Anglogold Ashanti PLC (AU) 2024 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the AngloGold Ashanti full-year 2024 results. (Operator Instructions) Please note that this call is being recorded.

I would now like to turn the conference over to Stewart Bailey. Please go ahead, sir.

Thanks, Dana, and welcome, everybody, to our call for the full year 2024 and Q4 2024 financial and operating results.

You have on the call, as always, Alberto Calderon, our CEO; and Gillian Doran, our CFO, other the members of our executive team are present. You'll have the opportunity to ask questions either on the phone lines or on the webcast after the presentation.

And before we commence, I'd just like to point you to the Safe Harbor statement on slides 2 and 3 of the presentation that contains important information regarding forward-looking statements that may be made. And I encourage you to read it.

Without further ado, I'll hand over to Alberto.

Thanks, Stewart. Safety is our priority. We're proud of the strides we have made in recent years, but mindful always that there were we're only ever as good as our last day. This year, we had a painful reminder of the fact following the light vehicle accident in May that claimed the life of [Obaid] at Geita. We have investigated that incident and implemented a range of recommendations to mitigate the risk of recurrence.

As we pan out and look at the company's performance as a whole, we reported a TRIFR of 0.98 injuries per million hours worked in 2024, the first time below one and a record for our portfolio, moreover, less than half of the average of the ICMM member. It's my privilege to report back on this third year in our journey to transform AngloGold Ashanti to one of the world's most valued gold mining companies.

You'll remember in early 2022, I sketched out a key strategy to do that. We started by replacing the old, confusing operating model with one that was not only simpler and clearer, but which empowered and resourced our operations and properly located responsibility at every level.

With that foundation in place, we moved quickly in a number of key areas. First was to improve safety outcomes. We immediately narrowed our focus on the main fatal hazards that exist in every mine site and created clear controls to mitigate them.

Second, we set a clear pathway to regain cost competitiveness relative to our peers. A key enabler here was the rapid rollout of full asset potential, not only to assist on that efficient journey, but to improve the resilience and predictability of our business.

Third was to improve focus and execution in every part of the organization. We did this by stripping away distractions and focusing on the work essential to delivering the right outcomes. Four was to prioritize a strong balance sheet and improve returns to our shareholders. And fifth, which we announced a few months later was to overhaul our corporate architecture by moving our corporate headquarters and listing to the United States.

So how is that all going for us? It's no exaggeration to say the operating model has revolutionized our business. Internal processes have been modernized. Decision-makings is more agile. And in my view, we have the best senior leadership team in the industry.

The new structure and expertise has allowed a highly successful rollout of full asset potential across the business. Our costs, which have blown out to their widest gap relative to our peers at around $300 an ounce, are now within double digits. In fact, we've seen real cost improvements in each of the past three years, and that's against the backdrop of the worst inflation in a generation.

We have dramatically reduced our cash lockup position, and we're reliably hitting guidance on our managed assets. We've stripped away long-running projects that never seem to move to an investment decision like Gramalote and mothballed CdS. Free cash flow is at its strongest in well over a decade and leverage at its lowest since 2011.

And you'll see dividend payout ratio has been increased to half of free cash flow with a 50% $0.50 per share minimum. We've successfully relocated our base and listing while maintaining an important presence in Johannesburg.

That's placed us in the world's largest capital market and alongside the industry's highest value peers. The stock has responded, providing us a currency we were able to use to make our first meaningful and accretive acquisition in two decades. We've come a long way, but there's always more to do.

So let's look at the numbers for Q4 and 2024. What we could control last year, we controlled very well. Production was up in Cuiaba, Cerro Vanguardia, Siguiri, Sunrise and Tropicana. Our cash costs and all-in sustaining costs were again down for the third year in a row in real terms. Our free cash flow was dramatically stronger.

We have found a way to optimize production at Obuasi, one of the most magnificent but also complex ore bodies in the world, and we have chartered a path forward to its potential above 400,000 ounces per year. As is usual in mining, we were hit by unusually high rains mainly in Tropicana and Iduapriem.

They made both operations made the best in dealing with the unforeseen, best demonstrated by the 5% year-over-year increase in Q4 production. And finally, our non-operated JV Kibali came in significantly below plan.

The key takeaway from our results is our ability through disciplined cost to ensure the full benefit of the higher gold price flows straight through to the bottom line. You'll see here close to a tenfold increase in free cash flow to $942 million.

Adjusted EBITDA almost doubled to $2.8 billion, and there's a $1.2 billion turnaround in basic earnings over the prior year. Our balance sheet has rarely looked stronger. We have no material near-term maturities. Leverage is almost 0.

To match that reality and the valid expectation that shareholders should see greater benefits from our improving business and higher gold prices, we increased our dividend payout ratio to 50% of free cash flow, payable quarterly and a minimum dividend, which we commit annual payment of $250 million. What does this look like? Gillian will talk to the detail, but we will pay an interim dividend of $347 million for H2, taking the 2024 full year payout to $439 million.

Next slide. Looking at our portfolio, Tier 1 assets account for almost 70% of production, including Sukari's 2024 production. These assets account for about 80% of our reserves and about half of the resources. We will see those production numbers improve once Obuasi ramps up, and we bring our Nevada asset into production.

Our Tier 2 assets are operating very well, too, with healthy margins and cash flow leverage, especially pronounced in the current gold price environment. We continue to look at other assets in the portfolio with an eye on capitalizing on this market to realize value.

On Obuasi, just to recap, Obuasi battled for the greater part of the year to grow volumes from conventional sublevel open stoping areas. That's because of difficult ground conditions at very high grades. We've now successfully pivoted to a hybrid approach with conventional loss mining, deployed in relatively lower grade areas that is less than 8 around 8 grams a tonne and more selective underhand drift and fill, where we find higher grades. You'll see in our results booked at the site is busy with development stepping up aggressively and preparing for access to the higher block rate Block 10 and eventually access to the even richer Block 11.

The good news is that we met our revised target for Obuasi in Q4. We delivered 221,000 ounces in total with around 12,500 ounces from underhand drift and fill. As we mentioned in November last year, this is from a single mining front, and we plan to open at least three more this year that improved flexibility of additional mining areas along with the higher tonnes from underhand drift and fill and the significantly quicker times to open our slot stopes give us improved confidence in hitting our marks this year.

Our guidance for this year remains for 250,000 to 300,000 ounces. Finally, it's worth noting that even with the slower ramp-up we announced last year, Obuasi continues to deliver healthy cash flows to the business. In the second half of 2024, it was roughly $300 of free cash flow per ounce in the H2.

Full asset potential. It remains a cornerstone of our ability to operate predictably to drive better cash flows and to improve the long-term value of the business. Over the past 3 years, we've delivered value from 200 individual projects, half of which have exceeded our target value. Around a third of those are mining with processing and maintenance, the next big area of focus.

Interestingly, around two-thirds of the initiatives were geared to efficiency improvements and a third to cost reductions. That's a good split. This is a powerful illustration of the improvements we've seen in different areas across various sites. The gap between the dotted line is not only progressed but it's cash flow, and we believe there is more to come.

To dive in one of the assets. After three years, we're now in the second or refresh phase of full asset potential with Sunrise. We expect this second round to deliver another exciting set of initiatives. Largest opportunities include accelerating drilling and development of multiple small open pits, which could add as much as 1 million tonnes of ore over the next two years. Every time from a pit with will displace very low-grade stocks that we're using to fill the mill so the upside is significant.

We can also continue to increase underground ore volumes by redesigning stopes, having more stopes available and making better use of remote [logging] from surface. Building on the work done in wave 1 to improve recovery.

We're now seeing that the current leach strain lacks resident times and have scoped the project to introduce concentrated leach, a payback period at more conservative gold price assumptions is close to one year with a benefit of around $1.6 million per month. What is remarkable was that once we had completed the detailed analysis, construction started almost immediately, as you can see from the slide.

Finally, a key success for the program has been the introduction of league tables to compare the performance at each site. It's injected some healthy competition into the business. We started with processing, which included comparing recoveries, run times and talent process as a percentage of the theoretical maximum at each site.

This slide shows the relative improvement year-on-year with an improvement of almost 2% points between 2023 and 2024. What is even more exciting is the result we got in Q4 where plants reporting closing the gap to 99.6% of theoretical maximum.

Everyone wants to be at the top. Nobody wants to be at the bottom. We're less fixated on that and focus more on the upward trend improvement. We've now rolled out league tables to open pit and underground mining and hope to see similar results.

And finally, for full asset potential, the proof is in the numbers. And you can see the benefits in the incremental EBITDA of more than $600 million. I will come back to that slide, but just if you do a quick sum $600 million on 3 million tonnes, it's about $200 per ounce. You will see how every single dollar of that has flowed to the bottom line in the last slide.

Let's go to the Centamin acquisition. Since the completion of the transaction, we are pleased to report a seamless transition since week 1. The major achievements to date include the deployment of AGA values and code of business principle and ethics, focused engagement and onboarding connecting teams to the AGA model, integrating into year-end process and AGA management rituals, site rebranding largely complete, relationships established within Sukari teams and AGA technical teams, maintaining Sukari safety performance and production volumes.

As we have mentioned before on the synergies, we currently are assessing Centamin corporate overheads. We probably continue that. It's about $32 million of savings per year. Supply chain purchasing capacity, there's going to be a visit in the Q2 of this year.

We're expecting about $30 million per year, and projects and exploration costs will probably reduce about $100 million of what they plan to spend in 2025. And we've leveraged AGA's full asset potential program. We expect a significant visit in Q3 of 2024, and we're still confident that we'll get benefits or increases in EBITDA in the range of between $50 million and $100 million.

For 2025, we expect Sukari's cash costs to be slightly lower than 2024. I will mention something, you will see in the growth CapEx that it is growing. We are expecting a pre-stripping in Sukari of about $140 million increase.

That will have a significant impact about increase of 10% in volumes in the medium term, in probably '26 and maybe in '27 and '28. So this is growth capital, and this is in our objectives to carry that asset to even better days than what it has had in the past.

Let's look at Nevada project. And the title, it's a new 20 million-ounce district. That is quite remarkable when three years ago, we had 0. In the US, we continue to make very good progress this year on the prefeasibility study at Expanded Silicon and have continued to add answers through the drill bit.

The smaller North Bullfrog project remains in the federal permitting process. We have no fresh update on the timing of that project, although we are, in any event, working on an integration to our initial plan that will use far less water, which will be beneficial in the longer term.

We expect an update in the next few months from BLM. And as soon as we have that update, we will let you know. As you can see, we've been busy growing this part of our business in the Beatty district. North Bullfrog has added ounces in reserve and resource. We continue to optimize our project plans and remain excited about the potential for this project as a manageable profitable, albeit small scale start to a reentry as a major operating in the US.

At Expanded Silicon, we completed a large drilling campaign last year, which has vastly improved our knowledge of the ore body. We've also improved our infrastructure in the district and will soon put the finishing touches on the pre-feasibility study before releasing it to the market in the second half of this year.

Here's a quick look at the familiar slide on the Merlin ore body. Our initial point of attack to the Expanded Silicon project. We managed to add another 3 million ounces of resource, taking it to 12 million ounces. Once again, you'll see a number of new very exciting intercepts of high grade or significant widths. The infill drilling to classify a portion of the deposit from an indicated resource in the 3500 zone has continued to intercept broad zones of between 0.5 and 1.8 grams per tonne mineralized intercepts.

Foundational of our business. Sukari has provided an injection of new resources to supplement an already healthy mineral inventory. What you'll see from the top waterfall that we've also had good success from our own brownfield efforts across a range of assets. All told, we've added almost 16 million ounces of resource into resource.

On reserves, we are pleased to see a good showing again from Geita and Cuiaba, which both managed to replace depletion. But it's important to zoom out and look at the longer-term picture to understand the quality of our exploration effort and the potential in our portfolio. We continue to invest considerable effort and resource in both reserve deployment and brownfield exploration.

This has multiple benefits in reserve conversion, extending mine lives, improving operating flexibility and supplementing our knowledge of our ore bodies. We have established a good track record. Over the past four years, we've added almost 15 million ounces of reserve, a little over $60 an ounce. That is very good value.

I will now hand over to Gillian to cover the financials.

Thank you, Alberto. In 2024, the gold price exhibited a significant rise, with the average gold price increasing 24% higher than the year prior and averaging at $2,394 an ounce. Brent Crude and WTI prices remained relatively stable throughout 2024, trading within a more predictable range than the previous year. US CPI decreased to 2.9% down from 3.4% in 2023, highlighting a steady moderation in inflation.

Argentina saw a sharp reduction in inflation, dropping to 118% from 210%, while Brazil maintained stability at approximately 4.8%, underscoring broader global progress in managing inflationary pressures. Our realized inflation rate, which represents CPI changes in the jurisdictions that we operate improved from 8.4% in 2023 to 6.6% in 2024, demonstrating a positive trend towards price stability.

As Alberto highlighted, the 2024 financial performance reflects disciplined execution, operational excellence, and a commitment to delivering sustainable shareholder value. Starting with the headline numbers. Adjusted EBITDA nearly doubled, reaching over $2.7 billion, up 95% year-on-year and demonstrating improved operational efficiencies and cost discipline.

Solid cost leadership helped us to ensure that higher revenues were reflected in stronger earnings and cash flows. Basic earnings increased to $1 billion, a sharp turnaround from the $235 million loss recorded in 2023. Higher revenues, cost containment reduced losses from asset derecognition and restructuring costs in '23 were not repeated in '24.

Net cash inflow from operating activities more than doubled, rising 103% to nearly $2 billion from $971 million in 2023. This increase was supported by improved business fundamentals, a continued operational turnaround in Brazil and the recovery from weather-related disruptions in Australia.

As a result, free cash flow for 2024 soared to $942 million, representing a ninefold increase year-on-year after accounting for capital expenditure and loan repayments from Kibali. Adjusted net debt declined by 55% from December '23 with the adjusted net debt to adjusted EBITDA ratio were improving to 0.2 times, the lowest level in over a decade. Underscoring the company's strong financial position and enhanced flexibility for future growth.

Our non-managed JV had a difficult year in terms of production and cash costs, and I think it's worth just highlighting the primary metrics from our managed operations. Production at managed operations rose by 2% to 2.352 million ounces up from 2.301 million ounces in 2023. This growth was underpinned by a strong year-on-year improvement at Cuiaba, CVSA, Siguiri, Sunrise Dam, and Tropicana, partially offset by lower production at Iduapriem and Serra Grande.

We also included Sukari from the end of November. The company realized overall year-on-year uplift in milled tonnes and underground recovered grade on the back of continued reinvestment in improvement initiatives. Total cash costs from managed operations increased by a mere 2% despite a realized inflation of around 7%. Total ASIC from managed operations increased by 2% reflecting the company's ongoing focus on efficiency and operational discipline.

Looking at our full-year total cash cost performance, our firm commitment in moving down the cost curve is evident. In 2024, total cash costs rose by 4% to $1,157 per ounce from $1,115 per ounce in '23 while managed operations saw only a 2% increase to $1,187 an ounce, reflecting efficiency gains (technical difficulty). Total cash costs for the group at $1,157 per ounce for '24 were within the guided range.

Total cash costs from our managed operations of $1,187 per ounce were also well within the guidance range, reflecting the reliability we have brought to the business despite headwind pressures. As usual, when looking at the graph, we have isolated the noncontrollable portion of our costs.

These industry-wide macroeconomic factors increased the group's total cost by 5% or $56 an ounce. Higher inflationary increase and gold price related royalty increase were partly offset by exchange rate movements in the jurisdictions that we operate.

When we normalize for one-off events, in 2024, it's the non-recurrence of the CIL tank collapse in Siguiri and the Tropicana heavy rainfalls from the first half. What's left over is our controllable spend based primarily on volumes, grades and absolute cost performance. This consistent and deliberate focus on the things that we can control has allowed us to optimize opportunities to minimize cost growth.

Controllable costs from our managed operations reduced by $20 an ounce, and this was driven by better productivity in our mines, better grades through the various improvement initiatives and absolute lower cost in open-pit mining.

Despite industry-wide cost pressures and macroeconomic factors contributing to approximately 5%, our group's ASIC increased by a modest 4%. This decline in real in real terms highlights our steadfast commitment to operational excellence, cost discipline, effective capital management and positions us to sustain efficiencies and deliver strong performance.

As Alberto has highlighted, we have an obsession with ensuring the increases in gold price flow through to our bottom line, and this is best evidenced in this chart. Free cash flow of $942 million in 2024, a substantial increase from the $109 million in 2023, highlighting effective cost management, capital discipline, and a successful capture of higher gold price.

Gold price related gains of $1.1 billion translated into an after-tax free cash flow increase of $833 million. Higher gold sales contributed to an additional $95 million, driven by CVSA, Tropicana and Siguiri. Operating cost increases were effectively contained below inflation levels rising by $73 million, primarily due to higher price-related royalties, higher labor costs and some stores inventory.

Working capital outflow movement of $162 million in 2024 was made up of two key elements. $78 million in inventory build, reflecting full grade ore placed on stockpiles and required to deliver the 2025 volumes. $182 million in trade receivables, primarily due to gold debtors. Whilst our receivable days are constant at approximately two days, higher gold price increased the receivable balance.

We've also got increased recoverable tax rebates and levies. And this, again, is linked to the gold price increase. On other payables, relatively flat with a modest reduction of $6 million. We continue to invest in our business to maintain safe, stable operations, and this is reflected in the planned capital expenditure for the year.

Company's robust financial position, strong liquidity and reduced debt levels position it well for the long-term growth, value creation and the reassessment of its capital allocation policy. Adjusted net debt decreased to $567 million as of December 31, 2024, a substantial reduction from the $1.27 billion at the of December 31, 2023. The adjusted net debt and adjusted EBITDA ratio improved to 0.2 times compared to 0.89 times at the end of '23.

The company remains committed to maintaining a flexible balance sheet, with the target adjusted net debt and adjusted EBITDA ratio of 1 time through the cycle, ensuring financial resilience and stability. Total liquidity stood at approximately $2.6 billion. Cash and cash equivalents totaled approximately $1.4 billion, further reinforcing the company's strong liquidity position.

Our capital allocation framework has served us well over a number of years. It was appropriately prudent for a period of time in the company's evolution. It helped us to maintain modest shareholder returns while ensuring balance sheet strength as we recapitalized our portfolio and redeveloped Obuasi.

After a careful review last year, we have now developed a new revised dividend policy. This new policy will continue to keep the health of the assets and the balance sheet and focus while significantly stepping up our shareholder returns.

The cornerstone of this policy is our continued ability to generate superior cash flows. The instrument for us to do this remains a combination of operational excellence, the full asset potential program and active management of working capital.

This provides us with the wherewithal to invest the right level of stay-in-business capital to ensure safe, stable operations and to deliver a compelling growth pipeline to ensure we are able to sustainably grow this business well into the future with our multi-decade Tier 1 deposits in both Nevada and Colombia. We will do this all whilst maintaining leverage at below 1 time net debt over EBITDA through the cycle.

Our revised dividend policy is simple. We will pay out 50% of free cash flow with a base annual minimum of $0.50 per share. This means that regardless of the price environment, we will return about $250 million to shareholders every year. This minimum base will be paid quarterly with the final dividend of the year incorporating the 50% free cash flow metric.

Over time, surplus cash flows over and above 50% will be allocated in some form, either through potential share buybacks or supplemental returns. The policy speaks to the health of our portfolio and our confidence in the outlook of our business even at lower gold prices. And perhaps more importantly, speaks to our desire to offer more competitive returns to our shareholders.

Moving to guidance. For 2025, we have enhanced the level of guidance provided, providing regional production, cash cost and ASIC guidance. For the group, gold production for the portfolio is expected to be between 2.9 million and 3.2 million ounces, reflecting the inclusion of Obuasi's ramp-up profile announced last year, Sukari and Barrick's guidance for Kibali. At the midpoint, we expect production growth of about 18% relative to 2024. This, of course, is predominantly Sukari with the remaining portfolio expected to grow by around 1.5%.

Guidance on costs, as you know, is provided in real terms. Total cash costs for the group are expected to range from $1,125 per ounce to $1,225 per ounce, which at the midpoint is reduction is a reduction given where currency inflation is. Our sustaining CapEx with a modest increase opportunity to include fleet replacements at Geita, and we've also included sustaining capital at Sukari.

Year-on-year, ASIC is also little changed despite reducing in real terms at the midpoint. Our gross capital is increasing with a range of $535 million to $585 million. The increase in growth CapEx is due to additional investment in Nevada, additional stripping at Sukari as well as the diesel grid connection at Sukari and the opening of Block 3 in Siguiri.

For 2026 guidance, we are maintaining consistent production cash costs in ASIC with our growth capital increasing to support Nevada expansion in line with our projected timelines.

Okay. So what are the key priorities. For 2025, we banked some strong operating improvements, but we're far from satisfied. We will continue to find ways to optimize and operate more efficiently. Full asset potential is fully embedded and has now shifted from a pure operational optimization program to a way of working. It improved our resilience over the past two years in the face of stiff headwinds.

Obuasi has pivoted successfully and will place tremendous focus on ensuring it continues on its new trajectory. At Sukari, we expect to enhance value through the full potential program and leveraging our global abilities across procurement, supply chain and talent.

We continue to refine our operating model and remain vigilant to prevent any trend towards entropy. We will continue to look at the shape of our portfolio, always asking the question of whether any asset is worth more inside or outside of AGA. We have a new, more generous dividend policy, and we'll continue to ensure we allocate capital in the most prudent and value-enhancing way.

Our world-class exploration team continues to add value through the drill bit across our properties. We continue to prioritize safety and advance on our decarbonization projects, which are not only NPV-positive, but reduce our reliance on thermal energy and often complex supply chains to get fuel to remote sites. Our technical team continues to uncover value in Nevada as they work to bring our project to account.

So why AngloGold Ashanti? Let's take a step back and see where the business is. Safety first. We have among the lowest injury rates in the global gold sector and are working to reduce the risk further focusing on major hazards. We have a predictable business that delivers on its commitments. We have an operating model and optimizing process that is now proven to work.

The proof of the pudding is in the ability to deliver real cost improvements for three years in a row. That means we're continuing to close the relative gaps with peers. We have reset Obuasi, ensuring that we recover most of the gold from high-grade areas with a safe and suitable mining method. It also is delivering meaningful cash flow to our business.

The Centamin deal is concluded and the integration is proceeding exactly to plan. It's excellent high-quality addition to our portfolio that will improve or has improved already our NPV and free cash flow per share. That is another important step towards increasing the production share of our Tier 1 assets and provides us the opportunity to realize value from our higher cost, short life operations.

What does that all look like in our financials? The strong gain in free cash flow shows not only shows the focus on cost management, but also the big improvement in cash conversion that Gillian and her team have been able to deliver.

This has been a core strategic focus area since I joined. The balance sheet is strong and getting stronger with leverage almost 0, no near-term maturities and strong liquidity. With the prognosis good on our ability to deliver a meaningful cash surplus after funding our capital needs, we've delivered a more generous and competitive dividend policy.

So why AngloGold Ashanti? When I joined the business under three years ago, the mission was simple to safely regain cost competitiveness At that time, we had jumped to the top of the industry cost curve. Then in late 2021 with new senior leadership working alongside empower operating and with new clear operating model in place, we've implemented the full potential program to turn the tide.

Today, we can take a step back in on how we are tracking against our original goal. With mid-2021 as the base and adjusting for US. CPI, our cash costs are about 5% lower in real terms, relative to a 13% average increase of the peer group. Remember that $600 million of full asset potential and the $200 per ounce, well that 20% is at $200 per ounce, which is the proof that all of full asset potential all of the full asset potential improvements have gone straight into the model, into the bottom line. This has allowed us to meet the guidance for a third year in a row, our guidance in production and a guidance in costs. We intend to meet that guidance in 2025 for the fourth year in a row.

A bit of a reminder of how we look at guidance. We privilege in our ranges, the ability to meet that guidance even with the unforeseen. In other words, if everything goes perfect in a year as expected, we should expect ourselves to be in the high end of the guidance.

But if we are facing a year like in 2024, when you have biblical rains and you have a non-operated JV significantly underperforming, and we had the issues of Obuasi, we still expect to meet guidance. And we did. I know that this is probably not typical in the industry.

I would think that probably very few, if probably one more that I can think of, of the large gold minings have met guidance each one of the last three years. And so we are the exception. We probably prefer to slightly disappoint on the guidance and to never disappoint you on our commitments and our outcomes.

With that, we'll take questions.

(Operator Instructions)

Adrian Hammond, SBG.

Alberto and Gillian, I have a few questions for both of you, please. Alberto, firstly, on Sukari, you briefly touched on the integration and synergies. Are those cost benefits incorporated into your guidance? Or is that something you're still needing to work on? I know you've only had a few months looking at the assets.

Perhaps also could you tell us what you see? What about this extra $140 million you need to strip? Is that going to translate into some more life extension and production growth? Or is that just to keep things steady?

And then secondly, I appreciate your explanation on the wide range on the guidance, but you've got a 10% delta whatever you assumed in forecasting that wide range so we can get a better sense of what sort of risks you are thinking about?

And then for Gillian, I appreciate the improved dividend policy. And certainly, I'd like to know where you rank now versus your peers in terms of yield. Why exclude though Kibali in that calculation. And I appreciate Kibali's equity accounted, but are you forecasting risk there with FX controls, and perhaps give us an update on what the Rebel insurgency means for Kibali, if any risks are there? Then the working capital outflows were quite significant, $250 million-odd. What should we think about for 2025?

Thank you, Adrian. We were actually visiting Sukari some days ago, and we couldn't be happier with how everything has gone, including the integration, the quality of the people, the quality of the operation. We didn't have time.

We what is in the guidance and in our budget is as things as they are. So we haven't included any upside probably apart from the what we already know, which was the less corporate costs. But there's also some, obviously, redundancies that come in. So I wouldn't back much.

So the short answer is we do expect upside mainly in '26, I would think, and '27. The $140 million are not a surprise again for us. They used to incorporate that into cash costs. And that's why I said the cash costs are going to be lower than last year's. We believe it is in growth capital because it will only have impacts in '26 and mainly in '27. As I said in my comments, we do expect versus 2024, an increase of about 10% from that pre-stripping.

And then on the costing, Gillian will help me, but there is obviously a correspondence between production and cash cost. I said, if things go as expected, we should be somewhere between the middle and the high end of the range, enhancing cost between the middle of the high end in the range. If we have another 600% increase in rainfall, then that you start coming down. But what I can tell you is, if we go, let's say, in a year's time, we can reconcile it to you and say this is why we're in.

And I repeat that if things go according to plan, we should be in a good state. But our mantra is to keep guidance beyond anything. So that you need to understand that for that to cater what we don't know, we don't know, we have to put these type of ranges. And we prefer to be like that and then always deliver.

I don't know if you want to complement that production cost but.

Okay. Well, thanks, Alberto. Maybe, Adrian, I'll address your questions. And then if Alberto, if there's anything additional on the cost guidance, happy to take it. I think maybe the first thing to start with is to saying that Kibali's cash flows are actually included in the dividend policy definition.

What we're going to try to do is show cash flows from operations with less CapEx so that you can see it quite clearly. But we will be including Kibali cash flows in the dividend policy. So sorry for any confusion there.

And how do we see it? We see the base dividend that I spoke about, bringing us in line with the North American peers. If you use today's share price, it's an implied 1.5% yield. And then, of course, that's the base.

So we sort of feel that we are with this dividend policy, we'll position ourselves alongside our North American peers, and we're really happy to be able to do that. On working capital outflows, we've managed what we can really well. And I think Alberto spoke to that on the various elements of cash flow well in the presentation.

For working capital specifically, the increase in gold price means you do have an increase in receivables. And you also have an increase in tax receivables because taxes are higher or cash taxes were higher, again, because of gold prices. What we have thought is an increase in inventory build, which is over inventory essentially on stockpiles. It's around $78 million, and we actually need that to deliver the volumes in 2025. So we think it's good working capital.

When we look at payables, relatively flat. And as I said, we've done what we can on our cash levels as well. How do we see that for '25? We look at receivable dates, and we'll maintain our two days receivable days on the balance. And then working capital will fluctuate to the extent that gold price does.

I think that's answered your questions, Adrian.

Insurgency at DRC. Adrian, maybe just to pick up the question on the insurgency at DRC that you mentioned and the impact on operations. It's just at the moment, it's a long way away in that DRC area is a long way away with no infrastructure, very difficult to get from one point to the other. So no impact on operations, no immediate threat, but it's something that both we and our partners at Barrick are watching very closely. So no issue at the moment.

Raj Ray, BMO Capital Markets.

I have a few questions. First up on your inflation. You did highlight the local CPI of 6.6%. Is that what you're seeing for mining inflation as well? And the second question is, Alberto, like two years ago, you had commented that sustaining capital spend needs to normalize around that $350 to $400 an ounce, which we are seeing is happening.

But are you able to maintain that around $350, $400 an ounce? Or does the inflation factor increase that level as well? Secondly, with respect to your nonsustaining capital spend, you did highlight the Sukari increase. Can you give some visibility how much is accounted for the Nevada operations in 2025 and 2026?

And also with respect to your reserve pit calculation, has the increased gold price impacting in growth aspirations in terms of bringing in lower grade ore into your mine plan? And one last question for Gillian on the capital, the new dividend policy. Gillian, I do understand that you're comparing it to your North American peers, but there's a broader market in the US that also we also need to start thinking about in terms of competing for capital.

Why you did mention that you look at share buyback at a later date. But if you look at North America, now that you're a North American listed company, share buybacks have far outstripped dividends. And why haven't looked at share buybacks today, thinking about it at a later date, if you can give some visibility on that. That's it from me.

Okay. Thanks, Raj. Inflation, yes, it's average cost inflation of the industry. I think we saw go up by about 6%. We're expecting it to go up by 5% and probably something that I forgot is we our guidance, as you see in cash cost is flat. And that sometimes is taking likely, but that means that we are reducing our real cash cost by 5%, again, which is never easy, but that's what we've done in the past years.

Sustaining CapEx, if you look at it, it's roughly flat between 2023 2024 and 2025, and I think it's about $360 per ounce, something like that. So I yes, I think that's probably where it will be. It may go a little bit lower, but not much, but at least it was flat. Yes, the growth did go up.

As I said, it went up in Sukari. It was $140 million from that pre-stripping. There's another important project that they would have flagged in Sukari that is $40 million on our connection to the grid, but that pays for itself when it's done in a year, it reduces OpEx by about $50 million. That would be in 2027. So that's a no-brainer to do.

Nevada that you asked the other big one is Havana. Havana, pushback and all of that, it's about $80 million on growth capital. That's another big one for the year. Nevada is about $50 million in 2025. Important enough in 2026, it goes up to $200 million.

And so to about $200 million, $240 million, which is interesting because if you look at our growth capital projections at '26 and '25, they are similar, which means that we're basically balling. There's some temporary things of growth capital in '25 that disappear, but they come in and then Nevada starts going in, as we have always anticipated, at about $240 million in 2026.

And then reserve no changes. It's interesting. We did change our reserve, resource prices, but we don't change them for most of our assets. It depends if they're mine constrained or plant constrained. And if they are plant constrained, there's no reason to change them. So we're very selective on that, but no impact when we think of our exploration or anything that we are doing.

Okay. So thanks, Raj, on for the question on dividend policy. I think absolutely, we did look at all options and all variables. And I just want to clarify what we have communicated today. So the base is bringing us in line with the peers and is very similar to their base. And then we have the additional complementary 50% of free cash flow or a 50% free cash flow and dividend policy.

For us, it's about really making sure that we continue to maintain credibility. So it's a fundamental shift in the dividend policy from what we have had before. We wanted to implement it over the next couple of years, and we're always open to other mechanisms to return cash.

And as I said, that remaining 50% as it builds, we'll need to take a decision around how we return back to shareholders. But I think the point I just want to leave you with is, this is a fundamental shift for AngloGold Ashanti. We feel that share buyback programs are only credible when you actually exercise them.

What we are saying is, our policy is 50% of free cash flow. As we continue to build up cash flows, we'll look at other options. But for now, we're really quite happy and comfortable with what we've proposed today.

Could I let me just add something on the dividend. I think it's impossible. We did spend a lot of time in putting forward a dividend policy that will be sustainable in time and that can withstand the different sort of volatility in the gold price.

And so when we were out talking to our investors in the past about six or nine months, we've been asking to them and says, what would you and we have different investors, as you would know, some in South Africa, some in the Americas.

But there was one big sort of ask that was, look, at least have a predictable not only have a percentage, have a predictable rain or shine, and that's where the $250 million commitment comes in. It is stress tested for it's only binding if the gold price starts going down.

And we really believe that with overwhelming volatility. And again, this is very difficult to know. But when we stress that is a one standard deviation and two standard deviations, you can withstand that policy for several years, and it's a credible one.

So that's what we look for robustness in the downside. In the upside, what is binding, obviously, is 50%, and at some point, if the gold price continues to where it is, let's say, for two years or three years, will probably be in a different world, again, where we keep the policy, but as we've said in the past 50% may become a minimum, and then we have to do something else.

But for now, I think that we this probably meets the most average of what our shareholders and investors were telling us, and it is obviously a very big increase, again, passing to pay $450 million is, we believe, a sizable dividend, and we're happy with what we have proposed to the market.

At this stage, there are no further questions on the conference call. I will now hand over to Stewart Bailey for questions on the webcast. Please go ahead.

Thanks, Dana. First question is for Gillian here that says, please give us a breakdown how we get from FY24 CapEx to FY25 guidance? How much of the increase is related to the inclusion of Sukari and growth CapEx less any offset from asset closure?

So I think, look, I'll just I'll kind of give it just a set of a rough guides just to not get to too specific. But we spent in stay-in-business capital $942 million in 2024. And that for us is about safe, stable operations into the future. If you think about that as the envelope, a very modest increase with equipment replacement in Geita, so it's around $35 million.

And then Sukari, similar stay-in-business profile for that asset of around $120 million. So that's essentially what they spent on stay-in-business capital for the last couple of years. It also includes some equipment replacements as well. If you look at it per ounce, it's the same, it's flat basically year-on-year.

On the growth side then, we have a profile there, which is really important to maintain safety in tailings. And so if you're looking at the delta, you've got the deferred stripping program, which is linked to the growth in Sukari that Alberto spoke about.

You've got Havana pushback in Tropicana, which is around $60 million. And then you've got that $50 million in North Bullfrog that Alberto also spoke about. And sorry, just to clarify, the stripping cost in Sukari is $140 million. So that's kind of how you get from how you get from the sustaining actual and growth actual to the guided, let's say, midpoint for 2025.

Thanks, Dana. I think there's another question on the line.

We have a question from Tanya Jakusconek of Scotia Bank.

Great. I was circling back, Gillian, on the capital, and I appreciate that we get to about $310 million for growth capital for 2025 in your guidance range of that $535 million to $585 million. You were mentioning the the delta is the remaining tailings that I should be thinking about to get to that midpoint of, let's say, $550 million from the $310 million?

So if you were to look at the spend of $273 million in 2024, I'm saying that's the normal growth profile that we have, which is predominantly tailings, you've got some you've got the opening of Block 3 in Siguiri. You've also got grid connection sorry, that's not the growth one.

So sorry, you've got growth in Siguiri, as I said. So you want to look at your sort of profile starting at $300 million, then you add North Bullfrog, you add Havana, and you add this deferred stripping for Sukari, which again, is linked to their growth profile over the next three years, and it's $140 million.

Before, Tanya, and I'm sorry, you can go but on this one. We guided in 2024 $425 million for 2025. So we guided on that. So the only difference between the $425 million and the midpoint of $560 million is the Sukari, the rest we have guided. But anyway, just to be clear on that.

And just remind me what Block 3 in Siguiri is, so that I perhaps make sure I have that as well.

What is what, sorry?

You mean how much is it?

Yes. How much is Block 3 and Siguiri capital?

$45 million.

$45 million, okay. And then when we take the jump to 2026, which the delta of that $240 million for Nevada, I appreciate that as well. Like, am I still assuming there's continued stripping at in Egypt as well. I'm just trying to understand how I move from that additional delta. I can keep that $300 million in normal tailings and spending, but add up the additional $200 million, is that how I should just think of it, $240 million for Nevada?

Yeah. I think so.

Okay. So there's nothing more in Egypt at Sukari that I should be thinking of?

No. It's okay. You've got it there.

I really, really appreciate that. And then just on the dividend, just coming back, and I appreciate that 1.5% yield, which is in line with the other peers. How like I'm assuming this year that whatever is in excess in free cash flow, you're going to pay you want to do the top up with the Q4 dividend.

And you will, at this point, still keep going with the dividend. At what point do you start thinking about your value of your shares on a share buyback versus increasing the dividend? I mean, one more tax effective for investors versus the other.

So I'm just trying to understand, you look at it based on what you think your NAV for your company is? And if it's below that, you would prefer the share buyback over the dividend? I'm just trying to understand how you will approach the shares versus the dividend.

Okay. Thanks. So look our net debt gearing right now is 0.2%. And you know that we have some bonds that are only at a very interest rate. So we can't really pay them. That will be destruct value destroy value. So if the gold price stays high and at some point, we start accumulating more money, we will have to find ways of returning the capital. That will be a good problem to have, but it's not an unlikely problem to have if the gold price stays where it is, and then we will see then.

So that's why we bring this as a long-term policy with a commitment of the $250 million with a 50% in, like, this year and probably in '25. But if the cash balances start increasing significantly, we'll have to find a way to go above that policy. And again, this is at current gold prices. So yes, we're pretty open to that.

Will it be based on deciding one over the other, would you decide it based on where you think your value is of your shares to your NAV? Or are you using another metric that I ?

That will have to be the case, yes. They will have to be. It's there's, again, a long debate on that, probably, Tanya, I wouldn't get into that now because at some point, I think that paying it as a dividend or a buyback is the same thing.

But anyway, we will assess it at the time and see where the value of our is. But my point is that either we go way above the 50 or whatever. At some point, when you're no gearing and you are accumulating, we have to find a way to return additional to the shareholders. I'm looking forward to that day with that problem.

So absolutely it's a Hollywood problem. Great.

Thank you. Ladies and gentlemen, at this stage, we have reached the end of our question-and-answer session. I will now hand back over to Stewart Bailey.

Great. Thanks, Dana. I think that's all for the questions. There aren't any more questions on the line. I'm going to just hand over to Alberto to make some closing remarks.

Okay. Thank you again for your questions. We are I have to probably start by saying we are pleased with the results. As I probably said in my presentation today, I think that what we could control, we control very well.

And what we couldn't control, we made the best out of it and threw it all, even in the places that we had issues like at Obuasi or at Iduapriem, you look at the free cash flow and it's quite extraordinary in the second half and Obuasi at $300 free cash flow per ounce, even at Iduapriem it's $200. And then you have our sterling performance in CVSA, in Tropicana, in Geita, and in Cuiaba, and those are all in the $800 to $500 free cash flow per ounce.

So yes, we delivered about $1 billion of free cash flow. And we as we promised to the market, we have come out with a dividend policy that tries to cater for, let me put the average of the feedback that we heard during the past nine months. We think it's a compelling dividend policy. And as we look into the future, we are quite comfortable with what we have set out for 2025. We hope that we have, again, a bit of a not that many issues like unexpected.

You never know. But if we don't, then it will be a phenomenal year towards, let's say, the high end of the guidance. But whatever it is, we will keep our commitments, we will keep our cash costs, our all-in sustaining costs below inflation, and that will keep allowing us to have every dollar of gold price wherever it is that it flows into the bottom line.

So I think that is all. Thank you again for your questions and for listening.

Thank you. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.