Anglogold Ashanti Plc · NYSE:AU
Anglogold Ashanti — Q4 2012 Earnings Presentation
39 slides from Anglogold Ashanti's earnings presentation, Feb 20, 2013
Slide 1: Results for the fourth quarter ended 31 December 2012
Results for the fourth quarter ended 31 December 2012 Q4 2012
Slide 2: Building Safety Procedure
Building Safety Procedure In case of an emergency... A siren will sound and information will be broadcast over the public address system. Move quickly to the nearest exit points, which are on both sides of the auditorium and at the back right hand corner. Please gather at the open car park behind Tu
Slide 3: Disclaimer
Disclaimer Certain statements made in this communication, other than statements of historical fact, 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 prospe
Slide 4: Agenda
AGENDA Overview Financials Asset portfolio Conclusion
Slide 5: Succession
Succession Our strategy remains in place during our transition…… Global search process underway Board search committee formed and search agency appointed Internal and external candidates to be evaluated Search to be conducted with speed, not haste Joint Interim Chief Executive Officers S
Slide 6: Fourth quarter overview
Fourth quarter overview Fourth quarter affected by strike action… Highlights Lowest all injury frequency rate on record. Strikes hit South African operations; smooth build-up after strikes. Continental Africa, Americas and Australia deliver to plan. Obuasi starts owner-development after cont
Slide 7: Full-year overview
Full-year overview Adjusted headline earnings second highest on record… 3500 2012 Strike Impact 3000 2500 Production 3.944Moz 235,000oz US$m 2000 Cash Costs $862/oz $33/oz 1500 1000 AHE $924m $208m 500 EBITDA $2.4bn $300m 0 2009 2010 2011 2012 EBITDA Strike adjusted EBITDA Adjusted earnings* * Adjus
Slide 8: Safety performance
Safety performance Project ONE model underpinning sustainable safety improvements… Monthly fatal incidents 10 1 January 2007 to 31 December 2012 9 8 7 6 5 4 Four fatalities during the quarter. 3 2 1 0 Two fatalities each in South Africa, Continental Africa. 2007 2008 2009 2010 2011 2012 All inju
Slide 9: Regional overview: Continental Africa
Regional overview: Continental Africa 08 Q4 Results Presentation 20 February 2013
Slide 10: Regional overview: Continental Africa
Regional overview: Continental Africa Geita is a world-class, Tier-1 asset… Continental Africa production was 376,000oz at a total cash cost of $1070/oz. Geita grades decreased as planned. Annual target of more than 500,000oz achieved. Obuasi production declined after development contract term
Slide 11: Geita turnaround
Geita turnaround Margin growth shows the underlying health of this asset… 700 70% 600 60% 500 50% 400 40% 300 30% 200 20% margin US$m 100 10% 0 0% 2008 2009 2010 2011 2012 -100 -10% -200 -20% -300 -30% EBITDA EBITDA margin ...with plans to sustain the upward trend, while increasing life. 10 Q4 Resul
Slide 12: Regional overview: Americas
Regional overview: Americas 11 Q4 Results Presentation 20 February 2013
Slide 13: Regional overview: Americas
Regional overview: Americas Steady production progress… Production 258,000oz; total cash cost $720/oz. Steady growth continued during 2012. Focus now on optimising operations and expanding Cripple Creek & Victor. Wage inflation across South American operations maintained pressure on costs. C
Slide 14: Regional overview: Australia
Regional overview: Australia 13 Q4 Results Presentation 20 February 2013
Slide 15: Regional overview: Australia
Regional overview: Australia Sunrise Dam operations begin to normalise… Focus on delivering Tropicana and developing new, higher margin, long-life plan for Sunrise Dam. Sunrise Dam cash costs impacted by lower head grade and harder underground ore after depletion of open pit. High-grade crown
Slide 16: Australia: Integrated planning and work management
Australia Integrated planning and work management… 1 Year - SDGM Underground material tonnes moved per day Individuals Set 1: UCL = 6,253.65, Mean = 4,714.89, LCL = 3,176.14 (28/09/2011 - 15/02/2012) (mR = 2) Set 2: UCL = 5,714.68, Mean = 3,761.25, LCL = 1,807.82 (17/02/2012 - 16/04/2012) (mR = 2) S
Slide 17: Regional overview: South Africa
Regional overview: South Africa 15 Q4 Results Presentation 20 February 2013
Slide 18: Regional overview: South Africa
Regional overview: South Africa Encouraging progress after unprotected strike action… Production 171,000oz; total cash cost $1166/oz. Recovery from strike is underway. Month-long unprotected strike severely hampered gold output and hit costs across all mines. Vaal River Operations, particula
Slide 19: South Africa: future
South Africa: future Despite a declining production profile over the past decade South Africa Cash Generation 1600 1400 Strike impact 1200 1000 800 US$m 600 400 200 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 EBITDA Cash flow after capex …our efforts are focused on improving the quality of produc
Slide 20: South Africa: long-term strategy
South Africa: long-term strategy We have the best suite of gold assets in South Africa… Investing in Mponeng and Moab Khotsong aiming to ensure long-term, stable Life extension of key mines production for more than 30 years. Steadily reduce footprint by realising synergies through sharing of inf
Slide 21: Over the past five years
Over the past five years……. The major structural changes in the business…. Safety and sustainability: We’ve significantly enhanced our expertise in environmental management, community and labour engagement, and in adopting world class safety standards. Bottom line: Fatalities halved, accidents dow
Slide 22: People are the Business
People are the Business There is a deep, diverse bench of expertise across the business… ...with expertise to drive the group forward. 20 Q4 Results Presentation 20 February 2013
Slide 23: Agenda
AGENDA Overview Financials Asset portfolio Conclusion
Slide 24: 2012 Full year financial results
2012 Full year financial results 2012 was a difficult year for the Group… 2012 2011 2012 (Pro-forma strike adjusted) Adjusted headline earnings $1.30bn $924m $1.13bn Return on net capital employed 20% 14% 16% Return on equity 25% 18% 20% Total cash costs $728/oz $862/oz $829/oz ...but the foundation
Slide 25: Cash flow
Cash flow Earnings and cash flow remain solid… Q4’2012 Q4’2011 Q4’2012 (Pro-forma strike adjusted) EBITDA $780m $333m $642m Cash flow from operating activities $644m $454m $662m Adjusted free cash flow* $97m ($447m) ($239m) 2012 2011 2012 (Pro-forma strike adjusted) EBITDA $3.01bn $2.40bn $2.7bn Cas
Slide 26: Cash flow
Cash flow Net debt at a comfortable level, despite strikes… Net debt* of $2.06bn at year end, up $1.4bn year-on-year. Full year project capital $1.1bn; 80% spent on Tropicana, DRC, CC&V and Mponeng. Total 2012 capital expenditure of $2.15bn, after rationalisation announced last year. Acquisi
Slide 27: Balance sheet
Balance sheet Decisive actions seeking to ensure the continuation of a strong recovery… R1bn raised in South Africa under domestic Medium-Term Note Programme. - R700m matures in Jan. 2014 - R300m matures in April 2013. $1.75bn investment-grade rated bonds. (Mature 2020, 2022 and 2040) $1bn rev
Slide 28: Agenda
AGENDA Overview Financials Asset portfolio Conclusion
Slide 29: South Africa – MWS (100% AngloGold Ashanti)
South Africa – MWS (100% AngloGold Ashanti) Implementation of Project ONE already generating positive results… MWS bought for $335m, effective July 2012. Forecast production ~110,000oz in 2013 at total cash cost of ~ $775/oz*. Project ONE has yielded major improvements; volumes have increased
Slide 30: Americas – Serra Grande
Americas – Serra Grande The fast-track exploration programme is uncovering additional ounces… 50% of Serra Grande bought for $220m, net after-tax acquisition price of $162m. Forecast production ~140,000oz at a total cash cost of ~$705/oz*. Fast-track exploration added 882,000oz to inferred res
Slide 31: Upgrading the portfolio: acquisitions and disposals since 2008
Upgrading the portfolio: acquisitions and disposals since 2008 We have a track record of adding value to our portfolio…. Sold $m 33.33% Boddington stake Jun-09 1100 100% Tau Lekoa Jan-10 64 10.17% B2Gold Nov-10 68 TOTAL 1232 capital intensity Acquired $/oz 100% Golden Cycle (33% of CC&V) Jul-08 103
Slide 32: Australia – Tropicana (70% AngloGold Ashanti)
Australia – Tropicana (70% AngloGold Ashanti) Australia’s newest major gold mine in an emerging gold district… First production remains on track for fourth quarter of 2013. Engineering design and procurement complete. Almost two-thirds capital committed by end January. Estimated capital expe
Slide 33: DRC – Kibali (45% AngloGold Ashanti)
DRC – Kibali (45% AngloGold Ashanti) Flagship DRC project making rapid progress… All major mining contracts executed and all major contractors mobilised on site. Good progress on Metallurgical Plant; Mill bases poured and ball mills installed ahead of schedule. Primary crushers and conveyor stee
Slide 34: Americas – CC&V (100% AngloGold Ashanti)
Americas – CC&V (100% AngloGold Ashanti) Americas region key growth project remains on track… Construction of water pumping facility began in December 2012; drain cover fill placement complete; and mill platform construction underway. Contract awarded for construction of the VLF2* and the re-rou
Slide 35: Outlook
Outlook Production Cash costs Comments Assumptions Geita mill replacement Exchange rates of under way. ZAR8.75/$, A$1.02$, Q1 2013 $900/oz- 910-950Koz Obuasi recovery and BRL2.00/$ and guidance $910/oz switch to owner mining AP5.00$ and Brent under way. $113bl. Geita mill replacement Avera
Slide 36: Outlook for 2013
Outlook for 2013 Optimal phasing of 2012 (A) 2013 (F) production ensures appropriate level of Capital expenditure $2.15bn $2.1bn capital expenditure. Corporate, marketing, and Capital expenditure $291m $240m forecast includes $118m capacity building costs of qualified deferred Expensed explorati
Slide 37: Valuation gap
Valuation gap Our earnings and cash flow growth since 2008 have outpaced the gold price… ….but the valuation disconnect demands a resolute response. 36 Q4 Results Presentation 20 February 2013
Slide 38: Focused on closing the valuation gap
Focused on closing the valuation gap Three main capital projects will improve quality of production and portfolio diversification. Far-reaching corporate and operating cost review is well advanced; opportunities identified. Full portfolio review has commenced; keep, optimise or sell decision t
Slide 39: AngloGold Ashanti
at ANGLOGOLD ASHANTI