Published on April 22, 2008
AngloGold Limited: AngloGold Limited Structured for value and growth Slide2: Premised on value, focused on growth Amongst the lowest cost major gold producers Sound operating and financial performance, with track record of providing competitive returns today Strong project pipeline with low cost organic growth – building for tomorrow Comparative value, even in a rising gold equity market Proud of our product, committed to excellence and innovation … Share the wealth... Sound operating & financial performance ...: Sound operating & financial performance ... Performance in March quarter Operating profit up 7.3% to $147m Headline earnings (before unrealized non-hedge derivatives) up 1% to $89m or $0.81 per share Total cash costs decreased by 5% to $151/oz Total production costs decreased by 3% to $188/oz Record cash operating margin of 47% ($136/oz), up 13% from December quarter Return on capital employed maintained at 16% Return on equity up from 22% to 23% Improved leverage to a firmer gold market ...: Improved leverage to a firmer gold market ... Hedge restructuring in March quarter Increased exposure to rising gold prices through deliveries into low-priced forward sales contracts Hedge book restructured to eliminate all low-priced rand gold forward sales for the remainder of this year Open hedge position reduced by 1.7 Moz to 12.9 Moz (120% of the quarter’s production) Only 32% of forecast 2002 production sold forward, or 3Moz of forecast production fully exposed to the spot market, at much higher margins than our peers … and well positioned going forward: … and well positioned going forward AngloGold’s financial character – a strong balance sheet Strong cash position after Free State sale, Normandy transaction and debt restructuring Net debt at March 31 after adjusting for the sale of the Free State is $477 million On the same basis net debt to total capital employed is 20% New $600m facility at 70 basis points above LIBOR, with $360m drawn down to date Structuring for value and growth …quality assets: Structuring for value and growth … quality assets 530,000 oz p.a. Sale of Elandsrand and Deelkraal to Harmony 2001 1.3 Moz p.a. Sale of Bambanani, Joel, Matjhabeng and Tshepong mines in the Free State 2002 2.5 Moz p.a. Formation of AngloGold – 24 South African shafts closed or sold 1998 Estimated decrease in production Sale/Closure Date Geita transaction in Tanzania, 50% stake purchased from Ashanti Goldfields for $205 million in cash Morila transaction in Mali – 40% stake purchased from Randgold Resources for $132 million in cash Acacia acquisition in Australia for shares, valued at $443 million Minorco gold assets purchased in the Americas for $494 million in cash Acquisition 0.5 Moz p.a. 2000 0.4 Moz p.a. 2000 0.5 Moz p.a. 1999 0.9 Moz p.a. 1998 Estimated increase in production Date Structuring for value and growth …spreading risk: Structuring for value and growth … spreading risk Production and EBITDA figures for the year ended December 31, 2001. Structuring for value and growth …margin and returns: Structuring for value and growth … margin and returns Earnings & Dividends EBITDA & Cash Operating Margin AngloGold going forward …Three core objectives: AngloGold going forward … Three core objectives 1. Leveraging existing assets driving the company down the cost curve through workplace restructuring and ongoing productivity improvements. 2. Growth Value-adding organic growth via the completion of five major capital projects in SA, Australia, the US and, if feasible, two additional projects in Brazil and Western Australia. Projected reserve growth from brownfields exploration around existing operations. Targeting some 13 million new production ounces by 2015 through greenfields exploration. Continuation of AngloGold’s disciplined acquisition strategy. 3. Downstream Continued downstream investment and promotion of our product. Objective 1: Down the cost curve … track record of managing costs: Objective 1: Down the cost curve … track record of managing costs Objective 2 : Organic growthCapital Projects: Objective 2 : Organic growth Capital Projects Objective 2 : Organic growth Potential development projects: Objective 2 : Organic growth Potential development projects Objective 2 : Growth through exploration: Objective 2 : Growth through exploration In the past two years we’ve generated 5 million new reserve ounces from brownfields exploration at a discovery cost below $9/oz. A highly-focused greenfields exploration program is targeting 13 million new production ounces between now and 2015 at a discovery cost below $30/oz. In 2002 $50 million has been budgeted for global exploration. Objective 2: A disciplined acquisition strategy: Objective 2: A disciplined acquisition strategy AngloGold’s record 2.3 million lower cost ounces Outstanding performance from acquisitions in East and West Africa, Brazil and Western Australia Walk away from over-priced assets Going forward Double-digit discount rate valuations No value, no deal Strategic fit with AngloGold’s asset base Recognize opportunities for assets as well as companies Preference for full ownership or, at least, management control Objective 3: Creating value downstream: Objective 3: Creating value downstream Committed to improving the health of the market for our product Track record of innovation and industry leadership in gold marketing. Market development initiatives cover a wide range of activities, including: Industrial applications – Project AuTek Promotion and preservation – Gold of Africa Museum OroAfrica: 25% interest in South Africa’s largest manufacturer and exporter of gold jewelry. GoldAvenue: 33% holding in this e-commerce venture B2B trading operation GAExchange launched in 2001 – now with counter-parties in five countries. GoldAvenue B2C website and catalogue now live in the US – go to www.goldavenue.com to purchase quality gold products at reasonable prices. Gold investment product offer for retail consumers is currently being added to Gold Avenue B2C. Superior TSR performance: Superior TSR performance Strong earnings flow and consistent returns, relative to peers …: Strong earnings flow and consistent returns, relative to peers … Source: UBS Warburg, May 2002 EBITDA margins (2002) Return on equity (2002) 0 10 20 30 40 50 60 AngloGold Gold Fields Barrick Harmony Newmont Placer Dome Aurion Newcrest Buenaventura Lihir EBITDA margin (%) 0 10 20 30 40 50 60 Gold Fields AngloGold Harmony Buenaventura Aurion Newcrest Barrick Lihir Placer Dome Newmont Return on equity (%) … and value today, cheaply…: … and value today, cheaply… Sources: UBS Warburg, May 2002 EV/EBITDA (2002) EV/OpFcF (2002) 0 5 10 15 20 25 Newcrest Lihir Newmont Placer Dome Barrick Buenaventura Gold Fields AngloGold Aurion Harmony EV/EBITDA (x) 0 5 10 15 20 25 30 35 Lihir Newmont Buenaventura Placer Dome Barrick AngloGold Aurion Gold Fields Harmony EV/OpFcF (x) EPS sensitivity to a $25 change in gold price as a percentage of share price: EPS sensitivity to a $25 change in gold price as a percentage of share price EPS sensitivity / share price 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% Freeport AngloGold (ADR) Newmont Placer Dome Barrick Source: Goldman Sachs Research estimates, May 2002. AngloGold Limited: AngloGold Limited … proud of our product, committed to excellence and innovation … Disclaimer: Disclaimer Except for the historical information contained herein, there are matters discussed in this presentation that are forward-looking statements. Such statements are only predictions and actual events or results may differ materially. For a discussion of important factors including, but not limited to, development of the Company’s business, the economic outlook in the gold mining industry, expectations regarding gold prices and production, and other factors, which could cause actual results to differ materially from such forward-looking statements, refer to the Company’s annual report for the year ended 31 December 2001, which was filed with the Securities and Exchange Commission on March 18, 2002.