Good afternoon, ladies and gentlemen. Welcome to the AngloGold Ashanti Q1 2019 market update. All participants will be in listen only mode. There will be an opportunity to ask questions later during the conference. If you should need assistance during the call, please signal an operator by pressing star then zero. Please note that this call is being recorded. I would now like to turn the conference over to Stewart Bailey. Please go ahead, sir.
Thank you, Danae. Welcome everybody to our Q1 market update. We have the full executive team here in Johannesburg. Kelvin and Christine will be running through a presentation touching on some operating and financial details for the quarter, as well as the strategic progress we've made. Once that's done, we'll move straight to questions. I'll hand over to Kelvin.
Thanks, Stewart. Good afternoon. I'd like to start, as we usually do, with our strategic approach, which guides us in managing risk and determining how to capitalize on opportunities that are available to us, as well as protecting the integrity of the balance sheet, managing costs and capital while investing in the longer-term improvement of the business, and ensuring that we have a pipeline of options to sustain the business into the future. A key support pillar for our strategy is premised on ensuring our license to operate. We do this through delivering on our ESG objectives, specifically working towards zero harm, excellence in environmental stewardship, and community development. On April 7th of this year, for the first time in AngloGold Ashanti's history, we passed one year without a fatal accident in any of our operations.
This represents the collective efforts of everyone in the company, as well as the strategic focus on safety. While this is an important achievement, there's no complacency, and our focus remains on ensuring the goal of zero harm is achieved. The all-injury frequency rate, broadest measure of workplace safety, was 4.22 per million hours worked in Q1. That's a 34% decline year-on-year, showing the safety improvement extends across the business. We're also pleased to have seen some early safety wins from the new shift arrangements at Mponeng. Lastly, it's important to note that there were no reportable environmental incidents during the quarter. We indicated with our year-end results in February that Q1 was anticipated to be a relatively lower production quarter, reflecting normal seasonality as well as some maintenance and other items that we've now worked through.
Production of 752,000 ounces for the quarter reflected solid contributions from Geita, Iduapriem, Tropicana, and Kibali. Production was temporarily impacted by regulatory disruptions in Brazil, the mill ramp-up in Siguiri, and the scheduled plant maintenance shutdown at Geita. Importantly, however, we remain well on track to deliver full year guidance across all metrics with similar quarter-by-quarter profiles to last year. All-in sustaining costs for the quarter improved by 2% year-on-year to $1,009 an ounce. Cash costs improved by 5% to $791 an ounce, and the adjusted EBITDA margin increased to 37%, even with the lower gold price and volumes. As this slide indicates, we're maintaining our focus on margin expansion, which is seeing the benefit of prior years' brownfield investments and a continued hard focus on improving operational efficiency. Let's take a high-level look at the operations.
As I mentioned a moment ago, the Americas region was impacted by stricter tailings regulatory environment in Brazil following the Brumadinho tailings dam failure. Our team on the ground continues to work closely and constructively with regulators to support the rigorous inspection of and confidence in our sites. Like many operations in the state of Minas Gerais, we did see some interruption at CDS in the immediate aftermath of Brumadinho, and the design of the TSF was evaluated and confirmed to be safe. All operations have been running well and uninterrupted since. In Continental Africa, there was a planned mill maintenance at Geita, while Siguiri was impacted by a slow ramp-up of the new combination plant as the team worked through the usual teething issues. South Africa was affected by power-related challenges, which impacted recoveries at MWS.
There was also increased seismicity at Mponeng, which affected productivity as we lowered mining intensity above the 120 level to ensure safe production. While this reduced face length availability, deferring ounces a little in the name of safe production was an easy decision. Australia had a solid quarter, mainly driven by an 18% year-on-year increase in production, driven by increases in mill throughput and mill feed grade at Tropicana, and improved recoveries at Sunrise Dam. We also approved the Boston Shaker underground project at Tropicana in late March, which will provide an IRR of almost 40%, with total capital for the project at $79 million. This is exactly the kind of high return opportunity which improves life and margin that we're looking for. Looking into Q2, Geita is operating very well, Siguiri is steadily improving, and we'll be looking for a step up in production from Mponeng.
Brazil is also getting back on track, and Australia is looking to show an improved trend through the remainder of the year. Overall, group all-in sustaining costs improved by 2% year-on-year on lower cash costs, favorable exchange rates, improved efficiencies, and lower sustaining CapEx. Given the seasonally lower production quarter, we'll be looking to see the benefits to unit costs in the remainder of the year as our output ramps up. We remain on course to meet our all-in sustaining cost guidance and will continue the fundamental work to drive it lower over time. Now let's turn to Obuasi, which is a top priority deliverable for us this year. As we indicated with our year-end results, the project's on budget, and while tight, still on schedule for the commissioning of phase one by the end of this year. That will see mining rates at 2,000 tons a day.
Refurbishment on the plant continues to make progress as we move through the normal challenges that plant reconditioning brings. The ramp up to 4,000 tons a day by 2020 has some flexibility in the schedule and remains well on track. The first blast advancing underground access successfully took place in February. The demolition of redundant facilities is close to completion, and the mining contractor is mobilized. Our 2019 exploration program is also off to a strong start. Our teams have drilled 185,000 meters around our mine sites, 23% more than during Q1 last year. Those programs focused on satellite ore bodies near existing operations, reserve conversion, and improving confidence in our mineral resource. We've also had some very encouraging success at two of our sites in Brazil by leveraging our South African technical expertise with long incline borehole drilling.
This technique can potentially give us more confidence in resources ahead of current production from underground platforms. It's also made access easier than drilling deep holes from the surface, which requires permitting and may be in challenging terrain. On the greenfield front, our generative team improved drilling performance by 16% year-on-year with our focus on Western Australia and the U.S. In conjunction with our drilling efforts, we've also progressed field mapping, sampling, and geophysical surveys to establish the next phase of our programs. With that, I'll hand over to Christine to provide more detail on the numbers.
Thanks, Kelvin. Good day, everyone. As you've heard from Kelvin, we've had a steady start to the year, with our key metrics reflecting continued focus on operational efficiencies and capital discipline. This was achieved despite 3% lower production from retained operations due to the slower-than-usual start in the year, because of the Siguiri combination plant, which was still ramping up, regulatory challenges experienced in Brazil, and seismicity and power interruptions in South Africa. It is noteworthy that the Continental Africa region delivered an 8% improvement in operational performance year-on-year on the back of improved production at Geita, Iduapriem, and Kibali. Tropicana delivered a stellar performance with 17% production improvements in Q1. All cost metrics continued trending lower despite inflationary pressures, which were more than offset by weaker currencies, improved efficiencies, and lower CapEx.
Both total cash costs and all-in sustaining costs came in lower for the first quarter, whilst sustaining a healthy all-in sustaining cost margin of 22% through continued focus on the controllable factors in our business. The combined effect of the 2% lower gold price and reduced sales volumes from retained operations impacted both adjusted EBITDA of $307 million and free cash flow. Free cash flow for the quarter of -$109 million was also impacted by negative working capital movements relating to unsold gold inventory and additional Argentinian export duties. These, together with the delayed cash repatriation from Kibali of approximately $100 million, are timing issues and are expected to be received in the near term, which will boost free cash flow generation for the year. On a positive note, VAT receivables in Tanzania were largely steady as we continued to offset the historical VAT against corporate taxes payable.
The Kibali VAT receivable continues to decline through cash refunds and offsets. Total capital expenditure of $141 million was 17% lower than the prior year, largely due to the completion of the Siguiri combination plant, lower expenditure due to the South African asset sales in the prior year, lower stripping costs at Tropicana, and despite the current year increase in the Obuasi project capital. Capital expenditure is expected to increase by 50%-60% from the first quarter to the second quarter, mainly at Obuasi, Tropicana, and Brazil. Moving through to slide 12. Looking at the cost performance in detail for the first quarter year-on-year, our cash costs improved by 5% to $791 an ounce, lower than the prior year. This reflected the overall benefit of the South African asset sales and closures, weaker currencies, favorable stockpile movements, and an overall improvement in grades.
As I said, this was despite inflationary pressures that we've experienced across the emerging economies that we operate in. We also saw lower by-product contributions and lower volumes. All-in sustaining costs for Q1 were 2% or $19 an ounce lower year-on-year at $1,009 an ounce, and that was on the back of lower cash costs and sustaining capital. The cost profile is expected to improve on the back of improved production expected over the remainder of the year. All-in sustaining costs for the international operations, including continental Africa, were largely flat year-on-year at $959 an ounce, despite cost escalations in the Americas region. All-in sustaining costs for South Africa were 8% lower at $1,197 an ounce, reflecting the benefits of the portfolio restructuring, the weaker exchange rate, and improved operational efficiencies. Focus continues to right-size the business with a smaller production base by reducing both on and off mine costs.
Moving on to slide 13. Our balance sheet strategy continues to enforce capital discipline with net debt at $1.77 billion, which was in line with the last year-end, and it was 43% lower than the peak level of debt in 2014. Our net debt to adjusted EBITDA ratio of 1.27 times reflects ample headroom to our 3.5 times covenant. Liquidity remains strong and continues to provide good flexibility in a volatile climate. Our net debt to adjusted EBITDA ratio would have remained at similar levels to the year-end ratio, which was 1.12 times, had the Kibali cash of $100 million and the unsold gold proceeds been received at quarter end. Our currency exposure across the various geographies in which we operate in continues to provide a natural hedge to inflationary effects and to the volatility in the gold price.
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 current market conditions as well as from production and efficiency improvements across our business through the year. Finally, our credit ratings remain unchanged, with Moody's at an investment grade rating with a positive outlook and S&P at one notch below investment grade with a stable outlook. Moving on to slide 14. Our market guidance across all metrics remains intact. In line with past trends, production is expected to be weighted to the second half of the year, with strong performances expected from Geita, Siguiri, and Brazil over that period.
The cash costs and all-in sustaining costs metrics are expected to improve in the second half on the back of expected production improvements and in line with past trends based on the weaker currency and current commodity price assumptions. Total capital expenditure is guided at $90 million-$990 million for 2019, which includes the peak funding requirement for the Obuasi growth project. The total project capital for Obuasi is anticipated to be $495 million-$545 million, which includes the $45 million for the mining fleet purchase, of which 10% was spent in 2018, 60% will be spent in 2019, and the balance will be spent in 2020. The remaining growth capital relates to advancing the feasibility study for Quebradona, completion of the Siguiri hard rock project, which will be ramped up by mid-year, and that is relatively small expenditure, Tropicana, and also very little expenditure at Mponeng.
Sustaining capital expenditure of $520 million-$560 million amounts to approximately 55% of the total capital budget in 2019, that includes some additional capital at Kibali and Brazil. I will now hand over to Kelvin to conclude.
Thanks, Christine. As I've mentioned previously, we've firmly committed to a portfolio that will be more focused and structured according to our capital allocation priorities. Our South African business now consists of our underground Mponeng mine, which has a life of at least eight years without the need for additional growth capital, surface rock dumps, and the long-life waste retreatment operations, Mine Waste Solutions. While these operations are generating cash, Mponeng requires additional capital investment in the near to medium term to extend its life well beyond eight years. The present mining license goes to 2037. Relative to the other higher return opportunities in our portfolio and given limited capital, we've come to the conclusion that we're unlikely to be in a position to fund this mine life extension at Mponeng.
With this in mind, we decided to embark on a process to review divestment options for the South African business. We believe that under the right ownership, this portfolio offers a very compelling longer-term value proposition. These are important assets, and our priority is to ensure that this process is conducted responsibly and with appropriate thoroughness to ensure we find the right outcome for all stakeholders. We want to be clear that AngloGold Ashanti is and will continue to be an iconic South African company with a strong presence here. Our Johannesburg office is a center of excellence, and the talent and capabilities here will continue to service and support our global activities. To finish, I'd like to reiterate our clear emphasis on getting the basics right. That means delivering consistent results in accordance with our guidance and continually strengthening our license to operate.
We'll keep a sharp focus on costs and managing capital. We'll build on recent efficiency improvements using operational excellence across the business to continue to move down the cost curve. We'll continue to work hard to eliminate leakage that impacts cash conversion, especially in care and maintenance costs and working capital lockups. A near-term example of this will be the care and maintenance cost that we've been spending on Obuasi, for example, of about $60 million a year. That figure will be lower this year than in 2018 and will end altogether in 2020. We'll maintain a focused and manageable portfolio. We'll invest wisely to progress our exploration pipeline and projects. We intend to move our two key Colombia projects up the value curve and prudently move Obuasi into production this year.
Our vision is clear, to be a solid, predictable business that will deliver value to shareholders through the cycle. With that, let's open it up for questions. Thank you.
Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star and then one on your phone. If you decide to withdraw your question, please press star and then two. The first question we have is from Richard Hatch of Berenberg. Please go ahead, sir.
Richard?
Apologies. It seems that Richard's line has dropped. The next question we have is from James Bell of RBC Capital Markets.
Thanks for the presentation. I just had a question on the divestment process and whether if a buyer couldn't be found, if you'd consider a spin-out or listing of the South African business similar to what we've seen your peers do in the past. Thanks.
Hi, James. It's Kelvin. Listen, all options are on the table at this point. We just initiated the process, we'll see how it unfolds. Again, to repeat, we're not closed-minded to anything at this point.
Okay, that's great. Thanks.
You're welcome.
The next question we have is from Richard Hatch of Berenberg. Please go ahead.
I'll try again. Can you hear me this time?
Yep, we hear you loud and clear.
Yep. Happiness. Right. Thanks very much. Thanks for the call. Three questions from me. First one, just longer term, where do you expect, or where would you like to get your EBITDA margins to, just assuming gold price stays flat? The second one is just again on the process for the South African assets. Given the fact that you'd like to remain an iconic South African company, would there be any merit in being a minority holder of these profitable businesses and therefore contributing a minority amount of the capital, or is that not an option? And then thirdly, just in Argentina, obviously with the peso being pretty weak, what kind of cost inflation are you experiencing there? Thanks.
Thanks, Richard. Three questions. Look, we'll answer them in I'll start and then ask Ludwig and others to weigh in. With regard to your second question regarding the asset sale and the fact that this company is and will continue to be an iconic South African business, would we consider minority interest and things of the like? Again, nothing is off the table. We think it makes sense that these assets would transact as a package, we'll see. It's literally first inning, so we'll let things unfold. Again, we want to be clear that we would not consider anything off the table at this point. The second question was regarding long-term EBITDA. Clearly, the answer is we'd like it to go higher. We don't have a target set at this point, but we're going to continue to be moving up the range through the cycle.
Christine, you can add to that if you'd like when calling the next question. The third question was related to-
Inflation in Argentina.
Argentina inflation. Maybe Ludwig can jump onto that.
Richard, yeah, it's Ludwig. Yeah, on the inflation rate, we see north of 22%. We haven't seen the full impact of the inflation. There's always a delay as it come through. What we've seen and what we've experienced in the past is with the exchange rate also, it actually offsets the inflation as we progress. It hasn't had that huge impact on the operation yet. I don't see it actually. The exchange rate always helps us in that regard.
Okay, thanks.
Thanks.
Thanks very much.
Thanks very much. Thank you.
The next question we have is from Johann Steyn of Citi. Richard.
Hi. Thank you. Thank you for taking my question.
Sorry, Johann, just one quick thing. Christine, I interrupt, you wanted to make a comment on that.
Yeah. Just on the EBITDA margin, I think certainly in our longer-term business plan, we actually do see quite a nice expansion in the margin. I think certainly we're seeing benefit now of the prior year's investments in the brownfields opportunities. I think we're already at quite a robust level from an EBITDA margin perspective. I certainly think that with Obuasi coming on and other opportunities that we're actually looking at, we certainly see that margin expanding quite nicely. I wouldn't like to put the actual numbers out there, but I think the fact that we do see expansion in our longer-term business plan is important.
Thanks, Christine. Sorry, Richard, and Johann, sorry for interrupting you. We'll go back to you if you don't mind.
Excellent. Thank you. Also with regards to the South African asset sales, firstly, I know that you've stated that you want to replace the high cost, high CapEx intensive assets with lower cost, lower capital intensive. I guess the proceeds of the sale will be used in capital projects. Is there scope for returning some of that cash to shareholders? That's the first question. Maybe if you can answer that one first, and then I'll go to my second question.
Sure. Well, Johann, I think the answer there will be across the three criteria. Depending on how things unfold, proceeds would be considered for continuing to de-leverage. We want to chip away at the balance sheet still, as we've indicated. De-leveraging would be one. Certainly reinvesting back into the business. All three metrics come into account, and we do want to increasingly return value to shareholders. In terms of priorities, it would be those three.
Thanks, Kelvin. Then you recently sold Moab for about $300 million. Similar size, much lower cost, higher grade. Although Moab also had imminent capital that one had to spend effectively to extend the life of mine through Project Lifeline. If you look at Moab and Mponeng side by side, I guess one would consider or think that these assets should be able to attract the same kind of value. In fact, potentially Moab should be able to attract a higher value than Mponeng.
You know what? At this point, we're not going to speculate as far as that goes, Johann. Clearly Moab, shorter life than Mponeng, as you indicated. At this point, we'll let the process play out.
Okay. I respect that.
Thank you. The next question we have is from Andrew Kaip of BMO.
Thank you, Johann, by the way.
Andrew, you can go ahead, sir.
Sorry, can you hear me?
Yes, sir. Thank you.
Sorry about that. Kelvin, just a question on the seismicity at Mponeng. Can you give us a bit more insight on what was occurring during the quarter, and how you've approached it on a go-forward basis, and what kind of remediation, or if any, was required?
Hi, Andrew. Yes, listen, Sicelo's here. He's going to comment on Mponeng. Sicelo?
Thanks. Yes, incidentally, we did have two incidences of seismic events at Mponeng, both above the new project area, at 120 level and also at 116 level. Hence, had to take the necessary de-risking steps in that regard. If you look at South Africa in terms of safety performance, we achieved 1 million fatality-free shifts on the 14th of January. If you look at also how all-injury frequency rates and lost time injury frequency rates, they are all trending downwards in the positive direction. In terms of more strategic actions, one of them is, of course, the new shift arrangement, which allows for more face time and allows for a proper mining cycle, which means that you give people more time to do the work on the face thoroughly.
Hence, through that work, you can begin to address issues of seismicity because you've got more time to put up support, you've got more times to drill properly, et cetera. We are beginning to see those benefits certainly coming through with the volume improvement that we've seen in April. Thanks.
Right. Just on Geita. Can you remind us how long the mill shutdown was during the first quarter? I noticed that sequentially, quarter-over-quarter grades declined a bit, and I'm just wondering from the underground perspective in particular, even more so the open pit, are those grades expected to rebound in subsequent quarters through the remainder of the year?
Thanks. Certainly, the mill shutdown was work that we had to do on the ball mill. The ball mill was down for three weeks, which is 21 days. Whilst the ball mill was down, we were running the SAG mill in closed circuit, that means the throughput is reduced by a third. Hence, if you look at quarter on or year-on-year, we actually performed much better than first quarter last year. Going forward, we certainly anticipate to have a similar or stronger year than last year. As far as Geita is concerned, we are quite confident, and we saw the performance in April where we clawed back what we lost in Q1. We're very focused on having a strong Q2 and certainly a strong year. On the grades, I think the grades overall are holding steady.
It's really a question of the mine plan at a given time and the mining mix at a given time. The grades are certainly holding steady.
All right. Thank you very much. Congratulations on your safety record.
Thank you very much, Andrew. Thanks.
Ladies and gentlemen, just a reminder, if you'd like to ask a question, please press star and then one. The next question we have is from Tanya Jakusconek of Scotiabank.
Great. Good morning, everybody. Oh, sorry, good afternoon. Just wanted to come back to a couple of questions. Just on the way the year is going to progress. I think you mentioned in the presentation, both Kelvin, that we're seeing a progression of improvement at the mines second half weighted. I think you gave us some of the mines that are going to be performing better.
Sure.
Geita, Siguiri, and Brazil. Can I just get a feel for how this occurs through the year, Q3, Q4?
Sure, Tanya. Thanks for joining the call. First, maybe I'll turn to Ludwig to talk about Brazil and then ask Sicelo to talk about the African operations. Ludwig, do you want to start with Brazil?
On Brazil, obviously we had these stoppages in the first quarter. We do believe that's something from our past. If you look at the bigger mine, I'll talk to Cuiabá. What we're doing at this moment, we're progressing at this moment down with the main ramp, which some of you would know, we've actually had to do rehabilitation for over six months due to geotechnical issues. That's something of the past as well, so we'll get into the higher grade areas. That's the Serrotinho ramp at Cuiabá. The grades will start to pick up at Cuiabá, and we'll also see some more tonnages. We've got a new contractor, which also got mobilized during the first quarter, and during that mobilization, obviously, you lose a bit of mining volumes. That's now also fully mobilized, so the contractor will also increase the volumes from the underground mines.
It's very similar to the other two mines, where we're actually progressing through the year. We'll be getting more flexibility, and the grades will start to pick up as well as the volumes. In the open pit areas, we're out of the rainy season, so that will also start to help us quite quickly.
Thanks. Sicelo, do you want to Oh, sorry, Tanya, do you have another follow-up for Ludwig?
Yeah. I'm trying to understand. Q2 is going to be a bit better than Q1, and then stronger Q3, Q4. Is that how I understood it?
That's correct.
Yeah, that's correct. Q2 will be stronger, Q3 will be similar, Q4 will be quite a step up.
Okay. Thank you.
You're welcome. Thanks, Tanya.
Thank you. Tanya, maybe let me start with Geita again. Certainly, with the shutdown that we took in Q1, we have already seen improvements coming through in Q2. We expect a stronger Q2, a stronger Q3, and an even stronger Q4. A sort of similar trajectory as last year. This is really driven by the combination of both the underground and the open pit. Knowing that on the open pit, we are on the final cut of Nyankanga, which is the sweetest portion, and that will certainly sustain us for the remainder of 2019. When it comes to Siguiri, as Kelvin mentioned in his opening, we successfully commissioned the $170 million crushing plant and the milling plant.
Yes, if you look year-on-year, we were down in Q1 due to the ramp up, and certainly working very hard in terms of stabilization of the new circuit and making sure that we've got consistent feed, and maintaining and also achieving the recoveries that are in the design. I'm quite confident that come Q2, we'll see improvements, and as the crushing plant gets stabilized, improvements right through the year as well.
Will we see Q3, Q4 then even better than Q2?
Yes.
Yes.
Okay. Is it safe to assume that as a company-
Sorry, Tanya, very similar to last year.
Okay. Overall, as a company, very similar to last year's sort of progression?
Go ahead, Christine.
Yeah. I think the profiling is similar. I think I see an H1 that's at about a 47% weighting, 46%-47% weighting, and the balance in H2 in terms of production.
Okay. Christine, I think you said that CapEx for Q2 is going to be 50%-60% higher than Q1.
Yeah.
Lower in the second half of the year?
No. The second half of the year is normally higher, and I think bearing in mind that there's the Obuasi CapEx that comes in as we've guided, and so that's expected to balance off. We've got about $375 million spend relating to Obuasi for this year, and so that total is expected to be spent, certainly, the balance of that in H2.
Okay. Thank you. Maybe one last for Kelvin. Just on Tanzania in general, what you are hearing in terms of progress there, or you're making progress with the government. Just on the sale process on all of the assets that you're looking to sell, how are you handling that? Is it opening a data room? Is it an auction? Maybe just how we're handling these sales.
Okay. Thanks, Tanya. First of all, Tanzania, we're kind of watching progress as it's unfolding with regard to the Barrick, Acacia government discussions. From our own perspective at Geita, continuing business as usual. The operation's going well, our engagement's going well locally, no change. I've been generally pleased with how things are ongoing there. We'll wait, obviously, to see how things unfold with Barrick Acacia. With regard to the sales process was the second question?
Yeah
Progressing Sadiola and CVSA, both continuing robust processes is how I'd characterize them. In fact, we've just completed the second phase of diligence at CVSA with a number of, I think, very interested bidders. That's going well. With regard to today's announcement regarding the South African assets, just mentioning, we will be opening a data room, and we expect to see some strong interest there as well. Very early, as you know, we just announced today, early innings, and we'll keep everybody updated as we go.
Okay. Sadiola?
Sadiola also continuing. You hate to put timing on these things because there's more questions come through diligence and so forth, but interested parties and we're moving that forward. Without holding us to it, I hope that we'd be in a position to announce something before Q3, but we'll just have to wait and see.
Okay, great. Good luck, and good luck in Tanzania also.
Thanks, Tanya. We appreciate it.
Ladies and gentlemen, just a final reminder, if you would like to ask a question, please press star and then 1. We have a question from Patrick Mann of Bank of America.
Hi, good afternoon. Thanks very much, guys. I just wanted to ask, we've seen a lot of gold companies put assets up for sale. I was just wondering if it feels a bit like a buyer's market if you're still confident on getting value for the sales. I know, Kelvin, you said there's no fire sales, and if you don't think you're going to get value for a mine, you'll keep it within the portfolio. I'm just wondering if there's too many assets up for sale, and that that could potentially mean that they're more likely to stay within the portfolio or if you have a normal amount of interest.
Well, I think, Patrick, what I'd say is literally we just announced we'll see. We do expect to have considerable interest in the South African business in particular, largely just because of not all assets are the same. I mean, Mponeng, we're looking at, in round numbers, 12 million ounces grading close to 10 grams. That's a very strong ore body. The next 8 years, that asset will run without need for additional capital infusion beyond sustaining capital, and then the larger investment comes after that. It's a bit of a unique situation. That package is, without question, the premier gold asset package in South Africa. We do think it will attract good attention.
Okay, thanks. Yeah. I suppose I was asking more around CVSA and Sadiola.
Oh, okay.
Yeah.
Now look, I think the same logic applies. There's always a different universe of buyer for every asset.
Yeah.
I can tell you the CVSA process, which started last quarter, that's been going very well. We've got a lot of activity and a lot of interested parties on that, and are moving, as I said, we're past stage 2 of diligence now with a number of bidders. We're very optimistic. Sadiola, again, different universe of buyers, and we're in discussions as well, and we'll see. I can't really say much more than that. Different universe of buyers for all assets.
Got it. Thank you very much.
You're welcome.
Sir, that was our final question.
Thanks. Well, thank you very much, operator, and thanks everybody for joining us today. We know it's a busy reporting period. To summarize, we've had a strong start to Q2, guidance is on track. We're making good progress on the strategy, and we look forward to updating everybody with our first half results. Thank you very much.
Thank you, sir. Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.