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AngloGold Ashanti Limited isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, ladies and gentlemen, and welcome to the AngloGold Ashanti Full Year Market Call. All participants will be in listen-only mode. There will be an opportunity for you to ask questions later during the call. [Operator Instructions]. Please note that this event is being recorded. I will now hand the conference over to Stewart Bailey. Please go ahead sir.

Stewart Bailey: Thanks very much Chris. Good afternoon, everyone, and to those of you joining us from the Americas, good morning, and welcome to our 2023 market call. You have Alberto and the full expert team here to help run you through our performance. But before we start, let me call your attention to the fact that we’ll be making forward-looking statements and we will reference certain non-GAAP financial information during the course of the remarks. Slide two is our Safe Harbor Statement. It’s important and I would ask you please to refer to it. I’d also just like to apologize for the delay in releasing the report today. We had a glitch on our side that was a little tricky to overcome. So thanks for your forbearance on this and we hope this call will be fulsome enough to talk you through the detail in a way that’s helpful. Over to you, Alberto.

Alberto Calderon : Thank you, Stewart. Good day and welcome to our results call. Before we get into the details of what has been a very good year for us, I’d like to address an issue you may have picked up in our release today. During our year-end audit AGA, AngloGold Ashanti, found a potential error in the calculation of a deferred tax asset at Obuasi in 2022. This potential error that could impact our earnings by up to $146 million between 2022 and the first half of 2023. The error is non-cash and has no impact on production, cost, cash flow, value of the asset or anything related. Let me be clear, the facts and the numbers are very clear. For all practical purposes, this is an impairment of $146 million. However, there is still an on-going discussion with our previous auditor about whether and how much of this error should be accounted for in our eventually reinstated 2022 accounts.

Any potential restatement is a time-consuming complex process, made so more by the fact that we’re working with two sets of auditors. All parties must agree on the nature and quantum of any adjustments before we are able to issue our 2022 results, which we will do as soon as possible. That’s that. Now, let’s move to what really matters. A strong set of results we are all very proud of. The [inaudible] is a joint AGA in late 2021 was simple. Close the value gap with our peers. To do it, we’ve worked to address several interlocking initiatives that together will substantially improve our business. We still got work to do, but we made good progress on our original priorities. Most important of all, we’ve closed the cost gap with our major peers.

We’ve done it safely. We’re now among the safest mining companies anywhere in the world. We’ve improved predictability, again achieving guidance on production and cash costs. This increasingly sets us apart in the peer group. We’ve been decisive on loss making operations and projects that don’t fit our portfolio. That allows us to narrow our focus on the things that drive value, but its recovery strategy is progressing to plan. We’ve declared a new 9.1Moz Inferred Mineral Resource at Merlin, which almost doubles our resource position in this new gold district. We’re more than rebased reserve pre-depletion [ph] in the past five years. We’re building on a strong climate track record with a series of new emission reduction projects. And finally, last but not least, our primary listing on the New York Stock Exchange gives us exposure to the world’s deepest pool of capital.

We’ve recorded a strong H2 performance after a series of challenges in H1. Gold production was up to 15% with a standard performance from Iduapriem, Tropicana, Geita and Kibali. Cuiabá simplified the resilience we’re building in the business. Even after losing much of Q1 in the pivot to concentrate production, it delivered ahead of budget which in turn drove our 9% improvement in cash costs. And Obuasi recovery from poor ground conditions in Q3 is proceeding to plan. Perhaps more importantly, the better production results have tried $314 million in free cash flow in H2, showing the much improved health of the underlying business.

.: On safety. We have a clear safety strategy that pairs risk awareness with robust controls to manage the most critical workplace hazards. Our industry frequency rates remain well below industry peers. I’ve been around for long enough to know that we can never afford to be complacent and that we’re only ever as good as our last injury free shift. 2023, it is important to get the basics right. That starts with meeting our commitments. We delivered just under $2.6 million of production within guidance. Cash costs were also within our guidance range. All-in sustaining costs increase to 1038 an ounce, that reflects the higher cash cost and a plan increase in sustaining CapEx. Full potential is working exactly as intended. We will show a detailed graph of $215 million savings realized in 2023, played a key role in helping to offset inflation and also to increase impact of production disruptions.

Pre-cash flow was $109 million for the year. That’s a big turnaround after 205 outflows in H1. We took the decision to pay a dividend of one more payer policy, declaring a dividend of $0.19 per share, following the strong H performance, the strong balance sheet and our confidence in the future. The payer demonstrates confidence in the robustness of the business and our commitment to return to shareholders. We showed you a different view for the portfolio at the interim results. The steering lens shows more clearly the geological realities of each side, their flexibility and performance and potential for growth in both production and margins. This in turn determines their place in our capital allocation hierarchy. T1 assets have scaled life or at least the potential to increase life.

They are at the lower end of the internal cost curve or have the potential to get there. Tier 2 has our steady performance. Ore bodies are well understood and operations are reasonably well optimized or on their way to be there. Some may be on the higher end of the cost curve, but they are all well run, predictable and steady cash contributors. The Tier 1 assets produce 1.6 million ounces of gold this year at a cash cost of $990 an ounce. Geita had a strong finish coming back strongly from the Q1 shutdown. In fact, Q4 ounces were 45% higher than Q1. Obuasi recovered very well. As you see, Q4 production was a third higher than Q3. I’ll talk more about that shortly. Kibali made a solid contribution of 343,000 ounces and higher grades drove an increase at Tropicana.

Turning to Tier 2, Cuiabá as I mentioned had a stellar recovery from a standing stock generating $78 million free cash in H2, even at a discounted coal price being this a concentrated operation of $1,790 an ounce. The mine is fully converted to a concentrated operation. Sunrise was the poster child for both full potential, with a cash cost of all-in sustaining well below the year end. Siguiri has a steady second half as it recover from the Q2 tax collapse – quarter two tax collapse. By year end throughput rates have normalized and the team is now working to calibrate the plan to lift recoveries. CFSA production was lower year-on-year in line with its mine time. Full asset potential. The full asset potential program has started to gain traction across the asset base.

At Sunrise, we’re seeing a step chain in underground ore tons, which are now consistently above 220,000 tons a month. The better haulage performance was underpinned by improvements in stop availability and a fleet utilization. We look to sustain these levels in 2022. Tropicana’s underground ore tons were up around 25% in H2. That initiative has been successful. So successful that now we’re working on solid ventilation constraints before we can achieve further improvements later this year. There’s better availability and utilization of stopes progress and quicker re-entry for crews which has increased effective work time. In the plant we made improvements to the high pressure grinding roll circuit to support a throughput increase of 9.5 million tons.

Iduapriem had an excellent year. We’ve driven improvements in drill and blasts, as well as processes to get better fragmentation. We’ve optimized the load and haul processes to get better ore delivery to the plant and we’ve sharpened our maintenance practices to achieve better overall equipment availability. At data, underground tons from Nyankanga were 29% ahead of our full-acid potential target. We’ve delivered backfill directly to stopes via drill holes from surface rather than using trucks. This in turn has the bottleneck, their underground materials handling capacity and improved overall stope availability. We’ve also redirected from Star and Comet to Nyankanga bringing forward production into Q4. The full asset potential what you see in the graph is $250 million of an incremental EBITDA that was driven by improvements across four sites.

Cost savings are adjusted for uncontrollable economic factors including inflation, exchange rates and royalties, as well as oil and other commodity movements. Benefits include both productivity improvements measured at increment gold production and cost reductions compared to the flex or expected costs. Incremental gold production includes increasing plant throughput, metallurgical recovery and mine tons. The dollars of benefit of $215 million is very significant as you are well aware of, but this program has been this year absolutely vital in offsetting the massive, both inflationary pressures using the road margins right across the center, and also providing additional resilience to the business to counter the production interruptions we had at Siguiri and Cuiabá.

In sum, the reason why we have delivered cost guidance is we have similar sort of issues than our peers or we have a program that helps counter those costs. Brazil update. Our Brazil operations have been a drag to earnings and cash flow. Last year we took a decisive step forward to address this and the results are clear in our numbers. The most important step was to restructure our leadership team. We reduced senior management roles by 25% and introduced new experienced talent. At the same time we’ve carefully to properly locate accountability and drive performance.

-: The cumulative benefit of these initiatives have greatly stemmed the cash lead and were looking to a significantly better performance this year. We’re prioritizing full asset potential, which will further improve production stability and increase efficiency. Let’s take a step back to look at Obuasi. This remains one of the world’s greatest gold ore bodies. It has grade well in excess of eight grams per tonne over its life. It has size over 17 million ounces of resource and 7 million ounces of reserve and it has life. This is a flagship mine sample data and it enjoys small devices to work. We’re also regaining momentum in the range of [inaudible] or more than 400,000 ounces a year by 2026. You see in the slide we are forecasting a range between 275 and 320 for ’24 and between 325 and 375 for ‘25 and then plus 400 in 2026.

So let’s look how we get there. The V30 reamer is doing exactly what we said. To recap, we’re establishing our conventional stones with a much wider reamer head, which is showing itself more capable in soft higher grade rates. We’ve already getting better results after the blast. For the past four months you can see our mining bed rates have stabilized and are now around a 28% higher than for the first nine months of the year. And by the way February is going very well also. We expect another increase to around 110,000 to 120,000 tons from during this year. The Underhand Drift and Fill trial will show how to safely mine the high grade areas with poor ground conditions that we saw towards the end of last year. It’s going very well. We’ve shown that we can develop through pace backfill in an old stope which demonstrates pace competency.

We’ve developed the top drive from 3,300 level and installed ground support. We’ve established the pace reticulation line close up the levels with bulkheads and completed the pace backfill. We are focused now on developing a parallel drive alongside the pace fill drive. This will allow us to expose and test the pace strength. After that we’ll develop our first drift on pace. But it’s very important we continue to use the data from the trial to inform our cost models. And at this stage we see a $50 per ounce improvement at steady state from Underhand versus Sub-Level open-stope with higher mining costs more than offset by significantly better extraction efficiency. Page thee is the refurbishment and return to service of the KMS shaft and associated infrastructure.

This will provide direct access to the very high grade block 11 and other areas. It will double our current underground materials handling capacity to around 12,000 tons per day. If you look at the red block on this slide it shows the significant advantage we’ll have when we can move waste ore and other materials down the shaft with no congestion rather than transporting it via a 12 kilometers decline. The added flexibility will be a significant one. We estimate completion by an end of this year. The next key problems, [inaudible] that will be soon, rail system and new pump stations as well as ore passes between the upper mine and rail transport level. What progress is being made to clear mud between 5,000 levels and shaft wall? Let’s move to Nevada.

A picture is worth a thousand words. This is a picture of a gravity concentrate from a high grade intercept at Merlin in Nevada. As we continue to progress with our drilling and metallurgical programs, we are finding strong indications of visible gold in multiple areas of the project. We have moved quickly to build a world class new gold district in Southern Nevada. We’ll dig into the details of our new 9.1 million ounce discovery at Merlin in just a second. But as you all put the pieces together, we have a number of new deposits emerging that now together contain more than 16 million ounces. Our focus for now is mainly on near surface oxides with simple metallurgy first of this modern North Bullfrog project in the northeast of our property and then at the new Merlin discovery, which is a truly spectacular piece of geology in the heart of the world’s best gold district.

We believe costs will be extremely competitive and a number of potential development scenarios that will test match the project to our own capital return and needs. In short, the continued exploration success we’re enjoying suggests the potential at this stage for this research to support peak production of around 500,000 ounces over a multi-year period and this is a multi-decade gold district. North Bullfrog is our starter project. It is the most advanced in our current Nevada pipeline, already in the permitting process and we declared a first time mineral reserve of 1 million ounces today. The feasibility study is complete and detailed engineering is underway. Aside from the new low cost ounces, it will contribute to the group. North Bullfrog will provide us practical understanding of the permitting process, the opportunity to build the best-in-class project team and current experience of building and operating a project in Nevada, all of which will be invaluable as we roll forward to the much bigger Merlin development.

This project has a very attractive return profile. Our updated estimate of first production is around mid-2026 assuming all goes to plan. This is based on correspondence from Stantec, the BLM agency which estimates the timeline of the record of decision to be around April 2025. We’re engaging closely with the regulators to ensure we’re best able to support the process and their timeline in the best way possible. Our study which has been approved by our board pending receipt before the necessary permits assumes total goal of around 800,000 pounds average of leverage rate of 1.4 and initial life of 13 years. We expect Tear 1 all-in sustaining cost of around $854 an ounce. When you amortize the project capital of around $370 million, you will get an all-in cost of about $1,300 an ounce.

We assume a conservative goal price of $1,600 an ounce for the study, which would give us an IRR of 13% and a payback of just over seven years. However, at the spot, the return drops to 30% and the payback shrinks to just four years. The expanded silicon project covers the silicon deposit roughly in the center of our land holding and Merlin immediately south. Today we report a new 9.1 million ounce of inferred mineral resource at Merlin. As far as we can tell, this is the largest Greenfield discovery, gold discovery in the U.S. in well over a decade. It’s the fruit of a 2023 exploration program that beat all expectations. We drilled 144 holes totalling more than 100 kilometers of drilling. There is still significant upside particularly to the west.

At first pass in our concept study the economics look very strong. This year we’re focused on the PFS, which is already underway. This includes infield drilling to test the significance of high grade mineralization within the inferred mineral resource study. This slide shows clearly why this is a potential game changer for us. In this section, you see the extent and size of the deposit, along with some very exciting intercepts, which validates the extent and quality of the ore body. You will obviously look through this cross section in your own time, but I’d like to just highlight there’s 103 meters of 7.3 grams a ton. There’s 185 meters of around 4 grams a ton and there’s just over 236 meters of 3.4 grams a ton. Mineralization remains open primarily to the west of the inferred mineral resource.

This makes down our – we’re moving to exploration performance last year. Exclusive mineral resource addition totalled 10.3 million ounces from exploration and modelling and of course the introduction of Merlin. There were offsets which resulted in a net gain – one gain to gain of a year of 5 million ounces. Mineral reserve addition is total 2.5 million ounces. Two came from exploration including the addition of the million ounces at North Bullfrog. After the completion, another changes, we saw net reduction year-on-year of 0.7 million ounces. This slide shows exactly why we’re excited about the potential within our portfolio. We’re in the midst of a program to increase investment in mineral resource development and Brownfield exploration.

This will aid reserve conversion, extend mine lives, improve operating flexibility and supplement knowledge of our ore bodies. We’re making strong progress. Over the past four years we’ve added 14.4 million ounces of mineral reserve, which have come into our inventory at only $62 an ounce. When you compare that to multiples being paid even for resource ounces, you can see the enormous value that we’ve been able to generate organics. I’ll now put Gillian on the financial listing.

Gillian Doran : Thank you, Alberto, and hello everyone. Let’s first take a look at the macro environment and the impact on our business. The average gold price received last year was up around 8% compared to 2022 at around $1930 an ounce. We hedged just under 5% of production with a zero cost color between $1950 an ounce and $2029 an ounce which had a positive realized gain of $2 million. For this year we’ve used the same structure to hedge 347,000 ounces with a floor of $1,993 an ounce and a ceiling of $2,132 an ounce. This provides upside – provides downside protection for our assets in Brazil. You may recall, we anticipated inflation of 6% in 2023. As we look back, that was a little optimistic as we ended the year at an average CPI of 8%.

We’re seeing inflation easing somewhat, although it does remain sticky in Ghana, Guinea and Argentina, and we also believe the labor increases are structural and this impacts 40% of our cash costs. We see continued weakness in the Aussie dollar, the Argentinean peso and the Ghana CD. Currency weakness will not help inflation going forward and this is something we’ll continue to watch. Oil continued to drift lower and our year-end position on the hedge was a realized loss of $7 million. We have no oil hedges in place for 2024. As Alberto mentioned, we saw strong sequential quarterly performances from a number of our key assets in 2023. As you can see in aggregate 15% production growth, half-on-half with all regions delivering stellar performance in the last quarter, particularly bolstered by Iduapriem, Geita, Tropicana and Cuiabá.

The stronger half two production performance had a commensurate impact on our cost base. Total cash costs were 9% better half-on-half at $1,060 an ounce. Our cash costs for the full year were $1,108 an ounce, up 11% year-on-year, with lower production, higher operating costs, fuelled by the sustained inflationary pressures, planned higher waste stripping at Tropicana and one-off costs related to Brazil and the tank failure at Siguiri. When we flex for macro factors which we don’t control the increase almost halved to 6% and that includes the big disruptions we saw at Cuiabá and Siguiri. We would say we’re really quite pleased with this performance and it really demonstrates the value delivered from our full asset potential program. On ASIC, we did see an increase year-on-year as a consequence of investments made in three key areas.

OID and waste stripping as we accessed new areas in Geita, Iduapriem and Tropicana. Mineral resource development in our underground mines, supporting greater mine flexibility and stability, and of course, infrastructure development and tailings facilities particularly at our Brazil operations. We also increased investment in exploration and evaluation to comfortably replenish mineral reserves as well as additional investment required in an environmental rehab. Moving to cash flow or free cash flow, the strong cash flow performance despite the higher CapEx in the second half, by a specific focus on optimizing working capital, higher sales volumes, improved cash costs and higher dividends from Kibali. There is a greater focus on working capital management and cash conversion which we highlighted as a strategic priority last year.

As expected, most of our assets saw stronger operating improvements in the second half with tailwinds from the higher phase. Importantly as Alberto mentioned, decisive action taken in Brazil played a key role in managing cash outflows. With this strong free cash flow performance in the second half, today we announced an interim dividend of $0.19 per share incremental to the first half of $0.04 per share, bringing our 2023 dividend to $0.23 per share. Our focus on maintaining a strong balance sheet and decreasing debt levels remains intact. Long-term balance sheet improvements achieved through disciplined capital allocation and the self-funding of our redomicile quasi expansion program, Corpus and Coeur Sterling acquisitions and our major U.S. exploration program.

Moving on to guidance for 2024, gold production for the portfolio is expected to be between 2.59 million ounces to 2.79 million ounces. At the midpoint, we expect production growth of about 4% relative to 2023. This is driven mainly by a step up at Obuasi and Siguiri where we expect year-on-year recovery from the CIL tank failure. Total cash costs for the group are expected to range from $1,075 an ounce to $1,175 an ounce, which at the midpoint is a reduction in real terms given where current inflation sits. We are able to do that given the traction we are seeing in our full-ass in our inside of our business and specifically our full-ass of potential program. Sustaining CapEx is expected to grow slightly, mainly because of increased investment in mineral reserve development.

Year-on-year ASIC is also little changed despite the inflationary pressure. The increase in growth CapEx is due to additional investment in Nevada. For 2025 guidance, gold production is anticipated to grow 2% year-on-year, driven primarily by the expected continued ramp up at Obuasi and modest gains across multiple mines. Total cash costs are expected to decrease as continued full-asset potential, maturity and production efficiencies are anticipated to drive unit costs lower. The expected increase in non-sustaining capital expenditure reflects the anticipated incremental investment in the construction of North Bullfrog. It does not however include capital for the construction of the project. I will now hand back over to Alberto to comment.

Alberto Calderon : Thank you, Gillian. This is another year for delivery. Safety is our priority. We have two large climate projects to complete this year, which will significantly reduce our emissions. We’re focused on driving operating improvements and delivering more consistent predictable results. The full-asset potential program is working as intended. Our Q1 assets are performing well with improvements in the pipeline. We’re focused on further optimizing our Tier 2 mines and determining the best path forward for our remaining assets. There’s a good pathway for Obuasi’s ramp up with clear milestones against which we can judge our success. Our technical team is progressing on a lot of opportunity to surface the enormous value we have discovered.

Our world-class exploration team continues to add value to the drill bit across our properties. So why Anglo Gold? We’re a U.S. company and one of two primarily listed senior gold producers in the New York Stock Exchange. We have one of the industry’s largest resource space supported by high reserve grades. Our safety performance is among the best in the industry, in the mining industry, and we have a strong climate record. We have two partnerships in our host communities where we deliver tangible benefits. We have a highly motivated leadership team with world-class technical expertise and experience across development and developing jurisdictions. We have a diverse portfolio and are rapidly closing the margin gap with peers, with lower cost balances in the pipeline.

Our track record on competitive and replenishing our mineral inventory is among the best in the industry. Our balance sheet is robust with capacity to fund our capital needs, share all the returns and growth. We’ve disciplined and allocating capital with a clear dividend policy and leverage targets. I’ll finish where I started closing the value gap. An important part of the strategy to achieve that aim is to regain cost competitiveness. When we started this journey in 2021, our cost inflation was right at the top end of the peer group. As our various interventions have been tractioned, we moved first to the midpoint and then to the lower end of the range. You can see our guidance for 2024 and ‘25. The cost will be within $100 of the all-in-sustaining cost of the guidance of the main sort of competitors.

I just want to highlight that that would be about a third of the gap that existed three years ago. But we are far from finished. I know we’ve not been perfect, and I know there’s more work needed to ultimately to better our own costs going forward. We face challenges and overcome many of them. We’ve learned lessons that we will apply. We’re stronger, more competitive and better placed than we were this time last year. We are proud of our team. We are proud of our people. And what we have accomplished this year, we eagerly look forward to what is yet to come. Thank you.

Stewart Bailey: Thanks Alberto. Chris.

Operator: Thank you very much sir. [Operator Instructions]. Our first question is from Raj Ray of BMO Capital Markets. Please go ahead.

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Raj Ray: Thank you, operator. Good morning, Alberto and team. My first question Alberto is on the full-asset potential. I know you are going into the implementation phase at various operations. Can you give us some visibility as to what remains to be done and are you happy with the way things have gone across the various assets? Second is on the cost impact. The cost is flat year-to-year, you did say that. But against your initial guidance at the beginning of 2023, 1395 to 1455, it’s a substantial increase. So, if you can comment on that. And then lastly, with respect to Nevada, can you talk to what do you see as the potential permitting timeline with respect to North Bullfrog and when you expect to get into construction? And secondly, when can we expect some visibility on the expanded silicon economics?

Alberto Calderon : Thank you. Okay, let me – lots of questions, but good ones. Thank you. Full-asset potential, look, we track – you saw two slides and one of them are the hard metrics, and that is really what we track. Are we structurally and permanently improving the tons we’re moving and the recovery we’re having or the metallurgical recovery or whatever hard metric? And that is what is tracked with the operators, with the CTO, with the COO, and all of our teams. Now, that slide you saw on finance was actually done by the finance team. And they just made a reconciliation and said, okay, what can we see from this whole-asset potential in the bottom line? And this is an exposed fact. And you can see that they can find $200 million clearly of improvements of increase in the EBITDA because of what we have done in full-asset potential for 2023.

So I thought we would share this for the market. What is yet to come? I can’t put out – we haven’t put out targets, but we will continue. We think that there is still yet a lot to improve. So I haven’t done it in the past and I won’t do it now. But I believe that with a little bit of not bad luck. Again, we did have very significant events both in Siguiri and in Cuiabá. And so if we hadn’t had full-asset potential, we would have been in real trouble. I hope that this year, we don’t have – maybe we have only one, I don’t know. In mining you always have something. And then probably we can see that more clearly, not offsetting, but in the bottom line. But we believe there’s still a lot of value to be uncovered by full asset potential, let me put it that way.

In terms of cost, as we said, we met the guidance in cash cost and we’re quite happy about that, $1,108. You’re right, in all-in sustaining, we’re about 6% higher. It is two areas that we wouldn’t expect Obuasi and tailing stamps in Brazil really sucked up that additional 6%. The good thing is, if you see, we finish at 1538. Our guidance for 2024 is 1521, which is a slightly lower nominal turn, but significantly lower in real terms. And then we have another guidance of 1525 for 2025. So we’re stabilizing the all-in sustaining cost. If you look at the guidance, and I’ve looked briefly at the guidance, about three or four of our peers, they’re all, they’re all in sustaining is going up. So, I think we’re happy that we’re able to contain this for 2024 and 2025.

If we look into Nevada, we’re expecting, we had said probably last year we were expecting production at the end of 2025. Right now, we’re going to first quarter of 2026. The good news is that we got very clear feedback from the Bureau of Land Management and the organizations that are, which are going to give the license. So we have even more sort of understanding of when they will give us the permission and then how long it takes. And so I think that now we’re sort of comfortable that saying right now that production would be in, let’s say, 2026, which is still quite good we believe. And then expanded silicon, we told you about six months ago, ‘look, we have an objective. We want to finish the concept study for silicon at the end of the year.

And we want to finish the feasibility study’. We did both. Now we are entering the phase of the pre-feasibility study that may take between 18 and 24 months. Things can change significantly. We don’t know right now, nobody knows how to tackle in an optimized way this magnificent boardwalk. Is it going to be a huge pit? Is it going to be a smaller pit? Is it going to be underground? We just don’t know. And so the way we end up optimizing the project will determine a lot of things that we don’t know right now. I can tell you right now is, we right now have a target of 18 months. We will be telling you about progressing. And then when we finish the pre-feasibility study, as we are doing without a doubt, we will be able to tell you much more about silicon.

It is however, you can see already, it is and we said like, one of the probably the best discovery in more than a decade in the U.S., and it’s a massive, massive ore body. So we’re very excited.

Raj Ray: Alberto, thanks for that, very clear. One last follow-up question, if I may, on Obuasi. It’s good to see that last four months in the tonnage have stabilized. The grades have picked up. In 2024, how comfortable are you with your development rates and how much flexibility you have in the operations? The reason I ask is, is there any risk you see with respect to volatility similar to we saw in Q3, to Obuasi?

Alberto Calderon: So look, last four and now five months, because we are in the third week of February, we’re averaging this 90,000 tons, which would give you about a 250,000 ounces of gold for the year. And we’ve said that we believe we can ramp up a bit from about 95 to 110. That would then put us into the 270 to 300. So at this stage, everything is looking good. And we stand by our guidance. Honestly, right now, we are already at the lower end of that guidance. So if we can improve a bit more, which we believe we can, then we should get into the midpoint of that guidance.

V : And so I think we have good instruments now, as we move forward to give us comfort on the guidance that we put forward today on that range for ‘24 with the KMS shaft on the increase now for between 325 and 325 or ‘25. And then eventually when by then, by ‘26, we will be very comfortable with both methods and hence we have the confidence of above 400,000 in ‘26 and beyond. You want to? No. Thanks Raj.

Raj Ray: Thank you.

Operator: Thank you. The next question is from Josh Wilson of RBC. Please go ahead.

Josh Wilson : Thanks very much. So I just wanted to recap a comment that I think Gillian had made earlier on the on the capital front. What was the item that was not included in the guidance? Was that North Bullfrog?

Gillian Doran : For 2025, yes. The capital for Nevada.

Josh Wilson : Okay. So the project capital guidance. Yeah. So the project capital was something like 400 to 450. What would be that spending directed towards?

Gillian Doran : So there’s studies in there for Nevada and also our kind of usual growth program as well. So that of expansion of tailings facility and some other growth projects that we have in some of our assets, sort of like the normal envelope of growth capital that we spend annually.

Josh Wilson : Okay. So let’s so assuming the project were to be advanced in let’s say, mid-25, first half of ‘25, assuming the permit to come in, what sort of – what balance of the CapEx would be added to that figure in 2025?

Gillian Doran: For now, it’s on where we are with the study. We don’t – the level of confidence in the study, we haven’t – we don’t want to repine on what that range would be, because the team are still of course assessing a number of options in the region.

Alberto Calderon: But it’s not the construction phase or what else. Its pre-feasibility study, and so it’s not like going to be something that would be very, very material. But we just don’t know, so we’ll be telling you where the pre-feasibility ends.

Josh Wilson : Okay. We’ll stay tuned for those numbers. All right. Thank you very much.

Alberto Calderon: It could be 30, it could be 50, it could be 60. It’s not 100, I think. So that’s sort of what I’m trying to say.

Operator: Thank you very much.

Alberto Calderon: Okay. Go ahead Josh, anything more? Chris?

Operator: The next question is from Leroy Mnguni of HSBC. Please go ahead.

Leroy Mnguni: Hi. Good afternoon. Thanks for the opportunity. It’s, quite pleasing to see that the — and the underhand cut in fill at, Obuasi is progressing really well. I was just wondering if you have a sense yet of how the costs of that method compared to the sort of previous long haul open-stopeing mining method. And if you could also please provide some guidance on what you expect of Obuasi all-in sustaining costs to be when it reaches steady state production. And then the decline in all-in sustaining costs into 2025 compared to 2024 is also quite pleasing. I was just wondering, I know you mentioned that it’s asset optimization and improved deficiencies. I was just curious as to, is that just generally across the group or are there specific assets within the group that are driving those improvements?

Alberto Calderon: Leroy, you broke up a little in that last question. Could you just repeat for us please?

Leroy Mnguni: Oh yeah, sure. I was saying that the guidance, all-in sustaining cost guidance for 2025, the fact that it’s declining is quite impressive. I know you said its asset optimization and improved efficiencies. I was just wondering, is that just broadly across the group or are there specific assets that are driving those improved efficiencies? And then maybe if I could just add, what are you currently seeing as underlying mining inflation across the group?

Alberto Calderon: Okay, thanks. That’s clear. Thank you. So first question, underhand cut and fill. So look, in the trial that we already did and completed, what we found is that the cost per ounce was around $800 – $750 I’m sorry. And the equivalent cost with the existing method would be $800. And the reason for that is because what in the underhand cut and fill, as Richard explained very well last time, there’s no dilution and there’s no pillars. So you take all the gold. So when you are in high grade areas, if this method just reduces the cost per ounce of extraction. So that’s what is quite exciting that this now, this number of $50 an ounce, lower cost per ounce is now a proven one in this trial that we have been doing for the past weeks.

Regarding all-in-sustaining costs for Obuasi, it would be in the $950s, $980 an ounce for Obuasi. So Tier 1 in costs. Asset potential, I think that there’s two things why also the all-in-sustaining costs for ‘25. In the numbers that we have for ‘23, there’s still a lot of tailing stamps from Brazil. And if you look at the numbers of Brazil and this difference between all-in-sustaining costs and cash costs, it’s the highest in the group. It’s about $700. So we expect that that number should start coming down, and so that’s part of the reason. But of course, we are counting on full-asset potential. I would not highlight any particular one. This is an initiative that is done across all the group and all classes. So we now have a detailed budget, let’s say, for ‘25.

And so this is – I want to say this clearly. When we put up these numbers, there’s a lot of thought through them and we aim to achieve them. If I may say so, we put in in February of 2023, in March, the numbers for ‘24. If you go back to then, you will see that our current guidance for ‘24 is exactly in the range of what we said a year ago. And so I go back for ‘25. We were putting in a lot of attention, and we believe that this is achievable, so that’s that third question. And then mining inflation, it’s still that 5%. Unbelievable, but that is still pervasive. We’ve seen commodities go down slightly, oil goes down. And we are trying to do everything to renegotiate with our procurement people and the other ones when we age and send in ammonia, ammonia nitric explosive, that should come down.

But wage inflation, I would say it’s 5% an average across the group, and that’s still 50% and very pervasive. Any follow-up?

Leroy Mnguni: No, I’m covered. Thank you.

Operator: Thank you very much. Then the next question is from Adrian Hammond of SPG Securities. Please go ahead.

Adrian Hammond : Yes, good afternoon, everyone. Alberto, thanks for the detailed presentation and I appreciate the transparency increase here with a 2025 outlook on cost included. And as you know, transparency drives ratings, so well done on that. I would just like to know if you intend on increasing it further with the three year outlook in the future, perhaps on a mine-by-mine basis, that’s the first question. Secondly, the prospectivity around the Nevada looks obviously very attractive. I was wondering whether you’ve had expressions of interest for JVs and would you entertain that? That’s the second question. Also, a bit more color if you may. I’m not seeing much detail on the asset potential program for within the business itself.

South ex-Nevada, in terms of reserve replenishment, you decline 0.7 million ounces year-on-year. I wonder if that worries you. If there’s any sort of color you can give us on the progress of the asset potential program within the rest of the business. And then just a comment for Gillian. I noticed that the cash conversion has improved tremendously with the progress you’ve made on that lock-ups in DRC, Tanzania, and the duties in Argentina, so just a congratulations on that. It’s a lot more than your predecessors ever did, and in such a short time.

Alberto Calderon: Thanks very much.

Stewart Bailey: What is the third question?

Alberto Calderon: Adrian, I think the third question, could you just repeat the one on full asset potential and reserves? We kind of lost you halfway there. Sorry.

Adrian Hammond : Sorry, yeah. Replenishment is a concern. You were down 0.7 million ounces year-on-year. So perhaps you can recognize that as a risk.

Alberto Calderon: Okay. Well, thank you. Look, we’ve heard you and believe me, you are working towards increasing. We know we need to increase probably to a three year eventually. But we will only do it when we’re comfortable that we are not putting out like sort of gloves. And with all due respect, I’ve seen other that said, ‘oh, I’m going to go down by $100.’ And yeah, you just don’t know how to so we will do it. I can’t promise you when, but we will do. We are working a lot in mind planning right now across the whole company. And when we have a better understanding of all of that, of the long term, we will. So Gillian has it on her to-do list, but it’s really not Gillian. We just need to have the operators a better understanding.

But we’ve heard you and we’re working on it and will come one moment when we will be providing that and mine-by-mine also. Prospectivity, JVs, it’s actually not in the list right now. There are some other companies that have assets in the region. And we are not against probably creating a bigger one or something like that. But it’s nothing that is actively in discussions right now. It is such a massive resource as you see that in itself. It’s just going to take a lot of effort getting to that 0.5 million ounces. Look, the replenishment, if you look at our track record of 25% per year on six years, sometimes it’s a bit higher, sometimes it’s a bit lower. I really am not concerned about that. We actually, if you look at resource actually, we did increase now, but by 5% resource, more importantly, you see where Geita is – I think it’s at seven years.

All the big ones are between seven and 30 and 10 years and Tier 1. So I’m – I know we went down by $0.7 million, but it’s a lumpy thing. We have very interesting targets for this year. I am pretty comfortable that if you take a three year average, we’re basically replenishing our – I’m pretty sure we will be replenishing our depletion.

Adrian Hammond : And that $0.5 million ounces here, can you give a rough guide as to when you think you could get there from Nevada?

Alberto Calderon: That goes with the pre-feasibility. We know that the resource sustains something like that. But look, it’s the pre-feasibility study. I’ll take 18 months and we will be informing you when we have more right now. But at this stage, it will be very speculative. What we do know from the concept level study is that it’s going to be very profitable, that it is massive, that it is multi-decade. And we also know that it would be in the all-in sustaining, in the high 900s, let’s say at a high end. But we believe we can optimize that.

Adrian Hammond : Thank you.

Alberto Calderon: Thanks, Adrian.

Operator: Thank you very much. Sir, we have no further questions in the queue. Would you like to make some closing remarks?

Alberto Calderon : Okay. Well look, thank you again very much for your time, for your questions as always. I always think when I’m reading the presentation, it’s a bit too long and I hope we didn’t bore you too much. But we are proud of what we have done. We are proud of that in what was a difficult year that started with things beyond our control, with a concentrated collapse and with the change in the regulatory environment in Brazil, we were able to overcome. Probably I would add, you can see and we have heard you and all the analysts. We are much more focused also and our new CFO much more – not so new, but focus on cash conversion. Working capital, you can see it’s much better in the second half and that will be continuing.

So it’s not only cash costs, all in sustaining, but we’re also very, very heavily focused on free cash flow and working capital and its showing. So look, things are coming into play, into terms and how I finished again my last introductory comments. We have a great team at all levels. We have very committed people and we’re doing what we said we’re going to do, and that’s the most important thing. In the end what we have is our credibility. And you guys are the ones that judge us. Are we delivering on what we said we were going to do? I believe in the last two years we have done so. But again, many thanks for your questions and for your attendance.

Operator: Thank you very much. Ladies and gentlemen, that then concludes today’s event and you may now disconnect your lines.