AngloGold Ashanti - Earnings Call - Q3 2025

Transcript

Speaker 0

Good afternoon, ladies and gentlemen, and welcome to the AngloGold Ashanti twenty twenty five Q3 Results. All participants will be in listen only mode. A question and answer session will follow the formal presentation. Please note that this event is being recorded. I would now hand you over to Mr.

Stuart Bailey. Please go ahead.

Speaker 1

Thanks, Judith. It's good morning, good afternoon, everybody. Welcome to the Q3 results call. As normal, you have Alberto and Jillian doing the presentation. You have other members of the executive team available to answer questions after that presentation.

Before we start, I would point you to the safe harbor statement at the front of the presentation, which contains important information regarding forward looking statements, and we urge you to look at it. I'll hand over to

Speaker 2

Alberto. Thank you, Jordan. Safety remains our highest priority, and we're committed to eliminating severe injuries from all of our sites. But Triford improved 17% year on year, and it's now at point 96, well below the twenty twenty four ICMN average. We're proud of this result and the strides we've made in recent years, but we're always mindful that we're only ever as good as our last injury free day.

We will continue to work hard to mitigate risk and to learn from our mistakes and near misses. I'm pleased to report another excellent quarter, showing clearly how momentum continues to build alongside the success of our business improvements interventions. This result, strong by any measure, is underpinned by the much improved resilience of our portfolio, steady delivering to plan and growth in free cash flow and earnings. We did set a number of new records. Free cash flow for the quarter was almost $1,000,000,000 and close to the free cash flow we generated for all of 2024, and we will pay half of that as a dividend.

Our adjusted net cash position of €450,000,000 gives us our strongest balance sheet ever. Once again, we control costs very well despite persistent inflationary headwinds and higher royalties, the only cost that we would like. Our performance blocks the long term industry trend of cost rising ahead of the gold price since 2021. Our cash cost and fully sustaining cost have both remained remarkably stable in real terms. This is the result of operational excellence driven by full asset potential, disciplined project execution and tight cost control.

What we can control, we continue to control very well. That's clear when you look at our managed operations. Production benefited from higher contributions from Obuasi, Kibali, Geita and Cuyaba. These strong performances were partially offset by lower tonnes and grades at Eagle Preme, the temporary plant stoppage at Siguiri and lower underground tones and grade at Sunrise. Obuasi delivered another steady on plan performance in q three.

We're seeing the ongoing improvements in recoveries and found treated. The result is supported by the investments we made in ventilation and also generally better equipment availability that we're working hard to sustain. Total cash cost for managed operations year to date was only up only 3%. We expect that number for the full year to be similar, only 3% up. And this is despite macro factors of 9% when you take into account the prevailing inflation rate of around 5% and the increase in royalties, which are linked to the gold price.

Let me clarify this. We expect to be within our guidance range, and that is before discounting the impact of royalties that we estimate for the year around $40 an ounce. Free cash flow at also billion dollars was up 141%. Adjusted EBITDA growth grew 109%. Headline earnings were up 185%.

The balance sheet is in excellent shape. We have ample liquidity, no material near term maturities. At quarter end, even after record dividend payments in the first nine months, we have moved to an adjusted net cash position of $450,000,000 Let's have a quick refresher of our dividend policy. It provides for quarterly payout of zero one two five a share of around $63,000,000 It also provides for an annual true up payment, bringing the payout to 50% of free cash flow. We use discretion to make that true up at the half year, underlying it, not only the extraordinary cash flow generation, but also our confidence in the outlook of the business.

That took our dividend declaration for the half year to $469,000,000 We've done the same again for Q3 with a dividend declaration of $460,000,000 which matches in three months what we did in the first six months of the year. This provides one of the most generous and highest yields in the center. And as normal, we expect a strong final quarter. With Obuasi continuing to ramp up, our Tier one assets now account for more than 70% of production and 80 of reserves. We expect to see the production share from our Tier assets to rise still further.

Our Tier two assets are also delivering a strong contribution. We are seeing healthy margins across the portfolio and exceptional cash flow leverage as we remain active managers of our portfolio. The sale of Sierra Grande, which is expected to be finalized before the end of the year, will ensure that we can further sharpen our focus on the core business. During this extraordinary turnaround journey we've been on since 2021, We continually assess what we can generate and where we can generate the most value. And the answer is clear.

The best opportunities we're running remain within. First, we are committed to lifting performance from our core assets, driving margin growth through cost discipline, which is continuing to do what we have done well in the past. Full asset potential has been invaluable in this regard, keeping cost flats in real terms, cost per ounce in real terms. That's improved our position on the cost curve and help us to reliably deliver our guidance. The insights from this program have also helped to unearth a pipeline of organic growth options that are beginning to reveal themselves.

This extends beyond Wassa, which is starting to develop a consistent operating cadence as it ramps up. There are other projects under consideration to build scale and extend life at several other key assets. These are relatively low risk, low capital intensive opportunities that allow us to leverage our existing footprint, infrastructure and knowledge. The returns, as you can imagine, are more than competitive. We'll flesh those out in the coming quarters, helping to daylight more value in this extraordinary portfolio of ours.

And third, we're laying the foundation for the next stage of growth in Nevada, a world class gold camp where we're building scale and functionality. We committed to bringing some of our most exciting and triple opportunities to life, and we'll start today with Geita, our marquee asset. For years, Geita has been viewed as a world class mine and relatively short reserve life. That is completely changing. This is a tier one operation by every measure, consistent delivery, strong margins, and exceptional operational stability.

What's often overlooked is the geological quality. Data sits in the Lake Victoria Greenstone Belt on the Tanzanian Craton, part of the same gold province that holds Key Valley and North Mother. After two decades of mining, large large parts of the concession remain underexplored with compelling structural and geotechnical targets pointing to significant bump up potential along strike and death. Today, Geita hosts an open pit and multiple underground operations producing around 500,000 ounces per year, underpinned by 3,500,000 ounces in reserves and more than 7,000,000 ounces in resources. We're now showcasing the next chapter to Gaitan, a mine position to remain a tier one asset for at least the next twenty years, but in reality, it's going to be much longer than that.

Here, you see the simple roadmap to unlock further value. We're allocating a total of $50,000,000 an additional $15,000,000 a year to expiration. With that investment, we expect to grow reserves by about 60% to increase life to 10 or more from around 7.5 today to about ten years or more. Our focus is on near mine drilling with a priority of adding ounces to the four mining fronts we have established. We're working through a conceptual option to increase mill capacity.

Through this mill expansion, which we conservatively forecast to cost around $100,000,000 we expect to grow production by 20% to about 600,000 ounces. Importantly, we're focused on maintaining margin here and not simply creating an expansion to push through lower grade in Tinfield. We will update you as we move through the study process. At a proposed capital intensity of only a thousand dollars per ounce of incremental annual production, this is an extraordinary profitable project. We're looking to pull this additional investment to work in an area with proven geological quality and longevity.

Since we started dialing up our exploration investment in 2021, reserve life has more or less doubled to current levels around seven years. If we zoom out a little further, we've added 2,000,000 ounces of reserves between 2017 and 2024, over and above the 4,300,000 ounces of depletion during that period. That comes at cost of $39 an ounce, which is exceptional value by any measure and reinforcing the quality of the geology and our exploration team. The pipeline of targets is exceptionally rich. We've identified around 40 prospects already and believe that we will easily improve reserve life with an initial target of four of ten years or more.

We aim to achieve the first milestone by 2028. The first route marker for us is to see Gaeta's reserve at around 4,000,000 ounces by next year and then 5,000,000 ounces by the 2028. We have set clear initial priority agent areas for this drilling campaign. Given that exploration on Queita has been somewhat under underdone over the past decades or more, there is a lot of low hanging fruit. This slide shows both Keita Hill and Nayankanga underground mines, where we have established a solid track record of predictable production and an excellent understanding of the geology.

Importantly, these deposits remain open at depth, and development and drilling over the next years will let us to more clearly define the extent of the deposits. As Torren commented, it's very much the same approach. Resort definition drilling is aimed at defining the extension of the resource. At Haya Mulelima, drilling has confirmed the extension of the ore body at depth with good potential to transition to underground mining in time. We have additional high confidence exploration targets with striking distance of the pit where we've already intercepted mineralization, including some high grade areas.

So where does it all cater? We have a world class ore body supporting a compelling investment case. With the incremental exploration spend, we expect to leverage the large resource base growing reserve life to ten years or more and keeping it at that level for many, many years. The mine has maintained a resource to reserve conversion rate of more than 30%. This will underpin the base production of plus 500,000 ounces over a reserve life of ten years.

Over the medium term, we will continue to progress the mill expansion opportunity, which will step up production to 600,000 ounces. We'll update you at Cape Corridor for the feasibility process. That is data well positioned to unlock significant value and to sustain its tier one for decades to come. We move to Nevada. On Northrop, it is our first step in Nevada after the T 0 Q 1 discovery at which the Nevada strategy in service.

It is one of the most significant gold discoveries in a generation that is in one of the world's top mining jurisdictions. This is an automotive asset. It is a large with significant high grade. As of our latest update, Arthur holds a resource of around 16,000,000 ounces. The deposits are predominantly oxide, which is key.

Our focus is currently on the Merlin deposit where we have some more exceptionally high grade intercepts during resource definition drilling. These results reinforce our confidence in the project tier one quality. When fully developed, the awkward complex is anticipated to be long life multimillion ounce producer, which will become the center of gravity for the annual gold ashanti and will become the largest and probably most longevity asset that we will have in the portfolio, giving us low cost, low risk, high margin analysis and plenty of them. We're currently at the back of our comprehensive prefeasibility study, which will run through the remainder of the year. We expect to talk about the results of that prefeasibility study in our results in February.

The remainder of the year. We expect to talk about the results of that precentralization study in our results in February.

Speaker 3

For our own realized inflation rate, which represents CPI changes in the jurisdictions that we operate, was around 4.7%, keeping an upward pressure on our cost base. We continue to actively look for opportunities to mitigate cost impacts across the business, which we continue to demonstrate within our cash cost performance. Production was 17 higher year on year

Speaker 2

in For the year, Siguiri will still be up 8% versus 2024. So it will still be a very good year for Siguiri.

Speaker 1

Right. The next question from Yamin Gossain at Lorien Capital. He says, hi, team. Well done on a wonderful set of results. The current CapEx run rate is around $368,000,000 a quarter, implying $590,000,000 in Q4 to reach the midpoint of guidance.

Can we expect to see a big CapEx number in q four, or will some of this be rolled over to '26?

Speaker 2

Julia?

Speaker 3

Thank you for the question. I think we would anticipate relatively stable capital spend in stripping or development, etcetera. We do in queue up for some orders for fleet management strategy, and so you'll definitely see an increase, but we're gonna manage that well within our guidance range for the full year.

Speaker 1

Good. There is another question here from Herbert Carriva at Absa. He says, what is the outstanding dividend payment from CVSA, and is it likely that you received the an amount this quarter?

Speaker 3

So we just to just to get clear, we have finalized our 2024 financial statements for CVSA, which allows us to pay up dividends through to our parent company. We have done that quite significantly, actually, in 2025, and so there's no restrictions on how much we can can flow back through to the parent company. We, of course, will want to maintain working capital levels in Argentina, but we've made really good progress on, you know, cash lockups in that region. Yeah.

Speaker 2

Yeah. The the cash lockups, I think if you look at it, we've gone from a 176 to a 100 roughly. So dramatically reduced the cash lockups probably where we made the most gains. So just obviously, that's that's not surprising given sort of that there there's some as president in charge first time in a long time in Argentina. So things have added.

Speaker 1

Thanks, Alberto. We have one from Larry Clausen at Red Intelligence, and he just wants to understand if we've paid back any of our bonds over the quarter. And the answer for that is no, Larry. Not. And then just to sort of close-up, there are a couple of questions.

Martin Cream at Mining Weekly. Martin, you've asked some questions on clean energy use installed and whatnot. If you would just allow me to come back to you after the call on those questions and Jack Forbes. Jack, you can get hold of me just to follow-up on your question on s [email protected], and we can we can have a discussion just around the difficulty you're having on that. But other than that, we have we have no other questions.

So, Alberto, just maybe a closing remark from you before we do that.

Speaker 2

Hadn't thought about that. But, anyway, I look. It's it's all about disciplined execution. It's it's it's really and when we talk about discipline and execution, it's 40,000 people who really do the work and deliver every day. It's just pretty amazing to see.

And it's been a journey the last four years, but seeing how everybody's singing to that same tune and just being able to reliably and predict that we deliver what we say we're gonna do, that's that's that's your ambition in mind, the highest ambition to do that than we are. We have been able to do it. And just again, it's just that 40,000 people who understand that and are really getting up every day and delivering that. So it's just for me, it's just a thanks to all of them, and thanks to our shareholders and investors. And we will keep trying to be predictable, reliable, and at the top in other mining gold mining industry.

Thank you.

Speaker 1

Perfect. Thanks, Alberto. Thank you.

Speaker 0

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