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

Thanks very much, Chris. Everyone thank you for joining us for our H1 results. We’ll follow the normal agenda for today. Just noting that Graham Ehm has a family issue to attend to in Australia and unfortunately won’t be joining us today, Ron Largent, will be covering the exploration piece. Just before we get going, as is customary the Safe Harbor statement. 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, production, total cash costs, all-in sustaining costs, all-in costs, cost savings and other operating results, productivity improvements, growth prospects and outlook of our operations, individually or in the aggregate, including achievements of project milestones, commencement and completion of commercial operations of certain of our exploration and production projects and the completion of acquisitions, dispositions or joint venture transactions, our liquidity and capital resources and capital expenditures and the outcome and consequence of any potential or pending litigations 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 our 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 contained 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 amongst other factors changes in the economic, social, political and market conditions, success of business and operating initiatives, changes in the regulatory environments and other government…

Thank you, Stewart. Good morning and good afternoon everyone. I’m pleased to report another good operating and financial performance for the six months of this year, safe for one or two setbacks during the period. Starting with our overarching strategy that drives our business performance, our strategy has remained consistent since 2013 with our five key business objectives supporting our central strategic goal of delivering sustainable improvements to cash flow and return. We have certainly achieved that in these results for the first half of 2016 with the strong improvement in free cash flow over the six months period with the expectation more to come in the second half as these prevailing gold market conditions. My colleagues and I will dig into selected elements of the progress against the strategy through the presentation, notably our Brownfields and advanced Greenfields opportunities that we’re actively working through to deliver quality production that lap to margins, extend mine life and also shape the portfolio in the longer term for our business. Turning to the slide on safety, which remains our top priority and also our biggest challenge in terms of our deep underground South African operations, which continued to represent the vast majority of injuries and fatality. Our international operations continued to show world-class safety trends with several operations consistently exceeding previous high watermarks across Continental Africa, Americas and Australia. In South Africa, despite three of our deep labor intensive mines, namely Mponeng in the West Wits, Moab and Kopanang in Vaal River, we achieved 1 million fatality free shifts during the period, but despite this and Kopanang going fatality free over a year, we are still battling to make a sustained breakthrough in the region as a whole. Increased seismicity at our West Wits operations post a significant challenge during the period…

Thanks Venkat. In my previous presentation and at year-end, I stated that the key issues that needed attention were firstly an unsatisfactory safety performance as to unprecedented safety stoppages and resultant loss of life and production; and secondly, constrained immediately stoppable face length that resulted in a lack of mining flexibility. Six months later, to-date, this focus continues. And it’s pleasing to note that progress is being made in a number of areas despite the challenges facing our industry currently. In particular, Mponeng mine has responded well and has delivered the expected results thus far. Regarding safety lengths inventories, these have been steady, despite the impact of safety stoppages which always has a drag on ore reserve creation. Turning to safety, for the past two quarters, the South Africa region has suffered two fatal incidents involving three of our employees, which occurred at our TauTona, Savuka operation. These and subsequent incidents have highlighted the need to ensure that changed management of safety improvement measures is more fully and rigorously exercised to ensure a sustainable outcome. Furthermore, the need to hold all levels in the organization accountable with safe outcomes has never been more compelling especially in the face of continued elevated levels of safety stoppages. Our focus continues through our safe production strategy to improve the skills, safe behavior, work planning and protecting and removing workers from risk and thereby improving levels of compliance. Whilst we’re supportive of the intent of Section 54 regulatory stoppages and mass audits, the manner in which they are exercised continues to have a significant impact on work routine and production. Turning to the operational performance for our South African operations, production decreased by 3% compared to the same period last year, keeping in mind the average historical decline of some 8% per annum. The…

Thank you, Chris; and good morning. I will provide some detail regarding our first half 2016 operating results for Continental Africa, Australia and the Americas region, and then discuss some priority work around the operating portfolio focusing in on the Tropicana, Siguiri and Colombia projects. Slide 14, this slide represents the quarterly all-in sustaining costs for the international operations for the past three plus years. I’d stated at the year-end 2015 results in February that our costs would be impacted by exchange rate and some levels of inflation. We actually saw this impact in our quarter two numbers with both the Australian and Brazilian currencies strengthening against the U.S. dollar. In addition to the foreign exchange and inflationary impact, we are lifting our investment in our Brownfields pipeline with aggressive drilling underway at a number of our operations and also execution of life of mine extensions that we have planned for this year and beyond. My take away from this graph is we’ve established a sustainable operating margin for our international portfolio. The next slide, slide 15. Regarding production, first half 2016 saw us deliver 1.26 million ounces, which is 9% lower than the first half of 2015. The difference is related to the completion or stop of the tailings treatment at Obuasi, a planned reduction in the ounce production at Geita and Tropicana mines, primarily due to a reduction in grade, which we flagged earlier this year, and the challenges in the Kibali sulphide processing circuit. As you’d expect, these lower volumes also impacted our all-in sustaining costs though this was somewhat offset by strong cost performances at Siguiri, Sunrise Dam and Cerro Vanguardia. The America region improved their all-in sustaining costs by 4% to $816 per ounce. We are expecting a strong second half performance from the Cuiabá…

Thank you, Ron; and good morning and good afternoon everyone. As you heard from Venkat and my other colleagues, we continued to deliver on our target reflecting improved cost management metrics and lower debt levels. The trebling of free cash flow generation compared to the first half of last year, reflects the improved efficiencies, our strong leverage to gold price currencies and the oil price, as well as the interest savings on the back of meaningful debt reduction. I’ll now talk through our first half performance and conclude on the outlook for 2016. Moving to slide 25, our currency exposure across various geographies in which we operate, continues to provide a natural hedge to inflationary effects and to the volatility in the gold price. As reflected in the graph, the AGA production weighted increased in the gold price. This diversification differentiates AngloGold Ashanti from the majority of the peer group, providing continued resilience in a volatile market as we realize currency benefits in about two-thirds of our portfolio. The lower Brent crude oil price benefits our input costs, in particular in Continental Africa and in Tropicana in Australia. We remain sensitive to changes in currencies and the oil price and we issue the following sensitivities with a health warning. For every $10 per barrel change in the average Brent crude oil price, it will impact our cash cost by approximately $8 an ounce. And for every 1% change in our currency basket, it will impact our cash cost by approximately $6 an ounce. Slide 26, H1 2016 reflects continued strong cost discipline, despite 7% lower production. Year-on-year production FROM continuing operations declined due to weaker production from Kibali, Obuasi’s move into limited operation, planned decline in grades at Tropicana and Geita as South Africa’s disruption links to safety stoppages, which…

Thank you, Christine. To conclude, we have seen another half year of fairly consistent performance and one where our margins have widened further. We have kept our annual guidance unchanged. With reduced debt levels and improved free cash flows, our balance sheet remains robust. Our focus areas remain the following: Continuing to work to improve safety in our South African operations; Continuing our various engagements in Ghana for the authorities to resolve the law and order at the Obuasi mine; Providing support to the Randgold team in their efforts to reach annual targets and to effect sustainable improvements at Kibali; Advancing our exciting slate of near to medium-term, high-return Brownfields project that Ron touched upon; And advancing our Gramalote and La Colosa projects through to the end of their prefeasibility studies and related reserve declaration from those projects at the end of next year. I’ll now hand you back to Stewart.

Alright. Thanks Venkat. And we’ll take questions now. Chris?

Thank you, sir. [Operator Instructions] Our first question is from Richard Hatch of RBC Capital Markets. Please go ahead.

Richard, go ahead.

Richard, your line is open.

Chris, maybe let’s just go to the next question.

Not a problem. Next question is from Eily Ong from Bloomberg Intelligence.

Hi, good afternoon; Eily Ong from Global Intelligence. Thank you for taking my question. Three questions, if I may, probably for Venkat and Christine. The first question is on your balance sheet. In your view, what is the optimal AngloGold Ashanti balance sheet structure? Following to second question, given your ongoing efforts to lower debt, do you think it’s prudent to protect the balance sheet in any event of gold price decline, which the market consensus is expecting in next two years, especially in context of what Christine say of potential higher all-in sustaining costs in the second half? And my third question is on CapEx. Given it’s already August, I was just wondering if you could give us a little bit of color on what to expect the CapEx to progress next year; is there a range that we could be looking at? Thank you very much.

Actually, let me pick up the overarching theme coming through on your questions and then pass it across to Christine, it’s Venkat here, to cover the detail. Firstly, from the optimum point on the balance sheet, we did say that over a year and a bit ago, we said that our balance sheet has got higher debt, we are targeting a covenant ratio of about 1.5 times through the cycle, we will achieve that with the sale of one of the assets CC&V mine, and further application of cash to reduce debt. And at the same time, the target we set ourselves was to reduce and optimize interest and that has been done by taking the high-yield bond out of the equation. In terms of actually ability to withstand gold prices, and without getting into the debate on consensus, the balance is quite robust. We have withstood gold price falls before, which have been steeper with a higher amount of debt. And one has to bear in mind, given the portfolio diversification we got a natural hedge from currency in the event gold price falls in the back of U.S. dollar strength. That’s the sort of overarching comments. I’ll hand you over to Christine to comment on those and your response to your CapEx question.

Yes, I think the only other comment I would like to make is that by redeeming the high-yield bond, we have actually reduced the high [ph] debt. Yes, we’ve actually reduced -- redeemed the balance of the high yield bond through cash on hand as well as a draw on the RCA facilities but the flexible debt; and as cash becomes available, we will actually repay debt, the RCA facility. I think as it relates to CapEx, which was your second question, I think importantly is we despite be holding the guidance -- I just wanted to clarify, did you want to speak about the CapEx in the second half or next year?

Next year.

Next year? We’re not actually guiding on next year at this point in time. I think we will certainly guide on next year’s CapEx later in the year, we normally do that at financial year end. I mean, we’ll guide on CapEx for the coming year. I think in particular as it relates to the second half, I think I have covered as to which -- it will comprise of increased CapEx, both across the project capital and the sustaining categories, there has been a lag but this is in line with historic trends. And I think particularly as it relates to projects, with the Siguiri project that’s gaining momentum and then obviously the Kibali and Geita underground and then there is an Mponeng project as well that’s included in project capital.

Yes, thank you very much.

Thank you.

Thank you. Our next question is from David Haughton of CIBC. Please go ahead.

Good morning, Venkat and team. Thank you for the update. I know that you’ve gone through this with the South Africa audience, so thank you for the North American run of this too. Just following on from Christine’s response, just having a look at that CapEx guidance, I’m not so much worried about the spend rate on the development CapEx which is $120 million to $140 million, it’s the catch-up on the sustaining. Is there any particular project or mine rather that has got a catch-up or is it just across the board as far as getting back on track to your guidance?

So, thanks for the question. I think it’s across the board, but in particular we see the catch-up in South Africa. And as we see, South Africa was impeded by safety stoppages. So, we see a catch-up there, and in particular in South Africa as it relates to Mponeng as well as the Mine Waste Solutions, Vaal River Surface operations by our planning and expansion. And so that’s where we’re actually seeing a catch-up. And then of course at Kibali, in Continental Africa, as well as Geita underground we’re seeing increases in CapEx coming through in the second half and of course not to mention Siguiri as well. And for the balance of it, it’s really across the operations we’re achieving the catch-up in sustaining CapEx coming through. And I think just to point out, this is very much in line with what -- with trends that we’ve actually seen previously, typically the CapEx spend in the third quarter increases but you really see a big catch-up coming through in the fourth quarter as well.

Okay. Then having a look at the production, you just touched below the run rate for the lower end of your guidance, and I would expect then -- South Africa would also be the catch-up there. You don’t have the holidays and as much impact hopefully of those safety stoppages. Kibali should be coming back on track and Tropicana likely moving into better grade. Is that the main points or where you’d expect the catch-up in the second half of production?

David, that’s absolutely right. The uptick comes in, in terms of South Africa, not so much in the third quarter, but in the fourth quarter, which tends to be the better quarter and hopefully normality returns on Section 54s. Then Kibali is certainly another area that where the production picks up. In addition to that, you referred to Tropicana and Sunrise Dam, as well as in terms of the fourth quarter. And one shouldn’t forget Brazil is getting back into higher grades, in the third and fourth quarter. Those are the broad areas of catch-up, and that’s one of the reasons we are actually -- we’re quite confident in terms of the production guidance aspect here. And when you talked about the run rate at the lower end of the guidance, we made it 47% of the midpoint of 3.6 to 3.8 million ounces. And if you look back in history, generally the first half of the year at some instance has been even as low as 43% or 44% at times.

Yes, you have a lot of trouble with downtime for Christmas and Easter and you tend to get that in the second half.

Correct.

Okay. Just, Ron had been talking about Tropicana potential for 30% increase in throughput, nameplate currently 5.8 million tonnes. I presume it’d be going to something like 7.5 million tonnes. What sort of CapEx would be required and timing would be required to get to that level?

Well, actually we’re almost there, if you look at that chart. Last quarter, I think we were at 6.8 million tonne run rate. So, there hasn’t been -- there isn’t a lot of capital, if you went back, we did a little stockpiling, improved some conveyer systems and it was all about getting a higher pressured grinding circuit to 95% of its capacity. So, we’re basically there. What we did add and we’ve already spent, it was about $20 million on two tanks to add retention time to the CIO plant, and those actually started up last week. So in my opinion, all we have to do is get from 6.8 to 7.2, and we are confident we’ll be there before the end of the year.

Okay. And is there any change in the hardness of ore as you’re moving through. Should we be concerned as the pit goes deeper that throughput rate might need some additional upfront crushing or grinding to be able to sustain that plus 7 million tonnes per annum?

No, we’ve done considerable met testing on material and it doesn’t seem to be any different at all. And I think what some people may be missing is the real key to this is you increase -- you can go back to full grade ore. The whole plant at Tropicana was around grade streaming to get to pay back. And by extending and deepening these mines, we’re able to go back and feed a 100% of full grade ore versus nominal 80% and 20% from a stockpile. That’s the real key is to extent the mine life at nominal production.

Okay. Over to Obuasi, you’ve initiated arbitration with the government. What’s the next step?

I think, there are two traction progress at the moment. David, obviously the diplomatic engagement continues with the government in terms of getting them to fast track the removal of illegal miners from the site. I’ve got to be honest; it’s been quite frustratingly slow in this regard. The government has shown their ability to act when they want to. We have seen that with regard to when the illegal miners were entering the area where we were using to basically pump water and for ventilation purposes and we said, if this continues, we’ve got to draw our people on grounds of safety. And the army, which has actually stationed at the mine, was quite helpful in removing the people, the illegal miners from those areas. We’ve actually given two-thirds of the concession that we don’t need back to the government for them to redistribute the pit. [Ph] They’ve established a movement committee, which is working currently with a view of trying to see how they can promote artisanal mining, understandably illegal mining doesn’t fall under artisanal mining; it needs to be regulated. So that process is ongoing. Needless to say, there is an election period coming up in Ghana, which is obviously going to distract people in terms of moving as fast as they can, but at the same time our process in terms of the arbitration is proceeding, each parties are nominated, they are arbitrator and the two arbitrators together should choose an independent arbitrator and then the hearing will actually commence in that regard. So, it is a slow process but nevertheless one where we keep engaging with the various levels within the government and also the local traditional structures and the local community. And that’s why you see a number of people speaking up in the media in favor of Obuasi and again, what’s happening in terms of illegal mining there.

Of the thousands of illegals or people coming on site each day, is that both on the surface and underground?

David, it’s Stewart here. It’s predominantly underground.

Okay. And how are they gaining access then, if you’ve got control of that or has everyone just sort of disappeared, the army is not there and they can walk in and out of the decline as they wish?

No, no, no. They are not going in the decline. These are just sort of informal adducts [ph] that have been created at various points on some of the nearer parts of the underground workings and some of the further extremities, and they are, just to be clear, on areas that are not being properly built. [Ph]

Yes. In fact, the reality is what’s happened that the military was originally sent in after close to about 2.5 months to help make the area safe, and they were making it safe when their instructions were withdrawn by the government at that stage and they were asked to guard the shaft entrances and the entrance to the decline. So, it’s like guarding the front portion of the house when something is coming through the roof in fact. That’s the dilemma we have, which is the frustration we face. We are appealing to the government to basically go in and have a look at it. They’ve had a number of inspections to the site at various levels and various ministers all pledging action but we have not seen the action emerge. A lot of words but we haven’t seen the action come through.

Okay. Just moving over to balance sheet, free cash flow generation obviously raises the question that I’ve seen mentioned in the press already this morning about dividends. What’s your view on dividends now?

Thanks David, I’ll answer the question. I think certainly it is on our agenda, and we are -- what we said previously is we really wanted to get comfort around the sustainable levels of free cash flow generation and we certainly are there. And I think that it’s something that will be considered by our Board at the end of the financial year. I think from a management perspective, we certainly see dividends being a component of our capital allocation and I think certainly a component based upon free cash flow generation.

Okay. So, the Board consideration for year-end, presumably if a dividend is going to be announced, it would be tied with the year-end results. Would there also be some statement of a policy do you expect so that instead of it being a one-off, there is some sort of formula that we could consider?

Yes, I think absolutely, it will be as part of a policy and we see that policy being linked to a component of free cash flow generation. And yes, I think it’s likely at the end of financial year.

Thank you. Our next question is from Tanya Jakusconek of Scotia Capital. Please go ahead.

Yes, good morning everybody. I just wanted to thank you again for the North American and United call that you’re hosting. I have a couple of questions. I think I heard you mention that you did not felt everything that you produced in Q2, you had a shipment of gold and silver that was sold after Q2. Is that correct and if so how much?

Yes, hi Tanya. We did sell it at the end of June; it was just a cash proceed that came in post the end of the half year. So, it came through -- that was $28 million in Argentina and that actually came through in the first couple of days of July.

Okay. Alright. Okay, sorry about that. I thought it was actual gold sale. Then my second question comes back to the Sadiola sulphide then, we were on the IAMGOLD conference call and heard that portion of what’s being done at the Sadiola sulphide and the economics do look promising. But perhaps you can remind us what exactly you’re doing with the government in terms of getting the power and the fiscal schedule in place to move forward with this? What exactly needs to be done and what do we need?

I think there are two parts to this Tanya. Firstly, the feasibility study, which IAMGOLD actually had, we are actually working with the IAMGOLD team to refresh it, get it more up-to-date and also doing some additional work, which Ron will touch upon, in terms of actually optimizing the study further to improve the returns. It is a good project, don’t get us wrong. But the three things which need to happen from a government point of view; and here again we are working very closely with IAMGOLD and with the governmental authorities, it’s around getting the reliability and affordability of power aspect, one. Secondly, the fiscal stability and concession over that period where the project is actually going into development mode and production mode; and finally the various permits. We concur with IAMGOLD that as far as the government is concerned, they are not -- they wouldn’t want to see Sadiola close. So, it’s in their interest to basically provide the consent that we are both seeking from the government in this regard. So, what we want to do is to get the approvals from certainly both those, then go to the government as part of this approval exercise to say where are you in terms of your thinking, in terms of the three areas of approval. Ron can perhaps cover the areas on the feasibility study that is being worked upon.

And Tanya, there is two areas that are changed from the past feasibility study. One is tailings deposition, which is the big cost savings and capital; and the other one is around really the mine plan, if you got into the capital, it had a huge deferred capital spend upfront. And the work that’s been done in the past 2.5, 3 years of identifying some materials in the satellite pit, really changes. So it’s a more on the planning. And both -- actually IAMGOLD’s team is here this week to come to conclusion on these. So, it’s moving forward. And they know what we said; we don’t always have to agree in timing and but we’re working through it. And I think we’re both as excited about the potential of Sadiola.

Okay. So, I understand the reliability of the power, I guess the taxation and so forth that has to go in and the government’s contribution et cetera to that. But maybe just on the permitting side, what exact permits are required?

Actually, we’ve got to refresh, but the big one is around the change in the tailings deposition, which is, if we’re moving it and actually doing or asking to go back in and use an old pit as -- in their tailings, and that has to be approved through their environmental ministers. And we’re getting the information and we’re working through that. That’s the major one. There is the other typical ones, but they were approved and now have to updated.

And the advantage here Tanya is the government of Mali is a shareholder in the mine. So, the information which we provide at the Board meeting is shared to them real time and they clock in directly to the Minister of Mines.

Okay. That’s good. And then, maybe just one last one if I can, just on Tropicana, just to make sure I understood that you are looking at a new mining method underground. Is that what I understood?

It’s basically -- if you go into instead of large cutback to consume considerable upfront deferred capital, you take this more into a large volume, large production in low volume areas, so you can get to the ore fast. But the key is you’ve got to be backfilling pit to reduce the mining costs. And it’s a non-typical in the gold sector.

And so, what sort of cost savings are we expected to see with this; are we expecting cost to decline by 20%, just as an idea?

From our current mining costs, yes, we would expect maybe even more than 20; 20 would be a pretty considerable number. But, we’re working through that right now, because all has to do with length of haul and height of haul, and that’s exactly what we’re working through now.

Okay. Look forward to hearing more about it. Thank you.

Yes.

Thank you. Our next question is from [indiscernible].

Hi. Thank you very much for the call. My question is regarding your cost guidance. On your cost guidance, you are assuming the rand would be something like 14.97 and the Brazilian peso 15 I think or something and so on. My question was -- I mean, would you be able to keep your guidance if the rand is maybe 13 or went down to 12 and if the other currency is also firmed?

Yes, I think that’s why we give you the assumption, and those are average assumptions for the year. So, obviously, you are going to get current spot and then you’ve got to look at what is your average assumption for the full year. And I think when you take those assumptions into the account; we have hold it across [ph] guidance that we’ve given. And I think we’ve also given you the same sensitivities to cost. So, I think if the deal were to change, we would have to assess it. Right now this is the view. And I think you’ve got to plug in your model as to what your assumptions are and I guess you know leave an effect.

Thank you. Our final question is from John Tumazos of John Tumazos Very Independent Research.

Thank you for taking my call. I just wanted to ask if you have completed the debt reduction phase and you’re moving into the asset accumulation phase again, in which of your operating countries you think are most prospective to add assets.

If I can pick the answer to your question here, one thing which will not change in our approach is capital discipline. So, when you use the word asset accumulation, it’s certainly not shopping around with the check book. We’ll certainly be very focused in terms of returns, and that’s why we are looking at projects are incremental and effectively expansion in terms of our existing mine site and our existing operations which have got modest capital, high returns and relatively good payback. In terms of prospectivity, they are pretty much outlined in the presentation that Ron gave. We see Australia as being quite prospective, South America as being prospective, areas of Continental Africa being quite prospective as well; and in terms of South Africa, we see Mponeng having the potential to be a flagship mine going out into the future. So that’s the area of focus in this regard. I hope that answers the question?

Sure. So, you’re hunting everywhere.

No, we’re not hunting everywhere, in our own backyard.

Thank you.

Thank you.

Thanks, John. Everybody thank you very much for making the time this afternoon. We know it’s a detailed presentation. And Sabrina and I are available to take any further questions after this call. And we’ll chat to you again in November with our trading update.

Thank you very much, sir. Ladies and gentlemen that concludes this conference. Thank you for joining and you may now disconnect your line.