Wrap Text
AngloGold output rises for 2nd straight year; costs fall 13%
AngloGold Ashanti Limited
(Incorporated in the Republic of South Africa)
Reg. No. 1944/017354/06)
ISIN No. ZAE000043485 – JSE share code: ANG
CUSIP: 035128206 – NYSE share code: AU
23 February 2015
NEWS RELEASE
AngloGold Output Rises for 2nd Straight Year; Costs Fall 13%
(JOHANNESBURG – PRESS RELEASE) - AngloGold Ashanti today posted its second consecutive growth in annual
production alongside a 13% improvement in all-in sustaining costs, as it continued to focus on portfolio improvements and
capital discipline.
Production rose 8% to 4.44Moz at an all-in sustaining cost of $1,026/oz in the 12 months through December 31, 2014, from
4.10Moz at $1,174/oz the previous year. The result compared with guidance of 4.2Moz to 4.5Moz at an all-in-sustaining cost
of $1,025/oz to $1,075/oz. All-in sustaining cost is a measure that captures direct operating costs, corporate and exploration
expenditure and capital investment required to sustain the business.
"The second year of growth is gratifying but the real focus for us is on improving margins," Chief Executive Officer Srinivasan
Venkatakrishnan said. "Regardless of the gold price, we won't relax the pressure on costs or hesitate to take out marginal
production if needed."
AngloGold Ashanti has over the past 24 months taken decisive action to cut overhead expenditure by two-thirds while
improving the quality of its portfolio by bringing into production two new, low-cost mines, selling some assets, closing others
and removing loss-making ounces from ongoing operations. All-in sustaining costs for 2014 are 18% lower than they were in
2012, while production is up 12% over the same period as Kibali and Tropicana have ramped up output.
Despite a 10% drop in the average gold price, the company's adjusted earnings before interest, tax, depreciation and
amortisation (EBITDA) remained steady at $1.67bn, while free cash flow (excluding once-off retrenchment costs in Ghana
and the Rand Refinery loan) improved to $142m compared with an outflow of $1.06bn the previous year. Net debt: adjusted
EBITDA was 1.88 times at year-end, similar to the end of 2013 of 1.86 times, again despite the lower gold price, and the
once off outflows referred to above.
The improved operational performance was achieved along with a record safety performance, with the fewest number of
workplace fatalities in the company's history and the successful evacuation of its Vaal River mines, with only minor injuries
reported, after a magnitude 5.3 earthquake in August. The Continental Africa business finished the 12 months without a
fatality, for the first time ever.
AngloGold Ashanti is pursuing a range of measures to generate cash from internal sources to reduce debt by about $1bn
over the medium term. These steps include pursuing additional savings from current operations, realising synergies from
combining neighbouring mines and infrastructure in South Africa and potentially introducing partners in key areas, most
notably projects in Colombia and in one of its operating assets.
"The shop is closed to bargain hunters," Venkat said.
In addition, at the end of 2014 AngloGold Ashanti completed the transition of its loss-making Obuasi mine in Ghana to limited
operations. Underground production has ceased and the focus is now on the feasibility study into the redevelopment of the
high-grade ore body as a fully mechanised operation. The study is nearing completion, following which it will be optimised
while discussions with the government and potential funding and operating partners will be held.
Fourth Quarter
AngloGold Ashanti recorded strong operating results in the fourth quarter, which topped market guidance despite safety-
related interruptions which affected production from South Africa. Fourth quarter production of 1.156Moz was 2.5% better
than the previous quarter and better than guidance of 1.1Moz-1.14Moz. Total cash costs of $724/oz were 12% better than
the preceding quarter, which averaged $820/oz and well ahead of guidance of $800/oz to $820/oz.
Outlook
First Quarter
Production guidance for the first quarter is estimated to be between 900,000oz to 940,000kozs at total cash costs of $830/oz
to $860/oz, assuming average exchange rates against the US dollar of 11.60 (Rand), 2.60 (Brazil Real), 0.85 (Aus$) and
9.50 (Argentina Peso), with oil at $70/bl. This guidance takes into account the slow seasonal ramp-up in production following
the Christmas break, ongoing power disruptions and also interruptions to normal operations related to safety-related
stoppages, all in South Africa.
Full-year
Production guidance for the year is now between 4.0Moz to 4.3Moz, reflecting the sale of the Navachab mine, reduction in
production from Mali, cessation of underground production at Obuasi, only partially offset by the ramp-up in production from
Cripple Creek & Victor starting after the first quarter.
Total cash costs are now anticipated to be $770/oz to $820oz, which factors in the average exchange rates against the US
dollar of 11.60 (Rand), 2.60 (Brazil Real), 0.85 (Aus$) and 9.50 (Argentina Peso), with oil at $70/bl.
AISC are forecast at $1,000/oz to $1,050/oz. Capital expenditure for the full year are expected to be $1,000m - $1,100m.
Corporate costs are now forecast at approximately $95m - $110m for the year, and Expensed exploration and study costs
are forecast at $155m to $175m. Depreciation and amortisation are expected to be $860m, while the cash flow impact of
interest charges is expected at $240m.
Ends
Particulars 2014 2013 Change
Gold price received ($/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 & evaluation costs ($m) 144 255 (44%)
Capital expenditure ($m) 1 209 1 993 (39%)
All-in-sustaining costs ($/oz) 1 026 1 174 (13%)
All-in-costs ($/oz) 1 148 1 466 (22%)
Cash inflow from operating activities ($m) 1 220 1 246 (2%)
Adjusted EBITDA ($m) 1 665 1 667 0%
Free cash inflow/(outflow) ($m) (112) (1 058) 89%
Free cash inflow/(outflow) ($m) – excl.
Obuasi redundancies and Rand Refinery Loan 142 (1 058) 113%
23 February 2015
Johannesburg
JSE Sponsor: Deutsche Securities (SA) Proprietary Ltd
Contacts
Media
Chris Nthite +27 (0) 11 637 6388/+27 (0) 83 301 2481 cnthite@anglogoldashanti.com
Stewart Bailey +27 81 032 2563 / +27 11 637 6031 sbailey@anglogoldashanti.com
General inquiries media@anglogoldashanti.com
Investors
Stewart Bailey +27 81 032 2563 / +27 11 637 6031 sbailey@anglogoldashanti.com
Sabrina Brockman (US & Canada) +1 (212) 858 7702 / +1 646 379 2555 sbrockman@anglogoldashanti.com
Fundisa Mgidi (South Africa) +27 11 6376763 / +27 82 821 5322 fmgidi@anglogoldashanti.com
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, 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, dispositions or joint venture transactions, 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 health and safety 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 AngloGold Ashanti's
annual report on Form 20-F for the year ended 31 December 2013, which was filed with the United States Securities and Exchange
Commission ("SEC") on 14 April 2014. 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 forward-
looking 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 Limited
Incorporated in the Republic of South Africa Reg No: 1944/017354/06
ISIN No. ZAE000043485 – JSE share code: ANG CUSIP: 035128206 – NYSE share code: AU
Website: www.anglogoldashanti.com
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