Anglogold Ashanti PLC (AU) 2013 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen and welcome to the AngloGold Ashanti results. (Operator Instructions). Please also note that this conference is being recorded. I would now like to hand the conference over to Stewart Bailey. Please go ahead, sir.

Thanks, Dylan, and welcome everybody to the results for the fourth quarter and the year ended 31 December 2013. We've got a pretty full slate today just to cover the quarter and also the full year results, to look at reserves and resources and whatnot so a little longer than usual but hopefully not too much.

I'm just going to kick off with a speedy read of the Safe Harbor statement, as is usual. 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 achievement of project milestones, commencement and completion of commercial operations of certain of our explorations 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 our operations, economic performance and financial condition.

These forward-looking statements or forecasts involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from those -- from anticipated results, performance or achievements expressed or implied in these forward-looking statements.

Although AngloGold Ashanti believes that the expectations reflected in these statements and forecasts are reasonable, no assurances can be given that such expectations will prove to be 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 initiative; changes in the regulatory environment and other government actions, including environmental improvements (sic - see Press Release "approvals"), fluctuations in gold price and exchange rates, outcome of pending or future litigation proceedings, and business and operational risk management.

For a discussion of these factors, refer to the prospectus supplement to our prospectus dated July 17, 2012, filed with the US SEC on July 26, 2013. These factors are not necessarily all of the important factors that cause our actual results to differ materially from those expressed in any forward-looking statement. 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 forward and oral-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. We use these measures and ratios in managing our 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 measures or performance prepared -- 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. We post information important to investors on the main tab of our -- main page of our website under the Investors tab. It's important information, you should read it.

I'm going to hand over to Venkat. Thank you.

Thank you, Stewart. And good morning or good afternoon ladies and gentlemen.

If we can go straight into our fourth quarter and year results. If we can start with slide number 6. When we spoke previously at our previous earnings presentation and certainly for those of you who attended the Denver Gold Show, our message has been simple and it takes the business back to basics, with its cash flow improvements and sustainable returns. We're doing that using five pillars in terms of our strategy.

The first, which involves people, safety and sustainability during the stop times. We have a core and committed management team which is focused on improving our safety and sustainability record. As you would have seen during the course of the year, we have also proactively and effectively moved to address our balance sheet and financial flexibility. And Richard will cover that in greater detail.

The third aspect is around the whole area of cost. We're tackling head-on the tough decisions around direct costs, overheads and capital expenditure to improve sustainable cash flow.

Then, moving onto improving portfolio quality, the two new mines that came online in -- at the end of the third quarter, plus the asset improvements which we are affecting the business, will enhance the quality of our portfolio, giving us the flexibility to remove marginal ounces from the mix.

And finally, this is not all about the short or the medium term, we are keeping our focus on the longer-term optionality of the business to ensure it's intact by using lower cost options and a focused exploration portfolio. These will help AngloGold Ashanti ride the gold price shocks, improve cash generation and preserve our long-term future. So when the gold price surprises us on the upside, we can cream that extra cash flow for our shareholders.

If I can then turn to slide number 7 and start off with safety. Safety is our first value and our focus is even greater at these tough times. Lots of good work has gone in over the past six years and we continue to build on the foundation. We strive to achieve zero harm and as you can see from the slide, the progress has been good under most metrics. Whilst recognizing that one fatality is one fatality too many, it should be noted that the number of fatalities which were recorded in 2013 was the lowest in AngloGold Ashanti's history.

We also registered the best-ever all-injury frequency rate and loss-time injury frequency rate on record. And 80% of our operations set new safety records in 2013.

Sadly, two of our colleagues, [Edward McCurry] at Moab in South Africa and [Richard Adu] at Obuasi lost their lives in the fourth quarter. The accidents have been investigated; corrective actions have been identified and are being implemented not just at those operations but at other operations where similar accidents can happen.

The three focus areas on safety remain changing behavior, ensuring we have correct systems processes, methods and training in place and removing people from risk areas using technology. But we fully recognize that any safety record is only as good or bad as our last incident and therefore we continue to focus on major hazard control work and look at our high potential incidents, which we call near-misses, to see what we can learn from them and improve our safety record further.

Turning to the highlights for the quarter, slide number 8. Looking at the year in question, the AngloGold Ashanti team -- here I'm not just referring to the executive team, but all members of our workforce -- have done a fantastic job by registering the first annual production growth since 2005, with the first year of annual cost decline over that period. This is in line with our commitment that we'll only be adding ounces if they are profitable ounces.

For the year, production at 4.105m ounces exceeded the top end of our guidance of 4m to 4.1m ounces that was given in May. And the total cash cost of $830 an ounce came in within the guided range.

We're anticipating further growth in 2014 and we'll cover that later on in the presentation.

Cash flow was prioritized for debt reduction and completion of projects. Therefore the Board when it met on Monday concluded that it would not be declaring a final dividend. We do not believe borrowing money to pay dividends is a smart strategy, and as we can see from the next few slides, our cash flow is improving quarter on quarter and looks promising as we go into 2014.

For the fourth quarter, production of 1.229m ounces was above the 1.13m to 1.17m ounces which we guided. If you compare it to the same quarter the previous year, it was up 43%, recognizing that that quarter was impacted by the South African strike, but it went up 18% quarter on quarter when in fact the third quarter was also an improvement on the second quarter.

If you recall, we did say 2013 was going to be a year of two halves. And the improvement in the second half of the year from existing and new operations has actually enabled us to get to this production profile.

All four regions improved output. South Africa registered 1.3m ounces plus. Continental Africa recorded its best ever quarterly output since the fourth quarter of 2005. Americas hit 1m ounces for the first time in its history. And Australia recorded the highest ever quarterly production. And when you look at the fourth quarter production, it exceeds the production from all three quarters put together, as Sunrise Dam benefited from the grades from the (inaudible) and Tropicana came on stream.

All of these, together with our cost saving initiatives translated to a lower cash cost of $748 an ounce in the fourth quarter, representing a 23% improvement year on year and 8% quarter on quarter, third quarter versus the fourth quarter.

All-in sustaining costs declined to $1,015 an ounce. If you recall, we said it would be around $1,100, it dropped to $1,015 an ounce. And Richard will cover the financial metric in his presentation.

Our corporate and exploration costs have also come down 20% from the previous quarter and free cash outflow, which is basically our definition of what is available after meeting all obligations-- this is sustaining capital, project capital, tax, interest payment -- improved from $205m outflow in the third quarter to $82m in the fourth quarter.

And to compare it against the second and the first quarter, the drop was around a fifth -- to a level of around a fifth of what it was in the second quarter. So we are certainly narrowing the gap in terms of the cash flow, notwithstanding the fall in the gold price.

Post quarter-end an agreement was reached to sell the Navachab Mine for a total consideration of $110m, together with a royalty stream subject to certain conditions. We are expecting that transaction to close some time in the second quarter.

If I can then request you to look at slide number 9 and 10, starting with slide number 9. Apologies for a table with a bunch of numbers but these tables on this page, slide 9 and 10, says it all. And it's worth more than 1,000 words. Every quarter-on-quarter drop in the gold price steals hundreds and millions of dollars from our top line. But as you will see from this table, every variable that is either under management's total or partial control has shown significant but importantly steady improvements.

Production has improved. Two new projects are ramping up nicely. Cost control is paying off. Admittedly, currency weakening helps and cash flow is certainly improving. And as Richard will outline, the cash flows from Tropicana and Sunrise Dam are already being applied to redeem our Australian revolving credit facility without having to touch our US dollar revolving credit facility.

When you compare it to the same quarter the previous year, to the fourth quarter 2013 sic, you can see the marked improvement year on year. Agreed that 2012 was impacted by the South African strike, but despite that, the improvements are marked. Considering that over the two quarters, we have had to contract a $450 drop in the gold price. And when you translate it to 4m ounces, it's not an insignificant amount.

As we have said before, AngloGold Ashanti is a big ship, it does take time to turn, but once it starts to turn and gather momentum, you will start to see results. And that's what we said when we started in the first quarter of the year and you're seeing the benefits come through.

Every cost metric has improved markedly and production has stepped up and benefits are flowing into the cash flow line. We do appreciate that one quarter doesn't make a summer, but what we've been able to demonstrate through 2013 over four quarters, that we have met every one of our commitments which we have provided to you.

This is a long-term business and I know the market is fixated on quarterly guidances, but one has to be humble and recognize that we are bound to hit bumps along the way. And it'll impact a quarter here and there, and we won't be able to avoid it, but the overall trend is important here, and that is heading in the right direction.

Turning to slide number 11 which is the first area of cost reduction. When we outlined in our presentation previously, exploration and corporate costs were $760m in 2012 and we said we'll drop it by $460m in 2014, or a saving of $100 an ounce. We approached this exercise very carefully and not as a toe cutting exercise, focused on removing duplication, non-value-add work and fat.

On the exploration side, focus in addition to mine extension related to Tropicana, Siguiri, Kibali and the Colombian projects areas. As we go into 2014, we are withdrawing from around 13 regions. In fact, most of it, we have withdrawn or are in the final stages of withdrawing and we have retained our core exploration team.

On the corporate cost, a detailed review was done globally. We have streamlined structures, we have removed duplication, combined roles, moved technical skills closer to operations, mine general managers are empowered and supported as needed. We have removed 38% to 40% of the roles globally and committed to prevent the cost creep, even if the gold price rallies in the future.

And as you can see from slide 11, when you compare the fourth quarter of 2012 to the fourth quarter of 2013, our exploration and evaluation costs and our corporate costs have dropped by 67% and 56% respectively. We have continued to look at what is possible in terms of the estimates for 2014, but at this stage, our guidance remains exploration and evaluation cost of $150m to $175m in 2014 and corporate costs of between $120m to $140m.

Moving onto slide number 12 which tracks both our all-in-sustaining cost and, as you know, it is a measure which was recommended by the World Gold Council in conjunction with a number of gold mining companies. It is a combination of cash cost -- of costs both in the income statement and balance sheet. It picks up cash operating costs, non-project capital expenditure, overhead and exploration and that is coming down quarter on quarter very well.

We will continue to drive sustainable savings on all aspects of these costs and Ron will provide you with an update in that regard. Our all-in-sustaining costs in the fourth quarter has dropped when you compare it to the first half of the year by around $273 an ounce. It's marked as you go into the fourth quarter.

Then turning to the third element of the cost, which is around capital. We did say, both years 2012 and 2013, were heavy capital spend years as we were building two new projects, Tropicana and Kibali. Tropicana is now completed and it's paying down debt. Our capital expenditure bill in 2013 dropped by 15% or $300m. In 2014, we are estimating a drop in our capital expenditure bill of 31% or $625m.

So the project capital spend which is included in the $1.3b to $1.45b, or $400m approximately, represents capital expenditure needed for Kibali in terms of the sulfide circuit and underground, Cripple Creek and Victor for the high grade mill and the mine life extension, Obuasi the ramp project and Mponeng below 120 level.

Our CapEx bill between 2012 and 2014 with the projects coming off has reduced by some $1b as compared to 2012, but at the same time, we are maintaining our sustainable capital spend to ensure that the integrity of the business, whether in terms of safety, environment, asset integrity, is not compromised. And that is around $900m to $1b.

Moving onto slide 14 before I hand you over to Richard. Slide 14 shows what our annual production has done over the nine-year period. We are, thanks to the investment made in prior years on new projects, starting to reverse nearly a decade of shrinking production. With Tropicana and Kibali achieving full ramp-up during 2014, we plan to see production improve from the current levels along with margin growth as our portfolio transforms.

What it does give us is the flexibility to remove marginal ounces without compromising our base, thereby setting us apart in a sector that generally continues to shrink at the present time.

With those comments, I hand you over to Richard to walk you through the financials.

Thank you, Venkat. And I'm on slide 16 where I start with a breakdown of our improved quarter-on-quarter all-in-sustaining cost, which reduced from $1,155 an ounce in quarter three to $1,015 an ounce in quarter four, a reduction of $140 an ounce. The biggest contribution came from improved operating performance as outlined by Venkat, the result of higher production and the benefits of lower corporate costs, assisted by favorable inventory movement.

Our all-in-sustaining cost for the full year was $1,174 an ounce, nearly 10% better than our all-in-sustaining cost over the first six months in 2013. And this compares favorably to the target of $1,200 an ounce that we announced in our June quarterlies.

Turning to slide 17 and looking at our quarter-on-quarter earnings reconciliation. We have again shown normalized adjusted headline earnings, given the significant realized fair value gain of $567m on the conversion of our mandatory bond in quarter three and other once-off adjustments in quarter three and quarter four, as set out in the table on page 3 of our quarterly report.

The improved operational performance is reflected in normalized adjusted headline earnings, increasing by $54m to $164m, a 49% improvement over quarter three, despite a 4% lower gold price. The improved operational performance was driven by increased volumes and higher grades, which Mike and Ron will touch on in their respective presentations.

Lower net finance costs of $14m are the result of bonds maturing and being early settled in quarter three, together with capitalized interest, partially offset by the increased finance costs on the new $1.25b seven-year bond. Lower corporate and exploration costs further contributed to our improved normalized adjusted headline earnings for quarter four.

Turning to slide 18 and looking at our improving financial flexibility. Quarter 4 saw us continuing our prudent and proactive balance sheet management. The improvement in our EBITDA in quarter four from $327m to $544m, a 66% improvement, resulted in our net debt to EBITDA improving from 2.02 times to 1.86 times, despite a nominal increase in our net debt of $100m. This remains well within our loan covenant of 3 times, temporarily eased to 4.5 times for our June testing period, but reverting to 3 times at the end of the year.

Our net cash outflow in quarter four at $82m was considerably lower than quarter three's outflow of $205m. Importantly, and as highlighted by Venkat earlier, nearly two-thirds of our $224m of project capital in quarter four was funded from our operations. In addition to funding a significant portion of our project capital in quarter four, we also started repaying the balance drawn on our AUD600m revolving credit facility which was put in place to fund our Tropicana project.

The drawn balance was reduced to AUD548m by the end of 2013 and is expected to reduce to around AUD400m by the end of this quarter one. This facility matures at the end of 2015.

In quarter four, we also addressed both the tenor and structure of our South African borrowings, through a ZAR1.5b five-year revolving credit facility and a ZAR750m three-year floating rate bond. These complement our existing domestic medium term note program in South Africa.

Turning to our outlook on slide 19. The focus on cash flow in our business is reflected in our 2014 outlook numbers. Capital expenditure is projected to reduce from $2b in 2013 to between $1.3b and $1.45b this year. This includes $400m for the major capital -- major project capital spend that Venkat highlighted in his introduction. It also includes all sustaining business capital and all reserve development spend as well as $113m for capitalized deferred stripping.

Corporate costs are projected to reduce to between $120m and $140m and the expense exploration and studies to between $150m and $175m in 2014, in line with our earlier guidance and a further significant step-down from 2013. Depreciation and amortization for the year is guided at $800m. Interest and finance cost guidance is provided against both income statement and cash flow measures at $290m and $250m respectively for the year.

Importantly, our cash interest payments are higher in quarters one and three at around $83m in each of these quarters and lower at $40m in quarters two and four. Our outlook for all-in-sustaining cost in 2014 is between $1,025 and $1075 an ounce, $100 an ounce better than 2013 at the higher end of our outlook range. The assumptions between these outlook numbers are set out in my final slide which I will get to shortly.

Turning to slide 20, from the graph you see on that slide, you will see that our quarterly profile with production stepping up through the year is repeated and was particularly marked in 2013 with our two new projects at Tropicana and Kibali coming on-stream towards the end of the year. A similar impact is again expected in this first quarter given the typically slow start up in South Africa, stepping up through the year and assisted by the continued ramp up at Tropicana and Kibali.

Turning to slide 21, our production outlook for quarter one is between 950,000 and 1m ounces at a cash cost of between $800 to $850 an ounce. The production outlook for the full year is between 4.2m to 4.5m ounces at a unit cash cost of between $750 to $790 an ounce. The assumptions used to arrive at these cash cost outlook numbers as well as the outlook numbers that were set out on slide 19 are detailed in the third column on this slide, slide 21.

I will now hand over to Mike O'Hare to take us through our SA operations.

Thanks, Richard. I'm on slide 23. The region had a good final quarter and I think that that rounded off an improved year. We ticked the four big boxes with safety much improved, our cash flow up, our production up and our costs down. If I look at those four boxes in a little bit more detail, we are running mines now who go for years without fatalities, particularly in the Vaal River area.

This helped us achieve a record run of 198 days without a fatality. And as Venkat said, even one fatality is too many and we have six of those too many during the year.

Under the production, a slight decrease in volume mined over the quarter was offset by the grade increase. And this was due to mining a higher grade, much lower dilution as we controlled (inaudible) and cleaner mining.

Costs, the sustainable reductions in our cost are coming from our restructuring. Our management restructuring is now complete. Our voluntary separation programs have run their course. And we'll be looking at the next level of restructuring as we go into the year together with our union partners.

Below-inflation increases are being managed by our procurement guys and we're certainly targeting to have our inflation increases from our supply chain on or below inflation during the year. Our energy project designed to decrease the amount of energy we use continued to deliver significant savings. Our uranium production at 1.4m pounds for the quarter was 14% up on last year and we expect another increase to around 1.8m pounds in 2014, as Mine Waste Solutions begins to produce uranium.

We've had a number of questions around the grade increase at Moab Khotsong, so on slide 24 what we are trying to do is explain what's happening at Moab. You see the picture to the right, showing that our development over the last number of years has targeted the high-grade area, which are the warmer colors. And we actually expect the grade to be increasing over the following quarters. We are mining right on our reserve of grade at the moment, so I don't believe that we are doing any form of high-grading at Moab.

If we move to slide 25, on our technology drive, our key achievements for the quarter were that our new reamer head is now allowing us to do single-pass holes, at 3.5 days, which is still a little bit off where we'd like to be, which is close to 2 and 2.5 days.

You'll see from the picture at the bottom that we've also managed now to drill holes next to each other and completely remove all of the reef, which fits into our mantra of mining all of the reef, but only the reef, but doing it all of the time.

If I move to slide 26 it's a summary, if you will, of the work that we've done during 2013 and I think you'll note there we've drilled 18 holes and we are down to 3.2 days from the start of 8.8 days. And we are mining in an -- we are testing in an exceptionally high-grade area, as you can see, with the average grades coming out at 90 grams a ton, with holes having grades as high as 207 grams a ton.

Our program ramps up as we've been talking about and, if I move to the next slide, slide 27, you will see that our site constructions at the different mines are progressing well. And we start production in those sites from Q2 this year.

You also see that we've targeted specific areas; the high-grade pillars, which we've left behind. These are shaft-pillar areas which we had to pull out of a number of years ago due to the safety constraints. And we are setting up two sites there.

Narrow reef areas at Kopanang, which -- that, together with the C Reef area at Great Noligwa, are designed to test whether we can take uneconomic reef, if you mine it conventionally, and mine it with this equipment and take out only the reef there by increasing the grade significantly, and making these reefs payable.

Our last site is designed to take out a vertical high-grade piece of reef at Moab Khotsong, which is challenging to mine in the conventional way.

So I think for 2014, we are looking at quite an increase in the amount of holes and sites we are drilling at. We'll have an understanding by the end of the year of what kind of costs would apply to this mining method, and during the year we will be able to make a decision on how big our ramp-up is going forward into 2015, 2016 and 2017.

Thanks for that. I'll pass you on to Ron Largent.

Thanks Mike. Good morning, everyone. Before I give an overview of the Q4 operational outcomes for the international operations, I'd like to take this minute and update you on the work that is -- that we have been discussing over the past two quarters. In August I asked that you watch the outcomes, as this would be the best way to measure our progress as it relates to the changes that are being implemented, focusing on cost containment.

We committed to take $100 to $120 per ounce out of our business in an 18-month period. As you can see from the information already presented, cash cuts have reduced from quarter two 2013, from approximately $900 an ounce to quarter four 2013, to about $750 an ounce.

We have calculated and kept track of the improvements from the cash cost optimization process that we are working on and we estimate that that is somewhere between $50 and $55 per ounce of the $150 an ounce reduction. Taking these outcomes into account and the outlook for 2014 presented by Richard, which was between $1,025 and $1,075 per ounce, all sustainable, the $100 to $120 per ounce commitment is contained within the outlook of 2014.

So I think that work -- we are not saying it's completed, because we are not at the end of 2014, but it has been very successful throughout the Organization.

Now to touch on the regional -- or the regional outcomes for quarter four 2013. Safety performance was presented by Venkat, but I think we must give the accomplishment to the -- or the kudos to the accomplishment by the operators for 2013.

If we start at slide number 29, Continental Africa, production increased by 74,000 ounces in quarter four compared to quarter three. 40,000 of this improvement is attributable to the Kibali Mine in the GRC, the JV with us and Randgold. The other production improvements come from Geita, Siguiri and Iduapriem.

The Obuasi decline work is on schedule, meeting, I would say, international standards of 200 meters per month with the single phase, while engagement continues with the key stakeholders on developing options that will enhance the execution of this plan.

For 2014 Kibali will produce for a full calendar year, and we anticipate a very strong cash flow from Geita. Additionally, the cost management is in progress that positively impacts our cash flow profile in the region. These include but are not limited to working capital inventory scrutiny, which will really impact our balance sheet, contract mining agreement and labor rationalization.

Considerable work to be done in 2014, but we believe that the work that has been the foundation will lead us into being successful in 2014.

Slide number 30 is the Americas region. Production was steady at 262,000 ounces, giving the region its first 1m ounces production year. This was a stated goal over the past 3 years and finally met in 2013.

Cerro Vanguardia had its highest production in a decade, and CC&V's production was 15% improved from quarter three. Cash costs were impacted positively form the site cost management, as mentioned earlier, and exchange rates in Brazil and Argentina. Corrego do Sitio Mine has seen improvements to the ore body extraction efficiency, and ultimately resulted in improved grades in quarter four.

For 2014 the startup of the mill at CC&V in quarter four 2014 will eventually -- or in 2015 will be positively -- will positively add to the production profile for the Americas region.

Slide 31, Australia. The region has seen the anticipated increases in quarter four, from both the newly-constructed Tropicana Mine and from Sunrise Dam, as the extraction of the crown pillar continues. Production increased by 107,000 ounces for the two operations and attributed to the 50% reduction in cash costs.

The quarterly results for Tropicana are in line with the project expectation for both production and cash costs.

For 2014, Sunrise Dam ore production will be primarily from the underground mine, with open-pit CC early in 2014. 2014 will also be Tropicana's first year of full production at design grades, a very exciting time for the Australian team.

In summary, all three regions had very good metrics in quarter, with safety, environmental, production and cost metrics. And we are looking forward to seeing where we can take these in 2014.

I would like to move right on -- I think you probably assume it's Graham Ehm is presenting the next area, but I'll take that on too, if that's all right. If we go to slide -- I think it's 33 -- 33, we are going to talk about the projects. The first one is Kibali.

Following the first gold pour in September last year, the ramp up of the oxide circuit has gone very well, resulting in production of 88,000 ounces in quarter four, or 40,000 ounces for AngloGold Ashanti. The construction of the hard-rock sulfide circuit is proceeding well, and will be commissioned in quarter two of this year.

During the year, exploration has been very successful and resources have increased 17%, to almost 10m ounces AngloGold Ashanti share. Development at the twin declines is progressing well, with first underground ore extracted in quarter four of 2014. The shaft reached a depth of 195 meters at yearend. This is a long-term project, which continues to a depth of 760 meters, with full fit -- which is completed in 2017. But Kibali is going well and we look forward to its future.

Slide 34, the Tropicana Mine. We touched a little bit about the production, but the ramp up has gone well, with 95,000 ounces produced in the fourth quarter. Plant run time is about 90% and we plan to steadily improve that to 95%, over the next 6 months.

There's been no surprises during the project closeout, the costs remain on budget, and reconciliation from resource model through to gold production are good and are showing no surprises.

A little update, on slide 35, for CC&V. This project adds about [2b] ounces of production over the next 12 years, at the operation. It's -- the project should be looked at almost in two parts; the construction of a 2m-tonnes-per-annum milling facility to treat the higher-grade material, and the second would be the construction of a second leach pad facility, with a 200m tonnes capacity.

The construction of the mill is progressing well and will be commissioned towards the end of the year. And the valley leach facility and associated gold recovery plant are on track with commissioning in 2016.

If I go to slide 36, a couple of comments on reserve and resources for the end of the year. Resource prices reduced from $2,000 per ounce to $1,600 per ounce. Resources after depletion have slightly -- have reduced slightly to 233m ounces.

The gross annual decrease was 2.8m ounces before depletion, and 8.5m ounces after depletion. Changes to economic assumptions resulted in 12.9m ounce decrease, which was offset by 10.7m of increase due to exploration and modeling, most notably at Kibali and Colosa.

The reserve price was decreased from $1,300 per ounce to $1,000 per ounce. Reserves decreased to 67.9m ounces. The decrease was due to 5m ounces in depletion and the change in economic assumptions resulted in 3.4m ounce decrease that was offset by modeling and exploration increases of 2.2m ounces.

If we go to the next slide, 37, it just shows you a view of the resources and reserves by region, dominated by South Africa, followed by CAR, the Americas and Australia.

And with that I think I'll turn it back over to Venkat.

Thank you, Ron. If we can get to the last slide, concluding the presentation where we started off. We remain on course regarding our strategy and we have delivered what we promised at the start of the year and in May. We have seen some very good runs on the board and, as you can see, we've put a little scorecard outlining some of the successes we have had during the year.

Starting with people, we have re-established the leadership team pretty quickly, and they have moved into new roles. And we have ensured that the ship has been steady through this entire process. In addition to that, safety performance has been improving steadily, quarter on quarter, recording the best-ever performance in the Company's history, with 80% of the operations breaking and setting new, improved records.

On the sustainability front, environmental incidents are being reduced progressively and sustainability is being better integrated into the operation.

On the financial side, we did our capital raising last year, in terms of the seven-year bond. It provides is a mix of very good tenor and of facilities. The debt covenants have been relaxed temporarily, but we have not had to use those. And, as Richard has outlined, the Australian dollar facility is being repaid quickly, with the US dollar facility untouched.

On the cost-optimization side, our all-in-sustaining costs have dropped dramatically. Our overhead and exploration costs have declined and this year, 2014, sees the capital expenditure bill fall as well.

On the portfolio side, Kibali and Tropicana were commissioned ahead of time, in the third quarter, and on budget. And the sale of Navachab for $110m has been agreed, with completion anticipating in the second quarter. CC&V expansion is on track and on schedule, and the Obuasi ramp project is making very good progress.

All of this has been done without compromising long-term optionality. As Mike alluded, South African technology continues to be on track and significant progress is being made, as we move into setting up new sites at additional mines.

And we have a focused greenfield exploration program, targeting most prospective areas in a few countries, to get the bang for the buck.

With that concluding slide we'll pass you over to Stewart Bailey.

Dylan, we'll take questions as soon as you're ready.

(Operator Instructions). Andrew Byrne, Barclays.

Hi, good afternoon gentlemen. A couple of quick questions, just on -- asset-specific. I know it's not something that we've really touched on in the presentation. Sadiola continues to still really struggle. Can you highlight what the challenges are there and how you plan to address them over the next two years, or how we should think about that asset?

The second is just on Iduapriem. Could you just run through exactly -- how we should model that next year, in terms of production and costs, for the next 24 months?

And then just finally, on Kibali, if you could just clarify what your share of CapEx is for next two years please.

Actually if I can pick up the initial part of it in terms of our share of capital, for Kibali, we outlined what the total project capital expenditure is for 2014. That was around $400m. And the Kibali portion of the capital in that $400m is around $142m and, at this stage, we are only giving the outlook for 2014. And bear in mind that the Kibali project is in line with budget, so that hasn't changed.

Then your second question, in terms of Iduapriem and Sadiola, let me pass you across to Ron. What we have not made available at this stage is asset-specific guidance, and that normally comes out when we put out our annual report and we provide either asset-specific guidance or country-specific guidance, but Ron, Sadiola and Iduapriem.

Okay. I'll start with Sadiola. Sadiola, which has been at the end of its oxide life over the past couple of years, got caught in the downturn in gold price, and has forced us to relook at the Sadiola Deeps project, or Sadiola sulfide project.

Between us and Iamgold we are actively trying to define what the next step is. So if you look at our plan for 2014, it's to mine stockpiles and a small amount out of the pit that will -- at the end of this year you will have -- you'll be very limited on sulfide.

So it's in a transition period, being driven by gold price and economics. So that isn't much of an answer, but that's where we stand with Sadiola.

Iduapriem this year is in a transition year. We have actually reduced considerable amount of mining at Iduapriem and running stockpiles, and mine material from the pit, and have decisions to make this year on where we take that -- Iduapriem into 2015. Fortunately we are right at the end of a contract with our mining contractor, so we are able to vary it for 1 year.

So both of them -- you hit it right on -- are decision-making assets in 2014.

So --

(Multiple speakers).

Yes, yes. So -- just in terms of how we should think about them. One option is -- if we saw a low gold price prevail throughout the next 12 months, we could see them actually close over the next two to three years.

I wouldn't go there with Iduapriem, and it's a decision we have to make on -- stripping and ore-body capability. So I don't agree with that comment.

We have to make decisions this year. Sadiola is in the same vein. We have to manage both -- us in AngloGold have to manage our balance sheet, but it had a -- it's a fairly robust project. We've got to just understand how we build it, or not build it, or somebody else builds it, in the next timeframe. So it's not that easy as far as it -- $1,100, $1,200, they are not sub-economic.

Okay, brilliant. Thanks very much for that and best of luck.

Patrick Mann, Deutsche Bank.

Hi, good afternoon. Just two questions. Your production profile taking into account that you -- that Tropicana and Kibali are coming online this year, we are obviously seeing like-for-like decreases. I suppose it follows on from Andrew's question, but if you could give us a sense of which regions are most affected or most -- you are moving marginal mining from the most.

And then just quickly on the dividend policy, I understand that you said that debt's a worry you are not going to pay dividends at this point. In the future, how are you thinking about it? Would it be on a cover basis -- fixed amount every six months or so?

And then maybe just one last one, if you don't mind. Any thought of acquisitions, or is your focus really just on deleveraging at this point? Thanks.

Let me answer the last question first. No focus in terms of acquisitions, etc. We've got enough growth coming from within our portfolio and we have just delivered two new projects as they ramp up. So let's kill that one first.

The second one, in terms of your question in terms of dividend policy and the like, you made a comment that debt is worry. Debt is not a worry, if I can make that point upfront. Debt may be higher to our personal liking, but at a level which is not keeping us awake at night. Our net debt/EBITDA is around -- the covenant is 3.1 and, at the end of the day, the debt levels are currently manageable.

The Australian dollar revolver is getting repaid, the US dollar is not touched. We are working on our ways to improve our costs and cash flow and, importantly, we have a very supportive bank group, as you would have seen over the last couple of years.

The key in terms of dividend is -- what experience has taught us is not to lock ourselves into any particular formula-driven, whether it's gold price driven or whether it's yield driven, etc. It's purely going to be a function of what the free cash flow from the business is, and what we are looking in terms of debt levels and also in terms of capital expenditure levels.

And the profile going into 2014, if you see from the slide that Richard referred to, Q1 tends to be seasonally a weak quarter. Every year you have had Q1 start off slow, particularly given the slow startup in South Africa after the holiday period.

It then ramps up in Q2, but the biggest ramp up coming in Q3 and Q4. 2014 is going to be no different. You've seen that happen for over 4 or 5 years. So certainly the second half of the year, combined with Tropicana and Kibali coming fully on stream at that point, is really the period to watch out for.

To your first question, and here we've been fairly open with the market. The fact that we are getting 550,000 ounces to 600,000 ounces, please don't add that to 4.1m ounces to get to the production profile of 2014 because we will be removing marginal ounces and, to give you a flavor, some of them will come from South Africa.

Some of them will come from Continental Africa and Ron has touched upon Iduapriem in particular. And with regard to Navachab, we've only assumed production there for the 6 months of the year. Australia obviously is improving, but bear in mind that Sunrise Dam has actually mined the crown pillar completely, and it's going fully underground, but Tropicana kicks in and America, reasonably holding steady.

So the shifts here are in South Africa and also in Continental Africa. And within Continental Africa it's Iduapriem, an element of Ghana as well covered in that regard.

I hope that answers your question.

Thanks, it does. Thanks very much.

Leon Esterhuizen, CIBC.

Yes, hi guys, thanks. Just a quick one on your planning -- reserve planning. You are using $1,100 per ounce as your reserve planning base, but I find it amazing then that your cost, all-in-sustaining cost is still forecast to be in the same order, $1,050 roughly-speaking.

Clearly you are making a margin at $1,300, which should be in the order of 20% or so, given that cost level. But if you are running a reserve calculation at $1,100, your cost number -- all-in sustaining cost number should be well below that, so that you can lock in a margin at the $1,100 goal.

So am I missing something, or should the (multiple speakers) --

No, no, you're not.

-- come and go and [be lower than] that number?

No, you're not, particularly with regard to the reserve calculations, as you would appreciate. It has to be effectively economical at that reserve price.

You are taking our all-in-sustaining cost at a particular point in time, in terms of 2014. And there are an element of overheads which sits outside the mines as well, in terms of the reserve calculations. So it's fully costed, in terms of sustaining capital, in terms of corporate cost and in terms of overheads; it's all in there, in terms of the numbers. But you have picked 2014 as a point in time, whereas the reserve is over the life of the mine.

Okay, so what I'm trying to figure out, there's no potential for that cost to actually come down further than the $1,050 that you are guiding?

Potentially there could be. Potentially there could be but, at this stage, we are sticking to our guidance.

All right, thank you.

(Operator Instructions). Harry Mateer, Barclays.

Hi, good afternoon. Given that you are holding off on the dividend for the time being to pay down debt, how should we think about what your debt target is? As you said, your net debt/EBITDA is already quite low, so is there a target that balance that you have in mind that you want to achieve?

Not really. In fact, from our net debt/EBITDA covenant, as we have said, at around 2 or slightly north of 2 we are comfortable. It does give us flexibility to manage our debt levels in that regard, and we are below 2 currently.

And that certainly doesn't keep the CFO or the CEO awake at night, but Richard can comment.

No, I don't have anything to add.

And to look at it, if you compare our EBITDA for the fourth quarter, for example, of $534m, give or take. The net debt covenant is 3 times, so one quarter of EBITDA effectively covers half your debt level currently sitting on the balance sheet. So two quarters provide you the cover you need, which -- you then have two quarters left to spare.

Okay. And then in terms of further debt reductions, should we think of the Aussie bank facility as remaining a priority for debt reduction in the near term?

That's correct. Primarily it's the Aussie dollar facility which is drawn, which will get re-paid. That is correct.

Great, thank you.

Gentlemen, we have no further questions. Do you have any closing comments?

Dylan, I think that's it. Thanks everybody for your time and attention today, and we look forward to chatting to you next quarter.

Thank you, sir. On behalf of AngloGold Ashanti that concludes this conference. Thank you for joining us. You may now disconnect your lines.