AngloGold Ashanti Plc

Good afternoon, welcome to the Anglo Gold Ashanti Q2 2026 earnings release. All participants are in a listen only mode. The question and answer session will follow the formal presentation. If you should require operator assistance during the conference, please key in star and then zero on your telephone keypad. Please note that this event is being recorded. I will now hand you over to Mr. Stuart Bailey. Please go ahead.

Stuart Bailey Thanks very much, Judith. Good afternoon, good morning to everyone, depending on where you are, and welcome to our results for the second quarter and the first half of 2026. Alberta and Gillian will be presenting, but members of the executive team for any questions you might have. As always, we have a safe harbour statement at the front of the presentation, which has important information regarding forward-looking statements. And we would encourage you to read that. I'll hand over to Alberto.

Thank you, Stuart. I will start with safety. You will remember from our Q1 presentation that we had a tragic fatality out of Oasi on April 24. We suspended operations for two weeks to undertake a thorough investigation into the incident, and we are taking the necessary and important steps to prevent a recurrence. This kind of event validates the effort and resources that we spend every day to improve our safety performance. We do remain proud of the enormous strides we have made over the past five years, as you can see. Before we go into the quarter, Let's take a step back and look at the first half, which really, how are we doing after half a year? Production after stripping out the sale of Cerro Grande was more or less stable year on year at around one and a half million ounces. We had an exemplary cost performance again, managing controllable costs slightly lower in real terms. That is, if you strip away inflation, oil price, royalties, exchange rate, which is what we can't control, we once more are below that level of controllables. Once again, you see strong growth in EBITDA and earnings. Comparisons are not usually Nice, but probably we had the best EBITDA growth year on year of all of the large gold companies. Comfortably outstripping the rise in the gold price along with a more than doubling in cash flows. We made sure that shareholders both see the full benefit and see it right away with just under a billion dollars in dividends declared over six months. It's been an extraordinary period by any measure. As we look to Q2, there was a production impact from both Cerra Grande sale and the temporary safety suspension at Oboasi. On the positive side of the ledger, we had standard performances at Tropicana and Cuyabá. Total cash costs to the group were 1,480 per ounce once again, As with the half year, the macro context is critical. As I mentioned before, royalties, fuel, broad inflation, FX basically accounted for all of the increase. While this impact is driving cost inflation across the industry, our underlying operational discipline is firmly intact. And that discipline is why our financial metrics are so strong. We've ensured that earnings and cash flow grow well ahead of the gold price. EBITDA was up 46% to 2 billion. Headline earnings were 58% better at 1 billion. You can see our cash flows remain robust. Cash generated from operations grew 49% to 1.8 billion. As we expected, cash taxes more than doubled year over year to 542 million. This reflects not only our improved profitability, but also the timing of payments across our operating jurisdictions. Importantly, it is a seasonal peak. As we start reading the analyst reports, I think that that's probably something that needs to be adjusted because, for example, we do expect cash taxes to fall to less than half of that 542 million to about 230 to 250 in each of Q3 and Q4. So that points to an even stronger cash conversion over the remainder of the year. We continue to transform the balance sheet. Liquidity is ample at $4.2 billion underpinned by a net cash position of nearly $1 billion. To put that in perspective, we had a net debt position of $311 million just 12 months ago. This allows us to comfortably invest in our growth pipeline while ensuring our shareholders benefit from strong cash returns. This is an interesting graph, and we could make this one since 2021, but right now you're seeing since H1 of 2024. As we look at the broader industry landscape, it's clear that external market-driven factors have fundamentally reshaped cost profiles across the industry. Every operator is navigating the same intense macroeconomic pressures, Persistent inflation, fuel spikes and the impact of higher gold price link royalties. Our approach is not to passively accept them. We are relentlessly focused on executing what we can control. This chart provides important historical context of our cost performance. The gray bars represent our normalized costs. That is what our total cost would be if we simply accepted market inflation and royalty hikes and nothing else changed. However, through active mitigation strategies implemented across our portfolio, we have managed to partially offset these macro factors. This is reflected in the orange parts, which represents the total cash costs we actually reported, proving our ability to consistently outperform these macro inflated baselines. Through rigorous operational discipline and our full asset potential program, we have successfully compensated not only for the increase due to these external factors, but also for normal changes in grade and mining further from infrastructure that is inevitable. Ultimately, by decoupling our controllable operating costs from these escalating market headwinds, we ensure that the full benefit of record gold prices flows directly to the bottom line, maximizing free cash flow and driving our sector-leading yields. Our Tier 1 assets are the core growth and cash engine of the group, accounting for over 70% of total production at an exceptional 71% cash market. These assets hold approximately 80% of our middle reserves, underscoring the structural long-term quality of our global portfolio. Our Tier 2 assets continue to serve as reliable cash generators delivering a solid 58% margin with ongoing focus on operational discipline and cost competitiveness. This combined asset structure provides superior cash flow leverage to the higher gold price environment while maintaining the quality foundation needed to keep us firmly on track for full year guidance. The high-quality portfolio we just walked through is not static. We are fortunate to have an emerging slate of low-risk, capital-efficient, and potentially very high-return brownfield and greenfield opportunities. These projects underscore what I've said repeatedly. While we always scan the landscape for value-adding M&A, the best opportunities for us lie within our portfolio. Nevada has anticipated to become a significant production center for the company in the early 2030s. we're advancing to full feasibility study at Arthur. But even at our existing operation, we have options with the potential to add between 10% to 15% to our current production profile in the next three years, all from our existing operations. There are various opportunities identified through leveraging our established strategic asset review and option analysis processes. Key operational focus areas include additional ore sources and processing plant expansions aimed at sustainably improvement on current production bottlenecks at Cuiabá, Gaita, Sigüiri, Oboase and Zucari. We are currently advancing high-value exploration opportunities, priority studies and project implementations all around the pipeline with a new, more agile, fast-track project framework. I will give a detailed update of these growth projects in Q3. This is what disciplined capital allocation looks like, taking part of a record free cash flow and reinvesting in its low risk, high return opportunities that will optimize the value we can deliver from a world class or bodies. We are pre-funding the health and expansion of these assets today, ensuring they remain highly profitable cash generators well into the next decade. On dividends, it is worth having a quick reminder of our dividend policy. It provides for quarterly payout of 12.5 cents a share, It also provides for an annual true up payment, bringing the pay up to 50% of free cash flow. We again use discretion to make that true up at the half year, underlining not only the extraordinary cash flow generation, but also our confidence in the outlook of the business. That takes our dividend declaration for the half year to $949 million with $364 million declared in Q2. This remains one of the most generous yields in the sector, and as normal, we expect a strong second half. When you look at our overall capital allocation framework, you can see it working precisely as intended. Our portfolio is well capitalized and is performing consistently to plan. Our balance sheet is the strongest it's ever been. We're delivering sector-leading returns with one of the industry's most attractive yields We've shown an investment forward approach with more frequent dividend payments. In April, we executed a buyback of our outstanding bonds, retiring $666 million of our 28 and 30 notes. That's another reduction in our longer-term financing risk and a clear improvement in our strategic flexibility. That position was welded to deploy excess liquidity into a $2 billion open market share buyback program. Shareholders approved the program last week and we're now waiting approval from the South African Reserve Bank. Again, if you step back, this is a business with a predictable operating base and unrivaled project pipeline and a balance sheet that will stand us in good stead in whatever market we encounter. With that, I hand over to Gillian.

Thank you, Alberto. We generated free cash flow of $727 million in Q2, a 36% increase over the 535 million reported in Q2 of last year. This was underpinned by a 41% year-on-year increase in net cash flow from operating activities to 1.4 billion, driven by disciplined cost execution and a 35% higher average goal price received. The upward pressure on cost for our industry were particularly acute this quarter. US CPI escalated to 3.5% in June of 2026 from 2.7% 12 months earlier. The primary driver was the 45% increase in Brent crude prices, which led to a spike in our energy inputs. Australia was the clearest example, with inflation more than doubling to 4%, putting pressure on local labour and consumables. US dollar weakness was matched by appreciation of our local currencies, creating strong cost headwinds. This currency-driven inflation is receiving aggressive focus on internal cost containment measures. Our internal realized inflation rate, which represents CPI, changes in the jurisdictions that we operate is currently just under 6%. We're working to offset those cost pressures with our full asset potential program and by adopting a total cost of ownership supply chain framework, ensuring disciplined capital allocation by optimizing long-term asset performance. In our financials, the results show a significant rise in earnings and free cash flow. The increase in free cash flow is underpinned by higher realized price and improved cash receipts from Kibawi. EBITDA rose 46% to $2 billion. Basic earnings per share rose 49% year on year to 197 cents, up from 132 cents in Q2 of last year. As a result of the strong performance, we ended the quarter with net cash of $991 million, a $1.3 billion swing from June in the prior year. Total cash costs increased by 21% year on year to $1,480 per ounce compared to $1,226 per ounce in Q2 of 2025. We've been very clear on those exogenous factors driving the increase. Inflation, higher gold price linked royalties and exchange rates collectively added around $216 per ounce or 18% to the cost base. The higher gold price meant higher revenue linked royalty costs while the 45% increase in oil price drove up our fuel costs across the portfolio. The suspension at Abuasi accounted for another $38 an ounce. In our managed operations, we saw the benefit of our full asset potential programs, specifically our plant feed expansion program at Cuiabá. Total cash costs for our managed operations increased by 20% to $1,486 an ounce. Through full asset potential and other operational improvement initiatives, we continue to look for opportunities to improve efficiencies and protect our margins. On free cash flow, the higher price added 733 million offset by low sales volumes, which reduced it by 151 million. Increases in operating costs were largely driven by higher royalties, inflationary pressure and the weaker US dollar, partly offset by higher by-product revenues and lower costs related to legacy tailings facilities. It's important to note that earnings related tax payments in Q2, 2026 were the highest on record and are expected to be by some way the highest for this year. capital spend stepped up as planned, while distributions to our non-controlling interests were 85 million year on year. We are pleased to again reaffirm annual guidance based on our stated assumptions, which underscores the robustness of our portfolio and the improving operational performance into the second half. We do expect a second half weighted production profile, particularly in Q4. Production is expected to reduce slightly at Tropicana as open pit mining moves into the lower grade Havana 6 pit and at Idioprim due to difficulty accessing temporarily flooded higher grade areas. Abuasi is running at a normalised run rate with half tube production expected to be 150,000 ounces. We are keeping a close eye on developments in the Middle East to mitigate any impacts on our energy and global supply chains. With that, I'll pass back to Alberto to outline our relative market performance.

Thank you, Gillian. We've not changed our focus. 2026 is about discipline execution and controlling what we can control like we have done in the past five years. In a strong gold environment, discipline matters more, not less. Our aim is simple, protect margins, allocate capital, rigorously strengthen the portfolio. We remain laser focused on cost discipline across the portfolio. For full asset potential, we are systematically looking for ways to offset external pressures across the board. We're increasing the production contribution from our tier one assets which structurally lowers our cost base and improves margin resilience. Active portfolio management remains core. We've been active in this area and will continue to direct capital to assets that generate superior risk-adjusted returns. Sustaining capital is about protecting safety and reliability as well as asset longevity and growth. We are appropriately capitalizing our assets to ensure safe, stable, and sustainable operations. We continue to invest in mineral reserve development to increase operational flexibility, particularly in complex ore bodies. Reserve replacement remains fundamental. Sustained reserve growth underpins long-term value creation. Growth Capital is focused on high-quality, long-life projects, particularly in Nevada. These projects enhance jurisdictional quality and portfolio resilience. We are creating flexibility for life extension and brownfield growth across the portfolio by building new tailings and opening land to extend our mining operations. We are prioritizing short cycle, high return organic projects that strengthen free cash flow generation. Operational excellence alone is not enough. Social and regulatory stability are equally critical. We remain deeply committed to our host communities and governments where we're providing real-time benefit from the higher gold price through taxes, royalties, social investment, and meaningful participation in our value chain. We've made steady progress narrowing the rating gap relative to our North American peers through a comprehensive multi-year plan to strengthen the business. Today, our fundamentals are robust, our portfolio is performing, and the higher gold price is flowing directly to the bottom line. This slide clearly illustrates our relative outperformance. The transparent bubbles represent where we and our peers sat exactly one year ago, while the solid bubbles show our position today. Over the last 12 months, you can see a sector-wide derating. For Anglo Gold over the past year, as you can see in the chart, We moved to higher dividend yield and a slightly higher EV to EBITDA multiple. All of our competitors saw the opposite. That is no accident for us. The market performance has followed our results. In fact, in Q2, we generated a sector-leading 36% year-over-year growth in free cash flow per share, outpacing the peer group. In the end, that is what matters. We're close to the bottom line to free cash flow. While some peers have built significant net cash positions, our capital allocation ensures we pass this strong cash generation directly to shareholders. At these elevated gold prices, as these elevated gold prices hold, we are focused on realizing our operational catalysts, managing costs aggressively, and delivering on our buyback program. With that clear focus, we believe annual goals represents the most compelling investment proposition in the sector today with significant embedded upside. With that, I will hand over to this operator for your questions.

Thank you. Ladies and gentlemen, we will now be conducting the question and answer session. For the benefit of the participants who have joined via the webcast, you're welcome to submit your questions in the question box provided on your screen. For the benefit of the participants who have joined via the telephone lines, to ask a question, please press star and then one on your telephone keypad. A confirmation turn will indicate that your line is in the question queue. You may press star and then two to leave the question queue. Our first question comes from Josh Wolfson of RBC. Please go ahead.

Thank you very much, Alberta. We had a lot of questions on the last call on the buyback enhancement. Many of the details couldn't be disclosed with this now approved. Can you provide me a bit more information on how the company is looking to leverage this? Is it going to be opportunistic purchases, more stable?

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We're still waiting for the Reserve Bank and then we see.

Thank you. And then, you know, on our end, we're very excited about this upcoming organic growth update. The company's issued some details, at least at Gates. We kind of know the outlook for Abwasi. You know, when we think about the other assets that were identified, Sukari, Kuaba and Suguri, you know, you know, is there any more information you can provide, maybe early expectations there, and also, you know, what should we be thinking about the capital needs for some of these opportunities?

Thank you, Josh. Look, I'm sort of resisted because I want to give what I've said, sort of the next quarter is going to be, I would imagine, I know a significant detail per asset of what we expect to see in three years and probably before that. But obviously we've continued to work. There's a whole team, let's say, that has been assembled in the corporate with an SVP that's equivalent to the head of Africa. So it's a pretty senior position. and in that group you have planning people, you have supply people, you have finance, you have HR people, you have projects people, and so they're looking at each one of these The cost is not high. Probably it's where we have the processing plant in Gaeta, there's going to be a bit more cost. But in Sukari, it's basically equipment, trucks and shovels and things like that and exploration. In Cuiabá, it's going to be, we will, looking for bringing ore from other places, but it's pure mining and Cuiabá. Yeah, we'll see if it's between maybe 75 or something in three years that we're looking for. And Sigridi, it's again pure mining. We've identified areas. We again need to do a bit more brownfield, but the initial estimates sort of solidify, strengthen our view that this is going to be just more of mining, open pit mining. There's not issues. We need to do some issues of license to operate with resettlements, but nothing that we will see is going to be an issue within the next three years. So look, What I can tell you right now, we've given a guidance between of 2025 baseline, so about 3 million ounces and between 300 and 450,000 ounces. And the more we see, I think that we're going to be in that range and what we will be talking in Q3. So low capex. Interestingly enough, and this is important, what you see in the growth CapEx and sustaining CapEx right now in this quarter is already contemplating the money to achieve that growth. For example, you will see in the growth capital 120 million from memory for TSFs in Oboasi and TSFs in Sigiri from memory. So those two are needed as we grow the ounces. You are also seeing money on sustaining for stripping, money on sustaining for ORD, um and and and that is all preparing the terrain so we've started to spend within apparently normal course of business but it's within this laying the groundwork to um to have uh to materialize these growth projects and again it's not that we're going to only see the growth in three years we should start significant more resources to finish this.

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The board, we have the funds to start the feasibility study now in August. So that's what we've been focusing on. Everything else is walking according to plan. Thank you.

Great. Thank you very much.

The next question comes from Adrian Hammond of SPG. Please go ahead.

Thanks, Alberta. Hi, Alberta and Gillian. Firstly, just talk about capital allocations. If you may, your target for $1 billion cash buff is largely achieved. So does this assume then you pay out all future free cash flows, or are you going to build further cash buffers here in light of your growth aspirations?

Thanks, Adrian. No, the plan is to find a way to return that cash. At this stage, our plans is to build that one billion. And so as I look at it, it all depends on the gold price. But if you believe that the gold price is staying where it is, we should double the free cash flows and then you can just remember let's say it's 3.8 billion and we already so that's 1.9 we're returning of dividends and then on the other 1.9 we use 666 like close to 700 for the repurchase so you can see that that will uh there is uh if we keep 1 billion there's going to be more upside that will return one way or another

Okay, great. And then if we can talk about Abuwasi, you've mentioned three issues, including equipment breakdowns, availability, operational delays. Every six months, it seems to be something unfortunate there at Abuwasi. Do these issues, are they temporary, or do you think these risk the ramp up there?

The main main issue was the fatality. I don't think that if there was any before the fatality we were heading towards the first quarter was fine and we we were heading towards delivering on our target for the year that which was between 300 and 350 or something like that. We would have done that and even but as you know the fatality in an in an or pass the way it happened really. obliged us, we had an obligation to deeply understand why it happened, how it happened, and what we needed to do to avoid this. We also had a catastrophic failure in the system again. And so that impacted us not only in the weeks that we had operations close, but for example, we're not using those oil passes right now. So basically we're operating without the KMS shaft. And even without that, We expect to have an analyzed 300,000 in the second half. Now, we do expect to bring everybody back to normality, including the ore passes. So we're building another ore pass. Because remember, all of the gate into, how do you say the, yeah, that. that the gate that you used to control the flow of the ore pass was completely destroyed. So we are building another ore pass that should be ready by the fourth quarter. And that sets well the groundwork to deliver on the 2027, which was around 325, 350 or something like that. So that's where we are preparing ourselves to. And we are thinking, again, that mostly without the KMS shaft, we will do around analyze 300 in the second half of the year.

Yeah, I mean, good question. Perhaps a Jillian on the realized gold price versus market averages. They seem to be quite apart. Is this just timing or should we think there is a reason for this, such as the potential discounts that you're required to sell gold to Ghana and Tanzania authorities?

Thanks. Thanks, Adrian. It's exactly timing. You will know that there was quite a lot of volatility in gold price change in Q2. You saw the highest drop actually since 2013. And so it's effectively the timing of sales. So we we had and it was I realized prices $90 an ounce lower than the kind of the consensus or the spot price for the quarter it is related to timing the other thing we've got very small amounts of concentrate sales still um in Brazil 36 000 ounces so that's small premium or discount um on the gold price but otherwise nothing impacting us achieving um market prices

Thanks, Gillian. And while you're on the line, I've noticed your working capital outflows have improved quite considerably. Do you think that will reverse completely at all at 2H? Or is this going to be something where we should expect a steady balance going forward?

No, I think thanks and thank you for recognising the achievement. The team is so focused on working capital. We're not anticipating any lumpiness in the second half. Of course, as your receivables are higher based on goal price, maybe there's some movement there, but we are laser focused on working capital and don't anticipate any lumpiness in the second half.

Thanks.

Our next question comes from Roger Ray of BMO. Please go ahead.

Thank you, operator. Good morning, Albert, Gillian and team. A couple of questions. First of all, a follow up and more clarification on Adrian's question on the buyback. So am I correct in understanding that in periods where you pay 50 percent of your free cash flow as dividend, you're still willing to go above that for share repurchases. So your total capital returns could be higher than the 50% of free cash flow. Is that correct, Alberto?

That is absolutely correct. And stays where it is today, that will be the case.

OK, thank you. And then a second question is the comment you made on the on the growth of coming in the portfolio over the next few years. Can you comment on what it does to your capital intensity? Are you happy with your sustaining and non-sustaining capital intensity at these levels as you deliver on those growth or is that expected to increase?

No, look, it is, I would say it's going to be stable for some years. So we are doing about 480, something like that per ounce, which you look at other like Garnic, I think it's double. They're not investing anything. We have a very important growth pipeline within our own organic assets. And we, yeah, you need to invest in it. So we expect to stay where it is high for some years. But not go higher than that.

Okay, that's good. Thank you. That's it for me.

Thanks, Ross. Our next question comes from Joseph Rieger of Roth Capital Partners. Please go ahead.

Hey guys, thanks again for the questions. Two items I don't think have been touched on yet. So at first with Seguri, there was this announcement that the government's going to force the flow of gold through their refinery. Has this occurred to you guys with Seguri? And is there any impact from that going forward?

Thanks, Joseph. So yeah, we are in conversations with the government. This is something that we have seen elsewhere. And we work with the governments like in Ghana. And yeah, it's just about we have, I think they gave months so we we believe we will find a way of how to deal with it. But we understand the for the tasks of wanting to have more local having value and we will again talk to the government and ways to deal with that. At this stage I don't want to comment more except that we believe that it's something that you can address within almost business as usual. Business as usual means it's not any significant thing. We just need to a reach to how do we do this with the government. But we have a lot of, let's say, confidence. The Minister of Mines is probably very knowledgeable of the industry, understands what we are, the needs of the industry. And yeah, we expect to continue constructive conversations on this front.

Fair enough. And then, Ida Priam, cash costs rose pretty significantly quarter over quarter, looking at grades, throughput, et cetera. It doesn't seem like there's any meaningful justification for it. Is there some color you're asking of there on what caused that and if it's sticky?

I will tell you, and it is related there is a particular significant hit on this quarter on the royalties increase that's it if if you look at uh in the cream in terms of for the quarter in terms of what we call flex costs which is including royalties and fuel price and everything we sort of are flat so that is important And then the other interesting thing that I can note, if I look at the outlook for the year for the Supreme, we're going to be again flat in terms of the flat cost. And then that royalty impact is reduced. Let me just say one more thing, which is important. What the government did was increase the royalties. So right now the increased impact is 5%, but they reduced the COVID levy by a net impact of about 2.6%. But that you don't see in nationals, you see in taxes. And so there is a significant mitigation that you see below the line. So all in all, the sum is, the premium is doing well on cost. There was some increase in mining contract, but the bulk of it for the quarter was the royalty impact. Okay, thank you.

That's very helpful. I'll turn it over.

Our next question comes from Tanya Yokosconic of Scotiabank. Please come ahead.

Oh, great. Good morning, everybody. Thank you so much for taking my questions. The first one is just a clarification, if I can, Alberto. I understood from Doc and others that for that 300 to 450,000 ounce growth from your portfolio, that's going to come at less than 100 million of capital. and really not any additional change to the $480 per ounce of sustaining capital. Is that a correct way for me to think about that?

We will give you more details. The 100 million, we've never talked about that. What I've said is, overall, we don't expect the sustaining capital numbers to increase. and the other thing that i've said is that all of the projects i think most of them is going to be i i don't have the numbers yet but it's going to be nothing significant in the scheme of things they're very high ir projects but of course if you need to buy more equipment in segwiti and you need to buy more mining equipment in sukari that's just going to come at a cost and i i don't know how it's going to flow in exactly in the numbers. But it is nothing like you're going to have in billions of dollars that you have to do an expansion. So there will be no other projects that are as high IRs as this one.

That's the point I'm trying to make.

In the Q3, we will give probably some more detailed estimates of what we're assuming. But most of it is just more mining and the costs that are involved with that.

Sorry, I heard a $75 million number that was put out. I think you mentioned it. And so I thought that was for everything. Sorry, maybe it was my misunderstanding. Okay. So that was my first clarification. Thank you for that. The second I wanted to focus on was on your cost. And I appreciate that, you know, the higher oil price impacts the world, the higher fuel price, impacts the cost as well. Can you maybe just talk about some of the other inputs that maybe you are feeling some inflationary pressure on? Maybe it's labor, maybe it's consumables. Are you seeing anything in those areas that are also impacting your cost?

Thanks, Tania. The number I did mention was 75,000 ounces additional in Cuiabá. I don't know if that's what I didn't say. It wasn't millions, but ounces additional in Cuiabá. Look, in terms of the cost, how do we... The inflation impact in the half year is a bit larger than what we... So usually it's been 5%. It's about 5.8%, and this is excluding the fuel price. And the fuel price, it's about half on half, it's about $20 an ounce. So it's not significant, but everything adds up to it. So when you look at the impacts, and this, I'm talking again, half on half year, you're having about 60 on inflation you're having about 23 in fuel price and exchange rate by 46 and then you have the impact of the royalty that is significant so that's all adds up to uh a flex cost that is higher a bit higher than what you see in the numbers if you go to our cost for the half year cash cost is $1,436. The flex cost is a bit higher than that. So, which means that we've been able to lower a bit versus the flex cost. I don't know if that's helpful.

I'm just wondering, as you said, you know, is it labor? Is labor, you know, inflationary above the 3% to 5% in your portfolio? I'm just trying to understand, excluding that fuel and royalties, what else is, you know, this overall inflation, just trying to understand it. And I know you've reduced, you know, on your productivity and optimization of assets separate from this about 2%, so you're gaining a little bit there. I'm just wondering where else am I seeing those pressures.

Maybe, Tanya, I can just say that we're not seeing anything out of the ordinary in terms of inflationary pressure within the jurisdictions that we operate, particularly around labour. What we would say is it's a relatively fixed cost business, especially in the short term. And so, yeah, if you kind of look at the volumes and the cost base, you can see that it's those primary drivers for the costs are the macro factors that we are we are kind of trying to manage as best we can but there's nothing outside of that that we would highlight as an issue for us and we are again expecting really quite strong cost performance in the second half in line with this volume profile that we are anticipating.

I'm not going to say whom but we have heard others talking about like extraordinary costs and you see the rent back. We haven't seen that. That's just my point in mind.

Okay. Well, that's good. And then my final question, um, about those to you, when you put up a slide and you showed your tier one portfolio, which, you know, as a nice production of over 500,000 ounces, great costs. And then you have your tier two that's, you know, um, obviously brings up the cost structure. How do you think about that tier two portfolio? Like, if you you know always you know hindsight 2020 if you didn't have that portfolio you know would you theoretically trade higher valuation with that you know cost base so I just kind of think I wonder how you're thinking about those tier two assets um what makes them important to stay within the portfolio maybe just review the you know maybe declaration upside maybe think weeks in mine life I'm just trying to understand why they're important

And yeah, it's interesting. You know, we were at some point trying to sell one of the assets that was tier two. And then at these gold prices, it's impossible to get the right value because it's sort of in nature that a lot of the offers come like at consensus pricing and with very conservative views. of the gold price in two or three years, and we value them as futures, they're valued much, much more. It was no secret that we were trying to sell the CVSA. I can tell you the cash flows for this year are like 60% of what we were going to receive by selling it. What we now have in our tier two assets is, and the only one that is not working that well and is improving is Sunrise, and you see in the performance. But again, talk about CBSA, it's working like a little charm. It's been increased its life from three to five years. Silver obviously is now a bipolar, it's a blessing in CBSA, but the free cash flow it's generating is amazing. And so we have no rush. to dispose in the current environment of tier two assets. Different was the case, for example, of Sierra Grande that was just too small and it was just, it drew on a lot of management time for the money that it produced. And so we're happy to have disposed of that one, but the rest, we're very happy to keep it. And then you have assets that like Siguiti that, Thank you for taking my question. Pleasure, Tony. Thank you. Thank you.

Ladies and gentlemen, at this stage, I will hand over to Stuart Bailey for questions from the webcast.

Stuart Bailey Thanks, Judith. So the first question I'll ask is from Arnold van Graan at Nedbank. He says afternoon team, solid results and proper long term delivery. My question is, where do you see the most compelling near-term growth optionality in the portfolio? Also, please talk us through your risk-adjusted return methodology. Are you seeing good projects in certain jurisdictions that fall short once you add the risk component to your assessments?

Oh, that's an interesting question. Look, the near-time optionality is in those five assets that are the core of the growth portfolio, Oboasi, Keita, Sukari, Siguri, and Kuyaba. And as I said, there is a lot of focus of tension, even with a centralized team, even though it will be delivered by each of the assets. we want to understand what are the bottlenecks, what do we need to do, what we need to do in brownfields, what we need to do in license to operate, what we need to do in TSF, what we need to do in communities, and have a very clear centralized view of that. And that's what we're working on. So those are the best near-term optionality that we have. And those are the ones that we are working to present in Q3. The risk adjusted returns We do have different discount rates, obviously, for each. Even though we have a company-weighted one, we have a different risk-adjusted return. So they all, for example, these growth projects in different areas in Africa, they will all have to face the hurdles. Now, what I've said is they are so profitable that with All of them risk because it's little investment to a significant impact in the growth. Take whatever in Segwini, if we go from three to 350 or 375, that's 50%, I'm sorry, what would be 20% increase in the production and with very significantly little capital. So even though we do explicitly do risk-adjusted returns, they are way above any hurdle that we have for investment.

All right. Thanks for that, Arnold. The next question is from Robert Callaway, who says, please update on the connection of Sukari to the Egyptian national grid in light of the operation's heavy dependence on HFO fuel generation. And Robert, just very quickly, the feasibility on that 80 megawatt grid connection is almost complete. We've got all the regulatory approvals we need and all going well. We're looking at commissioning early in 2028. The work to do between now and then is just to make sure that there's certain upgrades to the grid just to ensure stability once that's connected but just for the meantime remember we do have the 30 megawatt solar facility there that's working like a charm so no problems there. Alberto one other from Martin Crema which is just your thoughts on AI are we using any in the business or exploration or for safety and do you think it can improve efficiency?

I think we can ask Marcelo who's the expert on that, but we are using AI, but give us some, Marcelo, of your wisdom.

We have been implementing AI across the organization for quite a long time, especially machine learning, which we have been using for predictive maintenance, for process control. and other activities around the mine. We also have a program to increase proficiency of AI across groups. So we have selected a single provider, blocked everything else, and now our technical teams and operating teams have access to generative AI for general tasks. We are not in the era of genetic AI. We have some of concepts going on, but even the security issues that we have with that type of technology, we are taking a very question mark approach to define that type of technology. But we are very advanced in our adoption across the group generally.

Right. Thanks, Marcelo. I think that's it from the webcast. And we don't have any other questions on the lines. Alberto, if you give us a closing remark before we wrap up.

Thank you. OK. Yes. Mining, I always say it's a normal curve without the right hand side. So there's always issues. This one was particularly difficult. The fatality of Oase impacted us in many, many ways. But apart from that, which is very bad, but apart from that, that impacted Oboasti. We have some impact in Sunrise, but the portfolio effect, Tropicana doing much better and many others, leads us to relatively stable production in the first half. We expect in the second half, if things go as expected, and that's always an if, we wouldn't have any additional surprises to have an increase in the second half by about 6%. so that will also lead to uh we expect cash costs in the second half to actually go down versus the first half just because of higher production obviously higher uh denominator and and and that will uh flow well the other thing that i'd like to highlight is the free cash flow because in the end You can talk about cash cost and who's better. You can talk about the sustaining. You can talk about rolling costs. But in the end, what matters is what flows to the bottom line. And we do exceptionally well there. Our increase in the half of 36% higher than anybody else much higher than most of them is something that we are proud of and this is in spite and something that we have prepared for the questions but none came which was the tax thing we had an unusual lumpy tax in the second quarter of about 540 million we expect half of that in q3 and half of that in q4 which by definition in the gold's price stays where it is today should significantly improve the free cash flow in relative terms in Q3 and Q4. So we are very comfortable where we are. We expect, as we said, to be comfortably within guidance. and we expect to keep making the most of this high gold price environment in terms of what we can deliver to our shareholders. We were clear that it's going to be, if the gold price was placed where it is, above the 50%. We are already in the $1 billion of net cash. So yeah, we're looking very much forward to a strong second half in all fronts. obviously with a little grace from God that you always need. Thank you.

Thank you. Ladies and gentlemen, that concludes today's event. Thank you for joining us. And you may now disconnect your lines.