EDVMF - Endeavour Mining plc (EDVMF) Q2 2023 Earnings Call Transcript

2023-08-02 16:41:06 ET

Endeavour Mining plc (EDVMF)

Q2 2023 Earnings Conference Call

August 02, 2023, 08:30 ET

Company Participants

Martino De Ciccio - Deputy CFO, VP, Strategy & IR and Head IR

Sebastien de Montessus - President, CEO & Executive Director

Djaria Traore - EVP, ESG & Supply Chain

Guy Young - EVP & CFO

Mark Morcombe - EVP & COO

Jono Lawrence - EVP, Exploration

Conference Call Participants

Ovais Habib - Scotiabank

Don DeMarco - National Bank Financial

Carey MacRury - Canaccord Genuity

Raj Ray - BMO Capital Markets

William Dalby - Berenberg

Daniel Major - UBS

Harmen Puri - Bank of America Merrill Lynch

Anita Soni - CIBC Capital Markets

Sandeep Peety - Morgan Stanley

Amos Fletcher - Barclays Bank

Presentation

Operator

Good day, and thank you for standing by. Welcome to Endeavour Mining's Q2 and Half Year 2023 Results Webcast. Please note management's presentation today will be in video format here on our webcast platform. [Operator Instructions].

I would now like to hand the call over to Endeavour's Deputy CFO and Head of Investor Relations, Martino De Ciccio.

Martino De Ciccio

Hello, everyone, and welcome to Endeavour's Q2 and Half Year 2023 Results Webcast. Before we start, please note the usual disclaimer. Today's format will be similar to what we did for our end of year results. We have prepared a video which matches the slide order of the PDF results presentation, which is available on our website homepage.

So feel free to follow along. We hope that you find this more engaging and enjoy the video content. Sebastien will start with a recap of our key accomplishments for the first half year. Then Djaria will talk about our latest ESG initiatives. Guy will then outline the financial results before Mark provides a detailed operational review. And finally, Jono will update us on the exciting progress being made at our Tanda-Iguela discovery.

So make sure you stay tuned until the end. After Sebastien's closing remarks, we'll open the floor to questions. And now I will hand it over to Sebastian.

Sebastien de Montessus

Thank you, Martino, and hello, everyone. For the first half of the year, we've continued to deliver against 6 key focus areas with the goal of unlocking near-term value for all of our stakeholders. I'll go through each area in detail. But as a quick summary, on the operational front, we are on track to meet our full year guidance for the 11th consecutive year. In line with our strategy of actively managing our portfolio to focus on higher-quality assets, we were pleased to close the sale of our non-core Boungou and Wahgnion mines during the period.

The quality of our portfolio is set to further increase as our 2 growth projects the Sabodala-Massawa BIOX project in Senegal and the Lafigue project in Cote d'Ivoire are progressing well. Both are on budget, are on schedule to commence production in Q2 and Q3 '24, respectively. Alongside this year's investment in our organic pipeline, we are pleased to continue to deliver attractive shareholder returns and have declared our H1 '23 dividend for $100 million.

On an annual basis, this represents $25 million more than the minimum dividend commitment for the year. Given that the Sabodala-Massawa expansion and the Lafigue greenfield build are expected to both increase the group production and lower our cost base, they will further enhance our capability to reward our stakeholders. As such, our goal is to increase our shareholder returns program once our organic growth projects are completed, thereby ensuring that our efforts to unlock growth immediately benefit all our stakeholders.

On the exploration front, in the first half of the year, we have accelerated our exploration efforts at our Tanda-Iguela discovery, where we have drilled over 95,000 meters during the last 6 months. As such, we've decided to increase the full year drill program at Tanda to 180,000 meters and remain on track to publish a resource update later this year. As part of our ESG strategy, we've launched several new initiatives, which aim to protect the places where we and promote sustainable social economic growth in our host communities. We've also launched the construction of our Sabodala solar plant, which has the dual benefit of reducing our emissions and decreasing our operational cost.

I will now dive deeper into each of these themes, starting with our asset sales. The divestment was well aligned to our long-term strategy of progressively upgrading the quality of our portfolio. You will probably recognize my favorite magic box chart -- as you can see, our non-core Boungou and Wahgnion mines were clear outliers in the portfolio with higher cost and shorter mine lives. They were also our 2 smallest mines. The divestment of these mines allows management to focus on the core mines while also increasing our geographic diversification. Prior to the sale, Burkina Faso represented 55% of this year's production, while it now represents 44% of production from our continuing operation.

This is expected to decrease to around 30% and next year, following the completion of the Lafigue build in Cote d'Ivoire and the Sabodala-Massawa expansion in Senegal. We were pleased to sell the assets to a trusted Burkina Faso business that shares our commitment to operate the mines in the best interest of employees and local stakeholders. We wish again to thank our Boungou and Wahgnion employees for their commitment and professionalism and local stakeholders for their support, which has contributed to endeavor success over the past several years. We wish them further success.

Overall, we expect to add proceeds of more than $300 million from both assets comprised of upfront and deferred payments in addition to NSRs, which also allows us to retain further upside. These proceeds will allow us to complete our ongoing construction with a healthy balance sheet, accelerating our ability to increase our shareholder returns program. Following the divestment of Boungou and Wahgnion, we have updated our production guidance to around 1.1 million ounces at an all-in sustaining cost of below $950 per ounce.

So far this year, we produced 511,000 ounces at an all-in sustaining cost of below $980 per ounce, places us on track to meet our guidance for the year. As we have previously guided, we expect performance to be weighted toward the second half of the year as we expect stronger production at lower cost at our Hounde, Sabodala-Massawa and Mana Mines. And as you can see on the screen, we are pleased that this operating performance continues to be achieved safely with a sector-leading safety record.

Looking at the half year production and all-in sustaining cost trend, you can see that production decreased in line with the guided trend, while all-in sustaining costs remained below 1,000, Mark will run you through the mine by mine asset performance later, but at a high level production decreased at Hounde and Sabodala-Massawa due to an increased focus on stripping activity which resulted in lower grade ore being processed. While at Mana, production decreased due to an increased focus on underground development with supplemental ore being sourced from the lower grain Maoula open pit.

At a group level, this was partly offset by increased production at Ity, which is on track to achieve another very strong year. In light of our efforts over the past 6 months, we are on track to achieve a stronger performance across our mines in the second half of the year. Turning to our operating cash flow. Before working capital movements, you can see a modest decrease as the higher gold price only partially offset the expected lower action and higher cost. This cash flow profile is linked to our mine plan sequencing which as mentioned earlier, is expected to yield stronger cash flow in the upcoming quarters.

As an aside, you can also see with the gray shaded area that the cash flow from the discontinued operation continue to fall each period, further demonstrating the rationale behind the divestment. While in the short term, we expect to generate stronger cash flow through our flagship assets -- by this time next year, we expect to see a significant uptick in cash flow as both our gross projects will have been commissioned. To look at them in more detail, let me first elaborate on our Sabodala-Massawa expansion project. We are extremely excited about this project because of both its strategic and financial benefits. Once this expansion is completed, the Sabodala-Massawa mine will rank as a Tier 1 asset, capable of producing more than 400,000 ounces per year, thereby increasing the quality of our portfolio and further diversifying our production base.

In addition, based on the exploration success to find oxide ore, we are confident to be able to further boost production in the short term. I will let Mark provide details on the build within this section, but at a high level, construction work is progressing on budget with 75% of the $290 million initial capital cost now committed. He is also tracking on schedule with first gold from the BIOX plant expected during the second quarter of next year.

Moving now to our next growth project, which is our Lafigue greenfield development in Cote d'Ivoire. It will be another cornerstone asset for the company with an envisaged annual production of over 200,000 ounces over the initial 13-year mine life at a low all-in sustaining cost of below $900 per ounce. Construction activities have ramped up fairly quickly as you can see. We have now committed around 60% of initial capital with costs in line with expectations. And we are on track for first production in Q3 next year. As you see in the production chart, these 2 projects will deliver growth next year with the full year benefit in '25.

We see production increasing to above 1.3 million ounces in 2025 with strong potential for further increased production based on the continued out-performance at Ity and Hounde.

We also anticipate bringing in more oxide at Sabodala-Massawa to lift production well beyond 400,000 ounces -- and in addition, we see Lafigue outperforming its nameplate capacity as most of our plants do. But equally important, this growth will allow us to maintain industry-leading all-in sustaining costs of below $950 per ounce. Shifting now to our ongoing exploration efforts, which continue to generate excitement amongst the team -- so far this year, we spent over $50 million with a significant focus on our greenfield discovery, Tanda-Iguela. And owing to the long success there, we have decided to increase this year's budget from $65 million to $80 million for our continuing operations.

In the first half of the year, we drilled over 95,000 meters at Tanda, which is already more than the 70,000 meters originally planned. With the updated budget we are now targeting to drill 180,000 meters this year. Tanda-Iguela continues to show its potential to be a Tier 1 asset and we are excited to work towards publishing an updated resource estimate later this year. But our exploration success is unlimited just to Tanda. We've made significant progress across our producing assets. At Hounde, for example, we've identified extensions at the Kari Pump and Kari West deposits.

Also at Hounde, we have potentially made a game-changing discovery as we confirmed high-grade mineralization below the Vindaloo deposit, which shows the potential to delineate a sizable high-grade underground resource. We will be following up on this in the upcoming drill programs. At Sabodala-Massawa, we are expanding resources at Kiesta, Niakifiri, and the Kerekounda, which could provide nonrefractory ore and help lift production.

At Ity, we are looking to expand resources at the Flotouo, Walter-Bakatouo and Yopleu-Legaleu deposits, and we are testing also new targets. While at Mana, we've been busy testing ore shoots at Wona underground and expanding resources at the Maoula and Nyafe open pits.

This success across the group leaves us well positioned to meet our 5-year discovery target, which has been updated to reflect the divestment of the non-core Boungou and Wahgnion mines from 15 million to 20 million ounces of indicated resources to 12 million to 17 million ounces of indicated resources over the 2021 to 2025 period at the low discovery cost of less than $25 per ounce. While we continue to grow our business organically through our development projects and exploration, another important capital allocation priority for us is to continue to return capital to our shareholders. For H1, we have announced a dividend of $100 million, which on an annualized basis, would represent $25 million more than our minimum dividend for this year. This reiterates our commitment to paying supplemental shareholder returns despite our other capital allocation priorities this year, including significant growth and exploration.

In addition to our dividend, we have returned over $20 million in share buybacks year-to-date, which means that since the launch of the program in early '21, we bought back more than $250 million worth of shares, representing over 11 million shares, which is equivalent to approximately 5% of our current shares outstanding. To put this into context, it means that approximately $200 per ounce produced in H1 was returned to shareholders. Or to put it in another way, 10% of our revenue was distributed to shareholders. Corresponding to over 30% of our operating cash flow.

It also means that we returned an attractive indicative yield of over 4% for the half year, coupled with, of course, strong value creation by unlocking our growth potential. Overall, this means that our progressive shareholder returns program has now returned over $750 million in the form of dividends and share buyback since we declared our first dividend in 2020 and commenced payment in early 2021. To put this in context, we've returned approximately 13% of our market cap since the beginning of our returns program.

Another way to look at it is that we delivered significantly more than the capital required to build a new mine. Looking ahead, once we finish our current 2 builds by mid next year, we then expect to refocus on further strengthening our balance sheet and increasing our shareholder returns before potentially launching a new build, thereby ensuring that our efforts to unlock growth provides immediate benefits to all our stakeholders.

Before I hand over to the team, I just wanted to reflect on our LSA listing following its 2-year anniversary. We are very pleased with our listing given that over 50% of our trading volume is now occurring on the U.K. line. This is a great outcome given that we didn't issue equity into the U.K. along with our listing. As you can see on the chart, getting included into the FTSE100 an MSCI U.K. indices has clearly helped drive appetite for our stock.The volume increase is also reflective of the change in our shareholder base, which has seen U.K. and European shareholders climb up the register. Now I will hand over to Djaria to share some ESG initiatives with you.

Djaria Traore

Thank you. In our recent results webcast Sebastien as mentioned, how mining has the potential to be one of the most impactful industries in contributing to improvements in living standards, particularly in West Africa where we operate. During this webcast, we often take the opportunity to share some of our later ESG updates.

And I am pleased to announce several new environmental initiatives that we've launched this past quarter. In April, we committed to the reforestation of 30 hectares of [indiscernible] forest located near our Ity mining Cote d'Ivoire. This is aligned with our biodiversity strategy to protect and preserve the places where we operate. We also serves to support new green jobs and sustainable livelihood through program management, monitoring and evaluation. In June, we launched our Zero Plastic Strategy on world environmental Day with awareness campaigns and public area cleans up across our sites and communities.

The two year strategy also aims to work with our suppliers to reduce the generation of plastic waste and most importantly, encourage the development of project that recover and add value to the remaining plastic. More information regarding our ESG initiatives and performance is detailed in our sustainability report, which was launched earlier this quarter. As part of our drive to continually improve our disclosure, we have continued to augment our reporting with an ESG data center and dedicated fact sheet outlining how we manage our key impact. We continue to make significant progress with the implementation of our ESG strategy. And I look forward to sharing more examples in the quarters to come. Thank you.

Guy Young

Thank you Djaria, and hello to everyone joining us today. Sebastien covered the high-level half year picture, so I'll walk you through the quarterly variations. In summary, our production from continuing operations was up 10% this quarter over the first quarter, while our all-in sustaining cost was up 5%. The stronger production, along with a 4% higher realized gold price, drove significantly higher net earnings and EBITDA, while our operating cash flow was lower due to the seasonally higher tax payments.

I'll now take you through the details, starting with our all-in sustaining cost. Our quarterly production from continuing operations increased by 25,000 ounces to 268,000 ounces as production increased at both Hounde and Sabodala-Massawa, driven by improvements in process grades in line with the mine sequence and higher recoveries. All-in sustaining costs increased to $1,000 per ounce. This was due to higher cost at Ity as a result of increased reliance on self-generated power and at manner due to an increased focus on underground development. Owing to the strong gold price during the quarter, we maintained a robust all-in sustaining margin of $947 per ounce.

Turning now to our operating cash flow, which decreased by 23% to $159 million in Q2 as a result of the higher taxes paid during the quarter. Typically, we make higher tax payments in both Q2 and in Q3. In Q2, we pay our full year tax payments for the prior year and provisional payments for the upcoming year. And in Q3, we typically upstream cash from our operating entities and pay withholding tax on this cash. As an aside, you'll see in the gray in the chart, the cash flow from discontinued operations which were not generating significant cash flow for the group. This underlines an advantage the sale of the non-core assets will have, allowing management to refocus our efforts on the cash-generative core assets.

Here, you can see a bridge of our quarter-over-quarter variances in operating cash flow. Moving from left to right, you'll note that we benefited from a $61 higher realized gold price as well as an increase of 6,000 ounces of gold sales. Our operating expenses and other items increased as a result of higher volume-related mining costs at Hounde and Sabodala-Massawa and increased processing costs across the group given higher tonnes milled as well as increased corporate and exploration costs.

As mentioned, the income taxes paid increased by $64 million in Q2 compared to Q1 and due to increased payments across the portfolio related to the timing of final tax payments in relation to the '22 tax year and provisional payments for 2023. There was also a lower working capital outflow as the cash outflow in inventories driven by stockpile builds was partially offset by an inflow of prepaid expenses at Sabodala-Massawa. Overall, this meant that we generated $159 million in operating cash during the quarter, equivalent to $0.64 per share.

Moving on to our net debt position. You can see that we continue to maintain a healthy financial position with a net debt-to-EBITDA ratio of 0.15x. As depicted in the waterfall chart, our net debt of $50 million as of the end of Q1 was reduced by the $159 million in operating cash flow generated from all operations for the quarter and then offset by investing activities of $214 million.

This included $22 million of sustaining capital, $61 million of nonsustaining capital and $104 million of growth capital which is mainly related to the Sabodala-Massawa BIOX expansion and the Lafigue greenfield project. We also incurred $26 million in investing activities at our discontinued assets. Financing activities was a net outflow of $73 million, mainly comprised of the settlement of $29 million worth of call rights with tourists linked to the Teranga transaction.

In addition, we incurred $19 million of interest payments on our outstanding debt facilities and completed around $9 million of share buybacks. There was also a $7 million gain on the remeasurement of cash on hand which is held in non-U.S. dollar denominated currencies. Overall, this means that we ended the quarter with a net debt of $171 million.

As you can see from the evolution of our historic net debt, given the quick payback periods of our assets, our business has the potential to absorb debt during construction phases and rapidly de-leverage itself. Our current leverage ratio stands at 0.15x net debt to adjusted EBITDA which is well below our target of 0.15x. As such, the group is currently in a robust financial position with significant liquidity headroom to support our ongoing phase of growth while allowing us to continue to pay attractive shareholder returns. If we look at our debt structure in order to manage short-term offshore cash flows during the quarter, we increased the size of our RCF to $645 million, while maintaining the same favorable terms and we drew down a further $155 million on the facility.

In addition, in July, we have taken advantage of favorable financing terms in West Africa to arrange a $167 million term loan with a syndicate of West African banks, locking in competitive pricing for the 5-year instrument. This term loan is a cheaper source of financing because it mitigates any requirements to upstream and downstream cash, which naturally incurs withholding taxes. We believe that our diversified long-term debt structure has us well positioned to continue to deliver our near-term growth with significant financial flexibility. Switching now to analyzing our profitability. Our adjusted EBITDA increased by $13 million to $253 million, and we maintained an attractive EBITDA margin of close to 50%.

As you can see here, the EBITDA margin has been fairly stable, while the operating cash flow showed more variability due to tax payments. Moving lastly to our net earnings, where I'll just focus on a number of key line items. We reported an increase in earnings from continuing operations, partially offset by an increase in exploration costs in line with higher exploration activity at our Tanda-Iguela Greenfield property in Cote d'Ivoire. We benefited from gains on financial instruments from the unrealized gains on gold collars and gold forwards as the gold price increased in Q2 and which compares to a loss in Q1.

The combined effect of which was significantly higher net and comprehensive earnings as compared to last quarter. Adding back the impairment of $15 million related to exploration permits, reversing the $30 million gain on financial instruments and a number of other smaller adjustments results in adjusted net earnings of $79 million for the quarter. I'd now like to hand over to Mark, who will take you through the details of our operations.

Mark Morcombe

Thank you, Guy, and hello to everyone on the call. Before I discuss our operating results, I'd like to touch on our strong safety performance -- over the last 12 months, our lost time injury frequency rate was 0.09, well below the industry average of 1.14, which is very encouraging, considering we are currently building 2 new growth projects and increasing our staffing levels every quarter. Despite this, we had 1 LTI at our continuing operations during the period. So we still have some work to do as these types of incidents are preventable. We are focused on improving training frontline supervision and reviewing operating procedures to ensure that we eliminate all reportable incidents. Moving to our operations. I am pleased that the group remains on track to achieve full year production and cost guidance with a strong performance anticipated for the second half of the year.

In fact, 3 out of the past 4 years have seen production weighted towards the second half. I will talk to each mine in a bit more detail, starting with Sabodala-Massawa. However, given the time constraint, I will focus only on the continuing assets. At Sabodala-Massawa, we are continuing to see the benefits of our ability to quickly bring new discoveries and existing resources into production. As an example, we were able to commence mining at the Niakafiri East deposit in late quarter 2, following a 6-month intense drilling program -- as a reminder, this pit is close to the processing plant and access possible once the village resettlement project was successfully completed.

The Niakafiri pit will provide supplemental higher-grade non-refractory feed to the plant and replace ounces from the Sofia North pit. Production increased as a result of a higher average grade being processed due to the increased contributions from the Massawa and Bambaraya pits, higher tonnes milled and higher recovery rates compared to the previous quarter. All-in sustaining costs also improved during the quarter.

Benefiting from higher gold sales and lower sustaining capital as we completed less waste capitalization during the period. In the second half of '23, we expect to introduce additional higher-grade oxide feed from the [indiscernible] pit, which is just north of the Sofia North pit, which should further improve average grades. At Sabodala-Massawa, we are fortunate to have so many resources in close proximity to the plant, which provides options to manage ore types and grade through effective sequencing and blending. Moving on to the expansion project. I'm really happy to see how the BIOX plant construction is going along with all of the other infrastructure. The structural mechanical and piping work packages are all starting to take shape, and we remain on budget and importantly, schedule for a Q2, 2024 startup.

As Sebastien stated so far, approximately $217 million or 75% of the initial $290 million growth capital has now been committed with pricing in line with expectations. As shown in the photos, the BIOX reactors and concentrate feed installation are now complete, CIL foundations have been installed with tank construction underway. And the neutralization tanks are nearing completion. We have made significant progress since we launched construction in the first half of 2022. The critical path items are the power plant construction and processing plant construction activities associated with the bio reactors.

Last week, we received the first ton of bacteria on site, which will serve as the feedstock to progressively grow and ramp up the bacteria population over the coming months using a separate set of small tanks ensure that we have large volumes of bacteria to start production in quarter 2 next year. The 18-megawatt power plant expansion is advancing on schedule, and we now have all 3 generators installed. We expect them to be fully commissioned by the center by the end of the year. We look forward to keeping you updated each quarter as the project approaches completion in quarter 2 next year. And while we are talking about Sabodala, we are very excited to launch the construction of a 37-megawatt solar facility. We will install the solar plant around 3 kilometers away from the processing plant. To ensure we can repower availability, we will be adding a 16-megawatt battery system as well.

The solar plant and battery system is expected to allow Sabodala to function on only 1 generator on clear sky days, reducing fuel consumption by around 13 million liters a year, that is equivalent to a 24% reduction in our CO2 emissions. In total, the initial CapEx for the project will be $55 million, of which $10 million will be incurred in 2023 with the remainder in 2024 ahead of start-up in Q1 2025. Importantly, power generated from the solar plant will cost around $0.01 per kilowatt hour compared to $0.18 for our self-generated power.

This is a perfect example of an optimization initiative that will not only reduce our cost, but also reduce emissions and help to put us firmly on track towards our 2030 emissions targets. Now moving on to our Hounde mine in Burkina Faso. Production increased during the second quarter, in line with the mine sequence as we finish the current phase of pre-stripping at the Kari Pump pit. This allowed us to restart ore mining and introduce higher-grade oxide ore into the mill feed. As a result, tonnes of ore mined and milled and average process grades increased in the quarter. All-in sustaining costs decreased as a direct result of the higher volumes of gold sold during the quarter. This was partially offset by a slightly higher mining and processing unit costs. As we head into the second half of the year, or is expected to be sourced from the carry pump and Vindaloo Main pits with supplemental feed sourced from the Kari West pit.

Production is therefore expected to be stronger in the second half of the year as there should be less stripping activity, and we expect to have access to higher volumes of higher grade ore across the Kari Pump and Vindaloo Main pits. I have just returned from a short trip to Ity, which had a very strong start to the year with a record throughput -- there was lots of activity on site to anticipate the wet season, and it is pleasing to see how far the mine has come with their preparations over the past 4 years so that they can minimize disruption from rain events. The strong performance in the first half of the year was due to a strong mill throughput, coupled with high-grade ore from the Ity Walter and Le Plaque pit along with high recovery rates.

Due to the strong first half performance, particularly in terms of throughput, which has been achieving well above nameplate capacity. We have taken the decision to accelerate the construction of the second to ensure that we have sufficient tailings storage capacity for the near future. Last year, we identified the opportunity to add a [indiscernible] circuit to improve recoveries, optimize costs by lowering cyanide consumption potentially recovering additional gold and silver and reducing what cyanide in the tailings.

The [indiscernible] project is approaching completion and should be fully commissioned in the second half of the year. Looking at further opportunities to optimize the operation, we have decided to launch the primary crusher optimization project. The mineral sizer is an additional crusher that will run in parallel with the existing jaw crusher and is expected to allow us to remove a number of high-cost mobile screens and crushers and rehandle this oxide ore, which is too sticky to go through the crusher. This will enable throughput to be maintained above 6 million tonnes per annum regardless of the ore blend.

At Mana, we are focused on advancing the underground development at Wona, so that we have sufficient mill feed to maintain production once the open pit feed from the Maoula pit is depleted in half 1 of next year. As a result of the underground development activity, production at Mana decreased during the second quarter as lower average grades were processed from Wona underground as well as Siou underground. Maoula open pit is a low-grade ore source to provide supplemental feed to the mill. So the main focus will always be the underground mines. All-in sustaining costs increased due to the lower volumes of gold sold the increased focus on underground development and higher volumes of open pit tonnes mined. We expect to see a higher rate of production in the second half of the year as development work undertaken will enable increased access to stopes at Wona. Stope production at Siou is expected to advance into a higher grade than the second half of the year.

Moving on to our second development project, the Lafigue greenfield project in Cote d'Ivoire, where we are making significant progress is really exciting to see the project advancing now that more than 50% of the initial $448 million CapEx has been committed, and the project is tracking on budget and on schedule for start-up in Q3 next year. We are now using the airstrip, which has been approved for flight, which will really help the logistics as activity levels continue to increase.

As a reminder, Lafigue has an envisaged annual production of over 200,000 ounces a year over its initial 13-year mine life at a low all-in sustaining cost of below $900 per ounce. The build was only launched in Q4 last year following completion of a definitive feasibility study that confirmed Lafigué's potential to be a cornerstone asset for Endeavour.

You can see the good progress we have made on civil and structural works as a primary crusher, high-pressure grinding roll, bore mill, reclaim tunnel and CIL tanks are all being built. Not shown in the photos is the water storage team where construction is complete. Whilst water harvest dam and TSF construction are both progressing well. The mining contractor has commenced to mobilize into site and is building the necessary infrastructure. Construction of the 225-kilovolt power line continues to progress well. We are working around the wet season and are targeting to complete tower foundations beforehand so that we can advance on tower erection during the second half. The key milestones for the remainder of the year are the process plant, power line and TSF construction as well as the start of mining in quarter four.

We are very pleased with the progress made at Lafigue, and it is always very impressive to see a project advance from nearly nothing less than 12 months ago to a project that we expect to be producing from in less than 12 months' time.

Thank you. And I will now hand over to Jono to provide a detailed update on the exploration program at Tanda-Iguela.

Jono Lawrence

Thanks, Mark, and hello, everyone. Given the significant drill program underway at our Tanda-Iguela discovery in Cote d'Ivoire, I wanted to provide a more detailed update. We are very excited by the positive drilling results we've been getting which is why we've already exceeded our original plan for 2023, with more than 95,000 meters drilled so far this year at the project, of which 82,000 have been drilled at the Assafou deposit. We have been expanding the program using 10 rigs, and we focus on converting mineral resources from inferred to indicated status.

At the same time, we are delineating new resource to increase the overall size of the resource base. Our exploration team benefits from being part of a larger group with the ability to reallocate capital to projects that meet our investment criteria. That means that, thankfully, we've been able to increase our initial exploration guidance for the full year from $65 million to $80 million, with all the increase being allocated towards Tanda-Iguela.

As a result, we have been able to increase our target of drilling 70,000 meters this year to staggering 180,000 meters. Our maiden resource of 3 million ounces at 2 grams per tonne was defined based on around 60,000 meters of drilling, focused within a small portion of the identified mineralized trend. Since defining those resources late last year, we've extended the mineralized strike length by over 900 meters, as you can see on the map. That's 300 meters to the northwest and 600 meters to the Southeast.

As a result, we expect to include additional resources and a resource update in the second half of this year. At the Assafou deposit within the dotted line on the map, we initially identified a significant fault structure that was separating the Birimian volcanic rocks to the Northeast from the Tarkwaian sandstones to the Southwest. This structure proved to be a significant conduit for mineralization, which is hosted adjacent to the structure within the Tarkwaian settlements on the southwest side, as you can see on the map. We like the Assafou deposit a lot. The mineralization is thick.

It's continuous, particularly on the northeast side of the deposit snuggled up against the fault structure. It starts at surface and extends down to over 300 meters depth.

Since discovering Assafou, we have identified several similar structural and geologic targets on the Tanda-Iguela permits. And we have around 10 targets within the 6-kilometer radius of Assafou that have the potential to be satellite deposits. During the first half of 2023, almost 14,000 meters out of the 20,000 meters planned for the full year drilling program was completed across these targets.

We continue to be encouraged by the results of the program, namely at the Pala Trend 2 and 3 targets, which locate 4 kilometers southwest of the Assafou deposit and at the Kongojdan target, which locates 4 kilometers southeast of the Assafou deposit. At the Pala targets, reconnaissance drilling has confirmed similar structures to Assafou with a fault structure separating the Birimian volcanics from the tuck-in sentiments.

Mineralization is already identified over 600 meters along the Northwest strike, and it remains open along strike and at depth. At the Kongojdan target, the structural contact between the Tarkwaian basin rocks and the Birimian basement had been well defined through geophysics. This has confirmed that the prospective structure hosting a Assafou continues over 20 kilometers, extending 4 kilometers to the southeast to the Kongojdan target and 5 kilometers northwest of Assafou towards the Gbabango target.

During the second half of 2023, the exploration program will continue to delineate both the Pala and Kongojdan targets, while reconnaissance drilling will begin at the Gbabango target. We are very excited about what we are seeing at Tanda-Iguela. We see this as being the potential for our next cornerstone mine. I remain available for questions on Tanda-Iguela and our exploration prospects at the end of the presentation. I will now hand back to Sebastien.

Sebastien de Montessus

Thank you, Jono, Djaria, Guy and Mark -- as you can see, we've continued to deliver against our key objectives during the first half of the year and remain on track to meet our full year guidance. We now entered the second half of 2023, with a higher-quality portfolio and are progressing well towards unlocking our organic growth projects next year. With Sabodala-Massawa and Lafigue completed we will further upgrade our portfolio by increasing production while lowering our cost base. This will, of course, position us to generate strong cash flow, which will, in turn, allow us to continue to reward our stakeholders. None of the progress we've made would be possible without our team, and I would therefore like to thank them for their continued hard work and dedication.

Thank you for joining us. I will now hand over to the operator for Q&A.

Question-and-Answer Session

Operator

[Operator Instructions]. The first question is from the line of as Ovais Habib from Scotiabank.

Ovais Habib

Sebastien and Endeavour team. Just a couple of questions from me. My first question is around sustaining capital for 2023. So now you've got multiple projects essentially that looks like they hit all at the same time in 2023. So do you see sustaining capital reducing into the second half and into 2024 -- or should we expect similar levels going into 2024?

Sebastien de Montessus

Thanks, Ovais. Yes, I agree. I mean, overall, we are expecting sustaining capital, I mean, to decrease in the second half versus the first half. And then it's really the nonsustaining capital and the gross CapEx, which are picking up.

Ovais Habib

And so in terms of the sustaining capital side then going into 2024, do you see any more additional obviously, high CapEx projects coming up? Or is that is that tapering on?

Sebastien de Montessus

No. I mean in '24, I mean, it's going to start reducing Bear in mind that '23 was a bit of -- in particularly, in H1, high year although in terms of stripping at the number of mine sites, we won't have, I mean the same like '24. In terms of other CapEx, and I'm looking at excluding the growth CapEx, we've got, obviously, this year, the [indiscernible] project, which has been a big one. we've already given, I mean, the very strong results that -- it started also the mineral sizes in order to have that ready, I mean, in '24. So we'll have a part of it in the CapEx in '24, and that's about it.

Ovais Habib

Okay. And then just moving on to Q3. Q3 is primary the renew season. How should we be looking at Q3 compared to Q2 and really is your operating team prepared for the rainy season?

Sebastien de Montessus

Yes. So I think we -- the team has prepared this time, I mean, for the rainy season. Usually, I mean we tend to have Q2 and Q3, which are a bit in line. So we should have slightly higher this time in Q3 versus Q2 and then a significant growth in as we access higher grades and get all the benefits of the H1 stripping.

Ovais Habib

Got it.

Sebastien de Montessus

Sorry, Ovais overall. I mean, the key point is feeling comfortable that we are on track with our guidance. We flagged early on at the beginning of the year that we were weighted, I mean, towards H2 and[indiscernible].

Ovais Habib

Okay. And my next question is for Jono. I mean, obviously, you've increased your exploration program at Tanda. Will you be able to incorporate all the drill results that you're looking to complete at Tanda for the resource update? And then maybe a follow-up to that would be -- in terms of the resource update, would that resource update be looked to be brought into a study? And when should we expect that study?

Sebastien de Montessus

So just I'll let Jono I mean, to continue on that. But a key point is, initially, we had close to 70,000 meter drilling program for tender this year. We did 95. I mean, in the first half, and now looking at doing 180,000 meters, which is a huge commitment. I guess it probably translates the high confidence and excitement that we have around the Tanda-lguela discovery. We are expecting to provide an update in -- around November in Q4 this year. But maybe, Jono, you want to comment on timing?

Jono Lawrence

Yes. Thanks, Sebastien. Habib, timing-wise, late quarter 4, 2023, we'll do a resource update. We are doing internal ones as we go along. And we comfort will be able to capture all the assays. At the moment, even with the 10 rigs on site, at any given week, we've got anywhere from 8,000 to 12,000 samples sitting at the laboratory. They've been very dedicated to us. The turnaround has been very good. And we're just modeling and updating the information comes through will 2 or 3 months, so we can keep track of our interpretations.

That resource update will form the basis then of our studies work for early next year, and that will move on to some further activities.

Ovais Habib

Okay. And just shifting gears a bit over here. Sebastian, this is to the situation in Niger -- now Endeavor doesn't have any real exposure in Niger, but Sebastien, can you provide any color or thoughts on Niger any impact to the current portfolio?

Sebastien de Montessus

[Indiscernible] past and there's no impact on -- what is interesting is to monitor the ECOWAS organization is going to react. You saw that they gave an ultimatum until Sunday to reinstate the President and they took a very, very tough and strong stance. So I think it's important. I always said that I see more stability in this region, thanks I mean to the power, I mean, of ECOWAS.So think it will be a good testament for them over the next few weeks. So to be monitored.

Ovais Habib

Okay. should I add some more questions, but I'll get back in the queue.

Sebastien de Montessus

Thank you.

Operator

[Operator Instructions]. This is from the line of Don DeMarco from National Bank Financial.

Don DeMarco

Sebastien & team. Maybe I'll just start off, carrying on Along the lines of the previous caller's questions on Tanda-Iguela. So to Juno, more specifically, there was an original target of about 4 million to 5 million ounces at the year-end update -- are you still maintaining that? Or do you think you're near the higher end of that range now, maybe perhaps above that range?

Sebastien de Montessus

Thanks, Don. I remember that we -- when we made, I mean, the first announcement on Tanda-Iguela last year, the next question we had is, when is the asset going into production? So I think we just need to do the work step by step. We still have, I mean, this target of 4 million to 5 million ounces by the end of the year, which will be already a huge milestone after less than 2 years of drilling. I think the increased efforts we're putting there is just showing how, again, excited we are and how promising we see this. And we want to continue to build up our organic growth pipeline and Tanda-Iguela is clearly starting, I mean, to be at the top of the line for the next key projects.

Don DeMarco

Okay. Fair enough. Yes, I remember before that made resource last year, you had a certain target, and then the actual main resource was much higher. So -- but fair enough, we'll just wait to see what this is. Congratulations on that progressing nicely. Next question, can you comment on expectations for taxes paid in Q3 and Q4?

Sebastien de Montessus

Sure. Maybe I'll ask Guy, you want to.

Guy Young

Sure. I think probably just to take a quick step back on the overall tax profile may be useful for us just to understand that Q2 and Q3 are generally higher tax quarters growth. That's predominantly down to just the overall timing of both our final and provisionals, which will be in Q2 and Q3. The other big impact that you will have clearly seen in the numbers is the withholding tax. So that came through our expense line in Q2. as we had finalized the dividend that we're going to be looking to upstream our cash on, and that will effectively become payable in Q3. So we'll still see some cash out in Q3 -- but I think on an annualized basis, one can expect Q2 and Q3 to be slightly higher than Q1 and Q4.

Don DeMarco

Okay. Final question over to Mana. Can you just add a little bit more color on the -- working with the contractor and the underground development that's going on there and the expectations for a rebound into the back half of the year?

Sebastien de Montessus

Sure. I'll ask Mark to answer that and give a bit of color. I think what's important with Mana going second time on the ground and for us as Endeavor, setting up, I mean, on a property. -- is the fact that we see Mana as a key case study, I mean, for building up our internal capabilities for underground capacities as we see promising underground potential in a lot of our existing portfolio, whether it's Hounde, Ity or Sabodala-Massawa. And this is why we're putting a lot of efforts and taking way very seriously the right steps, I mean, to build up capacities and ramp up at Mana. Mark, I mean, maybe you want to give some color?

Mark Morcombe

Yes. So we brought in a new contractor who is also new to West Africa. And I think the ramp-up was underestimated, probably by us and by them just in terms of getting the equipment and supply chain personnel and so forth. And so we didn't get the anticipated production from the first half of the year. We are seeing improvement in the last month or two, and it's just progressively improving. So we do expect to see a far better performance in the second half of the year.

Don DeMarco

Okay. Great. And I guess, also related to Mana, just strategically, are you comfortable with your production weighting in Burkina Faso at this point? I mean, obviously, it's been reduced with some of the recent divestments. Is this just a level that you're comfortable with, with -- just Mana or rather Mana and Hounde.

Sebastien de Montessus

Yes. And there are different reasons. I mean, for that. One is once we have Sabodala-Massawa BIOX project and Lafigue up and running, overall, I mean, we'll see Burkina Faso coming down to a bit less than 1/3 in terms of production contribution. So we'll have an evenly split portfolio between the 3 countries Senegal, Côte d'Ivoire and Burkina. The other thing, which is obviously very interesting in the strategic move we did by taking out Boungou & Wahgnion we're becoming non-core is to refocus all our efforts into the Hounde Belt. So as you know, Mana and Hounde are very close to each other. So it allows me to refocus all the management but also our security efforts into 1 single area, which is obviously one of the safest part, I mean, of the country. So much easier, I would say, I mean, to manage the current environment.

Operator

This is from the line of Carey MacRury from Canaccord Genuity.

Carey MacRury

Just wondering if you could give some color on the cost outlook for the second half. I know production was up 10% quarter-over-quarter, but costs are also up 5%. So should we still be aiming for the midpoint of guidance or maybe at the higher end, if you can just give some color on the cost outlook?

Sebastien de Montessus

Sure. I think the short answer, Carey, is given that we're targeting to be within guidance overall on the cost, the increase in production will allow, I mean, all-in sustaining cost, I mean, to fall into the guidance. and therefore, ensure that we are overall for the year within guidance.

Carey MacRury

Okay. And then maybe just on Ity. I mean it's done 1.8 million tonnes 2 quarters in a row, which is quite a bit higher than the historical run rate and certainly well above nameplate. Is that a sustainable level that we should be looking at? Or are there other factors driving some of that?

Mark Morcombe

Yes. We're very happy with the performance at [indiscernible] . A lot of it is also driven by the blend where you've got more oxide material and so forth. The wet season is always more challenging -- so we will see the numbers drop a little bit in the wet season.

Sebastien de Montessus

Overall, I think that we're very pleased to see how it has been performing for the last 2 years and demonstrates our ability to better and better master, I would say, the blend and the throughput. This is why we feel that by bringing mineral sizes going forward, this would allow us also, I mean, to maintain a pretty strong throughput irrespective of the different blends. And I think if we can have a target of 6 million tonnes on a regular basis for Ity, that would be a huge achievement.

Operator

[Operator Instructions]. The next question is from the line of Anita Soni from CIBC Capital Markets.

Anita Soni

Most of them have been answered, but I just wanted to touch upon inflationary pressures and what you're seeing. Could you perhaps go through some of the major drivers of inflation and unit costs and see if your -- and give us some color on what you're seeing there, if you're seeing any relief in any of these areas.

Sebastien de Montessus

Sure. Thanks, Anita. I think the key point is probably on the fuel side. That's one of the major driver of cost increase over the last 12 - 18 months I mean through the inflation -- high inflation in a period. And if you recall, there is a bit of lag on our side in West Africa around those parameters. So we would expect, as we flagged in the beginning of the year, some reduction in cost on the fuel side in the different countries where we operate. So that's something that we're foreseeing. And that's probably one of the key drivers. I mean, the rest, I mean, is overall in line, and we haven't seen further, I mean, inflation, which I think is a good thing.

Anita Soni

Okay. And then in terms of the lag, can you quantify that in terms of how many months? Like is that a 6-, 9-month lag in terms of, I guess, just the amount of inventories you would have?

Sebastien de Montessus

Yes. We said, I mean, it was around 6 to 9 months lag versus Nordea in Australia, so which means starting in beginning of Q3 and up to beginning of Q4 in order to see some drops. We started to see some in Senegal. We're waiting to see that now in Cote d'Ivoire and in Burkina.

Anita Soni

Thank you.

Operator

[Operator Instructions]. This is from the line of Raj Ray from BMO.

Raj Ray

My first question is on the Hounde underground discovery at Vindaloo. I mean I know it's early days, but can you comment on what does it mean assuming it pans out as you expect, is that something that could be brought ahead in your mine plan if we add to your production profile at Hounde. So that's my first question. Second is on the solar plant at Sabodala-Massawa. Is it possible to quantify what the cost impact would be given that you're looking at a BIOX and the power consumption there. So the solar plant, what impact will it have on your processing costs and overall process Sabodala-Massawa -- so these two questions, and you have a follow-up question after?

Sebastien de Montessus

Yes. Thanks, Raj. Maybe, Mark, I mean, on the underground potential for Hounde, you want to comment?

Mark Morcombe

It's very early days. The exploration team has drilled a handful of holes into the underground. It's quite a large sort of bulk deposits. So we need to do a fair bit more work to ascertain however we mine it. It will be somewhere between a narrow vein and a bulk method. But it looks very interesting, and I think it will certainly be quite a nice project to advance for Hounde. And certainly sitting underneath the Vindaloo Main pit, it will and right next to the processing plant, it will certainly be something that we'll be pushing as hard as we can with the exploration team.

Sebastien de Montessus

And interestingly, as I was saying earlier, as we are building up capacities internal capacities at Mana, which is very close to Hounde, it will be easy if we are able, I mean, to move at some point into underground at Hounde to transfer some of those expertise and competencies from Mana to Hounde. On the second question, which is the solar part for Sabodala-Massawa I mean we're expecting the solar plant, I mean, to produce at about $0.014, $0.015 per kilowatt which means compared to HFO generated power, which is around $0.18 per kilowatt. So that's significant savings. Overall, this could represent up to about 22% to 25% of cost reduction for Sabodala-Massawa a year. So obviously, very, very interesting for having this solar, I mean, to reduce our power cost.

Raj Ray

And Sebastien on that solar, is there a potential to further expand or to the solar capacity in the future? Or do you think this is the opportunity size?

Mark Morcombe

Look, we've done a number of studies to look at expansion. And obviously, the first step will be to get this in and then to determine because any sort of expansion you're really looking at sort of low shifting as well, so you're having to add batteries and so on. So it's not straightforward in terms of a natural progression, but we'll certainly do the work to see whether there's something else there.

Sebastien de Montessus

The interesting thing on the electricity supply, I mean, for Sabodala-Massawa is that one option also on the table is to connect, I mean to the grid. There is a plan in country to bring up the electricity in the area of Sabodala-Massawa. So that could be down the road also in action. In particular, with the gas discoveries, this should bring down, I mean, the electricity cost on the grid down for the country. The other thing that we are looking at is potentially wind power, given that the Sabodala-Massawa is in the corridor of attractive wind for windmills. So a lot of options there. I mean, to continue to try to improve down the road our cost base for Sabodala-Massawa.

Raj Ray

One last question, if I may ask you a bit of a difficult question. With respect to your portfolio, what potential do you see for adding assets? I did see the news on [indiscernible] -- is that something you're still interested in? Where are you willing to also look at jointly making a bid with some -- and I mean are any other assets that you think could fit in the portfolio down to 4 assets, 1.1, you are adding Sabodala-Massawa, you Lafigue and also Tanda-Iguela the line. But if you were to add a quality asset, would you take the call?

Sebastien de Montessus

Sure. I think that what attend is, first of all, we've got a very strong organic growth pipeline despite the fact that we sold I mean 2 assets, next year, on a full year basis, with Tanda-Iguela and Lafigue, I mean, we'll go back to 1.3 million, 1.4 million ounce and then with the prospective of Tanda-Iguela even grow further. So the good thing is the baseline we've got a strong organic growth pipeline that allows us, I mean, to produce, I would say, a good quantity, I mean, of answers and in particular, quality ounces given the cost profile, I mean, of those ounces.

On M&A, I think it's -- what's important is to continue to remain extremely disciplined. And while it's sometimes unfortunate to see , it does have the advantage of, I guess, showing to the market that we are doing our homework, I mean, to evaluate assets that may fit our criteria, but we are able to also very easily walk away if we are too far away on price expectations. And I think it's the advantage of not being under pressure to do any acquisition given the strong organic growth pipeline. So we'll continue around those lines. There is no need, I mean, for M&A, and therefore, we'll continue to be extremely disciplined when looking at staff.

Raj Ray

That's great. Thanks a lot for me.

Sebastien de Montessus

Thanks, Raj.

Operator

[Operator Instructions]. This is from the line of Daniel Major from UBS.

Daniel Major

A couple more. First is on Tanda-Iguela in terms of I guess, the scale of the potential project will obviously be determined by the exploration progression. But is there any limitations to the size of sort of plant the size of the operation, depending on the success of how the exploration pans out?

Sebastien de Montessus

Sure. Well, I think the difficulty is that it's very early days. And -- what excites me is that usually, my exploration team, Jono and his team tend to be quite conservative. This time, they are pretty upbeat and the feeling is that it's a Tier 1 type asset. Now let's do the homework, and we'll see what we come out with it.

Daniel Major

Okay. And then the next question modeling and financial question. You typically pay dividends to minorities in the third quarter. You've obviously just sort of been in the process of disposing of assets, somewhat volatile number. Can you give us any steer on the timing and the magnitude of expected dividend payments to minorities through the balance of the year?

Mark Morcombe

Sure. We've got the vast majority of our dividends coming through in 2 tranches. There's roughly just over 20% will come through in Q3 and then we're expecting the remainder to come through in Q4.

Daniel Major

And can you give us a steer on where we should be thinking the magnitude of dividends to minorities for the full year?

Martino De Ciccio

The overall magnitude, if I take total amounts paid plus associated tax and friction costs, it's around $200 million.

Daniel Major

Okay. And then yes, the final one, I mean, I guess you've alluded to the moving parts around CapEx for 2024, obviously, directionally down from where we sit this year. But is it -- is it possible to give any early sort of indicative range, I suppose, in terms of where we would expect total CapEx, including project spend. And the second follow-up to that on the CapEx. If I look at the CapEx -- cash CapEx incurred in the cash flow statement relative to the sum of staining nonsustaining in growth. I think there's somewhat reaching the kind of $70 million difference, i.e., you paid less in cash than you've reported in total CapEx. Would you expect to catch that all up in the remaining two quarters of the year?

Sebastien de Montessus

Sure. I mean, early days. But overall, we would expect on the gross CapEx side, I mean, to be around $200 million, $250 million -- so the vast majority, I mean, is really in '23 cash out. In terms of sustaining and nonsustaining CapEx, I guess, should be around $150 million, $200 million given, I mean, the new portfolio size with 2 less assets. Yes, that's probably where we would be aiming at a bit early days as we haven't done yet budget for '24.

Daniel Major

And then on the -- just the difference in the balance of the year on the cash CapEx versus the reported?

Sebastien de Montessus

So this is effectively, as you would expect, the difference between our committed and accrued versus the actual cash outflow. There is a delta. I think there's a natural 1 during the overall phasing of the project, which will clearly narrowed towards the end, but we don't see any significant issue with that. It will narrow towards the year-end.

Operator

[Operator Instructions]. This is from the line of Amos Fletcher from Barclays.

Amos Fletcher

Just a couple of questions from my side. I guess first one, slightly following up on one of Dan's questions there. Is there anything you can do to reduce the effective cost of capital withholding taxes add to when you want to move cash around the group. In particular, I'm thinking when you want to return capital? Is there anything you can do to sort of bypass that or otherwise avoid it? And then second one, just on Kalana project. Obviously, you've answered much about that or late overshadowed by events in Cote d'Ivoire, which is great. What's going to happen to that project?

Sebastien de Montessus

Sure. Thanks, Amos. I mean on the overall capital front, I think the best way, I mean, to mitigate is to put in place some local financing and we'll report that in Q3 because we just indicated a turbulent in-country for about 100 -- a bit more than $150 million locally, in particular for Lafigue, which is a way, I mean, to be a bit more efficient overall in terms of capital movement. On Kalana, I would just say that there's been some optimization done around the latest results that we got, and we'll probably publish later this year, some updates on Kalana. For the time being, as you saw, I mean, the priority is delivering the two existing projects and then to line up the next two ones and the next two ones. -- would go into construction sometime in '25, '26. So we still have some time around those projects.

Operator

[Operator Instructions]. This is from the line of Sandeep Peety from Morgan Stanley.

Sandeep Peety

Thank you, operator. I had a few questions. So firstly, on decarbonization. So basically, what's the total CapEx required to achieve 2030 decarbonating targets? We have seen the first announcement today by way of solar plant construction? And how do you plan to phase it out? .

Sebastien de Montessus

So for the total CapEx, I mean, for the solar plant at Sabodala-Massawa is $55 million. And the expectation is to have the solar plant fully commissioned up and running beginning of '25. I would say that 20% probably, I mean, is going to be incurred this year and most of it is going to be incurred next year. We are in parallel also looking at potential for solar plants in Cote d'Ivoire and still in discussion for a solar plant for Hounde in order to reduce our overall production cost. So obviously, solar is extremely competitive, and this is why we are accelerating on this front, which is both, I mean, for reducing our cost and reducing our CO2 emissions.

Sandeep Peety

Perfect. And so based on those 3 projects, are you -- will you be in a good position to achieve a 30% reduction in overall emissions by 2030?

Sebastien de Montessus

Yes, completely. I mean that's the objective. We've also ensured that there was alignment around those objectives with top management compensation. So I think there are strong incentives to make sure that we are able to have a total emission per ounce below 600 by end of '25. And clearly, those projects are part of that strategy.

Sandeep Peety

Perfect. And then a question on dividend. Sir, can you please help us think through total shareholder returns for 2023? Should we be expecting close to USD 300 million in total, similar to 2022 levels or because of the growth projects, should we be close to $240 million, which is the annualized number for 1H?

Sebastien de Montessus

No. I think we're still committed to what we said initially, which is to be in line with 2022 shareholder returns level. which was around $200 million for dividend around $100 million for buybacks. We just committed -- I mean, $100 million as part of H1, which is in line with the $200 million target, I mean, for this year, which on an annualized basis is already $25 million higher than the minimum dividend that we had set back in 2021, but in line with '22. And on the buyback, it's been clearly, a slow start, I mean, beginning of H1 with only $20 million completed so far, but that's mainly because of the significant CapEx that we had on the project side -- so we wanted to make sure that we were all on track, and I would expect this, I mean, to significantly increase in H2.

Sandeep Peety

Perfect. And then a question on Tanda-Iguela. So what are the next milestones you update the market on resource by the end of the year? And then thinking about the time lines, so what about the prefeasibility study and first production, is it still a 2028 or will it be brought forward because of the good progress that we have seen so far?

Sebastien de Montessus

Sure. I think we all need first, I mean, to see the results of the '23 campaign. So part of those results will be published in November. But it will have only, I mean, the all the drilling that have been done until end of August. So we'll have them to wait. I mean, for further update in Q1. with the full results of this '23 campaign. And only once we have that, we'll be able to plan what are the next steps.

Operator

[Operator Instructions]. This is from the line of Harmen Puri from Bank of America Securities.

Harmen Puri

Sorry if you've already touched upon this. My line was cutting in and out. earlier. Just on capital returns in 2024 and beyond. Will you be putting out a sort of like a multiyear plan similar to the 1 currently in place with minimum threshold? And if so, when do you plan to announce this.

Sebastien de Montessus

Thanks, Harmen. I think that once we will have completed the build next year of the 2 projects, our goal is clearly to be able to continue to increase the shareholder return program. while at the same time, strengthening our balance sheet. We will look, therefore, to provide a further outlook on this next year. But at a high level, our program is a progressive dividend. So if the gold price remains above 1,500 and our leverage below 0.5x net debt to EBITDA, we should be in a good position to continue along our current trend. -- we've been prudent in '23 to allocate capital across this year's priority. [indiscernible]

And therefore, as it is a big year CapEx of -- our goal is to really finish the bills in a strong position and then see how we can continue to increase our program in '24.

Operator

This is from the line of William Dalby from Berenberg.

William Dalby

Just a quick one on Mana. I know you covered some of this already, but you sort of guiding slightly below on production. I was just wondering if you could give a little more of a steer on how much difference you're expecting versus guidance. and what steps you're taking to improve the asset and where you expect it to go into 2024 with volumes and costs.

Sebastien de Montessus

Well, I think on Mana, as we said, we've been cautious because like all underground mines, when you are setting them up you can have some slow start, which is what we've seen in H1. We're expecting this, I mean, to accelerate in H2. So let's see, I think it's a moving part. I mean, we clearly, I mean, targeting the lower end, I mean, of the guidance, that's for sure. But we need to see how the contractors are going to ramp up. Ultimately, I mean, the objective, I mean, for us is to be able to ensure that going forward, Mana is able to produce between 180,000 to 200,000 ounces in particular from the 2 Siou underground and Wona and to be back below $1,000 all-in sustaining cost, which is the target for this asset.

William Dalby

Okay. Great. And just one quick follow-up I know you've probably covered this a couple of times, but just to clarify on the dividend 100 million in the first half, so annualized coming above your target. Should we be then putting into our numbers a beat for the year? Is that what we can expect?

Sebastien de Montessus

Yes, I think we would expect, I mean, the second half to be at least $100 million. So an annualized basis, I mean target is clearly $200 million. And then on top of that is to continue to accelerate on the buyback program. So a bit like last year, where we had a slow start, I mean, on the buyback in H1. And then more aggressive in H2, I would expect I mean the same year.

Operator

And there are no further questions. I will now hand back to Martino De Ciccio for closing remarks.

Martino De Ciccio

Thank you, everyone, for joining the call today. We, of course, remain available for questions off-line. Thank you again.

Operator

Thank you. This does conclude the conference for today. Thank you for participating, and you may now disconnect.

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Endeavour Mining plc (EDVMF) Q2 2023 Earnings Call Transcript