AngloGold Ashanti Plc

and welcome to the Anglo-Goldish shanty for your market call. All participants will be in listen-only mode. There will be an opportunity for you to ask questions later during the call. If you should need assistance during the event, please signal an operator by pressing star and then zero. Please note that this event is being recorded. I will now hand the conference over to Stuart Bailey. Please go ahead, sir.

Thanks very much, Chris. Good afternoon, everyone. And to those of you joining us from the Americas, good morning and welcome to our 2023 market call. We have Alberto and the full Exco team here to help run you through our performance. But before we start, let me call your attention to the fact that we'll be making forward-looking statements and we will reference certain non-GAAP financial information during the course of the remarks. Slide two is our safe harbour statement. It's important, and I would ask you please to refer to it. I'd also just like to apologize for the delay in releasing the report today. We had a glitch on our side that was a little tricky to overcome. So thanks for your forbearance on this, and we hope this call will be fulsome enough to talk you through the detail in a way that's helpful. Over to you, Albin.

Thank you, Stuart. Good day, and welcome to our results call. Before we get into the details of what has been a very good year for us, I'd like to address an issue you may have picked up in our release today. During our year-end audit, AGA, Anglo Gold Ashanti, found a potential error in the calculation of a deferred tax asset at Obuwasi in 2022. This potential error could impact our earnings by up to $146 million today. between 2022 and the first half of 2023. The error is non-cash and has no impact on production, cost, cash flow, value of the asset, or anything related. Let me be clear. The facts and the numbers are very clear. For our practical purposes, this is an impairment of $146 million. However, there is still an ongoing discussion with our previous auditor about whether and how much of this error should be accounted for in our eventually reinstated 2022 accounts. Any potential restatement is a time-consuming, complex process made so more by the fact that we're working with two sets of auditors. All parties must agree on the nature and quantum of any adjustments before we are able to issue our 2023 results, which we will do as soon as possible. That's that. Now let's move to what really matters, a strong set of results we are all very proud of. The aims as I joined AGA in late 2021 was simple, close the value gap with our peers. To do it, we've worked to address several interlocking initiatives that together will substantially improve our business. We've still got work to do, but we've made good progress on our original priorities. Most important of all, we've closed the cost gap with our major peers. We've done it safely. We're now among the safest mining companies anywhere in the world. We've improved predictability, again achieving guidance on production and cash costs, This increasingly sets up a part in the peer group. We've been decisive on loss-making operations and projects that don't fit our portfolio. That allows us to narrow our focus on the things that drive value. Oboasa's recovery strategy is progressing to plan. We've declared a new 9.1 million ounce inferred mineral resource at Merlin, which almost doubles our resource position in this new gold district. We've more than replaced reserve depletion in the past five years. We're building on a strong climate track record with a series of new emission reduction projects. And finally, last but not least, our primary listing on the New York Stock Exchange gives us exposure to the world's deepest pool of capital. We've recorded a strong H2 performance after a series of challenges in H1. Gold production was up to 15% with a standard performance from Iduprim, Tropicana, Gaita and Kibali. Cuyaba exemplified the resilience we're building in the business. Even after losing much of Q1, in the pivot to concentrate production, it delivered ahead of budget, which in turn drove a 9% improvement in cash costs. And Obuasi recovery from poor ground conditions. Perhaps more importantly, the better production results helped drive $314 million in free cash flow in H2, showing the much improved health of the underlying business. The much stronger H2 ensured we ended the year on a solid footing. We reported a record safety performance, achieved guidance on production and cash costs, a re-domicile process is complete, We've taken decisive steps to place CDS on care and maintenance and to serve them a lot. We made a major discovery at Merlin, which translates into a five-fold increase in our Nevada mineral resources in three years, and we've maintained a robust balance sheet. On safety, we have a clear safety strategy that pairs risk awareness with robust controls to manage the most critical workplace hazards. Our agency frequency rates remains well below industry peers. I've been around for long enough to know that we can never afford to be complacent and that we're only ever as good as our last injury-free shift. 2023, it is important to get the basics right. That starts with meeting our commitments. We delivered just under 2.6 million of production. Within guidance, cash costs were also within our guidance range. Only sustaining costs increased to 1,038 an ounce That reflects the higher cash cost and a planned increase in sustaining capex. Full potential is working exactly as intended. We will show a detailed graph of $215 million savings realized in 2023, played a key role in helping to offset inflation and also to reduce the impact of production disruptions. Pre-cash flow was $109 million for the year. That's a big turnaround after 205 outflow in H1. We took the decision to pay a dividend upon our payout policy, declaring a dividend of 19 cents per share, following the strong age performance, the strong balance sheet, and our confidence in the future. The payout demonstrates confidence in the robustness of the business and our commitment to return to shareholders. We showed you a different view of the portfolio at the interim results. The steering lens shows more clearly the geological realities of each site, their flexibility and performance, and potential for growth in both production and margins. This in turn determines their place in our capital allocation hierarchy. T1 assets have scale, life, or at least the potential to increase life. They're at the lower end of the internal cost curve or have the potential to get there. Tier 2 has a steady performance. All bodies are well understood and operations are reasonably well optimized or on their way to be there. Some may be on the higher end of the cost curve, but they are all well-run, predictable, and steady cash contributors. The Tier 1 assets produced 1.6 million ounces of gold last year at a cash cost of $90 an ounce. Keita had a strong finish, coming back strongly from the Q1 shutdown. In fact, Q4 ounces were 45% higher than Q1. Oboasi recovered very well, as you see. Q4 production was a third higher than Q3. I'll talk more about that shortly. Kibale made a solid contribution of 343,000 ounces, and higher grades drove an increase at Tropicana. Turning to Tier 2, Cuyabas, I mentioned, had a stellar recovery from a standing start. Generating $78 million free cash flow in H2, even at an expected cold price, being this a concentrated operation of $1,790 an ounce. The mine is fully converted to a concentrated operation. Sunrise was the poster child for full potential, with cash costs all in sustaining well below the year end. Security has a steady second half as it recovers from the two-time tax collapse, quarter two-time collapse. By the year end, throughput rates have normalized and the team is now working to calibrate the plan to lift recoveries. CMSA production was lower year on year in line with its prime time. Full asset potential. The full asset potential program has started to gain traction across the asset base. At sunrise, we're seeing a step chain in underground ore tons, which are now consistently above 220,000 tons a month. The better haulage performance was underpinned by improvements in stope availability and fleet utilization. We'll look to sustain these levels in 2022. Tropicana's underground ore tons were up around 25% in H2. That initiative has been so successful that now we're working on solving ventilation constraints before we can achieve further improvements later this year. There's better availability and utilization of stone boggers and quicker reentry for crews, which has increased effective work time. In the plant, we made improvements to the high-pressure grinding roll circuit to support a throughput increase of 9.5 million tons. Itoprim had an excellent year. We've driven improvements in drill and blast as well as processes to get better fragmentation. We've optimized the load and whole processes to get better oil delivery to the plant. And we've sharpened our maintenance practices to achieve better overall equipment availability. At 8 underground tons from Nayakanga, we're 29% ahead of our full asset potential target. We've delivered backfill directly to stoves via drill holes from surface rather than using trucks. This in turn has the bottlenecked our underground materials handling capacity and improved overall stope availability. We've also redirected from Star and Comet to Nyakanga, bringing forward production into Q4. The full asset potential, what you see in the graph, is $250 million of an incremental EBITDA that was driven by improvements across four sites. Cost savings are adjusted for uncontrollable economic factors, including inflation, exchange rates, and royalties, as well as oil and other commodity movements. Benefits include both productivity improvements, measured as increment in gold production, and cost reductions compared to the flex or expected costs. Incremental gold production includes increasing plant throughput, metallurgical recovery, and mine towns. The dollars of benefit of $215 million is very significant, as you are well aware of, But this programme has been, this year, absolutely vital in offsetting the massive both inflationary pressures, you've seen the road margins right across the centre, and also providing additional resilience to the business to counter the production interruptions we had at Siguiri and Cuiabá. In sum, the reason why we have delivered cost guidance is we have similar sort of issues than our peers, but we have a program that helps counter those costs. Brazil update. Our Brazil operations have been a drag to earnings and cash flow. Last year, we took a decisive step forward to address this, and the results are clear in our numbers. The most important step was to restructure our leadership team. We reduced senior management roles by 25% and introduced new experienced talent. At the same time, we've carefully to properly locate accountability and drive performance. We will not indefinitely cross-subsidize underperforming and lost market assets, and we made that clear when we saw no return pathway to profitability for CDS. We took the hard decision to place it on care and maintenance in August. We've reviewed capital, made reductions, and ensured no stone is unturned in order to safely reduce costs. The cumulative benefit of these initiatives have greatly stemmed the cash stream, and we're looking to a significantly better performance this year. We're prioritizing full asset potentials reduction, stability, and increased efficiency. Let's take a step back to look at Oboasi. This remains one of the world's greatest gold ore bodies. It has grade well in excess of 8 grams per ton over its life. It has size over 17 million ounces of resource and 7 million ounces of reserve, and it has life. This is a black-cheeked mine and it enjoys a strong license for war work. We're also regaining momentum in the rainbow. So it's a runaway of more than 400,000 ounces a year by 2026. You see in the slide, we are forecasting a range between 275 and 320 for 24, and between 325 and 375 for 25, and then plus 400 in 2026. So let's look how we get there. The V30 reamer is doing exactly what we said. To recap, we're establishing our conventional stoves with a much wider reamer head, which is showing itself more capable in self-higher grade rates. We're already getting better results after the blast. For the past four months, you can see our mining rates have stabilized and are now around 28% higher than for the first nine months of the year. And by the way, February is going very well also. We expect another increase to around 110,000 to 120,000 tons from during this year. The underhand drift and fill trial will show how to safely mine the high-grade areas with poor ground conditions that we saw towards the end of last year. It's going very well. We've shown that we can develop through PACE backfill in an old stove, which demonstrates PACE competency. We've developed a top drive on 3,300 level and installed ground support. We've established the PACE reticulation line, closed off the levels with bulkheads, and completed the PACE backfill. We are focused now on developing a parallel drive alongside the PACE fill drive. This will allow us to expose and test the PACE strength. After that, we'll develop our first drift under PACE. What is very important. We continue to use the data from the trial to inform our cost models. And at this stage, we see a $50 per ounce improvement at steady state from underhand versus sub-level open-stopping, with higher mining costs more than offset by significantly better extraction efficiencies. Phase three is the refurbishment and return to service of the KMS shaft and associated infrastructure. This will provide direct access to the very high grade block 11 and other areas. It will double our current underground materials handling capacity to around 12,000 tons per day. If you look at the red block on this slide, it shows a significant advantage we'll have when we can move waste ore and other materials down the shaft with no congestion, rather than transporting it via a 12 kilometers decline. The added flexibility will be a significant benefit. We estimate completion by the end of this year. The next key part is the completion of the vent shaft. that will be soon, rail system and new pump stations, as well as ore passes between the upper mine and rail transport level. Good progress is being made to clear mud between 5,100 levels and the shaft wall. Let's move to Nevada. A picture is worth a thousand words. This is a picture of a gravity concentrate from a high-grade intercept at Merlin in Nevada. As we continue to progress with our drilling and metallurgical programs, we are finding strong indications multiple areas of the project. We have moved quickly to build a world-class new golden district in Southern Nevada. We'll dig into the details of our new 9.1 million ounce discovery at Merlin in just a second. But as you all put the pieces together, we have a number of new deposits emerging that now We have a number of new deposits emerging that now together contain more than 16 million ounces. Our focus for now is mainly on near-surface oxides with simple metallurgy, first of the smaller North Bulford projects in the northeast of our property, and then at the New Merlin Discovery, which is a truly spectacular piece of geology in the heart of the world's best coal district. We believe costs will be extremely competitive and there are a number of potential development scenarios that we will test to match the project to our own capital return and needs. In short, the continued exploration success we're enjoying suggests the potential at this stage for this resource to support peak production of around 500,000 ounces over a multi-year period. And this is a multi-decade gold district. North Pole Frog is our starter project. It is the most advanced in our current Nevada pipeline, already in the permitting process, and we declared a first-time mineral reserve of 1 million ounces today. The feasibility study is complete and detailed engineering is underway. Aside from the new low-cost answers it will contribute to the group, North Bullfrog will provide us practical understanding of the permitting process, the opportunity to build a best-in-class project team, and current experience of building and operating a project in Nevada, all of which will be invaluable as we roll forward to the much bigger Merlin development. This project has a very attractive return profile. Our updated estimate of first production is around mid-2026, assuming all goes to plan. This is based on correspondence from Stantec, the BLM agency, which estimates the timeline of the record of decision to be around April 2025. We're engaging closely with the regulators to ensure we're able to support the process and their timeline in the best way possible. Our study, which has been approved by our board, pending receipt of all the necessary permits, assumes total growth of around 800,000 pounds, average recovery rate of 0.44, and an initial life of 13 years. We expect to run all in sustaining cost of around $854 an ounce. When you amortize the project capital of around $370 million, you will get an all-in cost of about $1,300 an ounce. We assume a conservative gold price of $1,600 an ounce for the study, which would give us an IRR of 13.13% and a payback of just over seven years. However, at the spot, the return jumps to 30% and the payback shrinks to just four years. The expanded silicon project covers the silicon deposit roughly in the center of our land holding and Merlin immediately south. Today, we report a new 9.1 million ounce of inferred mineral resource at Merlin. As far as we can tell, this is the largest gold discovery in the U.S. in well over a decade. It's the fruit of a 2023 exploration program that beat all expectations. We drilled 144 holes, totaling more than 100. There is still significant upside, particularly to the West. At first pass in our concept study, the economics look very strong. This year, we're focused on the PFS, which is already underway. This includes infill drilling to test the significance of high-grade mineralization within the Inferred Mineral Resource Fund. This slide shows clearly why this is a potential game changer for us. In this section, you see the extent and size of the deposit along with some very exciting intercepts, which validates the extent and quality of the ore body. You will obviously look through this cross-section in your own time, but I'd like to just highlight There's 103 meters of 7.3 grams a ton, there's 185 meters of around 4 grams a ton, and there's just over 236 meters of 3.4 grams a ton. Mineralization remains open primarily to the west of the inferred mineral free zones. This breaks down our, we're moving to exploration performance. Last year, exclusive mineral resource addition totaled 10.3 million ounces from exploration and modeling, and of course, the introduction of Merlin. There were offsets, which resulted in a net gain, one gain to gain of year of 5 million ounces. Mineral reserve additions totaled 2.5 million ounces. Two came from exploration, including the addition of the million ounces at North Bullfrog. After depletion and other changes, we saw a net reduction year on year of 0.7 million ounces. This slide shows exactly why we're excited about the potential within our portfolio. We're in the midst of a program to increase investment in mineral resource development and brownfield exploration. This will aid reserve conversion, extend mine lives, improve operating flexibility, and supplement knowledge of our ore bodies. We're making strong progress. Over the past four years, we've added 14.4 million ounces of mineral reserve, which have come into our inventory at only $62 an ounce. When you compare that to multiples being paid even for resource ounces, you can see the enormous value that we've been able to generate organically. So now to Gillian on the financial issue.