Delivering on our strategy
AngloGold Ashanti delivered a solid performance in 2020 and continued to make progress in meeting its strategic commitments, despite the continuing COVID-19 pandemic.
Performance against our strategy
Ensure financial flexibility
Capital resource allocation
Related risks
- 1
- 9
Link to executive remuneration: DSP performance metric weighting
20.0%
Performance outcomes
- Strong cash flows used to reduce debt and for reinvestment for long-term growth
- Adjusted net debt to adjusted EBITDA ratio reduced to 0.24x, now >76% below 1.0x through-the-cycle target
- Strengthened balance sheet provides flexibility and optionality throughout the cycle – strong liquidity position of ~$2.8bn, including cash and cash equivalents at year-end of $1.3bn
- Investment grade credit ratings from Fitch and Moody’s Investor Services
- Track record of discipline capital allocation
- Improved financial performance leading to a more than five-fold increase in dividend to around 48 US cents a share, from 9 US cents in 2019. The dividend payout ratio was doubled to 20% of free cash flow before growth capital expenditure, payable bi-annually from 2021
Outlook – priorities
- Maintain shareholder confidence
- Excess cash flow generated used to boost shareholder returns
- Reduce debt and maintain liquidity
- Deliver on commitments/guidance
Action planned
- Strong financial discipline
Maintain long-term optionality
Capital resource allocation
Related risks
- 1
- 4
Link to executive remuneration: DSP performance metric weighting
12.5%
Performance outcomes
- Good progress – on time and on budget – with ramp up of phase 2 of the Obuasi redevelopment nearing completion
- Advanced project development at Sunrise Dam and Geita
- Feasibility studies advanced for Gramalote and Quebradona in Colombia - nearing decision
- Greenfield options being explored in the United States, Australia and Brazil
- Ongoing brownfield development across the portfolio: Sunrise Dam targets drill out; Tropicana Havana expansion and underground; opportunities in the Africa region with new additions at Geita, Obuasi, Siguiri, Kibali and Iduapriem; drilling programmes underway in Brazil and Argentina.
- Minimise the Inferred Mineral Resource in the first two years and delaying use of blue sky material for as long as possible
Outlook – priorities
- Use cash generated to reinvest in our asset base to support long-term business sustainability
Action planned
- Exploring for value to establish a system that goes beyond the norm, that allows us capture of geological understanding from the earliest stage of development
Improve portfolio quality
Capital resource allocation
Related risks
- 1
- 2
- 4
Link to executive remuneration: DSP performance metric weighting
42.5%
Performance outcomes
- Streamlined and improved overall portfolio quality with completion of the sale of assets in South Africa and Mali
- Embarked on a multi-year initiative to increase investment in Ore Reserve development and brownfields exploration aimed at increasing Ore Reserve conversion, extending the life of assets, improving mining flexibility and enhancing knowledge of orebodies
- Increased the portfolio’s operating life by two years to about 11 years
- Added 6.1Moz of Ore Reserve on a gross basis
Outlook – priorities
- Pursue value-accretive opportunities
- Self-funded portfolio improvements with no equity issuance
- Demonstrate capital discipline
Action planned
- Ongoing brownfield development across the portfolio in Tanzania, Ghana, Guinea, Argentina and Australia
Optimise overhead, costs and capital expenditure
Capital resource allocation
Related risks
- 1
- 5
- 6
- 8
- 9
Link to executive remuneration: DSP performance metric weighting
42.5%
Performance outcomes
- Maintained capital discipline
- Margin-focused operations through a streamlined portfolio
Outlook – priorities
- Deliver on commitments
- Optimise operational efficiencies
- Apply technology and innovation to enhance efficiencies
Focus on people, safety and sustainability
Capital resource allocation
Related risks
- 1
- 3
- 6
- 7
- 10
Link to executive remuneration: DSP performance metric weighting
25.0%
Performance outcomes
- Given the COVID-19 pandemic, health and safety of employees and communities are a priority
- $44m spent on COVID-19-related initiatives to prevent the spread of the pandemic, to protect employees, to provide public health and economic relief to host communities and governments, and to manage the direct COVID-19 impact on the business
- Safety and health performance:
- Fatalities increased with six deaths recorded for 2020
- All-injury frequency rate continued to decline, reaching a record low of 2.39 per million hours worked (or 1.68, excluding South Africa and Mali)
- All occupational disease frequency rate fell to 0.72
- Improved employee mental health support
- People
- Greater emphasis on inclusivity and diversity
- Environment
- Maintained water re-use efficiency of more than 70% – at 73% for 2020
- Reduced emissions
- Communities
- No human rights violations were reported
- Community investment of $20.6m
Outlook – priorities
- Ensure and maintain stakeholder trust and confidence
- Invest in stakeholders
- Maintain focus on excellence in ESG performance
- Motivate and engage employees
- Embed diversity and inclusion
Legend for risks
- 1Adverse regulatory changes to mining rights and fiscal requirements
- 2 Inability to convert Mineral Resource to Ore Reserve
- 3Adverse implications of significant events for AngloGold Ashanti and the industry and for our governance
- 4 Failure to successfully deliver and ramp up growth projects
- 5 Failure to meet our operational and safety targets
- 6 Failure to attract and retain critical skills and talent
- 7 Loss of or threats to social licence to operate
- 8 Failure to move down the industry cost curve: all-in sustaining cost competitiveness
- 9 Adverse gold and commodity prices, and currency movements
- 10 Inability to meet investor expectations on responsible mining and increased disclosure (ESG performance)