AngloGold Ashanti plc(US:AU)2024-02-23 20:29Financial Data and Key Metrics Changes - The company reported a strong H2 performance with a 15% increase in gold production, leading to a free cash flow of $314 million in H2 [7][9][31] - All-in sustaining costs increased to $1,038 per ounce, reflecting higher cash costs and planned increases in sustaining CapEx [9][31] - The average gold price received was approximately $1,930 per ounce, an 8% increase compared to 2022 [29] Business Line Data and Key Metrics Changes - Tier 1 assets produced 1.6 million ounces of gold at a cash cost of $990 per ounce, with Geita showing a strong recovery [10][11] - Cuiabá generated $78 million in free cash flow in H2, demonstrating a successful recovery from previous challenges [11][12] - The full asset potential program realized $215 million in savings, significantly offsetting inflation and production disruptions [15][33] Market Data and Key Metrics Changes - The company faced inflationary pressures, with an average CPI of 8% for the year, impacting cash costs [30][31] - Currency weakness in the Australian dollar, Argentine peso, and Ghanaian cedi is expected to continue affecting inflation [30] Company Strategy and Development Direction - The company aims to close the value gap with peers by improving operational efficiencies and focusing on high-value projects [6][39] - A significant discovery of a 9.1 million ounce inferred mineral resource at Merlin in Nevada is expected to enhance the company's growth potential [25][22] - The company is prioritizing full asset potential to improve production stability and efficiency across its operations [17][39] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of operations, particularly at Obuasi, with expectations of increased production in 2024 [49][50] - The company is focused on maintaining a strong balance sheet and decreasing debt levels while investing in growth opportunities [34][39] - Management acknowledged challenges but emphasized the company's improved competitive position and operational resilience [39][40] Other Important Information - A potential error in the calculation of a deferred tax asset at Obuasi could impact earnings by up to $146 million, but it is non-cash and does not affect production or cash flow [4][5] - The company declared a dividend of $0.19 per share, reflecting confidence in its financial health and commitment to returning value to shareholders [9][33] Q&A Session Summary Question: Can you provide visibility on the full-asset potential implementation and its impact on costs? - Management indicated that the full-asset potential program is tracking well, with significant improvements in EBITDA expected [43][44] - Costs were slightly higher than initial guidance due to specific challenges at Obuasi and Brazil operations, but future guidance remains stable [45] Question: What is the expected timeline for permitting and construction at North Bullfrog? - Management expects production to begin in 2026, with ongoing engagement with regulators to support the permitting process [46][47] Question: How do the costs of the underhand cut and fill method compare to previous methods? - The underhand cut and fill method has shown a cost per ounce of $750, compared to $800 for the previous method, indicating improved efficiency [61] Question: What are the expectations for all-in sustaining costs at Obuasi? - All-in sustaining costs for Obuasi are expected to be in the range of $950 to $980 per ounce, reflecting improved operational efficiencies [61] Question: Is there a plan to increase transparency with a three-year outlook? - Management acknowledged the need for increased transparency and is working towards providing a more detailed outlook in the future [68]