AngloGold Ashanti Plc

Good afternoon, ladies and gentlemen, and welcome to the Anglo-Gold Ashanti H1 2024 results conference call. All participants will be in listen-only mode. There will be an opportunity to ask questions later during the conference. If you should need assistance during the call, please signal an operator by pressing star then zero. Please note that this call is being recorded. I would now like to turn the conference over to Stuart Bailey. Please go ahead, sir.

Thanks very much, Denae, and welcome everybody to Anglo-Gold Ashanti's first half 2024 results. As always, Alberto and Gillian will cover the material in the call, and you've got other members of the executive leadership team to take your questions. Before we go into the presentation, I would invite you to look at the safe harbour statement at the front end of the presentation deck. that contains important information regarding forward-looking statements, and we do encourage you to study it when you have a moment. Without any further ado, I'll hand over to Alberto.

Thank you, Stuart. Before we go to the numbers, I'll start with safety. After three years with no fatalities at our managed operations, we received a tragic reminder in May that we're only as good as our last day with no serious injury. a colleague and father of three who worked for a drilling contractor at Gaeta lost his life with a light motor vehicle he was driving overturned after he lost control driving down a steep hill. Marcelo Godoy, our CTO, completed an in-depth investigation into the incident, which identified clear steps to do everything we can so that there is no repeat going into the future. Our thoughts are with Obed's family and loved ones as we mourn his loss. I have led a series of town hall meetings across our business over the past few weeks, reflecting on the learnings from this tragedy and leading a campaign to ensure continuous focus on the very few critical controls needed to eliminate what we call high consequence, low frequency events like this one. We continue to invest considerable resources in understanding the root causes of all accidents, including high potential incidents or near misses, in order to prevent recurrences. This process is a strong indicator of the strength of our safety culture and the effectiveness of our systems and provides a good foundation on which to continue working to realize our ultimate goal of zero harm. Next slide. Before we turn to the numbers in detail, I'm very pleased to report a strong operating and financial results for the half year. This results show the hard work that has been done by so many to improve the fundamentals of our business, to drive productivity benefits, and to manage costs. Most of our tier one assets recorded a solid performance driven both by higher tons and higher grades mined. At the tier two mines, we continue to drive full potential initiatives to enhance asset performance. Now that we're well into the full potential execution, we have seen our costs trend lower. We will talk about that later. We are the only gold major that has reported so far to post an improvement in cash costs at the half. That means that we're able to capture the benefit of stronger gold prices. Revenue is up more than $400 million on year, all of which has flowed directly into the bottom line. We're building a strong operating momentum into the second half when we expect to deliver not only further production and cost improvements, but significantly stronger cash flows. So, to go into the numbers, production was up 2% year-on-year, driven by strong performance from our key assets, That result was significantly aided by a strong Q2, where production was 12% higher versus the first quarter. This was driven by Australia's strong improvements following the biblical flooding in March and security bouncing back from the recovery challenges that hurt Q1 production. Brazil's turnaround is a clear highlight, with a cash flow turnaround that was barely imaginable a year ago. Our cash costs were 1% lower year on year, as I mentioned a moment ago. This is not luck. In fact, the improvement was achieved despite the stiff headwinds we faced in Australia and Guinea in Q1, and it is a testament to our full asset potential program, which is yielding much of the benefit we expected. And we believe more is yet to come. On the back of these production and cost improvements, we have started to see the leverage to a higher gold price that has been so rare across the sector during previous upcycles in the gold market. We reported a 65% increase in EBITDA to 1.12 billion, And more importantly, a swing of more than $400 million turned in free cash flow, which came in at $206 versus an outflow of $205 million last year. This was well up ahead of the higher price due to improvements in both ounces sold and costs. Most encouraging is that we anticipate a stronger second half. With that in mind, we have declared a dividend that reflects that confidence. Gillian will cover that in more detail. But it is clear that we have the conviction of the consistency of our operating performance and a commitment to ensure shareholders see improved returns. This, of course, underpinned by confidence in our balance sheet. Liquidity is very strong, giving is low, even while we invest in our existing portfolio and growth pipeline, and we are well on track to achieve guidance. As I said, in May, we were focused during Q2 on recovering from the obvious Q1 challenges that cost us significant ounces in Australia and Guinea. You can hear... You can see the extent of the flooding that hit our Australian operations in March. Pits and infrastructure were flooded at Tropicana, and crucially, the 400-kilometre access road to this remote site had significant stretches underwater. This took some time to dry and cure sufficiently before it could reopen. Remedial works were completed in Q2, and we restarted operations successfully. This in turn saw improved production at both sites, Although ongoing rainfall during Q2 caused intermittent interruption to our supply lines into Tropicana, sometimes hampering our ability to restock consumables and other important items. Nonetheless, we expect to recover a significant portion of the lost production in the second half. I spoke about the challenges we saw at Sigridi in Q1. Low digger availability, poor availability of spares, and most of all, the steep drop in recoveries. We have improved maintenance, address fair inventories, and saw 38% bump in our funds in Q2. A new excavator has also been delivered, which will help us to continue that improving trajectory in Q2. Metallurgical recovery stabilized at around 87% in Q2, up from the low 70s in Q1. In fact, we have seen average recoveries above 90% in July. We're looking at the work that can be done to improve carbon management and oxygen efficiency in the plant, which will help maintain and potentially improve these strong recoveries, even when we introduce the challenging BD ore to the plant. The good news is that we're in no rush to do that, given the ability to source ore from alternative pits. So we may only need the between the ore in 2026, and we will then be well prepared to process it. Brazil picture. It's probably not even us probably would have imagined such a turnaround. It's hard to overstate what has happened in the past 12 months under the new leadership we appointed last year. The team delivered a 15% year-on-year increase in gold production in H1 and 19% reduction in cash costs year-on-year. The free cash outflow of $140 million during the first half of last year, which hammered our half-year result, has turned into a $53 million inflow during the first half of this year. As you can see on the waterfall, this was not simply a gold price story, but rather was driven by the controllable factors which we manage across the business. More extraordinary is that this cash flow result was achieved under the weight of a roughly $200 ounce discount for every ounce of concentrate we sold from Cuyabá while the Kiros plant has been suspended. The very good news is that the path is now clear to restart that facility during the second half, which will allow us to resume refined gold production and start to recapture the full margin once again. Well, Volasi's Q2 production was a steady 54,000 ounces. The V30 reamer continues to work as expected, helping to safely push underground ore volumes from the large open stokes. We've seen better results with ortons in Q2 averaging around 97,000 per month, 6% up in Q1. If you compare H1 2023 to H1 2024, we're up 12%. We are, however, experiencing some challenges in Block 8, a very mature block with fewer suitable working areas, more congestion, and hence less flexibility than we'd like to have, and probably with significant volatility in its grade in this last part of Block 8. That impacted mine great. particularly during April and May, the zones that we were mining. We did, however, reach equivalent annualized production of 300,000 in June and are on track to surpass that this month. Consequently, we expect to reach a production for the year around the lower end of guidance. We also anticipate, and this is probably the most important thing, strong cash generation from Boasi during this ramp-up, a solid cash, free cash for the year, probably surpassing $80 million, demonstrating a very strong cash flow potential. As I've said before, the real price that is coming relatively soon lies on the higher grade block 10. This is virgin ground with average grades above eight. In addition, in later years, there is block 11 with grades above 17 grams to provide another kicker. A critical path to bring block 10 into production is getting ventilation infrastructure into the right place, which we expect towards the Q2 of next year. We'll see that in the next slide. This will allow us to ramp up Block 10 and also to bring in Block 1, getting us comfortably over 300,000 ounces next year. Turning to the trial of the underhand drift and field mining method, this has gone to plan. The concept is proven in the trial area with pace, strength, good, and curing time down to 14 days. We will continue to ramp this over the rest of this year as we establish a new full-scale site in Block 8 lower. So, phase three of our construction project achieved 89% of overall completion by the end of Q2, 2024. The watering has been completed to the shaft bottom and construction has started on the dam and pump station building. The settlement of the project is expected to add another 6,000 tons per day hoisting capacity for the mine. Refurbishment of the KMS shaft is on track for completion by the end of 2024, and the ADEX flexibility a significant benefit. At the same time, the KMVS vent shaft will allow us to ramp up volumes from Block 10. More specifically, we will be able to develop several mining fronts on Block 10 and 1, which will help optimize the significant infrastructure we will have ready and hence surpass the 400,000 level we have spoken in the past. We plan to host a site visit to Oboassi ahead of next year's Indaba, where we'll be able to showcase the huge strides made in infrastructure development that will enable this access to the mining areas, and we will also provide an expected ramp-up during the next five years of Oboassi. Full asset potential continues to yield results across the portfolio. At Sunrise Dam, despite the weather challenges in year one, underground tones in Q2 step back up at around 220,000 per month. The better haulage performance was underpinned by improvements in stop availability and fleet utilization. We'll look to sustain these levels in 2024. Thereafter, drive the next step changes to the full asset performance target. We have completed all of our assets and are now starting a second wave of FAP, starting again with Sunrise, where we have already identified more than 100 million of potential benefits. Full asset potential will continue to be at the heart of our improvements in productivity and hence reductions in our cash costs. As I showed earlier, recoveries at Seguidi are up after interventions in Q1 2020. We have excluded Bedini ore from the blend and ore is being sourced from alternative deposits stabilizing plant performance. We will look to make low capex modifications to the plant with a specific focus on management of carbon and oxygen levels. Eduprene continues to perform very well. We've driven improvements in drill and blast as well as processes to get better fragmentation. We've optimized the load and haul process to get better ore delivery to the plant. and we've sharpened our maintenance practices to achieve better overall equipment availability. At GEITA, underground core tons from Nyakanga are ahead of our full acid potential targets. We're delivering backfill directly to stoves via drills from surface rather than using trucks. This in turn has the bottleneck of underground materials handling capacity and improved overall stope availability. Apart from the benefits in the incremental EBITDA we've been able to generate, the true value of this program goes beyond dollars and ounces. Over the past two years, the full asset potential program has given us significantly more resilience to help offset inflation and counter that impact of production interruptions across our portfolio. I'll tell you the same thing that I tell our employees and my board, which is that the proof is in the numbers. The proof is in the bottom line. It's our ability to meet and to sustain an improved bottom line that matters. Improvements in bottom line, and that's what this is. 464 million of improvements of incremental EBITDA in the past three years. Regarding the future, we have a strong pipeline of organic options we are executing on Oboasi that will give us additional medium-term ounces. Nevada is a game changer. We'll talk more about it now. We see the region producing as many as 500,000 ounces of our multi-year period at Tier 1 costs. And longer term, we have a world-class copper gold deposit in Quebradona, which gives us optionality and exposure to the energy transitions. This is, I think, a very nice graph, and this is different. We put new information. Merlin continues to deliver strong assay results. Further supporting, this is a high-grade, world-class ore body. In this section, you can see the extent and size of the deposit, along with some very exciting new intercepts, which continue to upgrade the quality of this impressive ore body. 66,000 meters, 66 kilometers of mainly infield drilling we're completing during the first half. You will obviously look through this cross-section in your own time, but I'd just like to highlight some of the high-grade intercepts over significant widths. So you can see they're 144 meters at 10.53 grams per ton. You can see 30 at 8.53. You can see 190 meters at 5.2. You can see 160 meters at 5.85. You can see 50 meters at 3.9. So it is, all of this has all of the signs of one of the truly tier one deposits in North America. The PFS program to expand silicon is expected to be completed by mid-2025. At North Bullfrog, where permitting is underway, engineering reached the 30% completion milestone in Q2 2024, in line with the planned engineering schedule, and we will continue to provide further updates in Q3. Okay, this is now to Gillian.