Anglogold Ashanti Plc · NYSE:AU
Anglogold Ashanti — Q4 2014 Earnings Presentation
45 slides from Anglogold Ashanti's earnings presentation, Feb 23, 2015
Slide 1: Results for the fourth quarter and year ended 31 December 2014
Results for the fourth quarter and year ended 31 December 2014 23 FEBRUARY 2015
Slide 2: Building safety procedure
Building safety procedure SAFETY IS OUR FIRST VALUE 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
Slide 3: Disclaimer
Disclaimer Certain statements contained in this document, 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, all-in sustaining costs, all-in costs, co
Slide 4: Agenda
Agenda Introduction Venkat International Ron Largent South Africa Mike O’Hare Projects & Exploration Graham Ehm Financials Christine Ramon Q4 2014 Conclusion Venkat
Slide 5: Introduction
Introduction Venkat
Slide 6: Building blocks for AngloGold Ashanti
Building blocks for AngloGold Ashanti Seek to maximise sustainable free cash flow from a high-quality, diversified portfolio… …whilst maintaining the fundamentals of the business, with a focus on delivery. 6 Fourth Quarter 2014 Results Presentation
Slide 7: Highlights
Highlights Another strong performance for the quarter and the full year… FULL-YEAR • Production 4.436Moz at top end of guidance; 8% growth year-on-year • All-in-sustaining costs $1,026/oz at lower end of guidance, shows 13% improvement year-on-year • All-in costs $1,148/oz show 22% improvement year-
Slide 8: Key metrics: Comparative performance
Key metrics: Comparative performance Strong improvement despite a lower gold price… Particulars 2014 2013 Change Gold price received ($/oz) 1 264 1 401 (10%) Gold production (koz) 4 436 4 105 8% Total cash costs ($/oz) 787 830 (5%) Corporate & marketing costs ($m) 92 201 (54%) Exploration & evaluati
Slide 9: Safety performance
Safety performance Fewest fatalities, low FIFR… Fatalities (thru YE’14) ’13 vs ’14 • Lowest annual Fatal Injury Frequency Rate on record. ’12 ’13 ’14 Change • 2014 FIFR 0.04, ▼20% (vs. prior YE) South Africa 11 6 (2) 4 International 6 2 - 2 • Continental Africa Operations complete first year with Ze
Slide 10: Deleveraging: Progress on Self-Help Measures
Deleveraging: Progress on Self-Help Measures A set of focused work streams are already underway… Area Initiative Progress • Obuasi on limited operations, complete feasibility • Workforce retrenched; mine on limited operations from end 2014 study for mechanised mine, explore partnerships • Feasibilit
Slide 11: Cost and production
Cost and production Consistent performance… Production Cash Cost ‘000oz $/oz 1400 1400 1200 1200 1200 1000 1000 1000 * 800 800 800 600 600 600 400 400 400 200 200 200 0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014
Slide 12: International
International Ron Largent ve agin
Slide 13: Regional overview: Continental Africa
Regional overview: Continental Africa A strong performance on costs for the quarter… Production oz • Full-year production 1.6Moz at total cash cost of $783/oz vs 1.46Moz at $869/oz in 2013 460,000 • Quarter-on-quarter production drop reflects Obuasi transition to 419,000 limited operating state Q4 2
Slide 14: Regional overview: Americas
Regional overview: Americas Americas region remains steady year-on-year… Production oz • Full-year production 996,000oz at a total cash cost of $709/oz vs 1.0Moz at $671/oz in 2013. 280,000 Quarterly highlights: 262,000 Americas: production rose year-on-year to 280,000oz at total cash cost of $677/o
Slide 15: Regional overview: Australia
Regional overview: Australia Tropicana achieves high production levels on strong mining and grade performance… Production oz • Full year production 620,000oz at a total cash cost of $804/oz vs 342,000oz at a total cash cost of $1,047/oz in 2013 169,000 • full-year contribution from Tropicana 152,000
Slide 16: International operations
International operations Significant progress on costs at all levels… Navachab sale and 1,400 Obuasi transition to 3,300 limited operations reduces production, helps improve overall costs 3,200 1,200 1,199 3,100 1,141 2,820Koz – 3,030Koz 1,000 3,000 968 922-968 2,900 '000oz $/oz 800 2,800 600 2,700
Slide 17: South Africa
South Africa Mike O’Hare
Slide 18: Regional overview: South Africa
Regional overview: South Africa Fourth-quarter hit by safety-related disruptions…. • Full year production 1.223Moz at total cash cost of $849/oz Production oz compared to 1.302Moz at $850/oz in 2013 339,000 300,000 • decline due to earthquake impact at Vaal River and safety-related stoppages. • Focu
Slide 19: All-in Sustaining Cost
Regional overview: South Africa Despite a declining gold price, lower output and rising inflation, AISC has declined… 1,750 $1,657 ($/oz) Gold price ($/oz) $1,391 1,400 All-in Sustaining Cost -6% 1,189 -5% $1,253 1,120 1,064 1,050 700 350 2012 2013 2014 …through ongoing cost management and the benef
Slide 20: South Africa: Portfolio improvements
South Africa: Portfolio improvements Significant overhead savings will be realised and maintained… • Moab/Great Noligwa integration expected to be effective first quarter. • Expected benefits include: • Lower capex from consolidation of infrastructure • Shorter underground commute to workplaces • La
Slide 21: Managing through energy challenges
Managing through energy challenges Communication with stakeholders and constant monitoring of the power grid … 3,500 2,500 • Active member of Energy Intensive Users Group (EIUG) established by Minister of 3,400 Energy, to address energy crisis. • Direct engagement with Eskom Senior Signed Energy acc
Slide 22: Technology progress
Technology progress To Safely Mine, All of the Gold, Only the Gold, All of the Time… Update and next steps: Adapt Raise Boring • Testing and modification of various prototype drills ongoing Reef boring methodology to a Reef • Additional test sites being equipped through 2015 (Mechanical Stoping)*
Slide 23: Projects & Exploration
Projects & Exploration Graham Ehm
Slide 24: Project update: Obuasi
Project update: Obuasi Decisive action continues to be taken to correct Obuasi underperformance… • Limited operating phase reached: Reserves & Grade • mining and milling ceased at year-end • retrenchments completed in December 8.14Moz Grade • Limited phase includes: 6.70(g/t) • Preservation of fixed
Slide 25: Project update: Kibali (45% AngloGold Ashanti)
Project update: Kibali (45% AngloGold Ashanti) Kibali continues to make strong progress toward completion… • Solid Q4 reflects improved plant availability and recovery 90,000 800 rates. 80,000 700 • Development of ventilation infrastructure 70,000 • Project progress 600 60,000 • metallurgical facili
Slide 26: Project update: CC&V MLE2
Project update: CC&V MLE2 CC&V MLE2 project remains on track… Total capital spend (SIB and Project Capex) East side of HG Mill – Reclaim Area $m Final site grading for process commissioning 145 37 43 34 31 7 23 4 6 6 Q1 Q2 Q3 Q4 2014 SIB Project • Mill construction and commissioning complete in Janu
Slide 27: Nuevo Chaquiro Project - Colombia
Nuevo Chaquiro Project - Colombia SECTION – FACE NE • Released maiden resource in November: CHA-DD- 057 • 604Mt @ 0.65% Cu, 0.32g/t Au, 4.38g/t Ag, 116ppm Mo • Contained metal content - 3.95Mt Cu, 6.13Moz Au Unaccounted Upside 432m @ 0.49g/t Au & 0.72% • Additional drilling this quarter has shown Cu
Slide 28: Brownfields Exploration
Brownfields Exploration Sunrise • Significant successes from Dam Vogue Brownfields exploration programme continue. These include: Sunrise Dam: 9m @ 69.5g/t Midway Shear 11m @ 35.5g/t 20m @ 6.79g/t 17m @ 7.36g/t Cuiaba Cuiaba: Fonte Grande Sul 1.65m* @ 125.4g/t Serrontinho 15m* @ 18.6g/t LAMEGO: Carr
Slide 29: Resources @ $1,600/oz
Resources @ $1,600/oz Exploration success… Moz 2014 Resources $1,600/oz – Main variances 255.0 Colombia Exploration at Nuevo Chaquiro/ La Colosa 250.0 AGA Mineração Exploration success at all three operations 245.0 Continental Africa Model revisions see increase at Siguiri offset by decrease at Geit
Slide 30: Reserves @ $1,100/oz
Reserves @ $1,100/oz A clear focus on margin… Moz 70 2014 Reserves $1,100/oz– Main variances 65 Portfolio Depletion Navachab Sale 60 Obuasi Mine plan focus on higher-grade area close to envisaged mine development 55 SA Region Model revisions/ improved geological knowledge 50 Portfolio Increased cost
Slide 31: Financials
ale " t.... ~ na —..,. a “ Financials Christine Ramon
Slide 32: All-in sustaining costs and cash costs
All-in sustaining costs and cash costs We have delivered a sustainable decrease in our cost structure... 2015 guidance range: Cash costs 770-820 All-in sustaining costs, total cash costs and group production AISC 1,000-1,050 4.599 - - - Production 4.0-4.3Moz 4.515 1,251 1,174 4.436 1,088 1,003* 1,02
Slide 33: Corporate and exploration costs
Corporate and exploration costs Allowing a prudent level of overhead cost… Corporate and exploration costs $m 800 700 600 500 395 2015 guidance range: 400 279 Corporate cost 95-110 Exploration 155-175 198 255 300 150 200 291 144 278 100 220 201 164 92 0 2009 2010 2011 2012 2013 2014 2015e* Corporate
Slide 34: Quarter-on-quarter reconciliation
Quarter-on-quarter reconciliation Our efforts to tackle costs across a broad front… Adjusted Headline Earnings normalised All-in sustaining costs ($/oz sold) Q3 to Q4 2014 ($m) Excluding stockpile NRV and other adjustments 44 -4 16 -56 22 1036 -23 1017 61 4 66 15 -5 5 68 -97 2 Taxation (4) -1 Other
Slide 35: Year-on-year reconciliation
Year-on-year reconciliation Our efforts to tackle costs across a broad front… All-in sustaining costs ($/oz sold) Adjusted headline Earnings normalised Excluding stockpile NRV and other adjustments 2014 vs 2013 ($m) -367 1174 171 -46 155 29 164 -7 -43 -125 -29 -12 1026 -61 -3 -57 411.0 328.0 2013 Hi
Slide 36: Debt levels
Debt levels Net debt has increased given the investment in improving our portfolio… Net Debt ($bn) and gold price ($/oz) Total capital spend (SIB and Project Capex) •Kibali/Tropicana developed $m 3.5 •MWS /Serra Grande acquired 2000 2.32 3.11 3.13 3 1.99 2015 guidance range: 2.5 1.69 Project 275-300
Slide 37: Schedule of existing debt maturities - USD
Schedule of existing debt maturities - USD Our balance sheet has long-dated maturities… Maturity Base Debt Type International Debt Facilities US$m* date Currency A$ RCF* 252 400 July 2019 A$ US$ RCF 100 1000 July 2019 USD ZAR RCF 43.5 130 Dec 2018 ZAR 5.375% Bond 700 700 Apr 2020 USD 8.500% Bond 125
Slide 38: Continued financial flexibility
Continued financial flexibility Focus remains on continuously improving our balance sheet… Net debt: EBITDA vs. Credit facilities’ covenant • Full-year EBITDA of $1,665m little changed ratio year-on-year despite 10% lower price 4 received. Debt covenant – leverage ratio 3.5X • Net debt: EBITDA 1.88
Slide 39: Leverage – Currencies and oil
Leverage – Currencies and oil The drop in the gold price has been offset by weaker global currencies… Year ended Dec.31, 2014 % change • Strong leverage to lower oil prices and weaker Gold A$ Rand Real Peso Brent currencies -1% • Based on 2015 currency basket and oil prices -8% assumptions, the foll
Slide 40: Outlook FY2015 and Q1'2015
Outlook FY2015 and Q1’2015 Guidance Notes - Navachab sold in June 2014; Mali mines’ production declining; Obuasi in limited operations phase with no production from underground mining anticipated in 2015. No provision for any unforeseen operational disruptions or power-related stoppages. Production
Slide 41: Q4 2014 Conclusion
042014 — Conclusion Venkat
Slide 42: Portfolio improvements
Portfolio improvements We’ve made significant improvements to the quality of our portfolio… Mill installed to treat higher-grades, improve recovery and extend life at higher output rate. Cripple Creek & Victor Closure phase New discovery of high-grade Yatela copper-gold deposit at Nuevo Chaquiro Obu
Slide 43: Focusing on margins
Focusing on margins We’re focused on growing margins, even in a depressed gold price environment… All-in sustaining costs, All-in costs and Average gold price 2500 2,169 2000 1,679 1500 1,567 1,622 $/oz 1,408 1,233 1,192 1,115 1,144 1,143 1000 1551 1254 1275 1302 1155 1060 500 1015 994 1036 1017 0 Q
Slide 44: Investment case – value catalysts
Investment case – value catalysts A strong investment case with several catalysts… 1. High-quality portfolio of long-life, pure gold assets with strong leverage to energy and currencies. 2. Prioritising margins over production growth – focus on cost and capital discipline. 3. Decisive strategic resp
Slide 45: AngloGold Ashanti
ANGLOGOLDASHANTI