What’s Down the Track 2014
Andrew Doe – Vice
President Technical &
ANALYST VISIT – 3RD MARCH 2014
Business Improvement
OCTOBER 2014
DUNCAN GIBBS – GENERAL MANAGER
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, cost savings and other
operating results, return on equity, productivity improvements, growth prospects and outlook of AngloGold Ashanti’s operations,
individually or in the aggregate, including the achievement of project milestones, commencement and completion of commercial
operations of certain of AngloGold Ashanti’s exploration and production projects and the completion of acquisitions and dispositions,
AngloGold Ashanti’s liquidity and capital resources and capital expenditures and the outcome and consequence of any potential or
pending litigation or regulatory proceedings or environmental issues, are forward-looking statements regarding AngloGold Ashanti’s
operations, economic performance and financial condition. These forward-looking statements or forecasts involve known and
unknown risks, uncertainties and other factors that may cause AngloGold Ashanti’s actual results, performance or achievements to
differ materially from the anticipated results, performance or achievements expressed or implied in these forward-looking statements.
Although AngloGold Ashanti believes that the expectations reflected in such forward-looking statements and forecasts are reasonable,
no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from
those set out in the forward-looking statements as a result of, among other factors, changes in economic, social and political and
market conditions, the success of business and operating initiatives, changes in the regulatory environment and other government
actions, including environmental approvals, fluctuations in gold prices and exchange rates, the outcome of pending or future litigation
proceedings, and business and operational risk management. For a discussion of such risk factors, refer to the prospectus
supplement to AngloGold Ashanti’s prospectus dated 17 July 2012 that was filed with the United States Securities and Exchange
Commission (“SEC”) on 26 July 2013. These factors are not necessarily all of the important factors that could cause AngloGold
Ashanti’s actual results to differ materially from those expressed in any forward-looking statements. Other unknown or unpredictable
factors could also have material adverse effects on future results. Consequently, readers are cautioned not to place undue reliance on
forward-looking statements. AngloGold Ashanti undertakes no obligation to update publicly or release any revisions to these forwardlooking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except
to the extent required by applicable law. All subsequent written or oral forward-looking statements attributable to AngloGold Ashanti or
any person acting on its behalf are qualified by the cautionary statements herein.
This communication may contain certain “Non-GAAP” financial measures. AngloGold Ashanti utilises certain Non-GAAP performance
measures and ratios in managing its business. Non-GAAP financial measures should be viewed in addition to, and not as an
alternative for, the reported operating results or cash flow from operations or any other measures of performance prepared in
accordance with IFRS. In addition, the presentation of these measures may not be comparable to similarly titled measures other
companies may use. AngloGold Ashanti posts information that is important to investors on the main page of its website at
www.anglogoldashanti.com and under the “Investors” tab on the main page. This information is updated regularly. Investors should
visit this website to obtain important information about AngloGold Ashanti.
AngloGold Ashanti at a glance
AngloGold Ashanti Australia
•
•
•
Regional office in Perth, Western Australia
500+ permanent employees and approximately 600
employed by contractors
Annual Brownfields and Greenfields exploration budget of
approx.
9% A$20 million
Sunrise Dam Gold Mine – 220 km NE of Kalgoorlie
• Started production in 1997
• Underground mining operation, contract mining
.9
• Fly-in, fly-out
Exclusive of
Ore Reserves
Tropicana Gold Mine (70%) – 330 km ENE of Kalgoorlie
• Joint Venture with Independence Group
• Began production in Sept 2013
• Open pit mining operation, contract mining
• Fly-in fly-out
The gold sector – rising costs and falling prices
9%
.9
Exclusive of
Ore Reserves
From RBC Capital Markets Research Report: Capital Punishment Part VI: “Squeezing costs from a stone”. Data
Source: SNL, RBC Capital Markets Estimates
Sunrise Dam
9%
•
AngloGold has produced 6 Moz since
start-up in 1997, total ore system has
produced >8.5 Moz
•
Transitioned to wholly underground mining
in early 2014 with completion of the open
pit at a depth of 490m
•
Production in the June 2014 half of
133,000 ounces
•
June quarter total cash costs of
US$1,308/oz and AISC of US$1,527oz
(AGA costs)
•
Ore Reserve (as at December 31, 2013)
containing 1.18 Moz and Mineral
Resources containing 3.32 Moz*
.9
Exclusive of
Ore Reserves
* Please see AngloGold Ashanti Mineral Reserves and Ore
Resources 2013 Report at www.anglogoldashanti.com for relevant
competent persons report and JORC detail.
Sunrise Dam – meeting the cost challenge
9%
•
Alliance-style contract with Barminco
•
Demonstrated viable bulk mining capability
•
Ore zones are suitable for high-volume
long-hole stoping
•
RC drilling successfully introduced as a
grade control tool to replace diamond
drilling and face sampling
.9
Exclusive of
Ore Reserves
•
The mine is delivering on planned grade of
3.0g/t
•
Reduction in $/t mining cost by approx.
50% over past two years driven by
improving productivity
•
At the same time ore mined has increased
by almost 100%
Tropicana
9%
•
Owned 70% by AngloGold Ashanti
Australia Ltd and 30% by Independence
Group NL
•
Most significant Australian gold discovery
of the past decade
•
Poured first gold ahead of time and on
budget in Sept 2013
.9
Exclusive of
Ore Reserves
•
Production in June 2014 half of 253,423
ounces (100%)
•
June quarter total cash costs of
US$498/oz and AISC of US$689/oz
(AGA reported costs)
•
Ore Reserve (as at December 31, 2013)
containing 3.76 Moz and Mineral
Resources containing 7.72 Moz*
* Please see AngloGold Ashanti Mineral Reserves and Ore
Resources 2013 Report at www.anglogoldashanti.com for relevant
competent persons report and JORC detail.
Tropicana – meeting the cost challenge
•
New gold mine can utilise economies of
scale
•
Technology plays a critical role at
Tropicana, minimising operating costs
and improving safety
•
Processing plant is highly automated and
mining fleet utilises high precision GPS
technology
•
New grade control process
complemented by a fully automated onsite lab equipped with hyper-spectral and
XRF technology
•
3D seismic technology – better known in
the oil industry - will better identify drill
targets and minimise drilling costs
9%
.9
Exclusive of
Ore Reserves
Meeting the cost challenge – energy solutions
9%
.9
Exclusive of
Ore Reserves
•
Agreements signed in July with APA
Group to transport natural gas to
Sunrise Dam and Tropicana via a
292 km pipeline
•
Construction scheduled to begin in
February 2015 for delivery of gas to
Tropicana by January 2016
•
Gas fired power will reduce
operating costs by approx. $25$30/oz
•
Gas removes exposure to diesel
price volatility, reduces unit costs
and ensures continuity of supply
The future of the gold sector - community commitment
9%
.9
•
AngloGold Ashanti’s support for the local
community is deliberately multi-faceted
•
Key aspects include initiatives supporting:
• Youth, though Clontarf Goldfields
Football Academy, Role Models &
Australia, and Kalgoorlie
•
Partnerships for Success
•
Local businesses through a “Think
Local, Buy Local” approach
•
Local employment through
traineeships and FIFO flights out of
Kalgoorlie as well as Perth
•
Contracts structured to enable
participation by Aboriginal-owned
businesses
The gold sector - outlook
9%
•
The gold sector is important to Western Australia
– it was the State’s second largest export earner
in 2012-13 behind iron ore*
•
The State remains highly prospective for gold
and other metals
•
WA has a highly skilled mining workforce and
service providers that are the best in the world
•
The current gold price environment is
challenging - improved productivity along with
innovation will be critical for the sector’s survival
.9
*Department of Mines & Petroleum, Western Australian
Mineral and Petroleum Statistics Digest 2012-13
Working with AngloGold Ashanti Australia
Centralised Kalgoorlie yard to consolidate goods for transport to both Tropicana and Sunrise
Dam designed to facilitate local procurement. Expenditure in 2014 to date with Goldfields
businesses = $142 million
Some of our local business partners:
• Caltex
9%
• Pacific Energy
• Bundarra Contracting
• C&A Taylor Grading
• Hahn Electrical
.9
• Ativo
• Goldfields Air Services
• Goldfields Crane Hire
• Blue Spec Mining
• CPC Engineering
• RUC Cementation
•
•
•
•
•
•
•
•
•
•
Goldnet
Allcon
Goldfields Equipment
Desert Sands Cartage
Logichem
Hampton Transport Services
Triodia Mining
Specialised Engineering Services
Minex Transport
Metres Down Under
CONTACTS
Rob Leonard – Manager Supply
• Reagents
• Transport & logistics
• Supply of goods
Darren Dawes – Manager Services
• Services, non-material supply
• Site-related work – labour only
• Site-related work – supply & install
9%
.9