Anglogold Ashanti Plc · NYSE:AU
Anglogold Ashanti — Q4 2006 Earnings Presentation
28 slides from Anglogold Ashanti's earnings presentation, Feb 13, 2007
Slide 1: Results for the fourth quarter and year ended 31 December 2006
Results for the fourth quarter and year ended 31 December 2006
Slide 2: Disclaimer
Disclaimer gold Certain statements made during this presentation, including, without limitation, those concerning the economic outlook for the gold mining industry, expectations regarding gold prices, production, cash costs and other operating results, growth prospects and outlook of AngloGold Ashan
Slide 3: Q4 2006 results overview
Q4 2006 results overview gold Production 4% higher and in line with company forecast 1.5 Moz Total cash costs Slightly improved and also in line with company forecast $309/oz Reduced by year-end accounting adjustments of $100m Excluding these adjustments, earnings would have been Adjusted headline s
Slide 4: Q4 2006 operational performance
Q4 2006 operational performance gold Combined production marginally lower this quarter Total cash costs well-contained at R62,888/kg South Africa Strong performances from Tau Lekoa, Moab Khotsong and Kopanang Sadiola, Geita and Obuasi reported production increases due to improved grades Africa Sigui
Slide 5: Health and safety: 2006 fatality rates
gold Health and safety: 2006 fatality rates 0.35 0.3 0.25 Fatality rate 0.2 0.15 0.1 0.05 0 2001 2002 2003 2004 2005 2006
Slide 6: Health and safety: 2006 lost time injury rates
gold Health and safety: 2006 lost time injury rates 12 10 8 LTIF rate 6 4 2 0 2001 2002 2003 2004 2005 2006
Slide 7: 2006 results overview
2006 results overview gold In-line with company forecast; 9% lower year-on-year Contributing factors: Production - reduced contribution from Geita due to cut-back phase - lower ounces from Bibiani, Great Noligwa, Savuka and Tau Lekoa 5.6Moz Total cash costs 10% higher but solid cost performance in T
Slide 8: Total cost savings of $73m achieved, $50m in South Africa
Total cost savings of $73m achieved, $50m in South Africa gold South African cost savings: $50m Increased operating efficiency ($29m) Restructuring of Savuka and Tau Lekoa ($17m) Improved procurement practices ($4m)
Slide 9: 2006 Ore Reserve and Mineral Resource growth
gold 2006 Ore Reserve and Mineral Resource growth 2006 Ore Reserves 2006 Mineral Resources Australia Australia South 10% South 8% America America 7% South Africa 9% South Africa North 40% North 45% America America 6% 4% Rest of Africa Rest of Africa 37% 34% 2006 Mineral Resources 2006 Ore Reserves 1
Slide 10: 2007 forecast
2007 forecast gold Increase due to Cuiabá expansion project, Moab build-up and higher grades at Sunrise Dam Production Recent slope failure at Geita and revised mining plan at TauTona materially affected production and cost outlook 5.8Moz Based on currency assumptions of $/R7.50, A$0.76, Total cash
Slide 11: Year-end accounting adjustments
gold Year-end accounting adjustments Q4’06 accounting adjustments BEE and ESOP transaction $22m Share-based awards (granted prior to 2005) $22m Current and deferred tax provisions $32m Redundancy costs (to improve efficiencies at Obuasi) $15m Other year-end adjustments (amortisation and rehabilitati
Slide 12: 2006 adjusted headline earnings
gold 2006 adjusted headline earnings 450 $413 400 350 300 250 $201 $m 200 $140 $141 150 $86 100 $46 50 0 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 2006
Slide 13: 2007 accounting adjustments
gold 2007 accounting adjustments 2007 accounting adjustments $m ESOP annual cost $15m Share-based awards $4m (granted prior to 2005) Redundancy costs $7m (efficiency improvements at Obuasi)
Slide 14: Q4 2006 hedge book update
Q4 2006 hedge book update gold $6/oz below third quarter price received and 6% Q4: price received of below the average spot price for Q4 $578/oz Well within forecast range of 5–10% below spot 7% increase the result of a higher fourth- Q4: delta increased to quarter end gold price and was offset by d
Slide 15: African asset review: South Africa
gold African asset review: South Africa Regional production marginally lower Operational improvements at Tau Lekoa and Moab Excellent quarter at Kopanang, with production 6% up and cash costs 5% down Production 5% lower at Mponeng despite significant out- performance during the year Declines in tonn
Slide 16: African asset review: Ghana
gold African asset review: Ghana Production up 4% at Obuasi due to 14% grade increase, with total cash cost 13% due to higher royalties, inflation and power shortage Production down 11% at Iduapriem due to mill stoppages and lower grades; total cash costs up 8% Sale of Bibiani to Central African Gol
Slide 17: African asset review: Guinea and Mali
gold African asset review: Guinea and Mali Another solid operational quarter at Siguiri in Guinea, with ounces 24% higher and total cash costs 12% better In Mali, production steady at Yatela at 34,000oz and total cash costs 5% lower Production down 4% at Morila due to 10% grade decline Sadiola produ
Slide 18: African asset review: Tanzania
gold African asset review: Tanzania Production 10% better at Geita to 80,000oz after first higher grades accessed in Nyankanga pit cut-back Total cash costs 9% higher due to expenditure on equipment maintenance Key issues Partial slope failure in late January with implications for 2007 production Pi
Slide 19: Geita slope failure
gold Geita slope failure Southern zone of failure Area of concern early November 2006 Northern zone of failure FOG 27 October 2006 Main ramp new position Planned position of the 40m catch berm Final mining of push- back 4
Slide 20: Geita slope failure: late January 2007
gold Geita slope failure : late January 2007 Southern zone of failure Original area of concern Main ramp new position Higher grade ore zone Ore zone push-back 4
Slide 21: International asset review: Brazil and Argentina
gold International asset review: Brazil and Argentina In Brazil, Serra Grande production again maintained at 24,000oz, although total cash costs were 7% higher due to increased equipment maintenance Production 3% better at AngloGold Ashanti Brazil Mineração, reflecting better heap leaching activitie
Slide 22: International asset review: Australia and USA
gold International asset review: Australia and USA In Australia, Sunrise Dam had an excellent quarter, with recovered grade up 35% and tonnes treated up 10% Production 42% higher and total cash costs 17% lower as a result In Colorado, production rose 25% as solution flows on the leach pad normalised
Slide 23: International reserves and resources
gold International reserves and resources Key International resource Key International reserve additions additions Boddington Cripple Creek & Victor Cripple Creek & Victor Boddington Cerro Vanguardia Sunrise Dam Serra Grande AGAB Mineração Cerro Vanguardia Serra Grande
Slide 24: 2006 greenfields exploration
gold 2006 greenfields exploration 2006 greenfields exploration spend 2006 total drilled metres 8% 5% 4% 1% 4% 28% 6% 119,000 24% 300% 20% North America Australia DRC Colombia China Russia SE Asia Corporate Other
Slide 25: Greenfields exploration strategy
gold Greenfields exploration strategy Mongbwalu Quinchia Gramalote Tropicana
Slide 26: Partnerships
gold Partnerships CHINA 8.7% stake in Dynasty Gold Corporation Co-operative joint ventures with local partners at Yili-Yunlong (Xinjiang province) and Jinchanngou (Gansu province RUSSIA 50:50 strategic alliance with Russian gold and silver producer Polymetal 29.99% stake in Trans-Siberian Gold SOUTH
Slide 27: 2007 greenfields exploration
gold 2007 greenfields exploration 2007 greenfields exploration spend 2007 total drill metres targeted 7% 4% 1% 9% 43% 350,000 200% 18% 18% Australia DRC Colombia China Russia SE Asia Corporate
Slide 28: ANGLOGOLD ASHANTI
it ANGLOGOLD ASHANTI