He's been CEO for five years. Extensive leadership experience across the mining and energy sectors. Thank you, Alberto.
Thank you. I have to start with an apology. I don't have any exciting M&A for you. I'm just going to deliver a bit of a boring thing. We consistently deliver on what we say we're going to do. We're going to meet guidance on production again this year. We're controlling our cost, which is probably what we do best. What we can control, we control. Of course, we can't control royalties or inflation of oil, but the rest, we're always a little bit below. So that is it. Safety is our highest priority, like all of the great companies. There's the one in a million that happens, and we had, unfortunately, a fatality, and that's always devastating and reminds us that you just have to start every day with safety. I'll spend a little bit of time on this one.
I was thinking how mining, I always say there's always issues. Always. It's just the laws for all of us. But the scale, when you have so many Tier 1 assets and the breadth of the portfolio, that's what allows us to compensate. If you look at this year, we had flooding in Iduapriem. It came from the rains, but it also came from the neighboring pit of our neighboring Tarkwa, and so it flooded our pit, our high 2-C, and that puts you off for a little bit. We're now on recovered, but yeah, that affects us. And the fatality of Obuasi and basically the closing of the KMS shaft really affected us for this year, but it doesn't alter the medium term of getting to, we'll see it later, to 400,000 oz in 2028.
How do we, in spite of this, manage to deliver on guidance? We plan to be on the middle point of guidance because the other eight assets are performing very well. The ones in South America are performing exceptional. Tropicana has been performing exceptional. So you balance out, and that's the benefit of a global high-quality portfolio. Let me add two things. We'll talk a lot about the Nevada one. I'll have three slides on that. That is the star project. We had many of the analysts visit, a great visit some weeks ago, but I'll talk a little bit about that. I'll talk about another one which we hadn't been talking because in Colombia, Quebradona, the copper project, was basically on standstill with the previous president that we had in Colombia that was a lunatic. Now we have a very pro-business switched on.
I just came from Colombia. I talked to everybody, which is easy over there, the vice president, minister of mines, minister of environment. We're going to fast-track this. They are as interested as we are in getting this project approved within about 18 months, maybe, let's say, 24 months. It's so developed that we probably could start production towards the end of the decade. That's a very exciting sort of news in terms of adding another Tier 1. Currently, we have 70% of production is in one. What does it mean, or what is our definition of Tier 1? It has to be a minimal of size, 300, 350, but the costs are very important. I hear about many of our colleagues talk about Tier 1 assets with Tier 5 costs. That doesn't make it.
All of these assets are Tier 1 in size, but Tier 1 in cost, more importantly. That leads to 71% margin assets. Our ambition and where we're heading even inorganically is organically, I'm sorry, with the current assets, is that by the middle of the next decade, we will be close to 80% on Tier 1 assets and much higher production than today. That is really very compelling future for us. The Tier 2 assets are performing well. Their margin is 58%. It's not 71%, but we're very happy, for example, with CVSA. It's just a little cash machine. They perform well. I've said it in the past, they're so far away, nobody visits them for corporate. They're perfect, outstanding performers. I won't talk a lot about these numbers. They've seen operational. We did about close to 1.5.
The midpoint of the guidance for 2026 is 3 million. We should be around that 3 million. The cash costs, as I said before, when you take the cash costs of 2025, adjust by royalties, inflation, oil, and exchange rate, will be roughly around there, which means we're controlling what we can control. Let me move. I'll try to leave for questions probably more time, so I'll move quickly. Capital allocation, it's very clear. We were probably one of the first very high. We go first from cash flow operations, all the CapEx, then we have a 50% of free cash flow after everything at a minimum is to shareholders. How do we return it? Dividends, long-term debt reduction. We did $660 million of which we bought from the market. Basically, we don't have any debt for this decade.
That will be important because we are going to be able to fund both Arthur and Quebradona. They're not simultaneously, but some of it overlaps, and all of our models indicate under reasonable assumptions of prices that we can fund that without any issues. We also announced the buyback. The buyback, we've encountered a bit of an issue in South Africa. We needed their permission. We wanted to go at the same time, and they've moved a little bit slower over there. But we'll get at some point to the buyback when we are in an open period again. That is in place and will happen at some point in the future. Dividends, we talked about. We have a policy of 50%, but more importantly, we go above that if we have excess cash. Last year, we returned in the second half, I think 62%.
Most probably in February of next year, if the gold price stays above $4,000, we will return in one way or another, more than 50% of the free cash flow. I will spend a little bit of time on this one. In November, we will go into much detail on the growth projects. I have said that in previous times. Basically, they are focused on five: Geita, Cuiabá, Obuasi, Sukari, and Siguiri. We believe we can go between 350,000 oz and 450,000 oz within three years. It is not one jump. It is a gradual increase. Some projects are bigger, but most of Geita will expand the plant, and we have some more CapEx. Cuiabá, very little CapEx. It is just the satellite and then some new ore bodies. Siguiri, pure, just brownfield exploration, and we have spare capacity in the plant. Sukari will be underground mining.
We go from about 1.3 to 2.4. The gravity gold project cost about $30 million, and that is already approved and in the making. Then Obuasi, we expect to be, as I said, about 400,000 oz in 2028. More importantly, we go to Block 11. So Block 11 is really the big gold prize in Obuasi. Currently, our grade is about eight or nine. Block 11, which will last about five years, is 17. So we will hit that around 2029. So a lot of growth above what we had in 2025 in the brownfields, and then in greenfields, we will talk about the rest. So Nevada. That is going to be the largest project, the most valuable project of AngloGold in the 2030s. Its cornerstone is the Arthur Gold project.
Some years ago, we had nothing, and now we have invested hundreds of millions of dollars in the Beatty District. We now have a mineral reserve of 4.9 million ounces, and that is the tip of the iceberg. The whole district has about 20 in resource. But we had to do the PFS with something. The interesting thing about that is that all these numbers, and including very high IRRs at $2,000 are just with that 4.9 million ounces of reserve. We plan to convert another million ounces in this year, in 2026, so we are close to completing another million ounces. As I said, at $1,950 an ounce, it is a very profitable project, and only with the 4.5 million ounces of reserves. The magnitude of the project is quite amazing in my mind. The average production is around half a million ounces, and this will start at 800,000.
We now know that by then, let us say, if we start the first three years in 2032 and 2035, we will have then done much more exploration, brought more into reserves. So we think that that district between Arthur and North Bullfrog can stay between 700,000 to 800,000 for decades to come. A little bit more on Arthur. I have said most about this, so probably not much more on Arthur. Let me just go to the conclusion.
Yatish, who helped me with this, thinks it is a very good slide. I do not understand it very well, but I will try to explain it. This is the fading. The sector has derated with this thing of war today, peace tomorrow, war today. So this schizophrenic world that we live in. The sector has derated, and that shows on the bubbles from the faded to the more colored to the left.
That means less EV/EBITDA for the sector. Of course, the dividend yield goes up. At these gold prices, who doesn't? We have moved to the right, actually. We are one of the few that have rerated, so moved to the right and then stayed with one of the highest dividend yields. Why? With this, I will conclude and open to questions. There are many metrics that are important in gold. Cash costs are super important. All-in sustaining is important. All-in costs are very important. In the end, there is a metric that what is the bottom line? Free cash flow. After all is said, because some companies have these massive things that they never put except in the appendix, but in the end, it is free cash flow per ounce. In this case, free cash flow per share in Q2, we grew by 36%, much higher than anybody else.
That, in the end, is what matters. Okay, thank you. Let's do.
Thank you.
Questions?
Yeah, we do have time for questions. If anyone in the audience has a question, please raise your hand and we will get you a microphone. Maybe while we are waiting for potential questions, I have one for you. Five years as CEO, you have had incredible performance and strong operating discipline, and now you are getting into more of a growth phase it seems. What do you think are sort of the key risks of this growth phase and the key opportunities that may not be appreciated in the market right now?
Look, I don't want to minimize things, but the beauty of both the Nevada project and the Quebradona project is there's nothing from a technology point of view that we don't know or haven't done. Take the Nevada. It's very similar, probably in the end to Geita. We have many, many experts. Our guy, Nick, who is the project guy, who's doing extraordinary job, has done many of these projects. Simple Carbon-in-Leach, 7.5 million tons per annum, 5.5 million Heap Leach. Nothing that we don't have or haven't seen. There's always issues, but the environmental is the big one. One of our main analysts is in the back, and she's always very hard on us, and she says, "Well, the environmental is still an issue," but it's not an issue. You never know how the Bureau of Land Management is going to do.
But so far, what we have seen from this government is a lot of support. We're quite confident that North Bullfrog will be put into operation. We will get the approval, and then we'll be in operation end of 2027, beginning of 2028. I think that will give a lot of confidence for what comes for Arthur. Just bigger, but the same type of disturbance in the environment. I think we've learned a lot to deal with the water. That was the big, big issue, and that is what, if you look at the North Bullfrog project in the beginning to now, it's completely changed from the water management. We learned that, and we have that in Arthur. There's always issues, but I am confident that we have the right people in the right place.
You take the Quebradona against sublevel caving, one of the top experts in the world works with us. His name is Jason May. The big, big issue was the government, the license to operate, and we were in suspension with the previous government. Now we have a window of four years, and we're going to go very fast because the current government in Colombia understands that this project is probably more important for Colombia than even for AngloGold. So the circumstances right now, we have tailwinds both in Nevada and in Quebradona. But there's always the unknown unknown. We'll park that for [Dr. Roskill].
We do have a question in the audience now.
Yep.
Hang on, John.
How many rigs do you have running in Nevada, northwest of Vegas? Are you focusing on stepping out and increasing the 20 million ounces or the inference versus the infill drilling to increase the 4+ reserves?
That is a good question. The decision was taken by the experts. We have more resource than we will need, and we can't start. There's an interesting graph. It's in the website, but we showed it in the visit. We were drilling, but for something else, and we found 3 g a ton or something like that, way out of Silicon. We know that it is a massive resource, but there's no point in going for more resource, as you say. This is about reserve this year and basically about the feasibility study. There is, I don't know how many there are. I know what we spend, and it's this $300 million or something like that. But it's all about the, right now, feasibility, pre-ordering, and putting this project as fast as possible. There's no water issues. It's just that water is scarce.
We have more than enough water, and we have the permissions. We were careful how we built that land in the past years. We first started with Corvus, then Coeur, and then Augusta. We have more than enough water in the whole region. It's just that it's a very sensitive area, and that's what we mean. For example, it's dry stacking, and so the use of water has been reduced to minimal amounts. We don't foresee any problems. We are not seeing problems in North Bullfrog currently.
Maybe one more quick question.
Thank you, Alberto. Can you please address your seeding of juniors? Like Thesis and so on. You have a pipeline of juniors you have been seeding.
Yeah. I see Terry over there, and he is the expert on the juniors. But look, we have as part of our plans on growing, and we want to be in Canada. What the team sort of found is that there is a possibility of another big, big district. And this one that you mentioned, Thesis, is one of them. And so we increased our stake, and we are looking at other possibilities in the area, but it is trying to be part of what we believe may be the next large district in Canada. So there is a lot of optionality on that. Our strategy, so we talked today about organically, we look at things obviously in terms of sort of bigger possibilities, but also a lot in the junior space and see if we can be part of the future of some area.
We think, or our team thinks it is very prospective. That is what I can see now.
Thank you very much.
Thank you. Thank you