Good afternoon, ladies and gentlemen and welcome to the AngloGold Ashanti Second Quarter 2015 Results Conference. All participants are currently in listen-only mode and there will be an opportunity to ask questions later on during the conference call. [Operator Instructions] Please also note that this conference is being recorded. I would now like to turn the conference over to Mr. Stewart Bailey. Please go ahead, sir.

Thanks, Chris and good afternoon or good morning everybody and welcome to the presentation of our second quarter results for the three months to the 30 June. In the room here in Johannesburg you have got a full executive committee. You have Graham Ehm, who is head of project and planning. You have got Venkat, Ron Largent. Chris Sheppard, our Chief Operating Officer for South Africa, Christine Ramon, CFO and Charles Carter, our head of business development. As is customary, I am just going to run through our Safe Harbor statements and then we will get right into it. Certain statements contained in this document, other than statements of historical facts including, without limitation, those concerning the economic outlook for the gold mining industry, expectations regarding gold prices, productions, 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 our operations, individually or in the aggregate, including the achievement of project milestones, commencement and completion of commercial operations of certain of our exploration and production projects and completions of acquisitions, dispositions or joint venture transactions, our liquidity and capital resources and capital expenditure 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 our operations, economic performance and financial condition. These forward-looking statements or forecasts involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied in these forward-looking statements. Although we believe that the expectations reflected in these 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…

Good morning and good afternoon ladies and gentlemen. Firstly, apologies for my voice. I picked some sort of a throat bug. So if I don’t come across as I normally do, that is the reason. To kick off, the AngloGold Ashanti team is pleased to present today another strong set of results and a continued delivery of our strategy. As you know we, like several other gold mining companies, are in a tough market. But certainly from our perspective, the more tougher it gets, the more our determination to deliver becomes. If I can quickly refer to the introductory slide starting with Slide no. 5. To recap our strategy to deliver sustainable cash flow improvements and returns are built on five pillars. Starting with foundation which is around safety, people and sustainability. Secondly, financial flexibility to see us through the various cycles. Then the third area is around operational excellence, here we take into account the production, costs and capital and we measure it on all-in sustaining cost and all-in cost, further enhancing our portfolio quality. And finally, preserving a focused long-term optionality in the portfolio recognizing that the mining industry does go through cycles From the team's perspective, we are a committed and reliable team. Our philosophy is very simple. We say what we are going to do. We do it. We then come back and say we have done it. So what you see with us is what you get. So moving on to Slide no. 6, in terms of the second quarter highlights. Starting off with free cash flow. We delivered free cash flow of $71 million during the quarter and Christine will unpack the number in further detail. In terms of production across the group, we met our market guidance of 960 to a million ounces,…

Thank you, Venkat and good day ladies and gentlemen. As you no doubt are aware, as indicated previously, I have taken over from Mike O’Hare from the first of June this year and to say that a hand over has taken place over the last few months and that has assisted a smooth transition given the criticality of the South African region. My immediate focus areas in the short-term, I will just lightly touch on those, first the safety. Whether pursing our journey through zero harm or minimizing the debilitating effect of Section 54 is number one my agenda at this stage. Secondly, we need to improve our face length minable position in order to improve volumes through increased mining flexibility. And third and important issue in my life at this stage is the delivery of the Mponeng below 120 project. If we can then turn the page to West Wits operations on Slide 10. It's pleasing to note that TauTona has delivered to expectation with a year-on-year improvement in cash costs of some 8% and as commented on by Venkat, TauTona achieved two-year fatality free shift during the month of May this year. We have seen pleasing progress with the reef boring project with the latest Mark 4 machine being imminently commissioned on site and the current machines that are on site operating are approaching blueprint cycle times. Furthermore, the ultra high strength backfill test has successfully been able to achieve a pumping of backfill over 1000 meters distance which was a key milestone in the project program. Turning to Mponeng. Performance was impacted on two fronts. Firstly, the section 54 stoppages that occurred in quarter one that ultimately impacted on performance on quarter two, as well as physical stoppages that took place in quarter two. Secondly, the execution…

Thank you, Chris and good morning. I will provide some detail around our quarter two 2015 operating results for Continental Africa, Australia and Americas region and also discuss some of the critical work streams that are underway to develop the optionality within the portfolio. As usual, I will not dig into the nitty-gritty of each operating asset as the detailed results are contained within the quarterly report. Before I get into the regional outcome for quarter two, I would like to reflect on some of the trends that we have seen in the international portfolio over the past two plus years since we embarked on our drive to improve efficiency and navigate the low gold price scenario but also to prove that we actually can thrive in it. For the past two years, I have asked you to watch or monitor the cost numbers in each of our quarterly results and to draw your own conclusions around the effectiveness and sustainability of our cost management work within AngloGold Ashanti. We set ourselves a challenging list of objectives in early 2013 for this work. We communicated during the quarterly results that the primary outcome was to remove $500 million from the operating cost basis within an 18-month period. Referring to Slide 17, I think you will agree that this Slide tells a compelling story around what this team has been able to achieve by focusing on the operations and relentlessly driving efficiency. Now with more than two years of data to support us, we can illustrate not only the effectiveness but also the sustainability of the process we have created. The first step change was in early 2013 when our all-in sustaining cost reduced to around $1200 per ounce. We worked hard at capital allocation and addressing all other cost elements,…

Thanks, Ron. Today I will provide an update on Kibali and Obuasi. Share some of our thinking around business and mine planning and share some of the good results that are coming from exploration. On Slide 24, I have commented previously that phase one of Kibali's development has been completed. Remaining elements are two hydropower stations and the shaft. The Ambarau hydropower station is about 70% complete and will commence power generation in quarter three. Detailed design of the Azambi station has just commenced and will be built in 2016. The three hydro stations will have an installed capacity of 44 megawatt and generate power at 1.5 cents per Kwh. The shaft bottom at 760 meters was reached on the 23rd of July, about three months ahead of plan. Fit-out will take until quarter one 2016, followed by construction of the crusher chamber and load level, leading to ore hoisting around mid-2017. On Slide 25, at Obuasi, a limited operating phase remains on track producing gold from the retreatment of tailings and remnant stockpile. The team is very focused on doing well and produced 14,000 ounces this quarter and 31,000 ounces year-to-date. Development of the decline is continuing to progress according to plan and the feasibility study is also on track for completion by year-end. The study reached an interim milestone this quarter with the completion of the draft study. Even at today's spot price, the results were sufficiently encouraging to warrant us continuing to optimize the study and think through execution planning and risk management. We have also commenced engagement with the Government of Ghana on the key issues on which we would need to align for any future development of Obuasi. In regard to the portfolio on Slide 36, I will spend a little bit of time here.…

Thank you, Graham. Good morning and good afternoon everyone. As you can see from another strong set of results, our second quarter's performance reflects the sustained operational delivery again beating market consensus views. These numbers reflect the strength of our portfolio and continue to differentiate AngloGold Ashanti from the majority of our peer group. The global macroeconomic environment remains volatile with downside risk, but proceeds received from the sale of CC&V enhances our liquidity and reduces our net debt providing the much needed buffer for volatility. I will now talk to the detail of our second quarter performance concluding on the third quarter and full year outlook. Moving to Slide 33. AngloGold Ashanti is uniquely positioned compared to our peers due to our geographic diversification and our exposure to a basket of currency. Our basket of currency cushioned the drop in the U.S. dollar gold price in 2015. The U.S. dollar per ounce gold price dropped by approximately 8% while on a production weighted basis AGA was positively impacted by 2%. Weakening currencies in South Africa, Brazil, Argentina and Australia cushioned the U.S. dollar drop in the gold price. Given its production weighting and the rand depreciation, South Africa comprises roughly one third of the currency basket. This benefitted our results in addition to the positive impact of lower oil prices which helped lower cash cost in the Continental Africa and Australia regions. Moving on to Slide 34, which deals with the quarterly financial and operating metrics. As we have heard from Venkat, we have delivered ahead of guidance on our overall production and cost target despite the safety stoppages that affected our South African operations due to good performance from our international operations. Notwithstanding an 8% weaker gold price and 8% lower production, we continue to deliver a strong…

Thank you, Christine. As the Slide will show, and I am now looking at Slide no. 41. We have built a good track record of consistency and delivery on our quarterly guidance. We have either met or beaten every production and cost target since the current team took charge in early 2013. We are in to our tenth consecutive quarter of consistent delivery and that’s despite numerous headwinds that have been coming at us as a gold mining company. However, as I reiterate every quarter, mining is a long-term game and we may miss a quarter or two here and there. But so far, we have certainly bagged all of the quarters to date. Turning to the conclude Slide, Slide no. 42. It's now 46 months since the gold price started to fall from its peak in September 2011. At some stage this has to reverse and start showing a positive trend. But notwithstanding that, we have been proactive and decisive in our response every step of the way. An overarching comment when you are looking at AngloGold Ashanti in a falling gold price environment, do bear in mind that we have got ongoing P500 initiatives which certainly Ron covered and Chris will be implementing in the South African regions, which provides an overall cushion in terms of our cash flow generation. And this we measure in all-in sustaining cost but it's income versus a range of initiatives which involve improving production efficiency and active cost management. In addition to that, favorable currency exposure an weakening oil prices which Christine alluded to, will continue to provide a natural cushion for oil gold prices in a partial manner. And if you look back, as the price has been falling, we have been decisive, we have taken a number of steps which…

Chris, we are happy to take questions now, please.

[Operator Instructions] Our first question is from Andrew Byrne from Barclays. Please go ahead.

I've just got a couple questions on the South African region. I think the international portfolio, the results are speaking for themselves there. If we look at Mponeng, so the question is for Chris. Is there any chance you could talk us through a recap of the B120 project? Give us an idea of timing and CapEx and production, and potentially the timeframe and CapEx needed to move that ore reserve back up to the 20% [formal] [ph] target that you've talked about?

Andrew, I think first point, as I alluded to in the presentation, right now as we speak a large amount of our focus is really on the infrastructure and the operational readiness of the project on phase one. As I indicated, we are focusing on 123 level and 126 level. Getting the decline operations operational to fully facilitate the production buildup and the medium term ore reserve development program. As far as the capital amount is concerned, I don’t have that figure right here in front of me at present and it's something that we should have a discussion on once my first 100 days is actually up in actual effect and have a more detailed conversation.

Yes, sure. Okay. And then just on Mponeng, you mentioned that you're getting pinching out there. Is that due to the actual ore body or is that due to a boundary constraint? Are there any potential synergies with neighbors that you could look to there? Yes.

Okay. I think first taking up the piece about are their synergies with adjacent properties on, so that would be a no because we are at the deepest part of the ore body on the [indiscernible] contact reef at this point in time. Point number two is laterally there are defined grade limits which we understand. So that’s the way I would position my answer to you on that one.

Yes, sure. No problems. And then potentially one for Ron. Just on Geita, Christine mentioned the CapEx is going to pick up in the second half. Is there any chance you can just put some numbers around that just to avoid any shocks in Q3 or Q4?

Okay. If I can just help with the numbers there, Andrew. In essence we anticipate total cost is about $35 million stay-in business CapEx for Geita for the full year. And in essence that we saw that coming through in the first half of our $17 million of that and so the balance will come through in the second half. But I think quite importantly, we will be overall staying within the guidance range that we actually put up. And as you know, of the guidance range, $900 million to $1 billion total, 77% of that being spent on stay-in business capital in the group.

Thank you very much. Our next question is from [indiscernible] from BlueBay Asset Management. Please go ahead.

I was wondering if you could give us an update in terms of your capital structure. I think you alluded to it on the call. Obviously in the past you've commented on your need to reduce gross debt. You've said that the 2020 bond represents a part of your capital structure that you're not happy with in terms of cost. Has anything really changed in terms of your ability or want to reduce that, given your need to retain potentially excess liquidity in light of a declining gold price? That's my first question. And then the second question I had is, given that you are facing fairly mature operations in terms of your portfolio, have you reconsidered the need to hedge your gold price exposure? Thanks.

I think from a capital structure perspective, we have always said that the high-yield bond is an opportunity for us. And as you know that the call option is due from July 2016 onwards, we are focusing on how we can reduce the interest [build] [ph]. From a group perspective just over $100 million of the $250 million interest [build] [ph] does relate to the high-yield bond. And in the current environment, I would just say cash is king. And I think once there is more stability in the gold price outlook, we would be looking at opportunities of how we can reduce the interest [build] [ph]. What we have done post the quarter end is that we actually have repaid the drawn amount of the U.S. dollar RCF facilities, about $200 million was actually drawn. And we repaid that as I think, quite importantly, it's the full $1 billion of the U.S. dollar facility will be available to us. So we are keeping our powder dry on there. And I think that all I would like to say at this point in time, I think importantly from a gold price hedging perspective, we are not making any fundamental changes from that perspective and has been kept -- and I spoke to in the presentation, there is a natural hedge as relates to the gold price. Maybe strong correlation in terms of the currency basket that we are exposed to. It's only really Continental Africa that actually doesn’t benefit from the currency aspect but the rest of the portfolio actually does. And they are not forcing a low gold price environment. One actually does experience the lower oil prices, low inflationary effects coming through and clearly, there is a bit of a natural cushion with relation to that.

Right. I mean on the earnings call, you mentioned that you've ring fenced the proceeds from CC&V. What do you mean by that?

It means that the proceed is being kept in dollars offshore, between the Isle of Man and the United States at this point in time. And so it's ring fenced for debt reduction so it will not be applied to any project related capital.

Right, okay. I mean given that the call price on the bonds is 106 and they're trading below that. Would you look to potentially move ahead of the call option next July or are you more inclined to retain liquidity and see if the gold price stabilizes?

Yes. I think you know, like I have said we would be looking at that from July next year onwards and clearly the current gold price environment does make us want to hand on to the catch and I think that’s the way I would like to leave it.

Thank you very much. [Operator Instructions] Our next question is from [Anand Jha] [ph] from Copal Amba. Please go ahead.

I have two questions. Would it be possible for you to give us a breakup between your sustainable CapEx and development in CapEx and the guidance which you have given? And second question, if I look at the guidance for your total cash cost and all-in sustaining cost this quarter and compare with last quarter, while the currency assumptions for currency, factoring weaker currencies and lower crude oil prices, your cash cost of operations, you have not revised that guidance. Can you give some color on that? Thank you.

Okay. Thank you for the question. I think I did speak to capital and the capital guidance for the year and I said 77% of the range of the $900 million to the $1 billion capital guidance. 77% of that is relating to sustaining capital. So then the balance would be, 23% would be relating to project capital. As regard to the outlook for the year, yes, it is based on stronger exchange rate assumptions than what we have experienced. And if you look at the commodity prices that we have actually used, in particular the oil price, we have also assumed the higher assumption than what it's trading at for both Q3 and for the remainder of the year. And hence that actually does factor into our cash cost and all-in sustaining cost outlook for the year. I think quite importantly, is we are quite cautious. There is still six months of the year to flow and I am talking about on the numbers that we have actually reported on. In addition to that we have experienced the big lag when it actually comes to capital expenditures. So there is normally quite a bit catch up in Q3 and then in Q4. And then there are some wage negotiations, as you are aware, that’s actually underway across jurisdictions also in Continental Africa, and those increases have to be backdated into the beginning of the year. So it does factor some of that in. So we are conservative and clearly there is a little bit of buffer that’s actually factored into that outlook as well. But as I have also said in my outlook Slide is that we certainly look and we focus on how we can actually improve on the guidance that we do actually have given so the focus will remain there.

Thank you. And just one more quick question, which is related to a question asked earlier. Given the fact that your 2020 bonds are trading at around $1.024 to a dollar and they're callable at $1.0624 to a dollar next year in July, and that you have sufficient cash balance and undrawn credit facilities. Does it not make much financial sense to call in the bonds or make a tender offer for the bonds now even after, say, 10%, 15% premium?

Yes. I did answer the question previously. I think you know it's important for us to retain liquidity in the current environment. We are obviously focusing on how we can reduce the interest bill and so certainly that focus will remain but like I said, the target does remain the high-yield bond and when the call option is actually due and it's from then onwards. So there is flexibility even after July next year.

Thank you very much. Our final question is from Harry Mateer from Barclays Capital. Please go ahead.

Two questions. I guess. first, as it relates to the ongoing labor negations in Africa. Can you just give us a roadmap of some of the key dates and events [indiscernible] going forward?

Sorry, Harry, your line is breaking up at the moment. We can't hear it. It's sort of coming in...

Sorry. Perhaps this is better. So just two questions. First, as it relates to the ongoing labor negotiations in South Africa, can you just give us a roadmap of the key dates and events we should be watching for from this point forward?

Okay. Let met pick that up. Typically what happens is when we started negotiating sometime in June, initially went through to July. We are in August. Certainly one of the union has formally declared a dispute and is taking it to the CCMA. Typically a CCMA process, and this is the Council for Mediation and Arbitration established under the labor regulations in South Africa. The process can take anything between, from two days to around 30 days. In practice it tends to take closer to the 30 days than the two days. So certainly all that makes four to five weeks, you will have sort of news flow coming out of that and at the end of 30 days a decision will be made by the CCMA in terms of the way forward.

Okay, great. Thank you. And then second question, I know there have already been some questions on debt reduction, but just to put a finer point on it, perhaps. Should we take your comments to mean that you are focused on retaining cash right now and as a result, you really are just looking at the high-yield bonds next year and not reducing any debt under the credit facilities at present?

Well, yes. You've summed it up correctly. But I think quite importantly is we are keeping all options open at this point in time, cash is king.

And Harry, just another point. Christine did reference the fact that we have paid $200 million on the U.S. dollar RCF.

Yes.

Got it. And then what about the Aussie dollar facility?

No. Aussie dollar, obviously still remains intact. There has been some debt repayments as regards to that in the past quarter but there is $270 million still undrawn as regards to the Aussie dollar facility at this point in time.

Ladies and gentlemen, we have one final question from Tanya Jakusconek from Scotiabank. Please go ahead.

Yes, good afternoon, everybody. Maybe some questions for Christine. Just on your Slide, page 46, you show your June quarter over your prior quarter, so Q2 over Q1, and you show the $11 per ounce benefit from exchange. What about your fuel? Where is your fuel in this and how much was that?

Yes. So I just talk to it in my slides. The fuel benefits have been offset, and this actually June quarter versus prior quarter. So I think some of that has actually been offset in the special receipts block over there. I have just [said] [ph] the year-on-year, I don’t have the outright number on quarter on quarter. But if you compare the current year to the prior year, it was about $25 benefit that was included in the efficiency gain that is actually referred to in -- you are referring to the backup Slide...?

Yes. I'm actually interested in June over Q1, because a year ago like is a long time ago and oil is very different. So maybe if we could get someone to get us back the -- you know what did we offset?

We can get back. We can get back to you on that. Obviously there would have been oil benefits actually coming through.

Exactly.

[indiscernible] Did you have that?

Yes, and I think we had for you combined for Q1 currency and fuel helping you by $25 an ounce, so I'm just trying to see what that number would be in Q2.

All right.

And then maybe, Christine, just on some of your other holding costs. What are your holding costs right now for Obuasi, Colosa and some of the other assets that you're trying to reduce some of these holding costs? What are they annually, so that we understand what's it costing you to hold them?

Actually, Tanya, if I can pick it up. The holding cost we have provided is only in respect of 2015 when we took Obuasi into limited operating phase. And if you recall, we said, from a profit and loss point of view, you have got about 100 million for Obuasi. That’s around 60 million of care and maintenance. And then $30 million in terms of underground development and $10 million for the feasibility study. That is just for 2015. We have not given any forward-looking numbers for 2016 because that’s really a function of whether the project goes ahead or it doesn’t go ahead. It could change materially. That’s in respect of Obuasi. The second in respect of Colombia, I would like John and Christine to come in -- it's around, just north of $80 million in terms of holding cost for 2015. Going into 2016 we would look at reducing that quite significantly and work is underway in that regard.

You said 80 million, eight zero?

Eight zero. That’s correct.

And that’s actually across all of the projects in Colombia and in includes Greenfield exploration of about $15 million.

Thank you, very much ladies and gentlemen. That’s all we have got time for today. Thanks for making the time and we will check you again in three months.

Thank you very much. Ladies and gentlemen, on behalf of AngloGold Ashanti, that concludes this conference. Thank you for joining us. You may now disconnect your lines.