leading the feasibility study is a seasoned project manager within South America and North America. We'll get continuity with that team rolling into the project, and we'll work with selected EPCM contractors who have also been involved in the feasibility study. So I think in terms of the people that we partner with for the builds And our own owners' teams and experience, we've shown that we've been able to deliver these projects in the past, and We'll be able to deliver them in the future.
Thanks, Graeme. And Lune Waibo, thanks for the question. Irene, I think we're ready to go to the break now And we'll be back in 10 minutes. Over that time, for those of you who are interested, the Quebradona video will be playing. And yes, we've got some exciting information coming up next with the operations.
Thank you very much.
Mining with Purpose. Capradona is an underground mining project for copper and other minerals. The Peradona project has been designed considering the following concepts. 1, implementation of cutting edge technology, Efficient consumption of energy and natural resources and maximizing the use of electrical equipment. 2, Communities to meet the sustainable development goals of the region defined by the United Nations.
4, Improvement of natural and social capital and implementation of shared value strategies with the communities, municipality and the region. 5, create a positive legacy developing an early landscape architecture through the construction of a new biodynamic park The project is in Colombia In the Department of Antioquia, in the municipality of Hanukkah, 104 kilometers southwest of Medellin. The project is located in 2 zones of the municipality. The first part is the deposit located in the Cambridona hamlet in the land property of El De Quito Owned by the project where there is currently a pine plantation. It is located 12 kilometers from the urban center of Hetiko, 707 meters from the integrated management district, Kuchia Harim Tamesis and 3 20 meters from the municipal border of Tamesis.
The second part is where the infrastructure will be built, which is located in Cauca Hamlet, 2,400 meters away from the Cauca River. 3 kilometers from Pointe Iglesias and 37 kilometers from Jericho. Jericho has about 12,103 inhabitants In an area of 19,300 hectareas of which there will be a direct intervention on 610,068 hectareas with the project Equivalent to 3.16 percent of the total area of the municipality. The projects in Floyd's area includes the urban Minerva Cabrera de Cobracadradona has been in the territory for 14 years developing surface and subsoil prospecting and Allowing it to generate and share value with the region. Upon obtaining the environmental license, the construction and assembly stage begins.
It will have an approximate duration of 4 years, a 21 year exploitation, a 3 year closure and a 10 year Post closure period for a total of 38 years. The construction and assembly stage will begin with the development of infrastructure works Such as access in roads, topsoil, preparation of areas and a tunnel portal. During the whole construction time, all the necessary measures will be Taken to minimize the intervention on the landscape and its surroundings. 2 tunnels will be built in the portal, Namely the southern and northern tunnels with a distance of 50 meters between them, each 6 kilometers long in parallel. Both will have an initial 10 times 10 meter section and they will be built using construction machinery.
At 1.5 kilometers above the northern tunnel, a port will be built and a tunnel will begin its construction diagonally upwards In a 6 by 6 meter section, it will be built using the drilling and blasting method until it reaches the ore body, Implementing the most modern and efficient controls to ensure that vibrations are not perceived on the surface. For the development of the project, landscape impact management is a priority from Minera Caddrada. This is why during the operation of the project, controls will be continued to minimize the impact on the landscape in such a way that it is not Per second, which means less than 1% of the flow of the river. This water will be used for construction, operation, Closure and post closure activities. The camp workshop offices, plant and powder magazine will be built And a landscape management will be implemented to allow the integration of the infrastructure to the environment.
In order to manage the water, Sediments, ponds and plants will be built to treat the domestic and nondomestic effluents generated by the project, thus ensuring that all water like acid rocks drain The operation will be carried out using the sublevel caving exploitation method. This method is based on the use of drilling and blasting to fracture the mineralized Body under controlled conditions, starting at the top of the deposit and moving sequentially down through 21 uniform and horizontal sublevels. The ore resulting from the blasting is removed from each sublevel with the use of loaders And it is taken to a shaft called ore pass where the ore will be dumped. This shaft connects all sublevels to a transfer level From where the material will be transported to the underground crushing station located 1 kilometer deep from the surface in such And then the ore is transferred through a belt conveyor to an ore stockpile to begin the process at the plant. Then it is taken to a secondary Copper, gold and silver will be recovered.
After being filtered, a concentrate of copper, gold and silver with Process where the inert material is separated from the pyrite. Both the inert tailings and the pyrite are filtered to a moisture The tailings and pyrite deposit without affecting Hedico and its access roads. The pyrite deposit will have an insulation with geomembrane And covers with a minimum height of 10 meters of filtered tailings in order to isolate oxygen and water to avoid the generation of acid drainage. Throughout a process plant, more than 80% of the water will be recirculated. Organic reagents will be used, Energy will be consumed efficiently and all measures will be taken to control noise, dust and lighting.
And most importantly, During the operating time, the filtered tailings deposit plan and pyrite deposit plan are directly related to the progress of the mine sublevels. As of the 3rd year of operation, the subsidence phenomenon will begin inside the surface of the El Chiquito We will implement all the necessary activities to facilitate the prevention, control, mitigation and compensation of the impacts generated by the mining complex in order Following. For the deposit area, plugging of the ventilation shafts and construction of perimeter dikes around the subsidence zone in order to prevent the entry of And terrestrial fauna of larger species and the planting of trees with the aim of implementing native natural covers that are integrated into the ecosystems near the project. In the Valley area, the decommission of infrastructure and revagitilization of excavation material disposal zones, Zodmez, The filtered tailings deposit, the camp platforms, the plant workshops, offices and the powder magazine, Thus ensuring the homogeneity of the landscape and a passive treatment system for the water coming from the tunnels and the tailings deposit.
Welcome back, everyone. We at AngloGold have developed a system for ensuring that our exploration activities are focused on maximizing the value to the business and that all the answers are delivered into the business plan and ultimately brought to account. The system is knowing as exploring for value, or E4V. And in order to maximize value, We had to establish the system that goes beyond the norm, that being the summary code, and allows us to bring into play at a very early stage very low confidence material In order to ensure that our exploration pipeline can deliver into the life of mine plants at the right time and at the right level of confidence, The system allows for the capture of geological understanding from the very earliest stages of development. The system runs from the lowest And most inclusive category named endowment, which is an estimate of the inventory of all the gold in a lease area and its immediate surrounds.
With increased geological information and understanding, the confidence levels increased through a series of steps to an ultimate estimate of produced ounces. In effect, each category is a subset of the previous category. It's almost like peeling an onion in that we are systematically removing the discardable material and exposing the core of the good stuff, in this case, the gold bars. We also adjust the estimates included in the plan for the level of confidence we have in it upfront. And for materials For instance, there's endowment or blue sky intangible.
We would adjust for the probability of occurrence, the probability of conversion to a mineral resource and the probability that, that ounce would be mineable and convertible, therefore, internal reserve and finally, for the metallurgical recoveries. In the case of the Blue Sky intangible ounce, the overall planned conversion could be as low as 10%, whereby the planned conversion for an inferred mineral resource Could be as high as 80%. These conversion factors are tracked, reconciled and then used in future planning. They count generally for geological uncertainty in the plan and reflect the complexity of the ore body, the exploration maturity of that specific site, the skills of our geologists and ultimately, the mining style, be it open pit or underground. Keeping track of the incremental costs of exploration, Studies in construction allows for more accurate cost planning.
We maintain these records and use them in our planning. On the slide, we show the group average based on the last 10 years, including both greenfields and brownfields. More detailed records At an operational level or regional level, allow for the granularity to local planning, but these numbers serve as a good check. Besides integrating our E4V process with our life of mine planning, we also integrate the process with our stage gate reviews process and our accounting standards. As an area is explored and drilled, a series of stage gate reviews And appropriate economic studies are used to justify the next level of exploration.
The size of the area naturally controls to an extent the scope of the study, For example, a large greenfields discovery will require a full series of studies moving from early scoping to a conceptual study and ultimately all the way to a feasibility study, naturally assuming that it passes all the hurdles on the way. Each of these steps will be associated with the required level of confidence in material to be mined and will undergo a defined stage gate review. Naturally, in the case of a small underground extension, for instance, in a brownfields operation, the studies would be infinitely less detailed, but would nevertheless be required. The process, therefore, ensures that funds are not expended on areas that will not report into the business plan and add value as produced answers. The integration with the business planning is also designed to set the timing for the exploration.
In order to maximize the return on exploration investment, the timing of drilling campaigns is critical in order to ensure the delivery of ounces at the required time. Part of the skill in using our E4B process is to recognize that a level of flexibility is always required to cover for the failure of a process to deliver. It can also not be rigidly applied as this may shut off the opportunity for step change discoveries at an operation or within a project. And to this end, some long range exploration targeting Very low confidence concepts may still be appropriate. In our planning process, we include material falling into all categories but have rules controlling how much of the lowest confidence material can be included in the early years.
We minimized inferred mineral resource in the 1st 2 years and tried to delay the use of Blue Sky material for as long as possible. The requisite exploration planning For the upgrading of the confidence levels, it's an integral part of our planning process. In the case of Blue Sky, the plan would be for a full exploration program to move the material firstly to an inferred mineral resource and then onward to an indicated mineral resource to allow for mine planning and ultimately to allow for reporting as an oil reserve. There would also be we would also plan for additional infill drilling that might be required to provide further confidence to the plan, and this includes advanced grade control and grade control. All of these costs are then incorporated and included in the Life of Mine Plan.
The E4V process ensures that our exploration is done just in time and that we don't spend monies too early, except in the case where we are chasing a step change for the operation and need to We've got sufficient material to support the capital required to implement the step change project. Looking moving forward onto our ore reserve process. Obviously, this is a subset of our Life of Mine planning, and we control the process with the mineral resource and ore reserve steering committee that is staffed by all our senior technical competent persons and relies on internal regional and group reviews and audits to provide us with confidence for the reporting of our reserve. Each operation is audited externally on the average every 3 years by an external auditor, And all our competent persons all our operations have competent persons based on-site, one that looks after the mineral resource and another to look after the ore reserve. We do regular ongoing training of our competent persons to conduct to actually enhance our confidence on the overall process.
The ore reserve reconciliation, which is shown on this slide, is a standardized process, which incrementally changes parameters in a defined way from the previous year's ore reserve to the current ore reserve by changing only one of the modifying factors at a time and quantifying these changes. This chart serves an example moving from 2019 to 2020, The categories are defined as follows: we have depletion and exploration, which are really self explanatory Methodology quantifies the changes due to estimation processes where no new data is present. Price captures the changes due to any change in ore reserve price or exchange rate, whereas cost reflects changes resulting from reduction or increases in the actual cost base at the operation. Geotechnical parameters and metallurgical changes are pretty much what we would expect. And while operational changes then encompass changes due to issues such A selection of the revenue factor for open pit mine planning, ground instability, access, mining width or just a process to ensure future access to a specific area.
The other category is really a catch for anything that has not been picked up, And these numbers are generally very low. Just on an aside, we're planning to move our reporting in terms of our listing in the U. S. From Industry Guide 7 to Rule SK 1300 next year, and this is pretty much a global process that all Mining companies listed in the U. S.
Will have to follow as well. Angergold Asante maintains a monthly Group view on the reconciliation of our produced grade and tonnage relative to the mineral resource. This is reconciliation provides on an annual basis the reconciliation factors which we need to improve our life of mine plan and its subset or reserve. The reconciliation assumes that our planning is pretty much perfect, and then it measures the accuracy of the mineral resource Modeling relative to our grade control processes, the efficacy of our long term planning process, the congruence between the long term planning and the short term planning, The amount of dilution and planned ore loss that we incur in our planning process the efficiency of the actual mining or extraction process, I. E, how much unplanned dilution or unplanned ore losses incurred.
We look at stockpile management processes and the mining actual movements. We look at the overall production tracking process, the efficiency of the plant measured primarily by the metallurgical recovery. We also measure the overall effectiveness of planning via a long term factor and a short term factor. These are very similar to what is traditionally called the mine call factor. Using the outcomes of this process and feeding back into the planning process, we're able to improve the overall efficiency and confidence of the planning process and of the reporting of our ore reserves.
With that, I'll hand over to Sikelo.
Thank you, Vaughn. Good day, everyone. We will now look at the Africa portfolio. The Africa portfolio has been transformed with the sale of South African assets and the Mali assets. This deliberate and decisive action has resulted in a focused portfolio with 3 world class assets In Geita, Obuasi and Kibali and 2 steady state assets in Siguiri and Idua Prim, further strengthening our position as the continent's largest gold producer.
All five assets We have upside potential and production is expected to increase by 20% to 30% over the next 5 years. Today's presentation will showcase where the potential lies at each asset and our plans to unlock value for all stakeholders. Starting with Gaeta in Tanzania. Gaeta is a world class Asset, which has historically produced on average 500,000 ounces for the last 20 years and is set to continue at similar levels in the medium term. However, 2021 is a transition year at Gaeta of bringing in the 3rd underground mine, which is Gaeta Hill and also bringing in a new open pit mine, which is Nyamalalimu.
Geita has over the last 4 years Consistently improved production whilst improving on costs and ensuring a disciplined capital allocation approach. This solid performance has been achieved whilst leading in world class safety matrices, Transitioning to underground operations, achieving the 3rd highest produced ounces in 2020, Increasing the reserve base by 1,400,000 ounces at a cost of only $35 an ounce with more growth opportunities available. The key to unlocking Geyser's potential is ore reserve conversion, both from underground and open pit. 2020 was a very successful year With 1,400,000 ounces added to reserves before depletion, and our aim is to continue with this level of performance and funding. This success has increased Gaeta's reserve life by 2 years to 5 years, which provides a strong foundation and allows us to prioritize our exploration program to effectively target the conversion of 5,410,000 ounces of exclusive mineral resource to reserves.
Mineral resource and ore reserve growth targets will be unlocked from detailed, efficient and adequately funded exploration programs that will focus on down plunge and strike extensions of main deposits at the 3 underground operations. Nyamalalimu open pit satellite targets as well as the Matandani and Kukuluma terrain of refractory deposits. The above upside potential will provide opportunity to maintain full plant throughput to 2,034. Exploration all in cost of approximately $35 an ounce for a new ore reserve addition was achieved for the last 5 years and this is expected to continue in the medium term. As mentioned, 2021 2022 are transition years for Geita.
We will have a deepened production From 2020 levels, as we bring in the 3rd underground mine, as well as bringing in the open pit. From 2023 onwards, production normalizes to between 500,000,550,000 ounces per annum with a commensurate decline in all in sustaining cost. Over the last 5 years, we have been able to successfully grow open pit reserves as well as from the underground reserves. We are confident on being successful on the exploration program and incrementally increasing the reserve life towards the 10 year target. Nyankanga is a good demonstration of our exploration process and how we have converted mineral resource to ore reserve over the years.
It clearly shows the success over the last 4 years, incrementally understanding the potential of the ore body and opening up further mining blocks. Since underground mining started in 2017 at Nyankanga, Over 1,200,000 ounces of ore reserve has successfully been converted and we plan on continuing on this trend. Since the initiation of underground mining at Star and Comet Complex in 2015, 617,000 ounces have been mined. Established production and exploration platforms at cut 23 ensure that down deep extensions are drilled out. Gap areas of Cat 4 and Cat 5 are being explored And based on current exploration intercepts, similar grades are expected.
There is further opportunity at Reach 8 deposit to bring this entire ore body together and unlock its fullest potential. As previously announced, Geita Hill permitting has been granted to access this vast ore body. The first portal has been established in Block 1 With development now 50 meters into the ore body to establish drilling platforms, A mineral resource of approximately 4 grams per tonne in Block 1 is expected to be converted from underground drill platforms. Also, down plunge extensions will be tested from these underground platforms. In total, the Gatorhill underground project offers the potential of converting a largely inferred mineral resource of approximately 1,500,000 ounces.
We are very excited about Nyamalalimo in terms of the potential that it brings as a new open pit to supplement the underground operations and the district potential as a whole. Environmental permitting for this project was obtained and the mining plan approval process is in progress with mining expected to commence during the second half of twenty twenty one. Almost 1,000,000 ounces of ore reserve were declared at the end of 2020 from Niamalalimu, extending open pit life by 5 years and providing the necessary source to fill the plant to full capacity. This highly prospective area within the district is being prioritized over the next 5 years with a reasonable likelihood of finding another similar sized open pit mineral resource and ore reserve. In wrapping up Gaeta, Geita will be a combination of 3 underground mines producing approximately 120,000 ounces each annually and an open pit mine producing approximately 140,000 ounces annually.
An aggressive open pit and underground exploration strategy is in place to ensure timeless conversion of ore reserves and achieve the targeted 10 year plus reserve life and then grow it further. Now moving to Kibali. Kibali is located in the Northeast DRC. It is an underground and open pit mine that is a joint venture between AngloGold Ashanti Barrick and the DRC gold mining parastatal, Sukimo. It is operated by Barrick.
First Gold was poured in September 2013 from the open pit operations, while development of the underground mine also commenced in 2013. The underground project was completed in 2018 and since then the mine has been in steady state operations, producing approximately 360,000 ounces annually of attributable gold at an all in sustaining cost of $800 an ounce. The mine has a potential life of mine of over 15 years With 4,250,000 ounces of ore reserves and an additional 2,650,000 ounces of exclusive mineral resource. The base plant consists of primary production from the KCD underground operations, supplemented by a number of open pits With the tonnage split between underground and open pit around 50%. Kibali is a steady state producer and has a steady production outlook with a planned capacity Of 7,200,000 tonnes per annum and an underground mine constrained at around 3,600,000 tonnes per annum, The short term strategy for the mine is to maximize underground production while supplementing plant throughput with open pit ore sources.
Dibali has a robust exploration pipeline in place, targeting to replace resources and reserve depletion annually. The plan on the left shows the main exploration KZ trend, extending 40 kilometers north and south from the main KCD Mining Complex in the center. Extensive exploration has taken place along this trend over the last few years, highlighting its prospectivity through new finds such as the Kalimbu and Ikamva in the north in support of the mining strategy. The picture on the right is a zoom in of the KCD Mining Complex, showing the KCD ore body as well as the underground workings and open pits. The underground exploration at KCD is focused on delineating down and up plunge extensions along the KCD Koredo.
Moving to Siguiri in Guinea. Following the initial challenges with the commissioning of the combination plant, I am pleased to say that The operation is now stabilized and we are now shifting our focus on growth opportunities such as Block 2, which we plan to bring in during 2021. The operational improvements will come with a declining cost trend towards the $1100 per mark and below. We have an exploration strategy to bring in new oxide and sulphide deposits to extend the reserve life. The exploration strategy will simultaneously target short, medium and long term potential.
The short term strategy is ore reserve conversion at Saraya and Fulata from Block 2 and Bidini pit in Block 1. I will talk to this potential in more detail shortly. The medium term is new mineral resource conversion targets at Kusise, Kozan and Segueland pits. This plan will further be supported by an aggressive exploration plan in Block 3 to pursue growth potential from Kunkun and surrounding areas. With regards to the combination plant, I'm happy to report that the initial challenges with the commissioning have been successfully completed and the project has been officially closed out.
As you can see, the recovery is currently exceeding design parameters for the February month to date, which is a massive turnaround and demonstrate the bench strength of our technical teams. These improvements, however, did not come without challenges. There were significant process modifications and new equipment installations to overcome the geometallurgical recovery challenges experienced. With the combination plant now having reached stability, The forecast is on commencing Block 2 execution and we are confident of an increased production outlook for the next 5 years. Siguri has great sulphide potential with some good intercepts in Block 1 as can be seen on the first cross section.
And studies will be carried out to test the feasibility of further cutbacks. 2 main ore bodies currently exist in Block 2, namely, Fulata and Saraya with a reserve of 314 kilo ounces declared in 2020. The project is now in execution phase with the mining schedule to start in the second half of the year within the current stability agreement window called the convention debar. In addition, the possibility of sulphide extensions We'll be tested at Block 2. And lastly, moving on to Idwa Prim in Ghana.
The operation is in a favorable jurisdiction and has been a solid performer, consistently exceeding expectations. For the last decade, Iberaprim has been growing production, achieving record production levels, particularly in 2019 2020 with an all in sustaining cost well below $1,000 an ounce. After a strong 10 year run, this operation is now embarking on a 3 year investment cycle to secure its future by stripping the major pushbacks in the main pit and the construction of a TSF and return water dam. This investment is expected to increase the reserve life to 2,032 beyond. Iboaprim has a significant endowment and exploration potential.
The Iboaprim reserve base is very sensitive to costs And any reduction in cost will unlock reserve potential and this is what we are focused on delivering. Whilst reinvesting for the future, Iguapriem's production is expected to reduce over this investment period, but expected to exceed current levels post the investment period. To further enhance Itauprim's values proposition, we are in the process of awarding a long term mining contract, which will enable the mine to unlock costs and unlock further value. We are also finalizing studies investigating the opportunity to increase the plant throughput From the current 5,200,000 tonnes per annum to 5,800,000 tonnes per annum by 2024. With the first phase of installing a tertiary crusher to the current circuit being completed in the second half of the year.
Our concluding slide in the Africa region is an illustration of the cutbacks that support Idwa Prim's life of mine as mentioned earlier. Importantly, the pit has high confidence resource levels with more than 90% of the material in the measured and indicated category. Ladies and gentlemen, this concludes the Africa portfolio. In summary, the portfolio is focused. We have a prioritized exploration program.
We are allocating capital adequately. There is a clear pathway for growth. The ESG lens and our values will continue to guide our actions. We are collaborating with our host communities and governments, And we have the right skills and teams to get this done. I will now look I would now like to hand over to my colleague, Ludwig, to give us an overview of the international portfolio.
Thank you.
Thank you, Sotelo, and good day, everyone. As Sotelo said, I will be giving a brief overview of the international operations. And starting with Australia, we have 2 Australian assets located in the Eastern Goldfields of Western Australia, where they have operated for 25 years. I would like to start with Tropicana Gold Mine, a joint venture in which Ango Gold manages and holds 70%. Tropicana has produced almost 3,500,000 ounces since it was commissioned in 2013 and it's worth noting that the mine life Tropicana has been extended by 7 years.
In mid-twenty 20, the operation moved from more constrained to being mine constrained As great streaming came to an end and production has been supplemented with lower grade stockpiles, you will see this reflected in the lower gold production and higher costs last year. Tropicana is entering an exciting new year and I'm pleased to report that in 2020, we We established a new underground mine below the Bosn Shaker open pit. The Bosn Shaker underground will contribute higher grade more feed and improve Future gold production, enhancing cash flows for this year whilst we are stripping the Havana open pit. And from 2022, Together with the ore mined from the Van Ness Stage 2 open pit, we'll support the mine to bring production back to historical levels by around 2023. Underground mine will reach full production of 1,100,000 tonnes later this year and contribute around 100,000 ounces a year to the gold production.
There are a number of other opportunities at Tropicana, including a trade off study to determine if we should mine the deeper Havana ore body with All from underground. We expect to have a decision on this later this year. There's also significant potential to unlock No more body extensions beneath the Tropicana and Havana open pits as well as extensions at at Boston's Sheikha Underground. In addition, there are various satellite open pits opportunities along the mineralized corridor to the north at Springbok and angel eyes to the south at Croaching Tiger and Rusty Nail and even further south at Madras in New Zebra. This view of Tropicana's system looking west showing the Boston shaker, Tropicana, Havana, Havana Southpits stretching out over We have complemented development of a 500 meter underground drive of the Boston Shaker decline.
This is indicated by the black line on this picture from Boston Shaker to Tropicana. The diamond drilling is well advanced and to draw beneath the Tropicana and Havana open pits. Moving to Sunrise Dam. The strategy is simple, fill the processing plant with the best possible ore. We are focusing on aggressive underground development, exploration drilling and to build ore body knowledge, add ore reserves and create additional mining areas.
This includes maximizing the extraction of the main ore body and also developing additional mining areas to deliver around 3,000,000 tonnes So, Adam, yielding gold production of around 300,000 ounces. Currently, Vocus, the anchor underground ore zone at Sunrise Dam, contributing about 80% of the underground ore supplemented by low stockpiles. This will be supplemented in 2021 by the new Golden This is satellite open pit situated 12 kilometers from Sunrise Dam and within trucking distance. Mining has progressed well and we are on track to deliver 1st ore by midyear. Golden Delicious ore will displace low grade stockpile material in the second half of twenty twenty one to be followed by a number of highly prospective targets.
We expect steady production over the short term followed by increase of production to around 300,000 ounces as we displace lower grade stockpile material with run of mine ore. This will enable us to offset the fixed costs of the mine and lower the overall unit costs. Looking ahead, Sunrise Dam story is one of endowment Exploration is critical to its future. We have an aggressive program underway, which will see us spend about $60,000,000 on drilling over the next couple of years. We have currently 11 underground drill rigs in action along with 6 grade control rigs.
This drilling has already identified exciting new Franki orebody This slide demonstrates exploration successes over the last years with expansion of existing ore bodies as well as new discoveries. I'm particularly excited about the discovery of the Franke orebody located close to the infrastructure and to surface, which will significantly reduce costs. Based on the initial results, Franke has the potential to deliver approximately 500,000 tonnes of oil per year starting in 2023. Franke is open in all directions and there are other highly prospective targets around Franke, which we'll plan we plan to fast track into production. We are also exploring for additional satellite oil sources similar to Golden Delicious, which will be within tracking distance of Sunrise Dam processing plant along with the British well, a JV with Northern Star in which we have 70% shareholding.
Moving to Brazil. I will start with the AGA Mineralsale, which includes all of the Anglo Gold Ashanti operations in the miniaturized state. The largest asset is secure by complex, which accounts for about 70% of production along with the Kiryu's metallurgical And the smaller Karikodositu complex. Gold production has been stable over the past 3 years at around 360,000 ounces Despite the decrease in average growth, it's pleasing to report that all these operations set new records for development and processing in 2020, which positions us well to increase the production from 2022. Key to the future is the conversion to dry stacking tailings and this is planned to be completed during the course of this year.
Over the short term, the focus is on increasing confidence levels of existing resources and adding new proven reserves. The current investment in ORD will create flexibility and open up higher grade production in the deeper levels of the mine. Looking at ATA Mineralsal has a potential life of 11 years when taking into account measured indicated mineral resource. However, the total endowment is significantly at significant at 48,000,000 ounces, 29,000,000 ounces for Cuba and 19,000,000 ounces for Perrigo Seco and exploration remains key to unlock this potential. As mentioned, the near term exploration focus is on the resource Conversion and main ore bodies in Cuba, which will create flexibility in the upper and lower levels of the mine.
There are also a number of exciting new targets in Cuba, including the Abox near mine target and this go back to exploration target, which is expected to deliver significant additional ounces in the medium term. Exploration is also a key focus for Coricca de Sitter Complex And the intention is to confirm the current geological through an accelerated exploration program campaign across multiple targets. Looking more closely at Coricida Sita, the declared mineral resource in 2020 was 3,600,000 ounces. However, the total endowment is around 20,000,000 ounces as mentioned earlier. It's exciting to note that there have been encouraging intercepts at debt, This confirms the strike and the down plans of all the main production ore bodies and the near term intentions to grow the mineral resource.
These are ore bodies like Larinjiras, Karuku Bravo and Rosalino. At Cuba, Historical production has reached 6,800,000 ounces and mining is currently at level 19. The ore body is in a contiguous geological structure, which is open at depth We have positive drill results from both main ore bodies as well as parallel narrow veins. As noted earlier, There's also a potential for further supplementary production from parallel orebodies, new satellite orebodies and near mine targets like this Gilberto. Staying in Brazil, we have the Cerro Grande mine located in Guaya state.
Cerro Grande produced about 130,000 from both underground and open pit, Noting that 84% of the gold production is from underground. Like the other Brazil assets, exploration remains key to the future growth of MSG with a specific focus on improving the geological confidence in the near term plans. As context, Stella Grounds was a fifty-fifty joint venture when it came which became 100% owned in 2012. At this stage, the life of mine was approximately 5 years based on the inferred material. After AGA acquired full Ownership implemented an aggressive exploration strategy, resulting in the current expected potential life of mine of 15 years plus based on measured and indicated mineral resource.
The production will be steady over the short term and increase back On the back of higher mining volumes that will enable us to grade stream, the key focus for Cerro Grande is the continued investment in exploration to add underground high We already had a quick win last year where we increased the mine reserve by 53%. This is critical to support the growing production from the current 130,000 to a sustainable 160,000 including exploiting the Palmyra Sol tenement. Our plant expansion can even be on the cards for the future, pending the success of the exploration program. But for now, we will focus on the ore reserve conversion and maximizing grades to the plant. Historical production at M and C has been 4,600,000 ounces and the deepest sublevel is 990 meters below surface.
The surface and underground exploration drill campaign has successfully confirmed the down plunge continuity of almost every ore body with the positive results in lines 34. In addition, the discovery of the new orebodies including Palmyra Sol As consistently grown mineral resource, there's also significant open pit potential, which will help increase operational flexibility in the mine, including the Mine 3 open pit, which will start production in the second half of this year.
Graham Ayn Moving
to Argentina. We have the Cerro Vanguardia mine in the Santa Cruz province of Patagonia. This mine has Contributed substantially to the company over the years with low cost and healthy free cash flows. Following the decision not to sell a mine, we renewed our focus on the assets Which impacted the production and the cost in 2020, the situation is managed well by a very experienced management team, and we are hopeful to return to normal operations soon. In 2020, CBS 8 produced 187,000 ounces of gold, but also 3,800,000 ounces of silver.
It is noteworthy that the ratio of silver to gold production is 22:one and this is expected to increase to around 24:one this year, Taking advantage of the high silver prices. Now that the decision has been taken to keep CVSA in the portfolio, have launched an aggressive brownfields exploration strategy to grow resource and convert reserves, targeting an additional 2,000,000 ounces of resource. This includes the addition of various tenements in our portfolio after a successful agreement with our partner, former crews, which consolidated our position in the region. We've already seen successes in the program last year by increasing reserves by 23% after depletion And we're confident that this will continue to increase the life of mine in the years to follow. Production is expected to be flat over the next couple of years while we follow our exploration program and invest in the tailings dam of new e fleets and the mine fleet.
We still expect healthy cash margins while investing back into the asset. Investment will turn the mine to traditional volumes over the next 2 years. The current current related situation in Argentina, as I mentioned, is adding complication to the team on the ground. But with this experience team that has proven themselves last year. I'm quite confident that they will be able to handle this.
The exploration program at CVSA is aimed at extracting all remaining value from the asset. This slide shows the success of mainly last year's exploration extending all our current ore bodies. The short term target is to add around 400,000 of reserve in 2021 in Osvaldo and adjacent ore bodies. Over the medium and longer term, the drilling program will extend to the tenements acquired at our within trucking distance of the mine. Looking ahead, Our intention is to add about 1,000,000 ounces of gold and 7,000,000 ounces of silver reserves over the next 3 years.
The international operations has a clear path to create value by continuing our commitment to safeguarding the health, Well-being and safety of our people, driving our operational excellence program to continuously improve cost, capital and efficiencies, Improve resource confidence and growing near term reserve through our exploration drilling programs develop new projects, This will add low cost production to the portfolio and using technology to strengthen our and improve our metrics on ESG. Lastly, we have a highly skilled and motivated team to deliver on all these commitments. And with that, I'll hand over to Graeme.
Thank you, Ludwig. Today, I'll cover Obuasi, which is 90% through construction and our 2 Colombian projects, which are in the late stages of the feasibility studies and permitting. Obuasi's redevelopment was approved in 2018. The project is rebuilding all aspects of the operation to deliver a modern, efficient mechanized underground operation. Since approval, all reserves have increased from 5,900,000 to 8,700,000 ounces.
Phase 1 to achieve a capacity of 2,000 tonnes per day was completed in 2019, and the first gold pour was celebrated on schedule in December 2019. Phase 2 to achieve a capacity of 4,000 tonnes per day is 90% complete. There is a third phase from 2021 to 2023. This is to refurbish existing infrastructure and construct new infrastructure I'll recap On the project dimensions, Obuasi's redevelopment is underpinned by a suite of agreements with the government of Ghana, which has been ratified by Parliament. A key measure for the government of Ghana and the Obuasi community was I'm pleased to say that the project has met and even exceeded these expectations.
80% of the project spend has been with local and multinational companies registered in Ghana. 90 7% The project and operational workforce is Ghanaian. Where international companies participated, business partnerships We're established with local companies to develop Ghanaian capability. Our social management plan is aligned to the sustainable development goals that Stuart discussed earlier. As an example, AGA facilitated the establishment of the Obuasi campus for the Kumasi Technical University using the former management is an Obuwati sports complex.
We're also on schedule with rehabilitation of old areas. The old treatment plant and shaft area in the north have been completed. Popuwashi is a long lifeline. Reserves already cover over 20 years, and there is plenty of scope to extend the mine life. Gold production ranges from 350,000 to 450,000 ounces per annum at the lower end In the 1st 10 years and the higher end in the latter 10 years when the high grade areas of Block 10 and Block 11 are mined.
All in sustaining costs are expected to be around $7.25 to $8.25 an ounce in 2018 terms. Taking a closer look at the next 5 years, construction and commissioning of Phase 2 will be completed in the first half of this year. This includes the process plant and associated surface and underground infrastructure. We are targeting ramp up to 4,000 tonne per day, But this is a tight schedule and may overflow into quarter 3. The ramp up is progressing somewhat slower than we had planned due to the 2nd wave of COVID, which hit Ghana and Obuasi in early January.
This is impacting mining in particular with key operating staff in quarantine or isolation. Nevertheless, we expect to achieve steady state production in the second half of this year. This slide shows the distribution of mineralized resource category. Note that a high proportion of the resource is in the indicated and measured category. In other words, the high confidence category.
As mining progresses, we will infill drill the inferred and blue sky areas to convert these to measured and indicated. And this slide illustrates the grade distribution on a long section of 1 of the 3 Obuasi mineralized structures. The actual and planned decline development is illustrated in black. Broadly, the mining is active at any point in time. Mining at Shenzhou commenced in 2019, and Block 8 commenced in 2020.
Block 9 and 10 are scheduled for 2023 and Block 11 in 2025, and this is when we hit the high grade quartz veins And we'll see a lift in gold production. Note that the 2 main plunging structures have not been closed off and offer opportunity for the future. Obuasi ore is refractory, And the process plant uses flotation and bio oxidation. The plant has now been operating for a year, now at 2,000 tonne today. Metallurgy is good, and the recoveries are in the mid- to high-80s.
We are commissioning the Phase II plant now, And this brings gravity recovery, flash flotation and concentrate regrind into the flow sheet. This will lift recovery further to the high 80s. Pictures tell a 1,000 words. The main Phase 2 process plant circuits are being commissioned, including crushing, milling, flotation, BIOX, CIL and the new gold room. And we're now bringing on the gravity flash flotation and grinding regrind circuits.
The KRS shaft and underground conveyors have been commissioned. We are now commissioning the shaft automation, the underground materials handling system, Sizing Grizzlies, rock breakers and oil passes. Yet to be completed in this half of the year The 2nd underground materials handling system, the new ventilation shaft and fans, paste fill plant and the underground fiber data network. In terms of surface infrastructure, the Vioxx, TSF, Water ponds and emergency generators have been completed. Areas in progress include the new high voltage switchyard, The power factor correction, fire protection system, stormwater drainage and demolition of the remaining old and redundant facilities.
So to wrap up on Obuasi, the mine has a very bright future, even beyond the current 20 year mine life. The redevelopment has addressed all the legacy issues of the past. We're on the final lap of the redevelopment. The pandemic is presenting some challenges, but the team is focused and determined to deliver what has been promised. Now turning to Colombia.
Quebradon is an exciting copper gold project. This is an Anglo gold discovery We are in the late stages of completing the feasibility study and are well advanced on permitting for both the environmental license and the mining permit. The mining tenements are secure, and the land required for the Development has been acquired. Construction would take approximately 4 years, starting first with the underground access tunnel development, then the ore body development and process plant construction. Quebradona is a high grade, high quality copper gold porphyry deposit.
Quebradona will diversify AngloGold into copper, a commodity that is often associated with gold and requires similar mining and on-site processing technology. You would note that several of our peers are also diversified into copper. In terms of global trends in urbanization, renewable energy, electric vehicles and climate change technology, The outlook for Papa in the long term is very bright. Quebradona improves AngloGold's portfolio. It provides production growth, will have a positive impact on the all in sustaining cost of the group and diversifies our currency and jurisdictional risk.
With reserves of £3,100,000,000 of copper and 2,500,000 ounces of gold, average annual Production is expected to be £130,000,000 of copper 67,000 ounces of gold for 23 years. The mine is an underground sublevel caving operation. The process plant uses conventional grinding and flotation to produce a copper gold concentrate, which will be sold into the global copper market. The cost of copper production is expected to be around $1.10 per pound after gold credit based on a $1300 per ounce gold price. And Capital costs are expected to be around $1,300,000,000 to $1,400,000,000 spent over 4 years.
The returns on the project are very attractive at conservative copper and gold prices. The feasibility study is based on a single ore body, the Nova Chekira ore body. Nova Chekira is the copper gold porphyry It has no surface expression and is approximately 400 meters below surface. Copper exists as chalpapyrite. The mineral resource within a 0.1 percent copper envelope is 600,000,000 tonnes at 0.73 percent copper and 0.37 grams per tonne of gold.
The project targets the high grade envelope Containing an oil reserve of 113,000,000 tonnes at 1.25 percent copper and 0.7 grams per tonne gold, containing the £3,000,000,000 of copper. Note that the project is based on only 1 of Several mineralized systems and mines only the high grade Nova Chekira envelope. The mine is developed as a sublevel cave. Because of the very favorable topography, Access will be via 2 50 kilometer tunnels from the valley below the plateau. A shaft system is not required.
The mine has 4 5 meter diameter ventilation shafts, each approximately 500 meters deep. The sublevel caving production rate from the 3 production levels is planned at 6,200,000 tonne per annum. The mine will utilize electric equipment and will be highly automated with production drilling and bogging and haulage. A copper gold concentrate is produced using flotation, a process applied at several of AngloGold's operations. The concentrate is filtered and transported approximately 200 kilometers to port.
Some aspects are new to AngloGold, like hyperbaric filtration and tailings filtration for dry stacking, but these are not new to industry. And site power demand is about 58 megawatts that will be drawn from the National Hydropower Grid. Finally, AngloGold has been working with the local community, regulators and government to understand and address their aspirations and concerns Regarding the development, the project has been sensitively designed to incorporate environmental and social concerns and the employment and business aspirations of the community. AngloGold Ashanti has developed Concept of mining as a tangible tool for social, environmental and economic benefit with an innovative plan to create and integrate a path and our biodiversity center into the project. The project implements AngloGold's objective of reducing and wherever possible, offsetting impacts on biodiversity.
The initiative is intended to gradually facilitate The park will incorporate a series of innovative architectural designs and has the potential to attract tourism to the area, complementing the development opportunities brought by the mine. Our second project in Colombia is Gramalote. Gramalote is a fifty-fifty joint venture with B2Gold as operator and is a large open pit gold project with attributable reserves of 1,700,000 ounces. We are in the late stages of completing the feasibility study. The project is already permitted And minor amendments are being discussed with the regulators.
Construction would take about 3 years, leading to production in 2024. Gramalote is a mesothermal gold deposit. All reserves of 100 on a 100% basis 125,000,000 tonnes and 0.86 grams per tonne, providing a life of 14 years at a processing rate of 11,000,000 tonne per annum. A higher mining rate, combined with grade streaming, will deliver a production rate of over 400,000 ounces per annum for the 1st 5 years. This is a similar approach that was adopted at Tropicana.
Average life of mine gold production is 284,000 ounces per annum. The capital costs are expected to be between $900,000,000 $1,000,000,000 All in sustaining costs are very attractive at $6.50 an ounce, providing a short payback period of approximately 6 years from the Start of implementation. Mineralization starts from surface, and the ore zones vary in width Mining is both conventional truck and shovel. All cutbacks are currently planned. The mine infrastructure will include the open pit, Waste dumps, process plant and a conventional tailing facility and power will be drawn from the national grid.
The process plant capacity is 11,000,000 tonnes per annum. The flow sheet takes advantage of coarse sulfide mineralization to reduce the processing cost and yield a high recovery of approximately 92%. The process plant will consist of primary crushing, 2 stage grinding with a coarse grind size, conventional slotation, In summary, this is a very exciting time for AngloGold's growth. Obuasi is on the final lap of project completion. Quebradona is a world class and brings copper into the portfolio.
And Gramalote adds low cost ounces to the portfolio. The 3 projects together AngloGold is a good record for project delivery and for successfully working with host And I'll hand back to Christine to conclude and draw everything together.
Thanks, Graeme. If I take a step back and consider everything I heard today, 4 key themes emerge. 1st, Operational Excellence. 2020 saw real momentum in our ore reserve growth program. We'll build on this success with continued investment in the development of the portfolio to unlock further reserves.
We are poised for growth through our brownfields over the next 5 years even before we factor in our exciting potential Greenfield opportunities. We understand how critical the next 2 years will be for AngloGold Ashanti. But let me be clear. We are thinking about the long term sustainability of the current operating portfolio and the full investment picture for our business. This is a self funded investment in the development of our portfolio, We'll increase longevity and reduce cost over time.
In short, we'll provide growth, production And margin growth across a diversified world class portfolio. That is a compelling opportunity. Next, our healthy balance sheet. We are in an enviable position. We have a robust balance sheet that has been significantly This gives us strategic flexibility and ample headroom through the cycle.
Our capital allocation framework is clear with clearly defined guardrails in place. When I think about this, coupled with our operational excellence, I think about our ability to self fund growth capital and focus on generating risk adjusted returns over the long term. Across all of this is our commitment to ESG. A great ESG performance equals great Overall business performance. We've seen in countless ways how this mutually reinforcing cycle Creates value for a wide range of stakeholders.
It makes our community stronger, makes our jobs more fulfilling and is good for shareholders too. It means reducing our environmental impact, reducing the waste and emissions we produce and optimizing the use of scarce resources like land and water. It means maximizing the benefit we provide to our communities and our host governments. The product of this equation is clear: more efficient operations with lower risk profiles, more supportive communities and increased access to growth opportunities. We aim to be leaders in this area.
And as you heard from Stuart earlier today, We're making real, measurable progress towards our goals, goals that we know will always be a moving target, pushing us to do better and strive for more. All the successes you've heard today are the result of a careful strategy endorsed by our Board and executed by every member of management and the entire AngloGold Ashanti team. It is this vision for the future that makes our valuation so compelling. We have an exciting growth story And the building blocks to unlock value are already in place. We're taking a long term view, But we've already demonstrated a track record of delivery.
Our commitment to our shareholders is unwavering. And as we've demonstrated today, we have and will continue to assess all options to improve shareholder value. We'll remain disciplined and steadfast in our approach and in delivering on the strategy through the cycle within the guardrails of our balance sheet. And we'll maintain this discipline even as we benefit from a suite of visible catalysts in the short, medium- and long term to unlock value. Our investment case is indisputable, And I look forward to AngloGold Ashanti's next chapter as we build on our momentum to unlock the value of our unique portfolio.
Our aim remains very clearly to build a solid, predictable business that delivers value for all stakeholders through the cycle. Thank you for your time today.
Thanks, Christine. Irene, we'll take questions from the line, please.
Thank you. We have a question from Raj Ray of BMO Capital Markets.
Thank you, operator and good afternoon, Christine and team. I have four questions, if I may. So the first on the 2 projects. With respect to Quebradona, what proportion of the project So are you looking to execute in house versus EPC and contractors? And with respect to potential for capital Appreciation risk, what strategies are you looking at?
The reason I'm asking this is because we're starting to See people talk about commodity super cycle. We'll see if it's true, but We have seen the impact of this in the last cycle where we have seen industry congestion and significant capital appreciation. So if you can talk to that. And then second question is
on Gramalote.
There was a news about the open ground application by Zonta Metals that is now awaiting a court decision. Is that a risk in terms of the timeline for the project? So I'll keep it at those And then I'll ask the other question on mobile. I see you later.
Thanks for the questions, Raj. I think in particular, if I can Graham to handle the questions on Quebradona given that he's actually just spoken to it and he's closer to that. And then I will just handle the Gramalote question.
Thanks, Kristine. Thanks for the question. Interesting question you posed in terms of The build market and how that might affect Quebradona and in terms of its capital. We realize that. We realize there is a risk.
We're aware of what the Construction program looks like in future years. In preparing our cost estimates, we've looked at our contracting strategy, both in EPCM terms and in the implementation contractor terms using local Colombian Contractors. And I believe we're rightly positioned in terms of the costs associated with the project and those applied to the estimate. In terms of your question about balance between EPCM, at this stage, our thinking is to use 2, 1 focused on tailings and water systems and another focused on plant and infrastructure. And there are elements that will be handled in house, particularly the tunnel development, mine development.
So an approach depending an approach tailored to the particular work. I hope that answers your question.
I think specifically, does that handle all of your questions relating to Quebradona, Raj?
Yes, I think it does.
Okay. Thank you. I think Gramalote is specifically the Zonta Metals case, I mean, Our understanding and clearly we've had discussions also with B2Gold recently in this regard. This does date quite far back And it's certainly nothing to be concerned about. I think there is a legal process.
I think it will extend over quite a lengthy period of time, but my understanding is that these Claims that are being made does not relate to the project area, so nothing to be concerned about.
So you're saying that you are able to start your construction activity Despite the legal case that's going on?
There is no concern from that perspective. And I think what you've got to bear in mind is that we already do have the mining license For Gramalote, there is a notification not relating to the Zonte matter, but there is some changes to the mine plan Relating to Gramalote in terms of the feasibility study, there's a notification that has to be made to the authorities. It does not impact the mining license. It just means it's a notification that has to be made, but this particular matter does not impact the project at all.
Okay, thank you. And Graham, sorry, if I may go back to you once more On Cobre Dona. So the CapEx that you have, dollars 1,300,000,000 to $1,400,000,000 What's the underlying assumptions for commodity prices? And if you include today's Spot prices, what does that do to the CapEx? Or what's the sensitivity?
If I understand your question, I don't understand the connection between the copper price and what the CapEx might be.
The market is not material, steel and other raw materials, yes.
As in supply into the project? Yes. Yes. Yes. It would have an influence On copper sorry, on things like cabling and so on.
And certainly, the copper price has certainly rocketed up. We haven't finished the feasibility study yet. The range that I've provided is still one under review. One of the areas to be looked at is the contingency. And at this stage, we've just applied a factor.
But then we'll As we finalize the capital estimate, we will look at those sorts of factors and see what the prevailing market is And see what level of contingency should be applied to deal with those sorts of issues. I think that, that will be our approach to getting to the final estimate.
Okay. Thank you. And then, Graham, I think the Obuasi, I have a question on Obuasi, it might relate to you as well. With Back to the underground development, can you give us some idea as to how much underground development remains to be done to arrive at a steady state And where you are as of today?
Maybe a way to express it would be how much have we got developed for production. At this point, we've got About 9 to 10 months of developed production in terms of capitalized development, and we'd like to get that out to about 18 months So in those terms, we've probably got about another 10 kilometers or so of the Capital development to do, which would get us into a position that we would then sustain through the ongoing business.
Okay. And what's your advance rate right now in terms of per day?
We're doing around 14,000 meters per annum. And if you can do the math quickly on that, That would give you the number. I'm just on my phone, so I don't want to use a calculator.
Okay. And so in terms of where you want to get to, is that or how far are you away from What your annual development rate should be?
Right now, because of the impact on COVID that I've sort of outlined and the issues we've had with skilled labor, we're working at around 70%, 75% of development capacity. That's not because of equipment. That's really due to the COVID impacts we're seeing right now. And we want to bring that up in capacity and then sustain that and get ahead into get further ahead in terms of development. So right now, the capital development is fine in terms of the ramp up.
We'd like to be a little more advanced, But we're dealing with the sort of priorities and restrictions around the COVID impacts at the moment. From A drilling point of view, production drilling in terms of drill stocks and available stocks, that's all fine. So It's a capital development and production, but we're seeing ourselves constrained somewhat just now.
Irene?
Thank you. Our next question is from Grant Spohrer of Bloomberg Intelligence.
Hi, good afternoon everybody. Just two follow-up questions from my perspective. The first one is probably for Tim. In your presentation, you mentioned you were targeting 3,500,000 ounces of additional ore reserve additions in 2021. First question is that with depletion or accounting for depletion or is that on a gross basis?
And Let if it is on a gross basis, so that will mean roughly an additional 5, sorry, 500 1,000 ounces of reserves in 2021, would that be an acceptable sort of run rate going forward, sort of incrementally adding 500,000 ounces per annum. That's my first question. And then second question, perhaps one for you, Christine. Just in terms of And it has been alluded to and you alluded to it in your closing remarks, the sort of the value or the discount versus peers. Do you consider sort of as a management team why AngloGold does trade at a discount to some of your larger peers?
And perhaps an unfair question, but do you think the plan that you've laid out today, which is very, very extensive, Would close that valuation gap over time. Thanks very much.
Thanks for that. I think, Tim, if you can address the first question.
Okay. Thank you for that. We note in the presentation that we're looking to add 3,500,000 ounces or more. And so that's our sort of our baseline target, but there are opportunities out there to add more. And our number one goal is to always make sure that we replace depletion in the 3,500,000 ounces that we Note there will be gross.
So there we're always working to build margin above depletion And continue to do that so that we continue to increase reserve life.
Thanks, Tim. I think certainly, as a management team, we're constantly looking at ways of unlocking value in the portfolio. And I think certainly the plan that we've outlined today, firstly focusing on brownfields Exploration and extending the reserve life, I think, is one of the very key areas that is going to help us And lock value across our portfolio. Of course, we've got the growth projects are also very exciting and they're very key. Firstly, Abuasi completing that and we're well on our way actually at the final in the final lap of Abuasi as we said.
And of course, then it is also getting the 2 Colombian projects to investment decision. That is certainly going to improve the quality of Our portfolio and extreme reserve life. I think certainly also addressing the free cash flow conversion challenges that we do have, we spoke about that Today is one of the other ways that we can unlock value. It's quite significant uplift in our share price If we can get the cash out of the DRC and it is looking very imminent. We've spoken about this a few times, But certainly, it is looking like we're just about there.
March is the date we will get the first chunk of cash And then clearly also addressing the VAT receivable in Tanzania. And I think look as a management team we will have Constantly, I don't think this is just once off that we do this Capital Markets Day presentation. I think We're certainly going to have to constantly be looking at ways of how we can improve, how can we unlock value. And we call ourselves active portfolio managers for that reason. It's not about being complacent.
It's about constantly tracking against our plans, but also looking at ways of further unlocking value for our shareholders.
Thank you. Our next question is from John Tumazos of John Tumazos
So family of 3 families that are 13 different devices.
I don't know that those
are right. That's just one family of products. The modern ones have a build in backup.
Irene?
Seems there's no response from that line.
Next question please.
We'll take the next question from Shielan Mody of UBE.
Afternoon, everyone. Thanks for taking some further questions from me. I've got 3. The first one is just more clarification. Like when you go through all of the mines that in your portfolio, You kind of give a little bubble with the life of mine.
Is that an aspirational number given that Currently, your reserves actually don't support that life of mine number. The second question is, if I look at your portfolio and I think about it for the next couple of years, Am I correct in thinking that implicitly for the next, say, 2 years, we're looking at, on average, a lower grade scenario for the company before things start improving, so from late 2022, early 2023 when things start improving. And implicitly, does that mean we're going to go through like a high And then the third question is in terms of the projects, they seem to have quite positive outlooks. I'm talking about Quebradana and Gramalote. If I look back 10 years ago, you all said 2 projects ongoing at the same time.
At the time, it was Tropicana in Kibali. How is the company positioned differently this time around? Thanks.
Thanks for that, Julian. I'm going to ask Vaughan to address the question your first two questions actually.
Okay. First, on the Life of Mine plan and the bubble in the report. Effectively, that bubble is calculated As the ore reserve, so the current ore reserve divided by the sustainable production from last the previous year. So it's just an estimate. It's certainly not a life of mine plan.
So that's all it is. It's just an indicative estimate of what the life could be. But it's coherent across the entire presentation. All of them are calculated in the same way.
And can you answer the question in terms of grade?
Yes, the average grades over the next 2 years, I would not expect to see a significant difference. Christine did obviously explain earlier today that our reserve grades have gone up quite dramatically with the sale of South Africa, specifically Mine Waste Solutions with the big tonnages. So those grades have stepped up. We would expect to see the operations maintaining their head grades. There's no expected major dramatic changes on any one of the operations in terms of average grade mined.
Just a follow-up to that. If you're talking about no change to the grade profile for any of the mines, I mean, even with Gaeta in your outlook, You say there's a dip in production for the next 2 years. So if the grade stays constant, that implies the plant will actually be Operating at a lower rate, so maybe explain the gap there.
Okay. I guess for Geita, it might be a bit of an exception And that as we have explained, it is very much a different year coming up with us moving to more underground, Losing and completing the Nainkanga pit late last year and then moving through into Nainkanga. So there is a difference, Nainkanga is slightly lower grade than 9 Kanga was. So there will be a slight reduction on that perspective. So I guess Geita It's an exception to the rest of the company.
And thanks for that, Vaughan. I think specifically as relates to the 2 projects, and Graeme actually spoke about How these projects are going to improve our portfolio quality and help us lower cost and extend life. I think what's important to note is that in the 1st sort of 4 years, you actually already see In terms of the guidance numbers that we've given out that you already see growth coming through from our existing portfolio. And then clearly, the Colombian projects do come in at the back of that 5 year period. And so It's really been thereafter you will see steady state.
I think certainly you will see that improvement in our portfolio. But I mean you heard the operators Speaking today about the optionality within both the Africa portfolio and the international portfolio In terms of very long life assets and our track record in terms of exploration success speaks for itself. And clearly, with that will also come an improved portfolio and lower costs. So I think certainly in the longer term, we've given you a 5 year view on production. And I think our focus very much with this increased The increased exploration program that we have is to improve reserve confidence over the longer term and we'll be able to guide Hopefully to 10 years and I'm not going to give you when, but I think the focus of it is to give us a more a longer visibility on our assets.
But clearly, it is to lower cost, to improve the quality of our portfolio and to extend reserve life.
My question actually referred to so 10 years ago when Anglicold was building Tropicana and Kibali, I think Venkat was the CFO at the time and Mark Cutofani was the CEO. Effectively, I think the company came from effectively an unlevered position. I think you just had Paid off all of the loss making hedges that had constrained the company for a long time. And there was a positive outlook on most of the operations and then there were these 2 projects that were going to be developed. Now where the question relates to today is effectively I'm indirectly asking you, are you doing procyclical investment?
And is the risk that in 3 years' time, if the gold price is lower than it is today, then you'll be caught with a levered balance sheet like you were last time. And therefore, how is the company different today?
Well, look, that's a very good question, but I think it It once again talks to how are we seeing through the cycle in terms of when we make assumptions on projects. And I think the fact that we have stuck to a very conservative reserve planning price, project Planning prices as well, it's 1240 long term real that we assume for gold projects. And I think certainly when it comes to copper, you can assume similar prudent assumptions going forward. And I think the other aspect of it is in improving the quality of our portfolio, you are going to see a lower cost profile coming through, And we'll be able to capture margins over the longer term. So we're certainly in the long term not planning to lever up The balance sheet of the company, of course, one has to allow for some flexibility.
That's why we give a one time target through the cycle. But I think the way we think about planning for the company over the long term is actually to position us better to capture margins and deliver improved returns to shareholders.
Irene, I'm going to take some questions from the webcast. We're kind of running a little short on time and I've got a line of them. So let's see how many we can get through here. Chris de Salvatore at RWC Partners says that project CapEx on Quebradona looks very low relative to other similar projects Of size in the region, why is initial project capital intensity so low? Graham, can I hand that one to you?
Thanks, Stuart. I'll have a go at answering the question. These sorts of things come down to the characteristics of the project itself. Quebradona, firstly, is high grade, and one of the slides It shows a comparison of the Quebradona grade versus several others. And at 1.25% copper and 0.7 grams per tonne, You're looking at somewhere like a 1.7 percent copper equivalent.
So a good grade, which means that volumes are lower per pound of copper production. I think the nature of the ore body, It sits within escarpment. It, therefore, doesn't require shafts, and we'll have twin tunnel access. Also, the mining method in sublevel caving will mine that entire envelope. So compared with large open pits, Where you've got big movements because of strip ratios and therefore large quality of equipment, Your costs are, therefore, lower.
We're using grid power, so we don't have anything other than power line requirements. And location, favorably located close to Medellin and very close to a highway, Very close to water access. So I think those sorts of attributes of the project, together with the grade, Explain the lower capital intensity that you're observing.
Great. Thanks, Graeme. Vaughan, the next one for you from Jarrod Hoover at RMB Morgan Stanley. He says, what exactly does the $45 an ounce to add reserves relate to? Is this all the exploration and drilling related to convert resources and reserves?
And does it include the written off exploration that doesn't deliver any reserves?
Okay. Thanks, Jarrod. To start off, yes, it does. It includes the entire budget expensed in converting From inferred mineral resource into indicated and measured mineral resources prior, obviously, to our life of mine planning. So and that would then deliver the ore reserves.
So it's fully inclusive of all the costs that we incur in the process And obviously, it does include any write offs of resource and reserve. But in reality, our conversion rates are pretty high, Probably 80% to 85% conversion from inferred to indicated. And so as a result, we don't have too much falling away in that process.
All right, the next question is from Kateko Matonsi at Investec. Kateko says, what is the level Of production, what is the level of production reductions at Gaeta in 2021, 2022?
Thanks, Katego, for the question. As mentioned, Gaeta is transitioning from Nyankanga, which has been the mainstay, the main Open pit and it is transitioning into the closure of that pit into the opening of a new pit, which is Nyamalalimu. And as Vona said that pit comes in at about a gram per tonne lower than at the moment then Nyankanga. I think that's the first thing. And coupled with the fact that we will be accessing That pit, Nyamalalimu probably in the second half of this year.
So therefore, there is a delayed effect in terms of bringing those ounces into 2021. The second aspect, of course, is the opening up of Gator Hill And that is expected to start delivering ore as well in the latter part of 2021. So in terms of our conservative planning assumptions is that the main sources of feed for particularly this year It's going to be the stockpiles, which is basically the ore from the last remaining benches of Nyankanga, which we mined last year, plus then the 2 underground sources, which is Nyankanga underground and Steyr and Comet. So we have adopted conservative planning assumptions to make sure that we are able to go through this transitional period with a fail proof plan. But however, there is upside.
If we are able to go into Nyamalalimu a little bit earlier, We do believe there will be some outcropping, there, which will then actually strengthen our production profile for this year. And as well, as we go into caterpillar as well, we may encounter some development or We may access those a little bit earlier depending on our success in terms of the drilling. So we have gone in a little bit on the conservative side, but we believe it's prudent to do so. However, we do See a bit of upside in 2021 and possibly as also we get to understand the Opodi's A little bit more with exploration success this year, it will feed into next year, which then will actually make the production decreases we are seeing now much less than in our plans. Thanks.
Thanks, Tayla. We have another one from Jared where I'll boil it down, but in effect, What are our long term planning assumptions, reserve price assumptions, resource revenue planning? Maybe we'll start there, Christine, if that's okay.
Yes. So thanks for that question, Jarrod. The reserve price assumptions long term is $1200 an ounce. We've so we recently increased it from $1100 to $1200 an ounce and the resource price Our planning assumption is $1500 an ounce. It was increased from $14 to $1500 an ounce.
Still very prudent and also when we compare that to our peer group, we're certainly at the conservative end of the scale there.
Great. I think Christine, Jared also asks about what Drives our view of jurisdictional risk as we are looking at these capital investments in new areas.
Yes, that's a good question, Jared. And I think quite importantly is when we do look at jurisdictional risk, we do Also look at it through the eyes of how the market looks at it in particular Institutions and so that would involve rating agency views as well as how funders potentially look at it. We take the country risk premium into account, the risk free rate of return. And I think what we also take into account when it comes to project is any project specific risks. So there are a variety of factors that would actually impact Equity to particular jurisdictions, but in this instance, we particularly do look at the external impacts.
And then internally in particular, it is looking at project risks in itself. So typically for example, Australia would be a very low risk jurisdiction. Colombia is a bit higher, But we still also see it as a low risk jurisdiction. But there are some other jurisdictions, for example, in the DRC and we've seen it With the issues that have arisen recently, yes, we've been successful as a company in managing jurisdictional risk. But there, for example, it would have a higher risk than, for example, Colombia.
And so Hopefully, that sort of gives you a sense of how risk is adjusted across jurisdictions and it does impact the discount rate at which project And so typically when we do look at The overall project, it's not just price that factors into it. It's a number of these other risk factors, capital, Operating costs as well as the price. And hence, for these projects in particular, we would be looking We'd be putting out ranges. We'd be putting out the feasibility study so that you can actually understand the parameters. And of course, we will be stress testing all of that through a Monte Carlo analysis as well.
Thanks, Christine. Just one quick question from Marcelo was the copper gold split at Quebradono Marcella that's 80, 20, 80 copper, 20 gold over the life of the project on average. I'm going to just hand over to Claudia to take the last two questions from Arnold and Leroy before we wrap, please.
Thank you. The next question comes from Arnold van Goghn from Nedbank. Please go ahead, Arnold.
Yes. Thank you. Christine, quick question on Cubadana. Would you consider bringing in a partner to spread funding risk and I guess also the And perhaps maybe B2Gold given that you really have a partnership in country. And then lastly, you talk about essentially being portfolio managers.
So I guess a bit of a left field question, but would you ever consider a offer for Kibali or do you consider it to be part of the crown jewels? And also, I'm asking that in the backdrop against
Thanks for that question, Arnold. I think in Quebradona, we're not looking for an equity partner. In particular, what I did speak to is financial risk mitigation. I think we're quite comfortable with all the other aspects of As a matter of fact, Colombia is ranked by the World Bank As one of the highest risk rated risk adjusted return countries for investments that they've actually been involved in And I've spoken to all of the other risk mitigations and I think improving confidence that we've actually in the country as well. And quite importantly, both of these projects are ranked as strategic projects In Colombia, we've seen very good support at different levels of government within the country.
I think it is more about financial risk mitigation. We're quite comfortable that we've got sufficient headroom in our balance sheet to fund This project at 100%, Quebradon at 100% and then Gramalote, our 50% share of it as well. And clearly, the refinancing of the $700,000,000 bond as well as the undrawn facilities, The RCF facility is $1,400,000,000 on our balance sheet. We're sitting with $1,300,000,000 of cash at the end of December. So that's quite a lot of firepower to execute on our growth strategy.
As regards Kibali, I think certainly this is a crown jewel for us and we're very focused On working with Barrick to get the cash out of the country, of course, both Barrick and ourselves are affected in the same way. And so it's not for sale. But of course, if we offered a premium price For our share of the asset, we'll certainly consider it, but I do need to state that it's very much a core asset within our portfolio.
Thanks, Christine. Claudia, last question from Leroy, please.
Thank you. The final question comes from Leroy Munguni from HSBC. Please go ahead, sir.
Thanks, guys. I'm glad I could sneak in. I've got two questions. The first one is probably For Stuart, it relates to the G in ESG. If I look at your Board composition And I look at sort of strategically where the company is going.
There's a disproportionately high number of South Africans On the Board, is that a concern at all? Is that something that you would be looking to change to get some more The ground expertise in some of the areas that you're more concentrated in, in terms of production. And then my second question is, when you look at allocating funds towards exploration, how What are the main characteristics you look at in terms of prioritizing certain assets of others? Is there a jurisdictional risk Do you focus on the ones that have critically short life of mine or is it maybe a Profitability thing, do you prioritize assets that are more profitable? Just some color on how you look at that.
And then maybe a third one, when I look at your assets that are going to underpin your organic growth, They all seem to be the assets in the regions where you haven't recently struggled to get cash or VAT refunds out of. Is that Purely coincidental or is that intentional?
Hiro, I'll quickly tackle the first question. I think the Number of South Africans on our Board is not a concern to us. I think we're certainly comfortable with that. I think the skills mix on the Board is appropriate. The Board is always looking at its composition to ensure that it's appropriately staffed and skilled for whatever lies ahead of us.
So They're never standing still in that regard and they certainly are keeping a focus on whatever particular challenges are coming at us at any point. So I would say that it's certainly front of mind for them. But the number of South Africans on the board know is not a concern. I'm going to hand over to Vaughan for the next question.
Okay. Thanks. In terms of prioritizing exploration, In reality, it starts off with our understanding of the geology. We're focused absolutely I'm not wasting money on exploration. So we would only target the areas where we have a geological Understanding that suggests to us that, that ore body could extend their depth to a long plunge, a long strike, and that would be the starting point.
Naturally, there has to be a portfolio look at it, but it all starts with the geology. Then we superimpose a portfolio look, And it's really around those operations that we would like to extend the life. But in general, It always comes back at the end of the day to the geology.
I think certainly when it comes to capital allocation because that's, In essence, the question that you're asking about on capital allocation, I think quite importantly is that we do have a diverse portfolio, which already brings balance to capital allocation. And of course, in terms of how we allocate capital, it's very much driven Based on opportunity, but also based on level of confidence that we see in that opportunity. So typically In our business plans and certainly for the 5 years going forward, you've in essence been given A snapshot of our 5 year business plans, you will see all the high confidence opportunities that have actually been factored in here. But I do need to say to you it's certainly balanced across our jurisdictions. And I think Geita is a point in case we have on extending the reserve life there both underground and open pit reserve life.
But the fact that we are balancing it across our jurisdictions I think certainly is a form of risk mitigation as well.
Thanks, Christine. Just before I ask you to make A few concluding remarks and we'll wrap up. Just to assure everybody who has sent questions through on the webcast that we'll get to those and respond to you over the next day. And apologies for not getting to you live on the call and ditto for those who were in the queue on the call. Christine?
Thanks, Stuart. So in closing, I'd like to say that AngloGold Ashanti is really at an exciting inflection point in its growth path, Primed to generate returns from its strategy, we are proving that there are high return investment options open to us. And after several years of rationalizing our portfolio, we now have a clear and credible path to disciplined high return and low risk growth. Our investment case is indisputable and I'm certainly looking forward to AGA's next chapter as we build on our momentum To unlock the value of our unique portfolio, our aim remains very clearly to build a solid,