AU

AngloGold Ashanti PLC: Q3 2024 Financial Summary

Business Context and Reporting Period

This Form 6-K filing reports AngloGold Ashanti's financial and operational results for the three and nine months ended September 30, 2024. The Company, a global gold producer, reported its strongest gold production quarter of 2024 from managed operations. The reporting period reflects a strategic shift in reporting for managed operations from an attributable basis to a consolidated basis, impacting comparability for certain metrics.

Key Financial Metrics

Material Changes vs. Prior Period

• Profitability Surge: Adjusted EBITDA increased 339% year-over-year in Q3, driven primarily by a 28% increase in the average gold price received ($2,449/oz vs $1,908/oz) and improved operational performance at key sites.
• Cash Flow Improvement: Free cash flow rose 17-fold to $347 million in Q3 2024 compared to $20 million in Q3 2023. Year-to-date free cash flow turned positive at $553 million, reversing a $184 million outflow in the prior year.
• Production Mix: While Group production decreased slightly due to lower grades at the Kibali joint venture (DRC), managed operations production increased 2% year-over-year. Significant production gains were recorded at Obuasi (+15%), Tropicana (+14%), and Sunrise Dam (+14%).
• Cost Inflation: Total cash costs per ounce rose 8% year-over-year to $1,172/oz, and AISC rose 10% to $1,616/oz. However, managed operations demonstrated cost discipline with total cash costs rising only 3% year-over-year despite inflationary pressures.
• Balance Sheet: Adjusted net debt decreased to $906 million, improving the Adjusted net debt to Adjusted EBITDA ratio to 0.37x from 0.89x at year-end 2023.

Guidance, Outlook, and Strategic Updates

• Guidance Reaffirmed: The Company reaffirmed its full-year 2024 guidance for gold production (2.650–2.850 Moz), costs, and capital expenditure.
• Centamin Acquisition: Shareholders approved the acquisition of Centamin plc on October 28, 2024. The deal, expected to close in late November 2024, adds the Tier One Sukari mine in Egypt to the portfolio, expected to be accretive to free cash flow and net asset value.
• Obuasi Mine Update: The trial of the Underhand Drift and Fill (UHDF) mining method was successfully completed. This hybrid approach is expected to improve safety and reduce costs by approximately 9% compared to traditional methods. Production guidance for Obuasi has been revised downward for 2024 (225koz +/- 4%) but is expected to ramp up significantly in 2025-2028.
• Operational Turnarounds: The Queiroz plant in Brazil resumed processing gold concentrate in September, improving the production mix and reducing reliance on discounted concentrate sales. Australian operations recovered well from Q1 flooding.
• Risks: Key risks include inflationary pressures, foreign exchange volatility (particularly in Argentina and Brazil), regulatory changes in operating jurisdictions, and operational challenges at specific sites like Kibali and Obuasi.

Investor Verification Checklist

• Centamin Closing: Verify the completion date and final terms of the Centamin acquisition, including the expected synergies and integration timeline.
• Obuasi Ramp-Up: Monitor the implementation of the UHDF mining method and the ability to meet revised production targets for 2025 and beyond.
• Kibali Performance: Track the recovery of grades and production at the Kibali joint venture in the DRC, which significantly impacted Q3 Group production.
• Argentina Liquidity: Review the status of dividend repatriation from Cerro Vanguardia, specifically the approval of currency swaps and Central Bank permissions for offshore dividends.
• Cost Inflation: Assess the sustainability of cost control measures given the 8% year-over-year increase in total cash costs and high inflation rates in key jurisdictions like Argentina.