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. Please note that this call is being recorded.
I would now like to
turn the conference over to Stuart Bailey. Please go ahead, sir.
Thank you, Danae, and 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, Stuart, and 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 licensed operate. We do this through delivering on our ESG objectives, specifically working towards 0 harm, excellence in environmental stewardship and community development. On April 7 this year, for the first time in Angewable Ashanti's history, we passed 1 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 0 harm is achieved. The all injury frequency rate, broadest measure of workplace safety was 4.22000000 hours 4.22 per 1000000 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 arrangement at Mponeng.
And 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 Gaeta, Idioprem, Tropicana and Cabali. Production was temporarily impacted by regulatory disruptions in Brazil, the mill ramp up in Seguri and 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 profile to last year.
All in sustaining costs for the quarter improved by 2% year on year to $1,09 an ounce. Cash costs improved by 5% to $7.91 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 seemed to benefit of prior year's 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 Seguri 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 of Boneng, which affected productivity as we lowered mining intensity above the 120 level to ensure safe production. While this reduced face time or face length availability, deferring ounces a little in the name of safe production is 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 $79,000,000 This is exactly the kind of high return opportunity, which improves life end margin that we're looking for. Looking into Q2, Gate is operating very well. Seguri 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 cost 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 we'll continue the fundamental work to drive it lower over time. Now let's turn to Eborosity, which is a top priority deliverable for us this year. As we indicated with our year end results, the project is on budget and while tight, still on schedule for the commissioning of Phase 1 by the end of this year. That will see mining rates of 2,000 tonnes 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 closed to completion and the mining contractors 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 2 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 maybe 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. And with that, I'll hand over to Christine to provide more detail on the numbers.
Thanks, Calvin. Good day, everyone. As you've heard from Calvin, 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, Ideapriem and Kibali.
Also Tropicana delivered a stellar performance with 17% production improvement 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 Q1, while 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 $307,000,000 and free cash flow. Free cash flow for the quarter of negative $109,000,000 was also impacted by negative working capital movements relating to unsold gold inventory and additional Argentinean export duties.
These together with the delayed cash repatriation from Kibali of approximately $100,000,000 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, debt 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 $141,000,000 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 Abuasi project capital. Capital expenditure is expected to increase by 50% to 60% from the Q1 to the 2nd quarter, mainly at Abuasi, Tropicana and Brazil.
Moving through to Slide 12. Looking at the cost performance in detail for the Q1 year on year, our cash costs improved by 5% to $7.91 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 byproduct 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 $9.59 an ounce despite cost escalations in the Americas region. All in sustaining costs for South Africa were 8% lower at $11.97 an ounce, reflecting the benefits of the portfolio restructuring, the weaker exchange rate and improved operational efficiency. 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 $1,770,000,000 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 a volatile climate. Our net debt to adjusted EBITDA ratio would have remained at similar levels to the year end ratio, which was 1.12x had the Kibali cash of $100,000,000 and the unsold gold proceeds being 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 and P at 1 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 Gaeta, Siguiri and Brazil over that period. The cash costs and all in sustaining cost 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 $19,000,000 to $990,000,000 for 2019, which includes the peak funding requirement for the Abuasi growth project. The total project capital for Abuasi is anticipated to be $495,000,000 to $545,000,000 which includes the $45,000,000 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 $520,000,000 to $560,000,000 amounts to approximately 55% of the total capital budget in 2019 and 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 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 8 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, component requires additional capital investment in the near to medium term to extend its life well beyond 8 years. The present mining license goes to 2,037.
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 Pune. 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. So 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 licensed stock rate. 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 costs that we've been spending on Obuasi, for example, of about $60,000,000 a year. That figure will be lower this year than in 2018 and will lend 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 2 key Colombia projects up the value curve and prudently move Oblasi into production this year. And our vision is clear, to be a solid predictable business that will deliver value to shareholders through the cycle. So with that, let's open it up for questions. Thank you.
Thank you, First question we have is from Richard Hatch of Berenberg. Please go ahead, sir. The next question we have is from James Bell of RBC Capital Markets.
Yes, 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, so we'll see how it unfolds. But again, to repeat, we're not close 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?
Yes, we hear
loud and clear.
Yes. Happiness, right. Thanks very much. Thanks for the call. Three questions from me.
First one, just longer term, where do you expect or 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 pace of being pretty weak, what kind of cost inflation are you experiencing there?
Thanks.
Thanks, Richard. Three questions. So look, we'll answer them in I'll start and then ask Ludwig and others to wade in. With regard to the 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, but we'll see. It's literally 1st inning. So we'll let things unfold. But 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.
I mean, 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 following next question. The third question was related to Argentine inflation. Maybe Ludwig can
go on to that.
Richard, it's Ludwig. On the inflation rate, you see north of 22%. We haven't seen the full impact of the inflation. There's always a delay as it comes through. But 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.
So it doesn't have that huge impact on the operation yet. I don't see it's actually the exchange rate always helps us in that regard.
Okay. Thanks. Thanks very much. Thanks very much. Thank you.
The next question we have is from Johan Steyn of Citibank.
Hi, thank you. Thank you for taking my question.
Sorry, Johan, just one quick thing. Kristina, I interrupt. You wanted to make a comment on that?
Yes. 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've seen benefit now of the prior year's investments in the brownfields opportunities. But I think we're already at quite a robust level from an EBITDA margin perspective. But I certainly think that with the WASI 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.
Sorry, Richard and Johan, 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, I mean, firstly, just I know that you state that you want to replace the high cost, high CapEx intensive assets with lower cost, lower capital intensive. So I guess the proceeds of the sale will be used in capital projects. Or 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, Johan, I think the answer there will be across the 3 criteria. I mean, if depending on how things unfold, proceeds would be considered for continuing to be we want to chip away the balance sheet still as we've indicated. So delivering would be 1, certainly reinvesting back into the business. And all three metrics come into account and we do want to increasingly return value to shareholders.
But in terms of priorities, it would be those 3.
Thanks, Kelvin. And then you recently sold Moab for about $300,000,000 Similar size, much lower cost, higher grade, although Moab well, Moab also had imminent capital that one had to spend effectively to extend the life of mine through Project Zaiplas. So if you look at Moab and Penang 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 the higher value than Benin.
Binane? You know what, at this point, we're not going to speculate as far as that goes, Eilon. Clearly, Moab shorter life than pointing as you indicated. But 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, Yaron, by the way.
Andrew, you can go ahead, sir. It seems that I'm
sorry. Can you hear me?
Yes, sir. Thank you.
Sorry about that. Kelvin,
just a
question on the seismicity at Bank. 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, Sotelo is here and he's going to comment on Boneng. Sotelo?
Yes, thanks. Yes, incidentally, we did have 2 incidences of seismic events at Tamboneng both above the new project area at 120 level and also at 116 level and 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 1,000,000 fatality free shift on the 14th 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. So in terms of more sort of strategic actions, one of them is, of course, the new shift arrangement, which then 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.
And hence, through that work, you can then begin to address issues of seismicity because you've got more time to put up support, we've got more times to drill properly, etcetera, etcetera. So we are and we are beginning to see those benefits certainly coming through with the volume improvement that we've seen in April. Thanks.
Right. And then just on Gaeta, can you remind us how long the mill shutdown was during the Q1? And I noticed that sequentially quarter over quarter grades declined a bit. And I'm just wondering from the underground perspective in particular, or even more so the open pit, are those grades expected to rebound in subsequent quarters through the remainder of the year?
Thanks. Yes. Certainly, the mill shutdown was the work that we had to do on the ball mill. The ball mill was down for 3 weeks, which is 21 days. But whilst the ball mill was down, we were running the sec mill, enclosed circuit.
So that means the throughput is reduced by the 3rd. And hence, if you look at quarter on or year on year, we actually performed much better than Q1 last year. And going forward, we certainly anticipate to have a similar or stronger year than last year. So I mean, as far as GATA is concerned, I mean, we are quite confident and we saw the performance in April where we closed back what we lost in Q1. And we're very focused on having a strong Q2 and setting the 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, but we would be the greatest that's in the holding steady.
All right.
Thank you very much and congratulations on your steady record.
Thank you very much, Andrew. Thanks.
The next question we have is from Tanya Yakuszkanik of Scotiabank.
Great. Good morning, everybody. 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. And I think you gave us some of the mines that are going to be performing better, Geita, Seguri and Brazil. Can I just get a feel for how this has occurred through the year, Q3, Q4?
Yes. Sure, Tanya. Thanks for joining the call. First, maybe I'll turn to Ludwig to talk about Brazil and then ask Taylor to talk about the African operations. So, Ludwig, you want to start with Brazil.
So on Brazil, obviously, we had these stoppages in the Q1, and we do believe that's something from our off the bus. And we if we look at the bigger model, I'll talk to Cuba, what we're doing at this moment, we're progressing at this moment down with the main ramp, which we some of you would know we've actually had to do reallocation for over 6 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 Serentino ramp at Cuba.
So the grades will start to pick up at Cuba, and we'll also see some more furnaces. We've got a new contract there. We've also got mobilized during the Q1. And that during that mobilization, obviously, you lose a bit of mining volumes. That's now also fully mobilized, so the contract will also increase the volumes from the underground mines.
And it's very similar to the other two mines where we actually progress through the year, we were getting more flexibility and the grades will start to pick up as well as the volumes. And in the open pit areas, we're out of the rainy season, so that will also start to help us cost per
Thanks. It's Charlie. Sorry, Tanya, do you have another follow-up for Ludwig?
Yes. Just I'm trying to understand. So Q2 is going to be a bit better than Q1 and then stronger Q3, Q4. Is that how I understood
It's yes, that's correct. Q2 will be stronger, Q3 will be similar and Q4 will be quite a step up.
Okay. Thank you.
You're welcome. Thanks, Tanya.
Thank you. Tanya, for maybe let me start with Geita again. We certainly with the shutdown that we took in Q1, we've already seen improvements coming through in Q2. So we expect a stronger Q2, a stronger Q3 and an even stronger Q4, sort of similar trajectory as last year. And I mean, this is really driven by the combination of both the underground and the open pit.
And knowing that on the open pit, we are on the final cut of Nyankanda, 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 $170,000,000 crushing plant and the milling plant. And yes, if you look year on year, we were down in Q1, Q2 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. So I'm quite confident that come Q2, we'll see improvements and as the crushing plant gets stabilized and improvements right through the year as well.
And then so will we see Q3, Q4 then even better than Q2?
Yes. Yes.
Okay. So is it safe to assume that as a company
Sorry, Tanya, very similar to last year.
Okay. So overall as a company very similar to last year's sort of progression?
Yes, I think the profiling is similar. I think I see an H1 that's at about 47% weighting, 46%, 47% weighting and the balance in H2 in terms of production. Okay.
And then Christine, I think you said that capital for Q2 is going to be 50% to 60% higher than Q1? Yes. And then lower in the second half of the year?
No. So the second half of the year is normally higher. And I think bear in mind that this Ebuwassie capital that comes in as we've guided. And so that's expected to balance off. We've got about $375,000,000 spend relating to Abuasi for this year.
And so that total is expected to be spent certainly the balance of that in H2.
Okay. And then maybe thank you. And maybe one last for Calvin. Just on Tanzania in general, what you are hearing in terms of progress there or you're making progress with the government? And then 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 Gaeta, continuing business as usual, the operation is going well, the engagement is going well locally and so no change. I've been generally pleased with how things are ongoing there.
And we'll wait obviously to see how things unfold with Barrick Acacia. With regard to the sales process, the sales process is second question. So yes, progressing Sadiola and CVSA, both continuing robust processes is how I'd characterize them. And so, in fact, we've just completed the 2nd phase of diligence at CVSA with a number of, I think, very interested bidders. So that's going well.
And with regard to the latest today's announcement regarding the South African assets, just to say, we will be opening a gator room and we expect to see some strong interest there as well. Very early, as you know, we just announced today. So early innings and we'll keep everybody updated as we go. Okay. And Sadiola?
Sadiola also continuing. We're 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. So 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.
Yes, thanks, Tanya. We appreciate it.
We have a question from Patrick Mann of Bank of America.
Hi, good afternoon. Thanks very much guys. I just wanted to ask, I mean, we've seen a lot of gold companies put assets up for sale. And 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 mean, 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 and so 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. In Bonang, we're looking at in round numbers, 12,000,000 ounces grading close to 10 grams. That's a very strong ore body. And so 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.
So it's a bit of a unique situation. That package is, without question, the premier gold asset package in South Africa. So we do think it will attract good attention. And Okay. Thanks.
Yes. So I suppose I was asking more around CVSA and Sadiola. Okay.
Now look, I think the same logic, there's always a different universe of buyer for every asset. But I can tell you the CBSA 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 2nd stage of diligence now with a number of bidders. So we're very optimistic.
Saviola, 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. But different universe of buyers for all assets.
Got it. Thank you very much.
You're welcome.
Sir, that was our final question.
Well, thank you very much, operator, and everybody for joining us today. And we know it's a busy reporting period. So to summarize, we've got 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. So 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.