AngloGold Ashanti plc(US:AU)2020-05-12 06:11Financial Data and Key Metrics Changes - Production was 716,000 ounces, with a 5% year-on-year decrease, impacted by COVID-19-related stoppages of 11,000 ounces [7][17] - All-in sustaining costs rose 4% year-on-year to $1,058 per ounce, with a margin increase to 34% from 28% [8][18] - Free cash flow before growth capital increased by 231% to $94 million, despite working capital lockups [8][18] - Net debt decreased by 10% year-on-year to $1.6 billion, with a net debt-to-EBITDA ratio of 0.5 times [8][23] Business Line Data and Key Metrics Changes - Strong performances were noted from Kibali, Geita, and Iduapriem, while production from Morila and Sadiola declined due to end-of-life operations [18][29] - Geita's production was 135,000 ounces, 24% higher than the previous period, marking the highest production in eight years [30] - Iduapriem's production increased by 5% due to higher-grade ore mining [32] Market Data and Key Metrics Changes - The gold price increased by 23%, contributing to a 64% improvement in adjusted EBITDA [18] - The company experienced a robust cash flow performance, with cash flow from operating activities rising to $219 million [18] Company Strategy and Development Direction - The company aims to safely deliver better quality production, widen margins, and improve the portfolio while maintaining discipline in the current gold price environment [5] - Ongoing divestment processes are in place to streamline the portfolio, including the sale of South African assets [10] - The company is focused on enhancing ESG practices and maintaining its license to operate [5][11] Management's Comments on Operating Environment and Future Outlook - Management withdrew guidance for 2020 due to uncertainties surrounding COVID-19, but continues to work towards internal objectives [15][26] - The company expects production to be weighted towards the second half of the year, with Obuasi ramping up production [26] - Management remains cautious about the operating landscape due to COVID-19 but is optimistic about cash flow generation improvements [25][54] Other Important Information - The company has secured a $1 billion standby credit facility, increasing liquidity to approximately $2.3 billion [14][24] - Safety measures have been intensified following four fatalities in Q1, with a commitment to achieving zero harm [6] Q&A Session Summary Question: Margins and Free Cash Flow - Inquiry about the relationship between all-in costs and free cash flow, with management indicating that free cash flow generation is expected to improve in the second half of the year due to higher gold prices and efficiency improvements [56][60] Question: Tanzania Operations - Questions regarding ongoing discussions with the Tanzanian government about the ownership structure of Geita, with management stating that there are no current discussions about changes [61][64] Question: CVSA Asset Outlook - Inquiry about the outlook for the CVSA asset, with management indicating plans to invest in reserve development to potentially extend its life beyond four years [66][68] Question: CapEx and Credit Rating - Questions about the decline in CapEx and its implications for cash preservation, with management clarifying that the reduction is part of planned sequencing rather than cash conservation [66][71]