Trade off: Implementation of new Operating Model and rollout of the Full Potential (FP) Programme to optimise and streamline the business versus potential reduced employment and contractions in our Mineral Resource and Mineral Reserve, resulting from the implementation of the new Operating Model

The new operating model is aimed at improving AngloGold Ashanti’s agility and resilience, ensuring a more robust organisation better able to deal with an increasingly unpredictable operating landscape. By simplifying the organisational structure, clearly defining work and accountability, this model will establish a foundation for operating excellence, improved cost effectiveness and better predictability, thus contributing to better operational outcomes.

Implementation started in the fourth quarter of 2021 and continued throughout 2022. The new Operating Model renewed emphasis on the ‘Operational Excellence’ initiatives aimed at optimising operating processes and reducing costs, while ensuring our workforce is fully engaged and appropriately skilled. The introduction of the new operating model also led to a headcount reduction of 635 employees between the Central Functions and business units.

Working in tandem with the new Operating Model is the FP Programme, which began early in 2022 and will continue until the end of 2023.

This programme entails a thorough analysis of each operation to enhance understanding of its full potential, its contribution to our portfolio, and to bring about a step-change improvement in operating performance and cost competitiveness.

Trade off: Acquisition of economically viable, long-life gold deposits to ensure a future pipeline of mineable assets versus the financial cost of their acquisition and development

The $365m acquisition of Corvus Gold was completed in January 2022. Together with our Silicon asset, these Corvus assets, namely North Bullfrog and Mother Lode, help us to establish a foothold in the prospective Beatty District, in southern Nevada. A second acquisition at a cost of $152m of the Coeur Sterling’s properties, which are adjacent to the Corvus assets, further helped to consolidate this landholding in the Beatty District.

Combined, these newly acquired assets have contributed a total 5.1Moz to our Mineral Resource at a total cash acquisition cost of $517m. In addition to contributing to our future pipeline of mineable orebodies, this acquisition enhances and entrenches the diversity of our geographic footprint.

AngloGold Ashanti plans to bring these assets into production by about the end of 2025. Initial estimates are for annual production of around 300,000oz over a mine life of at least 20 years at an all-in cost well below our current average, although we continue to calibrate those expectations in light of continued exploration success.

Trade off: Reducing our carbon emissions to make a positive contribution to efforts to help limit climate change versus the financial cost of implementing such a strategy

Our decarbonisation strategy and the accompanying Roadmap to Net Zero were officially launched in October 2022. At AngloGold Ashanti, we have committed to a reduction of 30% in our absolute Scope 1 and 2 GHG emissions by 2030 (2021 baseline) to around 1Mt CO₂e (2021: 1.4Mt CO₂e). The Roadmap, which also includes a commitment to net zero Scope 1 and 2 emissions by 2050, outlines a multi-pronged approach involving the implementation of renewable energy projects; electrification of our mining fleet; and the use of lower-emission power sources. The capital cost required to achieve these reductions is estimated at around $1.1bn, of which $350m will be funded by AngloGold Ashanti, with the balance through third party funding such as providers of renewable energy infrastructure.

Trade off: Managing and optimising Mineral Reserve extraction over time to maximise long-term value creation

Started early in 2020, our re-investment programme continued through 2022, pursuing growth-driven brownfields projects across our portfolio to grow our Mineral Reserve and thus production, to lower costs and increase value created over the medium to longer term. It entailed increasing the confidence in the Mineral Resource and allowing it to be converted via mine planning to Mineral Reserve while also increasing the rate of waste stripping at open pit mines and improving rates of underground development at those sites with high geological potential.

Over the past three years, the re-investment programme contributed 12.2Moz (pre-depletion) to the Mineral Reserve.

Trade off: Balancing competing needs for capital – investing in growth projects to ensure the long-term viability of our business and maintaining a solid balance sheet versus payment of shareholder dividend

Disciplined capital allocation underpins delivery on our strategy. Our approach is guided by a clear capital allocation framework that prioritises investment in our asset base to support the health and sustainability of the business. This framework enforces a disciplined approach to value creation through the effective management of capital, without placing undue financial or operating risk on the business.

The four pillars of our capital allocation strategy are:

• Sustaining capital expenditure that prioritises Mineral Reserve growth
• Maintaining a strong balance sheet to provide optionality and agility through the commodity cycle
• Returning value to shareholders
• Self-funding of major growth capital projects for future optionality

Our capital requirements can be funded by debt, an equity raising or they can be self-funded. Each of these options comes with an associated cost, risk and trade-off. In recent years, AngloGold Ashanti has chosen to self-fund much of its capital requirements.

The ultimate aim of our capital allocation strategy is to maximise long-term shareholder value and returns. One measure of the success of our capital allocation strategy is our ability to generate sustainable free cash flow through the cycle; another is our share price performance.

In 2022, of total value generated, $1,030m (22%) was retained for re-investment in the Company with a total of $330m being paid to providers of capital – $149m (or 45% of this amount) to cover finance costs and $181m (55%) paid in dividends to shareholders (2021: $974m (22%) was retained and $364m paid to capital providers – $140m (38%) for finance costs and $224m (62%) in dividends).