AngloGold Ashanti Plc Q3 FY2021 earnings call

Safety and COVID-19

• All injury frequency rate was 2.15 injuries per million hours worked, well below ICMM member average. Injury severity continues to decline. Emphasis on COVID-19 is on safely ensuring business continuity and providing healthcare support. About a quarter of the workforce received the first dose, and ~45% received at least one dose.

Operational and Financial Highlights

• Gold production was 613,000 ounces, underpinned by strong performance at Siguiri, AGA Mineração, and Tropicana. Investments in bigger assets track well. Brazil is working on Stan [ph] conversion. Cumulative inflation for the year is ~5% due to various factors. COVID-19 impacted production by ~4,000 ounces and all-in sustaining CapEx by ~$20 an ounce. Generated $18 million in free cash flow, lower year-on-year due to higher CapEx, lower production, and lower gold price. Balance sheet is solid with low gearing and $2.5 billion in liquidity. Revised guidance remains on track but at lower end of production and higher end of cost range. Obuasi resumed underground mining, and agreement to acquire Corvus Gold was made. Quebradona's mining operations license was approved but faced a delay due to regulatory appeal.

Leadership and Restructuring

• Strengthened leadership in Ghana, Brazil, and Latin America. Marcelo Godoy joined to lead a detailed analysis of asset capability and development of plans to close performance gaps. A team is conducting a productivity and cost review. Operating model review to have two-level structure (corporate and asset-level) to improve accountability and outcomes. Focus on improving social license to operate through safety, responding to host government/community needs, and updated climate response.

Quarterly Performance Details

• Surface capital more than doubled for Brazil compliance. Exploration up over 50%. Transitioning Brazilian operations to dry-stacking. Completed ground management plant review at Obuasi. COVID-19 infections declining. Australia labor market pressure, Brazil staffing returning to full complement but not pre-pandemic productivity levels.

Gold production was 613,000 ounces in Q3 2021. Kibali reported gold production of 94,000 ounces for the quarter with all-in sustaining CapEx of $771 an ounce. Siguiri produced 76,770 ounces, well above the prior year, with all-in sustaining CapEx at 1,271 ounces, 6% lower year-on-year. Geita reported production of 125,000 ounces. Brazil's production varied by operation, with AGA Mineração at 84,000 ounces vs. 103,000 ounces prior year, and Cerro Vanguardia at 18,000 ounces vs. 31,000 ounces prior year. Australia's production was 24,000 ounces down year-on-year. Tropicana had gold production of 67,000 ounces vs. 75,000 ounces prior year, and Sunrise Dam had 58,000 ounces vs. 74,000 ounces prior year.

2021 Guidance

• Revised guidance issued in August remains on track. Tracking towards bottom end of production range (2.45 million to 2.6 million ounces). Q4 expected to be peak production quarter. Tracking towards top end of total cash costs ($90 to $50 an ounce higher) and AISC ($1,240 to $1,340 an ounce) ranges. Capital expenditure tracking within guided range of $1.030 million to $1.190 million. Expect to continue reinvestment program for key growth-driven brownfield projects. Obuasi expected to ramp-up to full mining rate by end of first half of 2022.

• Inflationary pressures affecting costs. Continued spread of COVID-19 impacting operations. Higher than normal employee turnover rates. In Brazil, tailings facilities conversion to dry stacking amidst COVID-19 leads to increased competition for skills and engineering resources, with planned investment increase to meet legal deadline. Capital expenditures for 2021 to implement new technology not exceeding $150 million, with expected lower annual expenditures in subsequent years.

Q: Could you take us through the inflationary pressures at Serra Grande and what has been the main driver, and is this trend sustainable into 2022?

A: Local inflation in Brazil around 8% due to primary product pressure, COVID impacts, and labor pressures. Main issue is tailings spending at $150 million of CapEx, ~$300 an ounce for Brazil production. Biggest influence is PSF. Uncertain if trend is sustainable.

Q: At Siguiri recovered grades have improved by 24%. Can we expect this trajectory to be maintained into next year?

A: Main reason is higher grade oxide. Expect to continue in 2022 but need to improve plan productivity and labor productivity.

Q: Across all operations with the exception of Kibali and Siguiri, there has been a common issue of softening of grades. Why is this the case? Is the trend common to peers?

A: Lower grades due to not meeting production plans, e.g., Tropicana issues and Brazil's lack of operational flexibility. Not necessarily common to peers. Expect better grades in 18-24 months as full potential is assessed.

Q: What significance does the recent coup in Guinea have on AngloGold and its future in the country? Are we likely to pursue any diversification, bauxite, aluminum, etc.?

A: New government wants to work with foreign investment, operations continuity assured. Feedback from ground delegations is encouraging. Focus remains on gold mining, no significant diversification planned at this stage.

Q: Effectively elimination of duplication is one of your goals. Could you give us some examples of the scale of the issue and potential savings and time for execution?

A: Operating model review to have functions in two places (corporate and asset-level) to improve accountability. Old model had functions at four levels, new model at two. Clarifies reporting lines. Structure expected to be finished by end of year, more details in February.

Q: Could you just explain what happened at Quebradona and the cash burn rates there with the delay?

A: Got state approval but faced national regulatory delay, needing more information. Delay of ~18-24 months due to government change. Resized Colombia operations to reduce burn rate by ~40-45% to ~$8 million per year.

Q: Barrick recently alluded to an agreement in principle with the DRC regarding repatriation of funds. What does this mean for current monies held within the country of about $0.5 billion AngloGold share and future cash flows from Kibali relative to the 60:40 split?

A: In touch with Barrick weekly. 60% of joint venture profit remains in country, 40% repatriated as loan repayment. Our $512 million locked up expected to be accessible in dividend repayment once loan repayment agreement reached. Permanent solution possible with mining code exception.

Q: On cost inflation, clarify if there's double-digit pressure into 2022 and CapEx upside.

A: Up-to-date inflation for year is ~5%, assuming similar in future. Uncertainties exist on supply bottlenecks. CapEx increased due to needed operational improvements, will reduce from high levels in 2023 despite inflation.

Q: On operating model changes, details on changes made to date and disclosure of Marcelo Godoy's technical review.

A: Full structure to be announced in weeks, will talk more in February. Mentioned new hires and team strengthening, including HR and finance personnel. Technical review by Marcelo Godoy on asset capability and gap closing plans, details to be shared later.