AngloGold Ashanti : August 07, 2020 - AngloGold Ashanti weathers COVID-19 disruptions to post surge in free cash flow (138.2k)

AngloGold Ashanti Limited

(Incorporated in the Republic of South Africa) Reg. No. 1944/017354/06

ISIN. ZAE000043485 - JSE share code: ANG

CUSIP: 035128206 - NYSE share code: AU ("AngloGold Ashanti" or the "Company")

NEWS RELEASE

AngloGold Ashanti Weathers COVID-19 Disruptions to Post Surge in Free Cash Flow

(JOHANNESBURG - PRESS RELEASE) - AngloGold Ashanti withstood COVID-19-related disruptions to deliver a solid first half production performance and a surge in free cash flow generation to $177m, most of it coming in the three months to June 2020.

Free cash flow rose to an inflow of $177m for the first six months of the year, compared to an outflow of $31m in the same period last year. Of that amount, $173m was generated in the second quarter of the year. Free cash flow before growth capital, the metric on which dividends are calculated, rose 376% - or nearly fivefold - to $324m.

"The business is in excellent shape - cash flows are extremely robust, demonstrating the significant operating leverage we have to this strong gold price," Kelvin Dushnisky, outgoing Chief Executive Officer (CEO) of AngloGold Ashanti, said. "While the recent rally in the gold price is welcome, tight cost and capital management will continue to be the key focus areas for us as we work to capture this widening margin and increase reserves."

AngloGold Ashanti is investing in the redevelopment of its Obuasi Gold Mine, as well as exploration and ore reserve development to increase its operating flexibility and increase reserves. Interim CEO Christine Ramon will continue to focus on the inward investment programme, with rigorous capital allocation guidelines including leverage and return targets.

Operating Performance

Production in the six months ended 30 June 2020 was 1.469Moz at a total cash cost per ounce of $810/oz, compared to 1.554Moz at $792/oz for the first six months of last year. Geita delivered an outstanding performance, Serra Grande posted a strong recovery from the first quarter while Kibali, Iduapriem, Tropicana and AGA Mineração delivered steady production.

All-in sustaining costs (AISC) were $1,031/oz for the first six months of 2020, compared to an AISC of $1,002/oz for the corresponding period last year.

The adverse impacts of COVID-19 on production in the first half of the year was limited to an estimated 85,000oz, of which 63,000oz related to the South African operations. AISC were impacted by $53/oz.

Second quarter production increased 5% over the first quarter of 2020, rising to 753,000oz from 716,000oz. Quarter-on-quarter production improvements were recorded at Sunrise Dam, Serra Grande, Iduapriem, Obuasi, Geita, Siguiri and Cerro Vanguardia (CVSA).

Adjusted EBITDA for the first six months of the year increased by 59% to $1.096bn compared to $689m during the first half of last year, helped by a 26% year-on-year increase in the gold price received and weaker local currency impacts.

The Obuasi Redevelopment Project continued to ramp up, delivering 50,000oz in the first half of 2020 despite delays in receiving equipment and the arrival of certain critical skills to the site as a result of lockdowns in various jurisdictions, with Phase 2 ramp-up expected by the end of the first quarter of next year.

Free cash flow before growth capital - the metric on which dividends are calculated - increased significantly to $324m in the first half of 2020, compared to $68m for the same period in 2019. Cash flows were impacted by VAT that continues to be locked up at Geita and Kibali, with balances owing at the end of June 2020 of $131m and $71m respectively. At the end of June 2020, the Company's attributable share of the outstanding cash balances awaiting repatriation from the Democratic Republic of the Congo (DRC)amounted to $293m. Barrick Gold Corporation (Barrick), the operator of the Kibali joint venture, continues to engage with the DRC government regarding the 2018 Mining Code and the cash repatriation.

The sale processes related to South Africa and Mali continue to progress, with final conditions precedent to be fulfilled, and the decision was taken to retain CVSA.

The first production stope in Tropicana's Boston Shaker underground mine was fired in June 2020 and the project remains on track to achieve commercial production in the second half of 2020. The work on the Feasibility Study at the Quebradona project is progressing and is now expected to be completed in the first half of 2021. At the Gramalote project, our joint venture partner, B2Gold Corp expects to complete the Feasibility Study in the first quarter of 2021.

Balance Sheet

The balance sheet continues to improve as stronger cash flows helped with the continued reduction in debt. The ratio of Adjusted net debt to Adjusted EBITDA at the end of June 2020 was 0.67 times, well below the targeted level of 1.0 times through the cycle.

Adjusted net debt decreased by 18% to $1.428bn at 30 June 2020, from $1.739bn at 30 June 2019. In order to safeguard the balance sheet during the COVID-19 pandemic, the Company took proactive steps to further bolster liquidity. As at 30 June 2020, the Company's liquidity remained strong with approximately $2.47bn available, including cash and cash equivalents of $1.29bn.

Safety

Regrettably, there was one fatality in the second quarter, involving a Long-haul Dump operator who was fatally injured in a Heavy Mobile Equipment related incident at Obuasi. Subsequent to the end of the second quarter, a security guard was fatally injured at the Obuasi mine when he was struck by a private vehicle that veered off the road. In addition, we have previously reported four fatalities in the first quarter, which occurred in two separate safety incidents in March at the Mponeng mine. The tragic occurrence of these fatal incidents remains a stark reminder that we must continue to redouble our efforts to make sure our employees return home safely each day.

CEO Change and Executive Team Update

On 30 July 2020, AngloGold Ashanti announced that Mr. Kelvin Dushnisky decided to step down as Chief Executive Officer (CEO) and Executive Director, effective 1 September 2020.

The Board of Directors of the Company (Board) thanks Kelvin for his role in advancing AngloGold Ashanti's strategy and wishes him the very best in the future. Kelvin will remain in Toronto to spend time with his family but will be available to assist the group with a smooth handover until 28 February 2021.

"Kelvin has done an excellent job in delivering on the Company's strategy and leaves AngloGold Ashanti in solid shape, with an improving portfolio, robust cash flows and ongoing debt reduction," Sipho M. Pityana, AngloGold Ashanti's Chairman, said.

The Board is also pleased to announce the appointment of Ms. Christine Ramon, currently Chief Financial Officer (CFO) and Executive Director, as Interim CEO. Christine will assume the role from 1 September 2020, while the Board embarks on a comprehensive recruitment process to find a new permanent CEO. Mr. Ian Kramer, currently Senior Vice President: Group Finance, will assume the role of Interim CFO for the duration of the transition period.

The information contained in this announcement has not been reviewed or reported on by the Company's external auditors.

The figures and results contained in this announcement include continuing and discontinued operations, unless otherwise stated.

ENDS

Johannesburg

7 August 2020

JSE Sponsor: The Standard Bank of South Africa Limited

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Certain statements contained in this document, other than statements of historical fact, including, without limitation, those concerning the economic outlook for the gold mining industry, expectations regarding gold prices, production, total cash costs, all-in sustaining costs, all-in costs, cost savings and other operating results, return on equity, productivity improvements, growth prospects and outlook of AngloGold Ashanti's operations, individually or in the aggregate, including the achievement of project milestones, commencement and completion of commercial operations of certain of AngloGold Ashanti's exploration and production projects and the completion of acquisitions, dispositions or joint venture transactions, AngloGold Ashanti's liquidity and capital resources and capital expenditures and the outcome and consequence of any potential or pending litigation or regulatory proceedings or environmental health and safety issues, are forward-looking statements regarding AngloGold Ashanti's operations, economic performance and financial condition. These forward-looking statements or forecasts involve known and unknown risks, uncertainties and other factors that may cause AngloGold Ashanti's actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied in these forward-looking statements. Although AngloGold Ashanti believes that the expectations reflected in such forward-looking statements and forecasts are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic, social and political and market conditions, the success of business and operating initiatives, changes in the regulatory environment and other government actions, including environmental approvals, fluctuations in gold prices and exchange rates, the outcome of pending or future litigation proceedings, any supply chain disruptions, any public health crises, pandemics or epidemics (including the COVID-19 pandemic), and other business and operational risks and other factors. For a discussion of such risk factors, refer to AngloGold Ashanti's annual report on Form 20-F for the year ended 31 December 2019, which has been filed with the United States Securities and Exchange Commission (SEC). These factors are not necessarily all of the

important factors that could cause AngloGold Ashanti's actual results to differ materially from those expressed in any forward- looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results. Consequently, readers are cautioned not to place undue reliance on forward-looking statements. AngloGold Ashanti undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except to the extent required by applicable law. All subsequent written or oral forward-looking statements attributable to AngloGold Ashanti or any person acting on its behalf are qualified by the cautionary statements herein.

Non-GAAP financial measures

This communication may contain certain "Non-GAAP" financial measures. AngloGold Ashanti utilises certain Non-GAAP performance measures and ratios in managing its business. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the reported operating results or cash flow from operations or any other measures of performance prepared in accordance with IFRS. In addition, the presentation of these measures may not be comparable to similarly titled measures other companies may use.

Website: www.anglogoldashanti.com