Good afternoon, everybody, and for those joining us from North America, good morning, and welcome to AngloGold Ashanti's full year results for 2020. We have a busy lineup today, with various members of our executive team talking us through the results. Before we get there, I would like I'd like to invite you to the Safe Harbor statement in the presentation. It has important information regarding forward looking statements that may be made during this conference call. It's important information, and I do urge you to read it.
Without further ado, I'm going to hand over to Christine to talk us through an overview.
Thanks, Stuart. As always, we'll start with a look at our safety performance. As we previously reported, we had 6 fatalities, All in the year through to July was 4 at our South Africa operations, which have now been sold and 2 in Ghana at Abu Wasi. Our efforts are aimed squarely at eliminating all injuries and especially fatal accidents from our operations. This year, we will be implementing an updated safety strategy across our business with particular focus on the critical controls needed to eliminate what we call high consequence, low frequency events.
We continue to invest Considerable resources in understanding the root causes of all accidents and also high potential incidents or near misses In order to prevent recurrences, aside from those leading indicators of accidents, there's also value In looking at lagging indicators like the all injury frequency rate, which ended last year at its lowest level ever, 2.39 injuries per 1000000 hours worked. That fell to 1.68 for our existing portfolio of assets Without the South African assets included, that's well below the ICMM member average. It's also a strong indicator of the strength of our safety culture and the effectiveness of our systems and provides us a good foundation from which to continue working to realize our ultimate goal of 0 harm. A quick look at COVID-nineteen and our emphasis remains on safely ensuring business continuity as we navigate through the pandemic. We continue to work hand in glove with authorities and local communities in each of our operating jurisdictions, providing not only health care support we needed but also assistance in other areas that are feeling considerable strain from the pandemic.
This year will likely require support in the vaccination drive across our sites, and we're looking at Several ways in which we can aid government's efforts to safely and effectively roll out vaccines to our employees, their families and our host communities. Still, we saw an impact on the business from a production and cost perspective, which Iain will talk to in a moment and with respect to considerable complexity in moving people around to our sites. We continue to rely on strict adherence to our COVID-nineteen protocols as the best way for our employees to stay safe. As we look at 2020 from a strategic perspective, we had a strong year. In summary, We met guidance for the 8th consecutive year showing constancy and reliability.
We streamlined the portfolio By exiting operations in Mali and South Africa to focus on higher return, longer life opportunities, We progressed the construction of Abu Wasi Phase 2 to 90% at the end of last year and advanced our greenfield projects in Colombia. We vastly improved returns to shareholders and extended the average reserve life of our portfolio. Let's look at some of those highlights in more detail. The financial performance of the business was especially strong, highlighting our full exposure to a buoyant gold price. Margins were up strongly, and we produced a little over 3,000,000 ounces.
We generated $1,000,000,000 The measure on which we calculate dividends also came in at just over $1,000,000,000 To be clear, That would have been considerably higher if not for the cash lockup challenges we faced in the DRC and the Tanzanian VAT receivable. We'll talk to those more shortly. We've declared a dividend more than 5x higher Then last year's payout at around $200,000,000 in total. That was helped by the stronger cash flow and a more competitive dividend policy. We've achieved those returns and kept all our projects funded and on track without any equity funding top up.
That's the 10th year in a row we've kept that record, And it's one we plan to maintain with a balance sheet that continues to go from strength to strength. Net debt Dropped to its lowest level in a decade. Leverage ended the year close to 0 and well below our target of onetime through the cycle. And of course, the investment in reserve conversion and life extension got off to a very strong start. Ore reserves grew by 6,100,000 ounces on a gross basis, which more than offset our depletion and extended the reserve life of the portfolio to 11 years.
We're tracking close to the target of Abu Wasi Phase 2 construction At the end of this quarter and while still targeting ramp up to 4,000 tonnes a day in quarter 2, The impact of the pandemic may cause the tight schedule to overflow into quarter 3, and Graeme will elaborate on Abu Wasi a little later. I won't spend a lot of time here, but we have maintained a good margin whilst Self funding our business through years of a difficult market. We've seen that margin step up to around 40% this past year as we've remained disciplined and seen the gold price move higher. We've always said That shareholders must get their first slice of the pie before investment in growth. I'm pleased to say That they will receive a much bigger slice from our 2020 activities.
This slice is also bigger than the one going to service our balance sheet, Does not in any way change our firm commitment to continue self funding all our reinvestment needs and the greenfield projects that are moving toward an investment decision. So in summary, we continue to follow a very clear strategy. It's about being prudent and disciplined in line with our commitment to remain a self funding gold producer, which benefits a range of stakeholders and drives improving shareholder returns over the long term. To that end, We continued to upgrade the overall quality of the portfolio through several means: selling short life, higher cost assets, Bringing in new lower cost and longer life ounces, first from Abuasi and then from Gramalote and Quebradona. And we are continuing to add new ounces at a hugely competitive cost at our existing sites.
Importantly, we're adding these ounces on a per share basis, which sets us apart. We're strengthening the balance sheet At almost $3,000,000,000 liquidity is strong and getting stronger. Leverage is low and trending lower, and we've replaced Maturing bonds with lower cost, long term debt. We're working to improve direct returns to shareholders over the long term, And that means keeping an eye on costs and reinvesting in the business. We believe this reinvestment should be funded Wherever possible without diluting shareholders.
And we've walked the talk on that point for 10 years now. In fact, Capital discipline is very much in the DNA of the company and so is the focus on sustainability as we do work on a broad front to improve our social license to operate. And with that, I'll hand over to Iain to talk to the financials.
Thanks, Kristine, and good day, everyone. As you've heard from We have delivered a solid operational and financial performance for the year with our key metrics reflecting continued focus On operational efficiencies and capital discipline, this is the last period for which we will report results inclusive of the South African assets As the sale to Harmony successfully concluded at the end of the Q3 of 2020, Harmony took control of these assets effective 1 October 2020. Despite the accounting treatment of these assets as discontinued operations, I will discuss the performance of the group as a whole to particularly make the operational comparisons easier. Our detailed results announcement Contain sufficient information of continuing and discontinued operations separately, and I would refer you to that further information. Production of 3,047,000 ounces for the year includes South African production of 241,000 ounces For the 9 months through to September, in terms of the continuing business, production for the year was 2% or 56 1,000 ounces lower.
The sale of the Sadiholo and Marilla operations concluded on 30 December 11 November, respectively, And this further assisted us with the streamlining of our portfolio. Performance for the year was underpinned by a record year at Gaeta Of 623,000 ounces, which is its highest level of production since AngloGold Ashanti took full ownership of that operation, Geita has now surpassed 10,000,000 ounces produced since its commenced production in the late 1990s. Gate Hub was supported by steady performances at Kibali, Idioprem, Sigiri, Sunrise Dam and AGA Mineracao, which Reductions at Tropicana, Cerro Vanguardia and Cerro Grande. OBEIAC continued to ramp up and produce 120 7,000 ounces during the year despite COVID-nineteen challenges. Commercial production was achieved for Phase 1 of the redevelopment project At the beginning of Q4 of 2020, adjusted EBITDA increased 50% year on year To $2,593,000,000 from $1,723,000,000 on the back of a 27% increase in the gold price Total capital expenditure at $792,000,000 is 3% lower year on year With sustaining capital at $532,000,000 8% higher than the prior year, Reflective of the additional spend on ore reserve development, exploration and deferred stripping in terms of our reinvestment strategy to create improved mining flexibility and ore body confidence.
Growth capital of $260,000,000 was 19% lower than 20 With the RBAC project having passed the peak expenditure phase as well as an element of growth capital rollover into 2021, This is due to challenges experienced as a result of COVID-nineteen impacts relating to specialist skills shortages and ongoing travel restrictions. Free cash flow for the year of $743,000,000 was the highest level generated since 2011, aided by the improved gold price, However, partly offset by lower gold output, higher taxes and royalties and unfavorable working capital movements relating to inventories, Export duties at Cerro Vanguardia and VAT at Gaeta. The movement in inventories relates mainly to a strategic decision by management To increase consumable stores and reagents levels, specifically at our African operations in order to mitigate for potential supply chain disruptions, which may result from the ongoing COVID-nineteen pandemic and to assist in the ramping up at the OBIC operation. While we received cash receipts of $140,000,000 from Kibali during the year With $49,000,000 received in the Q4, free cash flow continues to be impacted by the slow repatriation of cash from the DRC With our attributable share of the cash awaiting repatriation at the end of the year amounting to $424,000,000 Despite the above, our free cash flow generation for 2020 was more than the previous 5 financial years in aggregate.
Free cash flow pre growth capital, which is our dividend metric, rose to over $1,000,000,000 the $11,000,000,000 level And in line with the revised dividend payout ratio of 20%, the board approved the fivefold increase in the dividend distribution to $201,000,000 This reflects an appropriate balance in our capital allocation discipline, demonstrating our ability to balance Our balance sheet strategy continues to support our capital allocation discipline with adjusted net debt at $597,000,000 62% lower than last year and at the lowest level for the last 10 years. We remain committed to maintaining a flexible balance sheet With an adjusted net debt to adjusted EBITDA target ratio of 1 times through the cycle, our current ratio of 0.24 times liquidity remains strong and continues to provide good flexibility in a volatile climate. We currently sit with cash balances exceeding $1,300,000,000 excluding the Kibali cash balance of $424,000,000 From a liquidity perspective, cash is mainly supported by the undrawn multicurrency $1,400,000,000 RCF. During the year, we successfully managed to raise a new 10 year bond of $700,000,000 priced at 3.75%, the lowest achieved by the company for a bond offering. The upfront proceeds of the $200,000,000 received from the sale of South African assets were utilized to settle all local debt.
We canceled our South African credit facilities
as well
as the $1,000,000,000 standby facility we entered into at the onset of the COVID pandemic. We remain strongly levered Both to the gold price and currencies and we expect cash flow generation across the business to continue to benefit from prevailing current market conditions as well as from production and efficiency improvements in our business. All of this was achieved without the need to approach shareholders for new equity Finally, while our credit ratings remained unchanged during the year, there were revisions to the outlook positions. Moody's maintained an investment grade rating for the company with the outlook revised to negative and S and P maintained a rating one level below Great with the outlook revised to positive. Looking at the cost performance in detail year on year, Our cash cost increased 6% to $8.19 per ounce, dollars 43 per ounce higher than the prior year.
This reflected lower grades, inflationary pressures and higher gold price related royalties, the impact of which was Partly softened by the benefit of weaker local currencies, favorable throughput volumes and other efficiencies. Underground recovered grades for the group were around 17% lower year on year. Lower underground recovered grades were experienced at Gaeta, Kibali, Cerro Vanguardia, AGA Mineracao and Cerro Grande, open pit recovered grades reduced at Tropicana and Sigiri. All in sustaining costs for the year were 6% or $61 per ounce higher year on year at $10.59 per ounce On the back of higher cash cost and the previous flagged higher sustaining capital spend, this related to additional investments in ORD, deferred stripping and in order to improve both mining flexibility and ore body confidence as mentioned before. We have seen the early benefits of these ongoing investments in our end of year ore reserve and mineral resource declarations.
COVID-nineteen related impacts Resulted in all in sustaining costs being approximately $55 per ounce higher for the year due to the estimated production impact of 100 and 40,000 ounces and associated cost impacts predominantly related to the South African lockdown. We continued our multiyear trend of meeting or beating our guidance during 2020. And in terms of commitments made, Take pleasure in extending our guidance to beyond in year with more detailed guidance for 2 years and indicative outlooks on the key production, Cost and capital metrics for further 3 years. In line with past trends, production for 2021 is expected to be weighted to the second half of the year. Expected production is guided to end between 2,700,000 2,900,000 ounces.
All in sustaining costs are expected to be between $11.30 per ounce And $12.30 per ounce for 2021. The uptick relates to an expected increase in sustaining capital expenditure, which forms part of the all in sustaining costs. As mentioned before, this increased results from our continued reinvestment strategy And in exploration or reserve development and deferred stripping. In addition to that, there is the increased regulatory requirements For tailings, storage facilities compliance in Brazil, and there's also further spend required for TSF infrastructure at other operations, including Ideaprim, Tropicana and CVSA and lastly, a shift from growth capital to sustaining capital in all reserve development at Obey RC. Total capital expenditure is guided at $990,000,000 to 1.1 $14,000,000,000 for 2021.
Nonsustaining or growth capital is guided at $270,000,000 $320,000,000 for 2021, which includes the remaining funding requirement for the RBRC Growth project, The 2 Colombian projects, the Niamolelima open pit at Geita, the Golden Delicious pit at Sunrise Dam and the Block II project at Sagiri. The 2 long life low cost Colombian projects, which will come up for board approval later this year and will have a material impact on capital, production and cost profiles of the company over the longer term. Sustaining capital expenditure of $720,000,000 to $820,000,000 constitutes About 72% of the total capital outlook in 2021. On a per ounce sold basis, this amounts to 2.60 dollars per ounce to $2.90 per ounce, with the main reason for the increase compared to 2020 relating to the sustaining capital expenditures previously mentioned. These costs will remain elevated in the near term but will fall back to more normalized levels of between $160 to $200 from 2023 Onwards.
We remain mindful that the further waves of the COVID-nineteen pandemic, its impacts on communities and economies And the actions that authorities may take in response are largely unpredictable. I will now hand over to Sekilo to cover the Continental Africa operations.
Thanks, Ian, and greetings, everyone. Let's take a look at the African operations. As the region continues to reap the benefits of the operational excellence drive and efficiency improvements. It delivered another strong production and cost performance, with gold production increasing by 4% Year on year to 1,600,000 ounces at a total cash cost of $7.57 an ounce For the year compared to 1,540,000 ounces at $7.59 an ounce during the prior period. The region's all in sustaining cost was $9.35 an ounce for the year compared to $8.96 an ounce for 2019.
This 4% increase was largely driven by higher royalties and COVID related costs. The region generated free cash flow of $648,000,000 for the year Compared to EUR 232,000,000 during the previous year, this is the highest free cash flow generation in the region for a single year. Now going into a little bit more detail on each asset. In Tanzania, Geita produced 316,000 ounces at a total cash cost of $7.22 an ounce for the second half of twenty twenty compared to 361,000 ounces at a total cash cost of $5.94 an ounce for the second half of twenty nineteen. The decrease in 2020 production was due to the rescheduled SEG relining and the blend ball mill relining and inspection, which resulted in lower tonnes treated.
Total cash costs were higher for the period, driven by lower production, utilization of stockpiles and higher royalties. For the year, Geita delivered an exceptional performance, achieving 623,000 ounces of production, the 3rd highest since commissioning in 2000 at a total cash cost of $6.41 an ounce for the year compared to 604,000 ounces at a total cash cost of $6.95 an ounce in the prior year. Tonnes treated were 4% higher due to stable plant operations. Lower total cash costs were driven by a buildup of ore stockpiles and a decrease in fuel costs, partly offset by higher royalties due to higher gold price. In the DRC, Kibali contributed production attributable production of 183,000 ounces at a total cash cost of 6.63 as an ounce for the second half of the year compared to 178,000 ounces at a total cash cost of 605 dollars an ounce for the same period in 2019.
This represents a 2% year on year production increase, mainly as a result of an increase in plant throughput. Total cash cost increased in the second half of the year due to movement in all stop piles and higher royalties. For the year, Kibali delivered attributable production Of 364,000 ounces at a total cash cost of $6.29 an ounce compared to 366,000 ounces at a total cash cost of $5.72 an ounce in 2019. The cash costs increased due to higher operational cost stockpile utilization and increased royalties. In Ghana, Itua Prim production for the 6 months ended December 2020 came in at 138,000 Ounces at a total cash cost of $7.19 an ounce compared to 139 1,000 ounces at a total cash cost of $8.95 an ounce in the second half of twenty nineteen.
Itua Prim matched its 2019 production record and produced 275,000 ounces at a total cash cost of $7.31 an ounce for the year compared to 275,000 ounces at a total cash cost of $8.15 an ounce in 2019. The 10% decrease in total cash cost resulted from capitalization of pre stripping mining costs at Teberebe Cut 2. This was partly offset by increased royalties as a result of higher gold price received and lower stockpile addition in 2020. Obuasi entered Phase 1 commercial production in Q4, ending the year with total capitalized and operational production of 127,000 ounces. Graham will provide an update on the progress of the Obuasi growth project shortly.
In the Republic of Guinea, Sigurdi's half year production increased by 7% year on year to 116,000 ounces at a total cash cost of $13.57 an ounce compared to 109,000 ounces at a total cash cost of dollars 1100 an ounce for the second half of twenty nineteen. For the second half of The year the total cash cost increased significantly year on year due to higher mining costs and processing costs resulting from the harder rock type, Additional costs incurred to resolve operational challenges at the mine and mental inventory challenges. For 2020, Sikuri's attributable production of 2.14 came in slightly higher Then the previous year of $2.13 had a total cash cost of $12.93 an ounce for the year compared to $1100 an ounce for 2019. Total cash costs were higher as a result of higher mining volumes and higher processing costs, resulting from increased hard rock mining and processing compared to more transitional or treated in the previous year and royalties. I'll focus more on security and the combination plant in the next slide.
I'm proud to announce that the initial challenges with commissioning of the plant at Siguiri have been successfully completed, And the combination plan project has officially been closed out. This has been a result of the focused effort by our technical teams This has led to the significant turnaround. This gives us the confidence for delivery in 2021, As our objective for the Siguri mine is to be a 300,000 ounce attributable producer at an all in sustaining cost at or below $1100 an ounce. The Q4 recovery factor showed a 7% quarter on quarter increase, reaching 83%, and the recovery improvement trend is increasing, as will be shown in our Q1 results in March. Significant process modifications were effected despite COVID-nineteen delays And new equipment installed to overcome the metallurgical recovery challenges experienced.
Further, engineering optimization of various components augmented the consistent incremental recovery improvements highlighted in the top right graph. Successful optimization initiatives that were undertaken include Improvements in milling and classification circuits, further optimization of the gravity gold recovery circuits, improved carbon management and reagent control completion of the CIL tank conversion project Additionally, engineering reliability improvements, particularly across the crushing and milling circuits together with revisions to the operating discipline helped to reduce the process variability, further contributing to the success achieved. This turnaround gives us strong confidence and demonstrates the deep technical talent within the company. Looking at Gaeta. With production of 623,000 ounces and improved all in sustaining It is truly a Tier 1 asset.
The aggressive exploration strategy since 2018 Has resulted in a steady rate of annual replacement of depletions of 2020 ore reserve Growth amounting to 1,400,000 ounces before depletion. This is a great achievement and aligned with our strategy of increasing ore reserves at Geita. The development of the underground operations of Geita Continued during 2020 with the Gator Hill underground mine permitting and portal establishment and engineering infrastructure completed during Q4 of 2020. Ore is expected to be accessed by late 2021. The Yamalalimu Cut 1 and Cut 2 allows Geita to continue having flexibility of open pit operations to supplement the now predominantly underground operations.
Environmental permitting for this project has been obtained and the mining Plan approval is well advanced. Yamalalimu area contributed just under 1,000,000 ounces of declared ore reserves It's the end of 2020, with highly prospective targets being prioritized over the next 5 years. In conclusion, as I look back at the past year, progress has been made in all our key focus areas. As we move into the new year, these areas remain critical to our success as a region and a company. Our focus is to increase the value of the African portfolio, and this will be achieved through the following: Keeping safety as our first value and remaining COVID-nineteen alert at many of our jurisdictions as many of our jurisdictions are experiencing the 2nd wave secondly, keeping ESG at the core of decision making Thirdly, continuing to build on strong performances at our key assets of Geita and Kibali whilst ramping up Obuasi.
Continuing to build on the positive momentum at Siguiri Whilst developing Block 2 will create further optionality. Advancing exploration projects To continue yielding reserve growth, primarily at Geita, Siguiri and Kibali over the next 5 years. With that, ladies and gentlemen, I would like to thank you and now hand over to my colleague, Ludwig, who will take you through the international portfolio. Thank you.
Thank you, Stelo. The international operations had a strong end to the year Despite the continued COVID-nineteen disruptions, as we flagged through the year, Argentina was the most severely impacted, Which included a voluntary 18 day suspension in November to contain a possible outbreak, followed by a 16 day mandatory industry closure in December. In Brazil, we continue to record COVID-nineteen infections, while Australia experienced a shortage of operators due to the travel restrictions. Starting with the Americas. The region produced 476,000 ounces of gold for the year, slightly below the 48 5,000 ounces delivered in the same period last year.
Despite the drop in production, all in sustaining cost was lower at $1,03 per ounce compared to $10.32 per ounce, mainly due to the well managed cash costs across the region. We saw exceptionally exploration results recorded at Cerro Grande and CVSA. Cerro Grande's ore reserves grew by 53% net of CVSA ore reserves grew by 23% net of depletion. The Brazilian assets recorded a strong second half, delivering 40% increase in production When compared to the first half of twenty twenty, important to note, we recorded improved plant and mine performances throughout the tail end of the year as a result of our operational excellence drive. This performance was largely due to AGA Minero Saam achieving a 37% increase in This was driven by a higher tonnage mined and treated in both the Kewa and the Karikita Seto complexes.
The strategy was aimed at prioritizing dry ore and sorting ore stocks that helped to increase the throughput. Staying in Brazil, Sediq Grand's performance was largely impacted due to the COVID-nineteen. Nonetheless, the mine recorded a strong second half, seeing a production rise of 53% in the second half. Moving to Argentina, Sereb and Gare experienced unprecedented operating challenges Related to managing the COVID-nineteen regulated and voluntary stoppages through the year. Production for the year was 173,000 ounces Compared to 225,000 ounces in 2019.
As we previously flagged, a decrease in production was mainly due to the lower planned grades aligned to the current life Mine plan and lower tonnes treated as a result of the COVID-nineteen pandemic impact. Shifting to Australia, the region produced 5 3,000 for the year compared to 614,000 in 2019. Production was lower mainly due to Tropicana moving to a stockpiles strategy As we progress our capital programs on-site. In anticipation of moving to a stockpiles strategy, we moved to increase the throughput As well as saw higher metallurgical recoveries at the plant, which partially offset the drop in the mill feed grade. Open pit ore from the Boston Shaker and Avana South Pits and the new Boston Shaker underground mine is being supplemented by stockpile drill downs, While the Vanna Stage 2 cutback continues, the cutback will provide access to the deeper Vanna open pit from 2022 onwards.
The Poznersekar underground mine achieved commercial production during the second half of twenty twenty, producing 400,000 tonnes of ore. The mine is on track to reach its design production rate of 1,100,000 tonnes of ore per annum in the Q1 this year. At Sunrise Dam, production was marginally higher than last year as improved metallurgical recoveries offset the slightly lower throughput. I'm pleased to report that early underground drilling results have extremely encouraging results, which includes the recently discovered Frankly orebody Within the western ramps and extensions of the Voke and Kheri share orebodies, waste stripping at Golden Delicious satellite deposit 12 kilometers from Sunrise Dam processing plant began in December, quarter after the mining contract was awarded to the indigenous partner, Kere Mining. Great control is ahead of plan and mining is on track to deliver first ore from the pit in June quarter this year.
Approximately 18,500,000 tonnes of material containing 3,000,000 tonnes of ore will be mined in total from the Golden The Lysis pit. The pit will be mined in 2 stages, reaching an ultimate depth of 155 meters and a diameter of approximately 4 20 meters. So in summary, although year on year production dropped, operating costs were well managed despite the higher spend on sustaining capital as the projects were completed. Initial results of our investment in ORD and exploration was extremely positive in 2020, as I've touched on. As a result, we improved our geological confidence at our sites, giving us greater confidence in the ability to deliver to our mining plans.
Looking ahead, the international has a clear path to create value by optimizing existing operations and continuing to develop new projects, which will add low cost ounces to the portfolio. The team remains committed to safeguard the health, well-being and safety And mitigating the lingering impact of COVID-nineteen on our operations. The focus for 2021 is to maximize the value of the portfolio by driving operational excellence to continuously improve cost, capital and efficiencies, improve resource confidence and grow near term reserve to In addition, the international operations will be investigating the application of operational technology at our operations future carbon emissions and proactively developing projects to reduce our carbon footprint. With that, I'll hand over to Graeme to cover Obuasi. Thank
you. Thank you, Ludwig. Today, I'll provide an update on Obuasi. Following the first gold pour in December 2019, the mine ramped up to the Phase 1 capacity of 2,000 tonnes per day. Gold production for the year was 127,000 ounces, close to the 130,000 Q4 2020 was the Q1 of commercial production And with 30,000 ounces at an all in sustaining cost of $13.16 an ounce, gold production was curtailed by a 22 day tie in shutdown for Phase 2 construction.
Phase 2 to achieve an installed capacity of 4,000 tonnes per day was 90% complete at the end of the year. We are still on schedule to commission the Phase 2 mills and associated infrastructure in quarter 1 this year. The mills have been run successfully for extended periods. The KRS shaft and conveyor systems have been commissioned. We are now commissioning the 1st ore passes and sizing systems.
The remainder of the underground infrastructure will be completed by midyear. This includes the 2nd underground ore passes and tips, the GCVS vent shaft and fans and the pace fill. Ramping up mining is progressing somewhat slower than we planned due to COVID related issues. While developed stocks and drill stocks are healthy, the 2nd COVID wave that hit Ghana and Obuasi in early January is impacting production. Our priority, as you would expect, is to look after our people.
Our strict COVID protocols remain in and the on-site testing facility is helping us manage the situation. Nevertheless, our testing and contact tracing systems Being in quarantine, of whom many are our key operators and supervisors. Australia's tightened travel restrictions has not helped with crew rotations for expatriates. We are dealing with this issue by prioritizing the operating development in the short term, Prioritizing ore haulage and hoistings through the shaft. We're also expediting training and the recruitment of experienced operators and supervisors Within Africa, we're still targeting ramp up of to 4000 tonne a day in quarter 2, But this may overflow into quarter 3.
Certainly, this has an impact now, but the overall project is looking good. Capital is under control. Geology is looking good, evidenced by the increase in reserves and good reconciliations. Plant metallurgy is also achieving throughput and recovery targets. Fundamentally, the project is shaping up as planned, except for the COVID impacts of the past year.
These photos illustrate our progress on Phase 2. Commissioning of the SAG and Boar Mills has been successfully completed. The flotation, flash flotation And BIOX circuits are running well. Overall, plant recovery is on target in the mid to high 80s. This will further lift when gravity, flash flotation and regrind circuits are brought online.
The KRS shaft Winder refurbishment has been completed and commissioned. The paste plant is completed. All that remains is the installation of the transfer pumps To move pace to the new pace delivery hole collar positions. In summary, the redevelopment has addressed All the legacy issues of the past, we're on the final lap of the redevelopment. The pandemic is presenting challenges, But the team is focused and determined to deliver what has been promised.
Thank you, and I'll hand over to Tim.
Thank you, Graham. 2020 was one of the best recent years for ore reserve addition by the company and across the portfolio. It shows the potential being unlocked by the strategic investment being made into drilling and or reserve development directly linking back to delivering reserve life extension. Our mine site exploration drilling topped 1,000,000 meters for the year. This was a 27% increase Achieved compared to the prior year and we have more than doubled the levels that we were achieving 5 or 6 years ago.
We plan to continue this level of increased strategic investment in our mine sites for the next 2 years to ensure that they have better operational flexibility To deliver planned production and to support our discovery process to be able to maintain ore reserve replacement and uncover further opportunities for reserve Strong ore reserve gains are made possible on a year to year basis Because of the reliability of the mineral resource to ore reserve conversion process we have in place at our mine sites, it's backed by a long history of demonstrated success. These waterfall charts illustrate the ore reserve gains across the portfolio in 2020 with some of the larger gains coming from Obuasi, Gaeta, Kibali, Cerro Grande and Cerro Vanguardia. Equally important in 2020, on the back of our targeted exploration And the divestment of the assets in Mali and South Africa, we recorded a 45% increase in the average grade of our proved and probable mineral resource. Looking ahead, we expect this strong momentum to continue into 2021 as we continue to unlock Latent value in our portfolio through our ability to discover and successfully grow ore reserves. Again, this focused investment strategy is expected to continue
Jern has been through the guidance detail, but let's take a high level view of the next 5 years. We see an average 5% compound annual growth in production. Over the next 4 years, The gains come from brownfields options in our existing portfolio. Abu Dhabi makes big additions in the 1st 2 years, While Australia and Brazil and Africa operations each make valuable contributions through the period. In years 45, Colombia kicks in.
Over the same period, we see costs improving. Some of that relates to TSF compliance spend in Brazil coming to an end. We will also complete programs at Tropicana and Ideopreum. There's also the tapering off of the intensive investment in all reserve development. So whilst we see an increase in all in sustaining costs in the short term, we believe that bringing in ounces at a competitive cost Into our current operating sites is the highest return capital we can spend.
The added benefit is the longer valuation runway for the assets As we start to stretch their lives out further ahead of them, we see this with the additional 1,400,000 ounces at Geita, And we'll have many more examples like it in the years ahead. In short, we're proving the short life skeptics wrong. And after years of rationalizing our portfolio and selling and closing mines, we finally have A clear and credible path back to disciplined, high return and low risk growth. We have our work cut out for us. Keeping our people safe and well and supporting our communities through this incredibly difficult Time is at the top of our priorities.
That includes finding innovative and effective ways to help our host governments in the vaccination efforts, so we can work together and good for our business. We have 2 excellent projects in Colombia, Wrapping up feasibility study, after which they'll come to our board for approval. That process takes a clear outlook at the best, Most cost effective and low risk mode of execution. Abu Asi is tantalizingly close to completion, But we need to manage our way to the full ramp up carefully. This is a high margin, multi decade asset, And we won't compromise that future.
And we need to drive our exploration program forward to build On the strong momentum we've created in reserve conversion this past year, keeping our eye on the costs, especially as our capital edges higher In the next 2 years, we'll be our bread and butter and working patiently to secure the release of our cash from the DRC and to restart that Offsets in Tanzania are absolute priorities to ensure those assets are fairly valued by the market. That's it from me today, And we look forward to a much more detailed tour through the business and our strategy tomorrow. With that, I'll take questions.
Shailen Mody from UBS.
Hi, good afternoon, everyone. Thanks for taking our questions and congrats on the results today. Couple of questions from my side. In terms of ore reserve development, you mentioned that you're going to be Spending cash on this for the next couple of years, why not make this a continuous process so that you continuously spend throughout the cycle? Maybe just your thoughts on that.
Do you have explicit production guidance for Obuasi for 2021? I see you give us your long term guidance, But nothing for 2021. And then maybe around your planning assumption, I believe this $1400 an ounce. What margin do you expect Cash flow margin do you expect to generate at $1400 an ounce? And then lastly, can you just give us some guidance in terms of the cash lockups at Bali and Tanzania?
Thanks so much.
Shylen, could I ask you just to ask the very first question of yours again? We missed the first bit of it.
Sure. It's in terms of ore reserve development, you've got quite an intensive program for the next couple of years. The question is why not continue the spend Throughout the cycle, so just have a continuous budget for this every year, forever. So instead of a cyclical type of thing, it's just a continuous process.
Thanks for those questions, Shailesh. I think quite importantly, when it comes to ore reserve development, We do have a continuous budget through the cycle. What we did last year is we did up that budget by about $30 an ounce. And I think certainly, you can clearly see the benefits of that coming through with the additional reserves that we've declared. I think going forward for the next 2 years, we've had to bump up some of that all reserve developments.
And like you say, It's also driven by where our assets are in their lives and what the requirements are. But I think Certainly, even beyond the bump up that you see in the next 2 years, you will see a continuous budget for all reserve development As we go forward. I think Ian, in particular, will unpack some of the detail relating to the SIB spend. So in addition to all reserve development, there's also deferred stripping and the TSF compliance capital That does actually impact our SIB guidance specifically for the next 2 years. And from 23, you see the more normalized sort of SIB spend that will come through.
As regards Specific guidance for Doctor. Wase, I'm going to hand that over to Graeme to talk to. And then in terms of The margin that we planned for, I'll ask Ian to comment, and then I'll wrap up depending on Where we land on that. But we don't give specific margin guidance because it also depends various analysts have got their own assumptions around the gold price. We've just given you our planning process, but Ian will actually give you some more detail.
And remember, we are unpacking more of our longer term outlook Tomorrow at the Capital Markets Day. So with that, Graeme, can I hand over to you to talk to the Abu Dhabi Specific guidance, how do we think about that? And fairly steady state as we see reaching, it will be likely in Q4 this year.
Thanks, Christine. Overall for the year, a reasonable way to think of Obuasi is the ramp up Through quarter 2, quarter 3 leading to steady state in quarter 4, we expect the overall annual production to be around €50,000,000 to €300,000,000 depending on how that progresses. So certainly lower in the first half And rising in
the second
half. Thanks. So I can maybe just answer the STAIN business question. As Kristine has mentioned, the step up this year, I've mentioned In my discussion, a couple of things. The Brazil tailings storage facilities compliance and additional North tailings storage facilities infrastructure spend at Ilia Prem, Tropicana and mainly at Ilia Prem and Tropicana amounts To about $30 to $40 per ounce as included in that SIB dollar per ounce number and then obviously rolling into the all in sustaining costs.
On the stripping additional deferred stripping and again mainly relating to Tropicana and Ideaprem, you'll be looking at about $15 to $25 per ounce margin. And then with regards to exploration, further exploration initiatives As part of that reinvestment targeted reinvestment strategy of between $10 to $20 per ounce. So that's that question. With regards to the planning margin, the planning margin we've run, business planning analysis has been done at that $1400 $14.50 per ounce real price. On those types of margins, as Kristine has mentioned, we'll give full details of the expected free cash flows As well as dividend payouts we anticipate at various price ranges From €13,000,000 through to €1900,000,000 But at the current business planning scenario, that still allows us To fulfill all of our capital needs on our capital allocation and discipline as well as continue to
Danae, I think that's it.
Thank you. The next question we have is from Leon Fitzpatrick from Deutsche Bank.
Good afternoon. Two questions from me. Firstly, on Colombia. I'm sure we're going to get more details on this tomorrow, but are you able to break out the amount that's included in your CapEx guidance for 2022? And can you, at this point, just remind us of the total project budgets for each project?
And then just on Obuasi, You kind of covered the ramp up. Once you hit that 350,000 to 400,000 ounce target run rate, What is the sort of cost structure that you're expecting to be at by the end
of this year? Thank you.
Okay. I'll handle the Columbia 1, and I think bear in mind that both these projects are dependent on board decisions that Should be made later this year. I think quite importantly is also the profile of the capital spend Will depend on how this features out in the actual capital profile going forward. So I think to Gramalote, we prefer to give ranges. I think certainly, we own 50% in Gramalote, And the capital range is $900,000,000 to $1,000,000,000 and our share being 50% of that will put at about $450,000,000 to $500,000,000 In terms of the profiling of the capital spend, The build period is over 2 to 2.5 year period.
And so certainly, it's fairly evenly spread Over that period, and so certainly, that's how you can expect it to see in the capital budget from 20222023 Paul Gramalote. Quebradona also arranged the of, I'd say, dollars 1,200,000,000 to $1,400,000,000 100 percent owned, 4 year capital spend period and the capital profiling is more back ended towards 2023 to 2024. And in both these projects, you've got Production, so for Quebradona, the production sort of comes through in 2025, and we talk second half of twenty twenty five. Gramalote, in particular, it's 2024, also the second half of twenty twenty four. So it's just Sort of to relate the CapEx spend to when we are expecting production ramp up as well.
Graham, if I can hand over to you for Abu Dhabi.
Thanks, Christine. We'll provide an update tomorrow's market day, But for now, when the project's ramped up, production will be around 350,000 to 450,000 ounces a year. It will be on the lower end for the 1st period and then on the higher end after that as we get down into the deeper, Higher grade sort of Block 11 area. And all in sustaining costs will be in the range €725,000,000 to €825,000,000 So in terms of the next years after we've ramped up, so that's the back end of this year moving into 2022, I'd think in terms of €350,000,000 to €400,000,000 and cost being in the area of around €800,000,000 to Thank you.
Michael O'Kane from JPMorgan.
Good morning or afternoon. Could I just have 2 quick questions? So coming back to the cash Tied up in DRC. So with the sort of the timing effects, I think we're possibly looking at close to sort of $500,000,000 there from your portion. What are your thoughts about how you redirect that amount of cash when it ultimately comes back, Given the debt free status of the balance sheet, is it possible that investors could expect A special capital return or will that cash be redeployed for gross opportunities?
And second question, again, just sort of coming back to the long term profiling of specifically sustaining CapEx. We're seeing across the industry that there's a lot of catch up sustaining CapEx. And again, The spend that you've announced on tailings facilities, is this a normalized run rate now for the industry or for AngloGold As we look forward on a 5 year view, is that should we be extrapolating that $700,000,000 to $800,000,000 of sustaining caps CapEx Over long term time horizon.
Thanks for those questions, Dominique. I think Importantly is how would the cash be deployed? Firstly, you're absolutely correct, it's close to $500,000,000 Our share At the end of December, it was $424,000,000 and just given the statements made by Barrick Very recently, we expect to receive that cash in March of this year. And I certainly do. That would be the first chunk, and I do expect the remaining chunk of cash to come through shortly thereafter.
In terms of how would we deploy it, I think bear in mind, we are now paying by annual dividends. And so there is a formula that we have 20% of free cash flow generation pre growth, So shareholders do get the 1st slice of the pie before growth capital. And so you should expect to see that Coming through in form of improved dividends going forward, and of course, the balance of the cash would be used to self fund Our growth strategy, both the improvement in reserve confidence as well as for our growth projects Going forward. And of course, we will always assess the appropriateness of our dividend policy going forward. We do aim to be competitive With our peer group in that regard, and so that will be constantly assessed going forward.
I think what you've got to bear in mind is we've committed to self fund our growth. There will be no equity raised for the growth and hence, it is it will be funded through internal cash Generation as well as through the headroom and the facilities that we actually have, and so that's how we expect to actually fund that going forward. In terms of sustaining capital, I don't know if you want further information, but I think certainly we've spoken to a normalized level being $160 to $200 an ounce. This is where we were at. There's a specific need now for us to increase The sustaining capital spend and certainly going forward, I think don't look at it in absolute terms.
Look at it on a dollar per On basis and related to the production guidance that we've given you. And as we've indicated, the production for the next 2 years will grow On a compound annual growth rate basis, about 2% over 5 years, it will be about 5%. And so you can apply that normalized sort of $160 to $200 an ounce to that guidance we've given you, and that's where we see it going over the longer term.
Thank you. Thank you very much.
Thank you. Sir, do we have any questions from the webcast?
Yes, we do. I'm going to start off with a question from Marcella Kim at Paulson and it's quite similar to a question from Ahmad Hakim at Oasis. Christine, how much cash do you have locked up collectively in the DRC in Tanzania? Darrick said last week that they Back to release in the next couple of months, your comment on that and what is the status in Tanzania?
Okay. So these are 2, I'd like to deal with Tanzania and the DRC separately. So in the DRC, I think we spoke to the $424,000,000 That is the cash that needs to be repatriated. There's also a VAT receivable That of $65,000,000 relating to Kibali. And none of these amounts are actually included in the cash balance on the balance sheet.
I think in particular, we were the cash was imminent At the end of last year, however, there has been some political instability in the DRC. You would have seen that the prime minister resigned in January. A new prime minister was appointed about a week ago. And certainly, the President, Ceti Kedi, He is consolidating control in his cabinet, and we're expecting the cabinet really to be reconstituted fairly And once the cabinet is reconstituted, that links to the immediate release then of cash that we expect to come through. So I think we are seeing Positive more positive movement from a political perspective in that regard, And that will aid the cash release.
And of course, Mark Bristow did put out public statements When it came to the cash release, and we, of course, said the engagement really happens by Barrick directly with The DRC authorities, we have regular dialogue with Barrick in that regard, and that is certainly The comfort that we are receiving from Barrick as well. As regards Tanzania, There is a VAT receivable amount. So just to affirm, the cash itself, We actually do receive the dividends quite seamlessly from Tanzania. It's really the VAT receivable, so The bulk of that amount does relate to historical VAT receivable that has accumulated from July 2017 to present. And we have engaged With the tax authorities in that regard, I think just bear in mind that this amount $138,000,000 does actually sit on our balance sheet as a receivable, so it's fully accounted for in our books.
It does get discounted at every period end. And of course, what I can say is on a Positive note is from July 2020, the legislation in the DRC was amended to allow for the offsets Of the VAT prospectively from July going forward, and we it's really about the government Following through on the administrative process to verify the VAT so we can actually offset it against corporate taxes. We've had agreements with the government previously in this regard whereby VAT receivables Have been agreed to be offset against corporate taxes in the past, and hence, we are continuing dialogue on that in that regard. And so certainly, We'll keep you informed on the agreements that we do reach with the government.
Thanks, Kristine. I think that was clear. The next one is from Jonathan at Oystercatcher Investments here in South Africa. He says on Slide 15, why does All in sustaining costs decline from 2023 through 2025.
Okay. Ian, can I ask you to just unpack that, please? Thanks.
As we've explained, the next 2 years, 2021 and 2022, we've got Investment on the sustaining CapEx side. 3 areas: the continued targeted reinvestment strategy, We will look at deferred stripping at various at certain operations, ORD development at Other operations and the continued exploration drive coupled with the Brazil tailings compliance and other tailings expenditure that's required As well as the Novi RC for the 1st year coming into its own with regards to sustaining CapEx and or reserve development. As we then go through the years that higher position holds for 2021 2022 And then it starts to drop back in terms of our guidance to our normalized levels of $160 to $200 per ounce. As Orbihaasik, for example, ramps up and as production starts to increase in terms of the guidance we've Put out there at the other operations. Basically, that is the reason why it comes back to the normalized levels.
Thanks.
Thanks very much, Iain. Danae, let's go back to the line.
Of course, sir. The next question we have is from Arnold van Schrand from Nedbank.
Yes. Thank you very much. Christine, don't want to hammer the point. You already talked a lot about this. But in terms of the cash flows out of The DRC, how do we think about that?
Does it come in as one amount or 2 amounts? You sort of alluded to that it could come in as 2 amounts So will it come through as over a period of time? Thank you.
Thanks, Arnold. I think how you should think about it is that the cash We'll come through in chunks. There are 2 mechanisms. The one is a more permanent mechanism, which seeks exemption from the changes in the mining code That happened in 2018, late 2018. And what that allowed for is for 40% of Free cash flow from the DRC to be declared as dividends.
60% is of the free cash flow is what you are seeing In that $424,000,000 balance. I think certainly in terms of what Barrick has referred to In these statements, is they're expecting $500,000,000 to come through. And so half of that would be our cash coming through and hence the balance would actually come through shortly thereafter. And in terms of the discussions that we've had with them Previously, it was also to expect the cash to come through in chunks but in close succession to each other. The more permanent mechanism would We allow for the cash to flow through seamlessly, but that would require approval from Parliament.
Thank you.
Thank you. The next question we have is from Patrick Mann from Bank of America.
Hi, good day, Christine and team. I wanted to ask about Columbia, these two projects are obviously coming together in short order. How do you think about that, both from a Balance sheet perspective and also just kind of concentration approving 2 greenfield projects or big greenfield projects in one jurisdiction. So it's $2,000,000,000 that's coming pretty much at the same time and in the same place. Does that affect the Where you think about the project at all?
Thanks a lot.
Thanks, Patrick. That's a good question. Of course, let me first address Balance sheet, I think quite importantly is that we've got sufficient headroom in our balance sheet to fund both projects. And we are looking at financial risk mitigation, in particular, As it relates to the Puebla Dona project, and that will entail a number of risk mitigation measures, which would include offtake agreements as well as project financing. And clearly, we are exploring other alternatives as well.
But I think just to give you comfort that our balance sheet Does we have catered for the funding of these projects through Internal cash flow generation and throughout facilities. I think just bear in mind just from a financial perspective, both of these projects, Even if the investment decisions were made at the same time, there's sort of a natural phasing in terms of the capital profiling. Gramalote's capital gets spread very evenly over sort of a 2 year period. The Quebradona is over a 4 year period. And like I said, the capital of the last 2 years is let's just say the capital gets freed over a 4 year period, But it is it does peak in the last 2 years of the profile.
In terms of risk, Because that's really what you're talking to. We've been in Colombia now for quite a long time, more than 10 years. We're familiar with the jurisdiction, and we believe that it is a low risk jurisdiction. It's got a very good fiscal framework. And I think certainly in the engagements that we've had with the government authorities through the cycle, I'd say that it's a very constructive relationship and both these projects are quite strategic To the country, and so that certainly gives us comfort from a jurisdictional perspective.
I think certainly Stuart is closer to the social Aspects, as you know, the Quebradona project will require the environmental permit as well as the mining license and Any decision to proceed with the project would mean that we would have to get those permits, and we're actually seeing very good Traction in that regard. Likewise, from an execution capability perspective, and maybe Graeme would like to give you Comfort around that, but I think certainly with us transferring operatorship to B2Gold for Gramalote, I think they will then build Gramalote and they certainly got a good track record in project execution in that regard And so that we can actually focus on the build of Quebradona. And we've built large projects Quite successfully. I think Tropicana case in point, Abuasi is a case in point. And of course, we've got confidence in our execution capabilities.
And where we do lack that, we will actually be supplementing We'll acquire the skills that are necessary to build these projects. Graeme, do you want to add on to what I've Pete, relating to execution capabilities?
Thanks, Christine. I think you've covered it thoroughly. There's not too much more to say. I think the key point was that we will focus on Quebradona, and B2 will manage and handle Gramalote. We did a similar thing when we were building Kibali, managed by Randgold at the time and Tropicana, managed by us, And that was done in parallel.
I think the other point is that the projects, though they're concurrent, one is much quicker than the other. Quebradona over about a 4 year period and Gramalote over a 2.5 year period. So and As we roll from the feasibility study into the project implementation, we'll look for as much continuity as we can In the same way that we managed Tropicana. So I think it's quite doable. Christine, to explain the financial aspects, and I think from a project execution point of view, we're well set up to manage it.
A
quick question. We see that the process is still underway in terms of appointing a permanent CEO. Is there timing that we can expect When should we expect conclusion to that process?
Well, Patrick, that is a board matter. As you know, when the board is they're well advanced in the process. They are attaching urgency to the process. And so when they're ready, they will issue an update to the market in that regard.
Okay. Thank you very much.
Thank you. The next question we have is from Jared Hoover from RMB Morgan Stanley.
I mean, you've already indicated that your outlook specifically around the CapEx caters for your greenfield projects. And the last time I had a look at some of the numbers around if I just use Camelot here as an example, it didn't quite fit your hurdle rate, 15% higher on the 12 100 gold. So I just wanted to find out if there have been any shifts to those guardrails that you had in place previously. And basically, what I'm trying to get at is to get a feel for how you think about balancing investment in this higher gold price environment This is protecting the company against asset write downs if the gold price obviously goes in the opposite direction. Yes, I'll follow-up with another one after that.
Yes. So thanks, Jarrod, for the question. I think quite importantly, to give you the comfort that we do have a very Disciplined capital allocation model and those guardrails do remain intact. Of course, returns are risk adjusted by jurisdiction. And so a lower risk jurisdiction, you will actually adjust The hurdle rate or your cost of capital that you would and returns that you would actually require For those projects, I mean both of these projects are very attractive projects.
We've been spending some time on it now for a number of years. They've been Up the value curve, we will continue to make prudent assumptions, be it the gold price assumption For Gramalote and the copper price assumption for Quebradona. And we'll continuously so apart from the prudent assumptions, it's also about We're testing it. Over the long term, in terms of the project metrics, be it capital, be it risk, execution risk and the like. So what I can say to you and just give you the comfort, we will give you a range Of metrics, when we're ready to put out the feasibility study before when the board makes an investment decision on it, And you will have comfort that we do have attractive risk adjustment returns for these projects.
Great. Thanks for that, Kristine. And then maybe just another one on your outlook. So I mean, obviously, the longer term guidance that you've given us is based off your longer term gold price assumptions and your long term mine planning. But is there also a degree of dynamic mine planning that's happening in the business for maybe quicker payback projects that would realize good returns in the current environment?
And to what extent is there any dynamism built into your 5 year forecast?
Yes. So we are an active Portfolio manager, Jared. So you can expect that dynamic planning to happen as well. And of Of course, we so we've given you a long term view, and that has been factored into The guidance that we've given you, but you can expect in terms of the focus that we have on the brownfields projects, it's very much to do what you're exactly saying. It's to focus on the sort of quick payback brownfields options that do generate higher returns.
There is upside to the plans that we've got here, but I think if you attend the Capital Markets Day tomorrow, You'll get a better sense of on an asset by asset basis where the optionality is and we'll be able It will give you more of a flavor as to how we're thinking about this. Of course, the longer term outlook is an indicative outlook. We've given a firmer sort of guidance for the initial 2 years. The longer term is an indicative outlook, and it's just based on The fact that we have got higher confidence relates to the 1st 2 years, however, it's important to get you to think about the longer
Perfect. Thanks, Christian. And just one more, please, if you don't mind. I thought your slide on Seguroy was quite interesting. And it looks like the mine could be up to about 300,000 ounces at about 1100 AISC.
I'm sure you'll give us more color tomorrow, but can you just give me an indicative idea of when it would hit that 300,000 ounces? And what are the risks for the project to not hit that 300,000 ounce level? I mean, it had a bit of a checkered history, so I'm sure there might be some hurdles and that, that might prevent it from getting there.
Yes. Thanks, Jared, I'm going to ask Iqbalo to give you more of a flavor on Siguiri and where we can expect to hit those Biontte, Townsend, ounces.
Thanks, Jared. I think the first thing is the technical intervention. That was a success in being able to Figure out the geometallurgy, which was the trick that we had to resolve with the combination plant. And now that we have completed the technical interventions in terms of The additional carbon screens and we have been able to consistently now achieve Recoveries of well beyond the design parameters. It then gives us the ability to know that whatever ore type we put through that plant, We will be able to get recoveries that meet our objectives.
Secondly, what we are doing as well to augment Securi's plan is to bring in Block 2. We are investing about $30,000,000 this year to build a road about 30 kilometers road and some mining infrastructure to bring in Block 2, which comes in at an average of about between 1.5 and 2 grams per ton. And that material is also oxide, which is what Siguiri has been sort of processing for the past 15 years. And that material is going to displace the marginal ore to further actually strengthen You know our plans going forward. Since the beginning of this year, we have been hitting that run rate of about 7,000 ounces a week.
So when you annualize that, that takes you well into the 300,000 ounces mark on an I mean, 7,000 on an attributable basis. So in summary, we believe that the technical interventions in the plant gives us stability and predictability. We have eliminated the volatility on the recovery side, then coupled with us being able to bring in a higher blend of ore, which will be sweetened by the Block 2 oxides. We believe that we have got a stable platform For this mine to be operating at over 300,000 ounces a year attributable, And then that's going to bring just a commensurate drop in costs to that range that we would like to achieve below 1100.
Thanks. Perfect. Thanks, Luciano. Thanks for the call, guys. And yes, I look forward to the Capital Markets Day tomorrow.
Thank you. The next question we have is from Grant Spohr from Bloomberg Intelligence.
Hi, good afternoon, everybody, and thanks for taking my questions. I just have two questions. The first one is around Tropicana. Your J. D.
Partner Independence is undergoing a strategic review around their holding. I'm just wondering what your thoughts are around that. And have you considered Buying out their stake, that would be the first question. And then the second one is just a quick one around Obuasi. It's obviously now into Commercial production, I'm guessing that's for Phase 1.
Previously, you've mentioned that you may For Stage 2, there might also be a period of capitalizing. Or can we just expect it's now in commercial production and that's The way we should think about it and model it going forward. Thanks very much.
Thanks for that, Bryant. I'll ask Ian to handle the commercial production. It sounds like it's you're trying to understand the accounting around that. I will deal with the Tropicana, the IGO marketing, the 30% stake. So I think just to preface that we've Had a very long relationship with IGO.
They've been a good partner in the Tropicana asset, and Tropicana is a core Asset to AngloGold. And certainly, we are investing and extending the life of Tropicana. And so yes, the IGO has decided to market the 30% stake. They went through a 1st round, Which ended, I think it was around December, towards the end of December. They're now in a second round process.
I think importantly is that AngloGold does have a preemptive right Over that 30% stake, and we've got to allow that process to follow its course, And we will assess our option to pursue it if it is value accretive For AngloGold, I think importantly is we've got a range of opportunities within our portfolio. And so we'll always look at acquiring the 30% stake through a value lens, But also in terms of how it will rank up against other opportunities that we have in our portfolio as well. Thank you. Yes?
Thanks. And then if I can answer the question on Urbiosi, you are correct. The Phase 1 commercial production was achieved beginning of Q4 of last year. And at that Stage all of those, the capital spend on Phase 1. We started to depreciate those values and obviously recognized revenue on those Production ounces.
With regards to Phase 2, we continue to capitalize the growth capital spend on Phase 2. In Q4, there was the tie over of the plant to accelerate the throughput from 2,000 tonnes a day to 4,000 tonnes a day. And as Graham has explained it now carries into the infrastructural development on the mine side, which is getting to a completion Q2 2021 and then the ramp up is the one that we flagged before where There's a bit of a tight schedule around that ramp up as a result of specialist SKUs on the ground. So we will look at continuing to capitalize the Phase To stage, until we are comfortable that we've achieved a sufficient ramp up on the mining side to put that in full commercial I hope that answers the question. Thanks.
Yes, thanks very much.
Thank you. The last question we have is from Leroy Mouni from HSBC.
Good afternoon, guys. I've got two questions, please. The first one is you've mentioned that your balance sheet can Easily accommodate your 2 major growth projects. If sort of gold prices remain where they are and After 20%, for dividends, you can fund your growth CapEx and there's still cash remaining. To the extent that you fully de geared, Would you prefer to build up a cash buffer to fund your growth projects or would you rather pay a special dividend?
And then my second question is you've mentioned that the market doesn't fully appreciate The value in your portfolio, if that persists, do you then Consider other avenues of maybe unlocking value for shareholders, like M and A, for example, Or maybe reconsidering your listing and your domicile?
Thanks Leroy. I think definitely we do remain alive to the competitiveness of our dividend policy. I think We have built up firepower in our balance sheet to execute on the growth strategy. Of course, we'd like to see a 0 net debt scenario, but you've got to bear in mind that it's not static because we've got to fund these growth projects going forward. And We're a company as a management team, we actually don't knee jerk.
It's really about we'll see where we're at. It Took us a while to update our dividend policy. I think as you can you know where we've come from. We've deleveraged the balance sheet and now We've positioned ourselves for growth. I think certainly, we remain sensitive to what we're hearing in terms of More dividends, be it cash or special.
Right now, special dividends are not on the table. We do prefer a more sustainable dividend policy Going forward, and we'll continuously assess whether we are competitive in that regard, Taking the funding requirements and the state of our balance sheet into account. I think just bear in mind, we've got a reinvestment strategy To improve our all reserve confidence, extend the reserve line, and we've got the growth strategy. Our balance sheet is in a good state, And we'd like to maintain it in a solid state. And of course, we will continue to focus to improve returns to shareholders.
In terms of unlocking value, I think that is the focus of the management team. It is to focus on unlocking the latent value in our portfolio. Of course, the primary listing, Like we said, it's not a near term priority for us. We stated last year that COVID is still a real risk In our business and in the economy in which we operate in, however, listing change will continuously we will continue to review it, And we'll keep you posted in that regard. I think the focus of the management team really is to deliver On the priorities and the fundamentals that we've actually spoken to, extend the reserve life, deliver on our growth projects, both Abuasi and Colombia addressed the free cash flow conversion challenges, and I think through all of that, we will be improving value for shareholders.
That's quite comprehensive. Thank you.
Thank you. Sir, do we have any questions on the webcast?
We do. I think we've got time for just a last question, bearing in mind that We'll be back again tomorrow to talk through everything in more detail. But the final question is from Mike Lawrenson from Laurium. And I'm just going to summarize the question, which is basically given the 250,000 to 300,000 ounce uplift or Pardon me, production guidance from Obuasi for this year that Graeme spoke to. Where are the drop offs coming elsewhere in the portfolio?
Could you just talk him through some of that detail? Thank you.
So that's a good question. I think specifically, You're focusing on 2021. And I think overall, the production for 2021 on continuing operations then is flat Year on year, we see Australia steady. I think the drop offs are really coming through Gaeta. Geita, as we said, it is a transition year because of the end of the large open pit and in Geita Hill underground and Naia Bolimo open pit.
And I think in particular at Tsuguri, We are expecting an increase to come through. So overall, the Continental Africa region with the what I've just said and the increased ounce ramp up from Abu Wafi is expected to be flat. And then Americas, the Americas region in particular is expected to be marginally lower due to, Zdravan Guardia. So hopefully that does cover it for you.
Great. Thanks very much. Christine, a couple of closing remarks from you before we sign off.
Well, in closing, I'd like to thank everyone for dialing in today, And please remember to join us for our virtual Capital Markets Day tomorrow. The details are on our website. There will be just over 2 hours of presentations, and then you will have the opportunity to take a deep dive into the business journey from the drill bit